THE GOODYEAR TIRE & RUBBER COMPANY

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein or in the definitive proxy statement incorporated by reference in Part III of this Form 10-K. o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

The aggregate market value of the voting stock held by nonaffiliates of the Registrant, computed by reference to the last sales price of such stock as of the closing of trading on June 30, 2003, was approximately $970,120,000.

The Goodyear Tire & Rubber Company (the “Company”) is an Ohio corporation organized in 1898. Its principal offices are located at 1144 East Market Street, Akron, Ohio 44316-0001. Its telephone number is (330) 796-2121. The terms “Goodyear” and “we,” “us” or “our” wherever used herein refer to the Company together with all of its consolidated domestic and foreign subsidiary companies, unless the context indicates to the contrary.

Goodyear is one of the world’s leading manufacturers of tires and rubber products, engaging in operations in most regions of the world. Goodyear’s 2003 net sales were $15.12 billion and its net loss for 2003 was $802.1 million.

Goodyear’s principal business is the development, manufacture, distribution and sale of tires for most applications. We also:


	•	several lines of rubber and other products for the transportation industry and various other industrial and consumer markets; and

	•	synthetic rubber and rubber-related chemicals for various applications.


	•	provide automotive repair and other services at retail and commercial outlets.

	•	sell various other products.

We make available free of charge on our website, http://www.goodyear.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we file or furnish such reports to the Securities and Exchange Commission (the “SEC”). The information on our website is not a part of this Annual Report on Form 10-K.

Restatement of Financial Statements and Audit Committee and SEC Investigations. In October 2003, our management and Audit Committee determined that it was appropriate to restate our previously issued financial statements to record adjustments resulting from various accounting matters, primarily related to account reconciliations, along with adjustments in our Chemical Products segment and tax adjustments. When improper accounting issues were identified in our overseas operations and in our administration of workers’ compensation claims, these matters were also included in the restatement, along with adjustments primarily resulting from additional account reconciliations and discount rate adjustments relating to certain employee benefit programs. These financial statements have been restated to reflect adjustments to the Company’s previously reported financial information on Form 10-K for the years ended December 31, 2002 and 2001. The Company’s 2003 and 2002 quarterly financial information also has been restated to reflect adjustments to the Company’s previously reported financial information on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003, and September 30, 2003. The restatement also affects periods prior to 2001. As a result of the restatement, the Company identified adjustments through the current date that were required to be recorded which reduced previously reported net income by a total of $280.8 million. For additional information on the restatement, see Note 2 of the Notes to Financial Statements.

In October 2003, the Audit Committee launched an internal investigation into the account reconciliation issues that led to the restatement. In December 2003, the Audit Committee began an investigation of

improper accounting in our European operations. This investigation was subsequently expanded into other locations of our overseas operations. On March 9, 2004, we announced that we had taken disciplinary actions including separation of several senior managers and reprimand of other personnel in our European Union operation and streamlined our organizational structure in response to the investigation of improper accounting. The Audit Committee initiated additional investigations in April 2004 into improper accounting related to the administration of workers’ compensation claims and the valuation of real estate received in payment of trade accounts receivable in Chile. Additional disciplinary actions, including separation and reprimand of senior managerial personnel, have been taken in response to these investigations.

On October 22, 2003, we announced that we would restate our financial results for the years ended 1998 through 2002 and for the first and second quarters of 2003. Following this announcement, the SEC advised us that it had initiated an informal inquiry into the facts and circumstances related to the restatement. On February 5, 2004, the SEC advised us that it had approved the issuance of a formal order of investigation. The order authorizes an investigation into possible violations of the securities laws related to the restatement and previous public filings. We are cooperating fully with the SEC and have provided requested information as expeditiously as possible. Because the SEC investigation is currently ongoing, the outcome cannot be predicted at this time.

The Company will restate the quarterly periods ended March 31, 2003; June 30, 2003; and September 30, 2003 on Forms 10-Q/ A to be filed as expeditiously as possible following the filing of the Form 10-Q for the quarterly period ended March 31, 2004.

Recent Financing Activities. On February 23, 2004, we completed the addition of a $650 million tranche to our $1.30 billion Senior Secured Asset-Backed Facility. Approximately $335 million of the proceeds of the new tranche was used to partially pay down our U.S. term facility. On March 12, 2004, we completed a private offering of $650 million of senior secured notes, consisting of $450 million of 11% senior secured notes due 2011 and $200 million of floating rate notes at LIBOR plus 8% due 2011. The proceeds of the notes were used to repay the remaining amount outstanding under our U.S. term facility, to permanently reduce our commitment under our U.S. revolving credit facility by $70 million and for general corporate purposes. In connection with these financing activities, each of our restructured credit facilities was amended on February 19, 2004, principally to permit additional financings.

Late Form 10-Q Filing and Bank Amendments. On May 11, 2004, we announced that we would not file our first quarter 2004 Form 10-Q by May 30, as required in our loan agreements, and that we would initiate discussions with our lenders to extend the deadline for filing by 30 days. While we do not expect to need to access the facilities during this 30-day period, in the absence of an extension, we would not be able to access them. If we do not obtain an extension, we would still have until June 30 to file our Form 10-Q and regain access, but if we do not file our Form 10-Q by then, there could be an event of default under the loan agreements and thereafter under other debt instruments.

On May 18, 2004, we obtained an amendment from our European credit facility lenders to allow until June 4, 2004 for delivery to our lenders of the 2003 audited financial statements for our Goodyear Dunlop Tires Europe B.V. joint venture. These financial statements, which have historically been completed after our Form 10-K was filed, were previously required to be delivered by May 19, 2004. We must complete these financial statements by June 4, 2004 in order to avoid defaults under our principal credit facilities.

Product Launch. On February 6, 2004, we launched our new line of Assurance™ passenger tires. The Goodyear Assurance featuring ComforTred Technology™ is a premium auto tire that promises a quiet ride and high comfort, a choice for drivers of premium luxury vehicles. Assurance featuring TripleTred Technology™ features all weather performance through three unique tread zones – Water Zone, Ice Zone and Dry Zone, and is intended for broad market appeal. In February 2004, we also launched two new lines of high performance summer passenger tires in Europe: Goodyear HydraGrip™, specially developed for rainy and wet weather conditions featuring DynamicDrain TRED technology; and Dunlop Sport Maxx™, a tire with outstanding dry handling capability featuring Multi Radius Tread technology.

Completion of Purchase of Sava Tires and Dackia. On April 7, 2004, we announced that we had exercised our right to acquire the remainder of Sava Tires d.o.o., a joint venture tire manufacturing company in Kranj, Slovenia. We plan to complete the purchase of the remaining 20% of Sava Tires owned by Sava d.d. for approximately $52 million in June 2004. We acquired our original 60% stake in the joint venture in 1998 and purchased an additional 20% share in 2002. Our stake in Sava Tires is held by our 75 percent-owned Goodyear Dunlop Tires Europe affiliate. On April 16, 2004, we announced that we will purchase the remaining 50% of Dackia, one of Sweden’s major retail tire groups for approximately $10 million. We plan to complete the transaction in June 2004.

Early Termination of the Rights Plan. On February 3, 2004, we announced that our Board of Directors voted to amend Goodyear’s shareholder rights plan to accelerate its expiration date from July 29, 2006 to June 1, 2004. This effectively terminates the shareholder rights plan on June 1. The Board also instituted a policy with respect to the adoption of a rights plan in the future. This policy is contained in our Corporate Governance Guidelines, which may be viewed on our website at http://www.goodyear.com/investor/governance.html. Please note, however, that information contained on our website is not incorporated by reference in, or considered to be a part of, this Annual Report on Form 10-K.

Certain information set forth herein (other than historical data and information) may constitute forward-looking statements regarding events and trends which may affect our future operating results and financial position. The words “estimate,” “expect,” “intend” and “project,” as well as other words or expressions of similar meaning, are intended to identify forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report. Such statements are based on current expectations and assumptions, are inherently uncertain, are subject to risks and should be viewed with caution. Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including:


	•	we have not yet completed the implementation of our plan to improve our internal controls and may be unable to remedy certain internal control weaknesses identified by our external auditors and take other actions in time to meet the March 1, 2005 deadline for complying with Section 404 of the Sarbanes-Oxley Act of 2002;
	•	pending litigation relating to our restatement could have a material adverse effect on our financial condition;
	•	we must complete and deliver to our lenders the financial statements for our Goodyear Dunlop Tires B.V. joint venture by June 4, 2004 in order to avoid defaults under our principal credit facilities;
	•	we have not yet filed our Form 10-Q for the first quarter of 2004, if we do not file it by June 30, 2004 there could be an event of default under our principal credit facilities;
	•	an ongoing SEC investigation regarding our accounting restatement could materially adversely affect us;
	•	we have experienced significant losses in 2001, 2002 and 2003. We cannot assure you that we will be able to achieve future profitability. Our future profitability is dependent upon our ability to successfully implement our turnaround strategy for our North American Tire segment and our previously announced rationalization actions;
	•	we face significant global competition, including increasingly from lower cost manufacturers, and our market share could decline;
	•	our secured credit facilities limit the amount of capital expenditures that we may make;
	•	higher raw material and energy costs may materially adversely affect our operating results and financial condition;
	•	continued pricing pressures from vehicle manufacturers may materially adversely affect our business;
	•	our financial position, results of operations and liquidity could be materially adversely affected if we experience a labor strike, work stoppage or other similar difficulty and the United Steelworkers of America currently has the right to strike after going through a grievance process;


	•	decline in the value of the securities held by our employee benefit plans or a decline in interest rates would increase our pension expense and underfunding levels. Termination by the Pension Benefit Guaranty Corporation of any of our U.S. pension plans would further increase our pension expense and could result in additional liens on material amounts of our assets;
	•	our long-term ability to meet current obligations and to repay maturing indebtedness, including long-term debt maturing in 2005 and 2006 of approximately $1,343 million and $1,481 million, respectively, is dependent on our ability to access capital markets in the future and to improve our operating results;
	•	we have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or otherwise materially adversely affect our financial health;
	•	any failure to be in compliance with any material provision or covenant of our secured credit facilities and the indenture governing our senior secured notes could have a material adverse effect on our liquidity and our operations;
	•	our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly;
	•	if we fail to manage healthcare costs successfully, our financial results may be materially adversely affected;
	•	we may incur significant costs in connection with product liability and other tort claims;
	•	our reserves for product liability and other tort claims and our recorded insurance assets are subject to various uncertainties, the outcome of which may result in our actual costs being significantly higher than the amounts recorded;
	•	we may be required to deposit cash collateral to support an appeal bond if we are subject to a significant adverse judgment, which may have a material adverse effect on our liquidity;
	•	we are subject to extensive government regulations that may materially adversely affect our ongoing operating results;
	•	our international operations have certain risks that may materially adversely affect our operating results;
	•	the terms and conditions of our global alliance with Sumitomo Rubber Industries, Ltd. (SRI) provide for certain exit rights available to SRI upon the occurrence of certain events, which could require us to make a substantial payment to acquire SRI’s interest in certain of our joint venture alliances (which include much of our operations in Europe);
	•	we have foreign currency translation and transaction risks that may materially adversely affect our operating results; and
	•	if we are unable to attract and retain key personnel, our business could be materially adversely affected.

It is not possible to foresee or identify all such factors. We will not revise or update any forward-looking statement or disclose any facts, events or circumstances that occur after the date hereof that may affect the accuracy of any forward-looking statement.

Goodyear’s operating segments are North American Tire; European Union Tire; Eastern Europe, Africa and Middle East Tire (“EEAME Tire”); Latin American Tire and Asia Tire (collectively, the “Tire Segments”); Engineered Products and Chemical Products.

Financial information relating to our operating “segments” for the three year period ended December 31, 2003 appears in Note 18 of the Notes to Financial Statements, and is incorporated herein by reference.

Our principal business is the development, manufacture, distribution and sale of tires and related products and services worldwide. We manufacture and market numerous lines of rubber tires for:


	•	automobiles
	•	trucks
	•	buses
	•	aircraft
	•	motorcycles
	•	farm implements
	•	earthmoving equipment
	•	industrial equipment
	•	various other applications

in each case for sale to vehicle manufacturers for mounting as original equipment (“OE”) and in replacement markets worldwide. We manufacture and sell tires under the Goodyear-brand, the Dunlop-brand, the Kelly-brand, the Fulda-brand, the Debica-brand, the Sava-brand and various other Goodyear owned “house” brands, and the brands of certain customers. In certain markets we also:


	•	retread truck, aircraft and heavy equipment tires.
	•	manufacture and sell tread rubber and other tire retreading materials.
	•	provide automotive repair services and miscellaneous other products and services.
	•	manufacture and sell flaps for truck tires and other types of tires.

The principal products of the Tire Segments are new tires for most applications. Approximately 78.3% of our consolidated sales in 2003 were new tire sales (77.5% (as restated) in 2002 and 76.9% (as restated) in 2001). The percentages of each Tire Segment’s sales attributable to new tires during the periods indicated were:

Each Tire Segment exports tires to other Tire Segments. The financial results of each Tire Segment exclude sales, but include operating income from tires sold to other Tire Segments and include sales and operating income derived from the sale of tires imported from other Tire Segments. Sales to unaffiliated customers are attributed to the segment that makes the sale to the unaffiliated customer.

Tire unit sales for each Tire Segment and for Goodyear worldwide during the periods indicated were:

Our worldwide tire unit sales in the replacement and OE markets during the periods indicated were:

New tires are sold under highly competitive conditions throughout the world. On a worldwide basis, Goodyear has two major competitors: Bridgestone (based in Japan) and Michelin (based in France). Other significant competitors include Continental, Cooper Tire, Pirelli, Toyo, Yokohama, Kumho, Hankook and various regional tire manufacturers.

Goodyear competes with other tire manufacturers on the basis of product design, performance, price and reputation, warranty terms, customer service and consumer convenience. Goodyear-brand and Dunlop-brand tires enjoy a high recognition factor and have a reputation for performance, quality and value. Kelly-brand, Debica-brand, Sava-brand and various other house brand tire lines offered by Goodyear, and tires manufactured and sold by Goodyear to private brand customers, compete primarily on the basis of value and price.

Goodyear does not consider its tire businesses to be seasonal to any significant degree. A significant inventory of new tires is maintained in order to optimize production schedules consistent with anticipated demand and assure prompt delivery to customers, especially “just in time” deliveries of tires or tire and wheel assemblies to OE manufacturers. Tire inventories are maintained at levels designed to optimize production schedules and prompt delivery to customers and minimize working capital requirements.

Global Alliance. In 1999, Goodyear entered into a global alliance with Sumitomo Rubber Industries, Ltd. (“Sumitomo”). Under the global alliance agreements, Goodyear acquired 75%, and Sumitomo owned 25%, of Goodyear Dunlop Tires Europe B.V., a Netherlands holding company. Concurrently, the holding company acquired substantially all of Sumitomo’s tire businesses in Europe and most of Goodyear’s tire businesses in western Europe.

Goodyear also acquired 75%, and Sumitomo acquired 25%, of Goodyear Dunlop Tires North America, Ltd., a holding company that purchased Sumitomo’s tire manufacturing operations in North America and certain of its related tire sales and distribution operations. The global alliance involved other transactions, including Goodyear’s acquisition of 100% of the balance of Sumitomo’s Dunlop Tire replacement distribution and sales operations in the United States and Canada. The global alliance agreements also provided for the

investment by Goodyear and Sumitomo in the common stock of the other. The cost of the acquired businesses totaled approximately $1.24 billion, including the cash payment of $931.6 million and the fair value of 25% of the Goodyear businesses contributed to the European joint venture, or $307 million.

Goodyear’s largest segment, the North American tire business (North American Tire), develops, manufactures, distributes and sells tires and related products and services in the United States and Canada. North American Tire manufactures tires in ten plants in the United States and three plants in Canada. Certain Dunlop-brand related businesses of North American Tire are conducted by Goodyear Dunlop Tires North America, Ltd., which is 75% owned by Goodyear and 25% owned by Sumitomo.

Tires. North American Tire manufactures and sells tires for automobiles, trucks, motorcycles, buses, farm implements, earthmoving equipment, commercial and military aircraft and industrial equipment and for various other applications.

Goodyear-brand radial passenger tire lines sold in North America include Assurance™ with ComforTred Technology™ for the luxury market, Assurance™ with TripleTred Technology™ with broad market appeal, Eagle® high performance and run-flat extended mobility technology (EMT) tires. Dunlop-brand radial passenger tire lines sold in North America include SP Sport® performance tires. The major lines of Goodyear-brand radial tires offered in the United States and Canada for sport utility vehicles and light trucks are Wrangler® and Fortera®. Goodyear also offers Dunlop-brand radials for light trucks such as the Rover™ and Grandtrek® lines. North American Tire also manufactures and sells several lines of Kelly-brand, other house brands and several lines of private brand radial passenger tires in the United States and Canada.

A full line of Goodyear-brand all-steel cord and belt construction radial medium truck tires, the Unisteel® series, for various applications, including line haul highway use and off-road service are manufactured and sold. In addition, various lines of Dunlop-brand, Kelly-brand, other house and private brand radial truck tires are sold in the United States and Canadian replacement markets.


	•	retreads truck, aircraft and heavy equipment tires, primarily as a service to its commercial customers.

	•	manufactures tread rubber and other tire retreading materials for trucks, heavy equipment and aircraft.

	•	manufactures rubber track for agricultural and construction equipment.

	•	provides automotive maintenance and repair services at approximately 778 retail outlets.

	•	sells automotive repair and maintenance items, automotive equipment and accessories and other items to dealers and consumers.

	•	provides miscellaneous other products and services.

Tire unit sales in the replacement and OE markets in the United States and Canada during the periods indicated were:

We are a major supplier of tires to most manufacturers of automobiles, motorcycles, trucks, farm and construction equipment and aircraft that have production facilities located in North America.

Goodyear-brand, Dunlop-brand and Kelly-brand tires are sold in the United States and Canadian replacement markets through several channels of distribution. The principal channel for Goodyear-brand tires is a large network of independent dealers. Goodyear-brand, Dunlop-brand and Kelly-brand tires are also sold to numerous national and regional retail marketing firms in the United States. North American Tire also operates approximately 967 retail outlets (including auto service centers, commercial tire and service centers and leased space in department stores) under the Goodyear name or under the Wingfoot Commercial Tire Systems, Allied or Just Tires trade styles. Several lines of house brand tires and private and associate brand tires are sold to independent dealers, national and regional wholesale marketing organizations and various other retail marketers.

Automotive parts, automotive maintenance and repair services and associated merchandise are sold under highly competitive conditions in the United States and Canada through retail outlets operated by us.

North American Tire from time to time offers various financing and extended payment programs to certain of its tire customers in the replacement market. Goodyear does not believe these programs, when considered in the aggregate, require an unusual amount of working capital relative to the volume of sales involved and are consistent with prevailing tire industry practices.

We are subject to regulation by the National Highway Traffic Safety Administration (“NHTSA”), which has established various standards and regulations applicable to tires sold in the United States for highway use. NHTSA has the authority to order the recall of automotive products, including tires, having safety defects related to motor vehicle safety. NHTSA’s regulatory authority was expanded in November 2000 as a result of the enactment of The Transportation Recall Enhancement, Accountability, and Documentation Act (the “TREAD Act”).

The TREAD Act imposes numerous requirements with respect to tire recalls and also requires tire manufacturers, among other things, to remedy tire safety defects without charge for five (5) years, and to conform with revised and more rigorous tire standards, once the revised standards are implemented.

Our second largest Tire Segment, European Union Tire, develops, manufactures, distributes and sells tires for automobiles, motorcycles, trucks, farm implements and construction equipment in western Europe, exports tires to other regions of the world and provides related products and services. European Union Tire manufactures tires in plants located in England, France, Germany and Luxembourg. Substantially all of the operations and assets of European Union Tire are owned and operated by Goodyear Dunlop Tires Europe B.V., a 75% owned subsidiary of Goodyear. European Union Tire:


	•	manufactures and sells Goodyear-brand, Dunlop-brand and Fulda-brand and other house brand passenger, truck, motorcycle, farm and heavy equipment tires.
	•	sells Debica-brand and Sava-brand passenger, truck and farm tires manufactured by the EEAME Tire Segment.
	•	sells new, and manufactures and sells retreaded, aircraft tires.
	•	provides various retreading and related services for truck and heavy equipment tires, primarily for its commercial truck tire customers.
	•	offers automotive repair services at retail outlets in which it owns a controlling interest.
	•	provides miscellaneous related products and services.

European Union Tire distributes and sells tires throughout western Europe. Tire unit sales to OE customers and in the replacement markets served by European Union Tire were:

European Union Tire is a significant supplier of tires to most manufacturers of automobiles, trucks and farm and construction equipment located in western Europe.

Goodyear’s primary competitor in western Europe is Michelin. Other significant competitors include Continental, Bridgestone, Pirelli, several regional tire producers and imports from other regions, primarily Eastern Europe and Asia.

Goodyear-brand and Dunlop-brand tires are sold in the several replacement markets served by European Union Tire through various channels of distribution, principally independent multi-brand tire dealers. In some markets, Goodyear-brand tires, as well as Dunlop-brand, Fulda-brand, Debica-brand and Sava-brand tires, are distributed through independent dealers, regional distributors and retail outlets, of which approximately 365 are owned by Goodyear.

Our Eastern Europe, Africa and Middle East Tire Segment (“EEAME Tire”) manufactures and sells passenger, truck, farm, bicycle and construction equipment tires in eastern Europe, Africa and the Middle East. EEAME Tire manufactures tires in Poland, Slovenia, Turkey, Morocco and South Africa. EEAME Tire:


	•	maintains sales operations in most countries in eastern Europe (including Russia), Africa and the Middle East.
	•	exports tires for sale in western Europe, North America and other regions of the world.
	•	provides related products and services in certain markets.
	•	manufactures and sells Goodyear-brand, Kelly-brand, Debica-brand, Sava-brand and Fulda-brand tires and sells Dunlop-brand tires manufactured by European Union Tire.
	•	sells new and retreaded aircraft tires.
	•	provides various retreading and related services for truck and heavy equipment tires.
	•	sells automotive parts and accessories.
	•	provides automotive repair services.

EEAME Tire distributes and sells tires to all classes of customers in most countries in eastern Europe, Africa and the Middle East.

Tire unit sales by EEAME Tire to OE customers and in the several replacement markets served were:

EEAME Tire has a significant share of each of the markets it serves and is a significant supplier of tires to manufacturers of automobiles, trucks, and farm and construction equipment in Morocco, Poland, South Africa and Turkey. Its major competitors are Michelin, Bridgestone, Continental and Pirelli. Other competition includes regional and local tire producers and imports from other regions, primarily Asia.

Goodyear-brand tires are sold by EEAME Tire in the various replacement markets primarily through independent tire dealers and wholesalers who sell several brands of tires. In some countries, Goodyear-brand, Dunlop-brand, Kelly-brand, Fulda-brand, Debica-brand and Sava-brand tires are sold through regional distributors and multi-brand dealers. In South Africa and sub-Saharan Africa, tires are also sold through a retail chain of approximately 180 retail stores operated by Goodyear. In the Middle East and most of Africa, tires are sold primarily to regional distributors for resale to independent dealers.

Our Latin American Tire Business Segment manufactures and sells automobile, truck and farm tires throughout Central and South America (“Latin America”), sells tires to various export markets, retreads and sells commercial truck, aircraft and heavy equipment tires, and provides other products and services. Latin American Tire manufactures tires in Brazil, Chile, Colombia, Guatemala (closed in the first quarter of 2004), Peru and Venezuela.

Latin American Tire manufactures and sells several lines of passenger, light and medium truck and farm tires. Latin American Tire also:


	•	manufactures and sells pre-cured treads for truck and heavy equipment tires.
	•	retreads, and provides various materials and related services for retreading, truck, aircraft and heavy equipment tires.
	•	manufactures other products, including batteries for motor vehicles.
	•	manufactures and sells new aircraft tires.
	•	provides miscellaneous other products and services.

Latin American Tire is a major supplier of tires to most automobile and truck manufacturers in Latin America and sells tires to independent dealers and distributors in the various replacement markets in Latin America. We are a leading participant in each of the markets served by Latin American Tire.

Tire unit sales by Latin American Tire to OE customers and in the replacement markets served were:

Our tire business in Asia manufactures and sells tires for automobiles, light and medium trucks, farm and construction equipment and aircraft throughout the Asia and Pacific markets. Asia Tire manufactures tires in China, India, Indonesia, Japan, Malaysia, the Philippines, Taiwan and Thailand. Asia Tire also retreads aircraft tires and provides miscellaneous other products and services.

The number of tires sold by Asia Tire in the replacement markets and to OE customers during the periods indicated were:

Asia Tire information does not include the operations of South Pacific Tyres, an Australian Partnership, and South Pacific Tyres N.Z. Limited, a New Zealand company (together, “SPT”), joint ventures 50% owned by Goodyear and 50% owned by Ansell Ltd. SPT is the largest tire manufacturer in Australia and New Zealand, with two tire manufacturing plants and 17 retread plants. SPT sells Goodyear-brand, Dunlop-brand and other house and private brand tires through its chain of 423 retail stores, commercial tire centers and independent dealers. For more information regarding SPT, see Note 18 of the Notes to Financial Statements.

Our Engineered Products Segment develops, manufactures, distributes and sells numerous rubber and thermoplastic products worldwide. The products and services offered by Engineered Products include:


	•	belts and hoses for motor vehicles.
	•	conveyor and power transmission belts.
	•	air, water, steam, hydraulic, petroleum, fuel, chemical and materials handling hose for industrial applications.
	•	anti-vibration products.
	•	tank tracks.
	•	miscellaneous products and services.

Engineered Products manufactures products at eight plants in the United States and 20 plants in Australia, Brazil, Canada, Chile, China, France, Mexico, Slovenia, South Africa and Venezuela.

Engineered Products sells its products to manufacturers of vehicles and various industrial products and to independent wholesale distributors. More than 50 major firms participate in the various markets served by Engineered Products. There are several suppliers of automotive belts and hose products, air springs, engine mounts and other rubber components for motor vehicles. Goodyear is a significant supplier of these products. Goodyear is a leading supplier of conveyor and power transmission belts and industrial hose products. The principal competitors of Engineered Products include Dana, Mark IV, Gates, Bridgestone, Conti-Tech, Trelleborg, Tokai/ DTR, Unipoly and Habasit.

These markets are highly competitive, with quality, service and price all being significant factors to most customers. Goodyear believes the products offered by Engineered Products are considered to be high quality and competitive in price and performance.

Our Chemical Products Segment develops, manufactures, distributes and sells synthetic rubber and rubber latices, various resins and organic chemicals used in rubber and plastic processing, and other chemical products. Sales are both to Goodyear and other customers. Chemical Products owns and operates four manufacturing facilities, a natural rubber plantation and processing facility in Indonesia and conducts natural rubber purchasing operations. We are exploring the sale of our Chemical business, or portions thereof, to both enhance our financial flexibility and focus future investments on our core business.

Approximately 63% of the total pounds of synthetic materials sold by our Chemical Products Segment in 2003 were to our other segments. All production is in the United States.

All of the natural rubber produced by Goodyear’s plantation and processing facility is used by Goodyear. Most external sales of natural rubber and other chemical products are made directly to manufacturers of various products.

Several major firms are significant suppliers of one or more chemical products similar to those manufactured by Goodyear. The principal competitors of Chemical Products include Bayer and Dow. The markets are highly competitive, with product quality and price being the most significant factors to most customers. Goodyear believes the products offered by Chemical Products are generally considered to be high quality and competitive in price.

The principal raw materials used by Goodyear are synthetic and natural rubber. We purchase substantially all of our requirements for natural rubber in the world market. Synthetic rubber typically accounts for slightly more than half of all rubber consumed by Goodyear on an annual basis. Our plants located in Beaumont, and Houston, Texas, supply the major portion of our synthetic rubber requirements in North America. We purchase a significant amount of our synthetic rubber requirements outside North America from third parties.

We use nylon and polyester yarns, substantial quantities of which are processed in our textile mills. Significant quantities of steel wire are used for radial tires, a portion of which we produce. Other important raw materials used by Goodyear are carbon black, pigments, chemicals and bead wire. Substantially all of these raw materials are purchased from independent suppliers, except for certain chemicals we manufacture. We purchase most raw materials in significant quantities from several suppliers, except in those instances where only one or a few qualified sources are available. As in 2003, we anticipate the continued availability of all raw materials we will require during 2004, subject to spot shortages.

Substantial quantities of hydrocarbon-based chemicals and fuels are used in the production of tires and other rubber products, synthetic rubber, latex and other products. Supplies of chemicals and fuels have been and are expected to continue to be available to us in quantities sufficient to satisfy our anticipated requirements, subject to spot shortages.

In 2003, raw materials costs increased from 2002 levels. Raw materials costs are expected to increase during 2004 driven by increases in costs of oil and natural rubber. Prices for raw material and fuel may fluctuate significantly during 2004.

Goodyear owns approximately 2,400 product, process and equipment patents issued by the United States Patent Office and approximately 5,700 patents issued or granted in other countries around the world. Goodyear also has licenses under numerous patents of others. Goodyear also has approximately 550

applications for United States Patents pending and approximately 4,000 patent applications on file in other countries around the world. While such patents, patent applications and licenses as a group are important, we do not consider any patent, patent application or license, or any related group of them, to be of such importance that the loss or expiration thereof would materially affect Goodyear or any segment.

Goodyear owns or controls and uses approximately 1,400 different trademarks, including several using the word “Goodyear” or the word “Dunlop.” These trademarks are protected by approximately 9,500 registrations and 1,100 pending applications worldwide. While such trademarks as a group are important, the only trademarks we consider material to our business or to the business of any of our segments are those using the word “Goodyear,” which we believe are valid and most of which are of unlimited duration as long as they are adequately protected and appropriately used.

Our backlog of orders is not considered material to, or a significant factor in, evaluating and understanding any of our segments or our businesses considered as a whole.

Our direct and indirect expenditures on research, development and certain engineering activities relating to the design, development and significant modification of new and existing products and services and the formulation and design of new, and significant improvements to existing, manufacturing processes and equipment during the periods indicated were:

At December 31, 2003, Goodyear employed approximately 86,000 people throughout the world, including approximately 36,000 persons in the United States. Approximately 14,000 of our employees in the United States were covered by a master collective bargaining agreement, dated August 20, 2003, with the United Steelworkers of America, A.F.L.-C.I.O.-C.L.C. (“USWA”), which expires on July 20, 2006. In addition, approximately 1,000 of our employees in the United States were covered by other contracts with the USWA and various other unions. The major portion of Goodyear’s employees in Europe, Latin America and Asia are represented by unions.

Goodyear is subject to extensive regulation under environmental and occupational health and safety laws and regulations. These laws and regulations relate to, among other things, air emissions, discharges to surface and underground waters and the generation, handling, storage, transportation and disposal of waste materials and hazardous substances. We have several continuing programs designed to ensure compliance with federal, state and local environmental and occupational safety and health laws and regulations. We expect capital expenditures for pollution control facilities and occupational safety and health projects will be approximately $13 million during 2004 and approximately $16 million during 2005.

In addition, we expended approximately $71 million during 2003 and expect to expend approximately $62 million during 2004 and $57 million during 2005, to maintain and operate our pollution control facilities and conduct our other environmental activities, including the control and disposal of hazardous substances. These expenditures are expected to be sufficient to comply with existing environmental laws and regulations and are not expected to have a material adverse effect on our competitive position.

In the future we may incur increased costs and additional charges associated with environmental compliance and cleanup projects necessitated by the identification of new waste sites, the impact of new

environmental laws and regulatory standards, or the availability of new technologies. Compliance with federal, state and local environmental laws and regulations in the future may require a material increase in our capital expenditures and could adversely affect our earnings and competitive position.

Goodyear engages in manufacturing and/or sales operations in most countries in the world, often through subsidiary companies. We have manufacturing operations in the United States and 27 other countries. Most of our international manufacturing operations relate to the production of tires. Several engineered rubber and certain other products are also manufactured in plants located outside the United States. Financial information relating to our geographic areas for the three year period ended December 31, 2003 appears in Note 18 of the Notes to Financial Statements, and is incorporated herein by reference.

In addition to the ordinary risks of the marketplace, our operations in some countries are affected by price controls, import controls, labor regulations, tariffs, extreme inflation and/or fluctuations in currency values. Furthermore, in certain countries where we operate, transfers of funds into or out of such countries are generally or periodically subject to various restrictive governmental regulations.

Goodyear manufactures its products in 95 manufacturing facilities located around the world. There are 31 plants in the United States and 64 plants in 27 other countries.

NORTH AMERICAN TIRE MANUFACTURING FACILITIES. Goodyear owns (or leases with the right to purchase at a nominal price) and operates 22 manufacturing facilities operated by North American Tire. These facilities have floor space aggregating approximately 23.5 million square feet and consist of:


	•	13 tire plants (ten in the United States and three in Canada),
	•	one steel tire wire cord plant,
	•	one tire mold plant,
	•	two textile mills,
	•	three tread rubber plants, and
	•	two aero retread plants.

Goodyear also owns one tire plant in Huntsville, Alabama that was closed during 2003 and has floor space aggregating approximately 1.3 million square feet.

EUROPEAN UNION TIRE MANUFACTURING FACILITIES. European Union Tire owns and operates:


	•	13 tire plants,
	•	one tire fabric processing facility,
	•	one steel tire wire cord plant,
	•	one tire mold and tire manufacturing machines facility, and
	•	two tire retread plants.

These facilities have floor space aggregating approximately 13.0 million square feet.

EASTERN EUROPE, AFRICA AND MIDDLE EAST TIRE MANUFACTURING FACILITIES. Goodyear owns six tire plants operated by EEAME Tire. These facilities have floor space aggregating approximately 7.5 million square feet.

LATIN AMERICAN TIRE MANUFACTURING FACILITIES. Goodyear owns seven tire manufacturing plants operated by Latin American Tire, one of which (Guatemala) was closed in the first quarter of 2004. Goodyear also manufactures tread rubber and tire molds and operates a fabric processing facility in Brazil and manufactures batteries in Chile. The Latin American facilities have floor space aggregating approximately 6.0 million square feet.

ASIA TIRE MANUFACTURING FACILITIES. Goodyear owns nine tire plants operated by Asia Tire. These facilities have floor space aggregating approximately 4.8 million square feet.

ENGINEERED PRODUCTS MANUFACTURING FACILITIES. Goodyear owns (or leases with the right to purchase at a nominal price) 28 facilities at eight United States and 20 international locations operated by Engineered Products. These facilities have floor space aggregating approximately 6.0 million square feet. Certain facilities manufacture more than one group of products. The facilities include:

Goodyear also owns one tire fabric processing facility in Cartersville, Georgia that was closed during 2003 and has floor space aggregating approximately 0.6 million square feet.

CHEMICAL PRODUCTS MANUFACTURING FACILITIES. Goodyear owns four manufacturing facilities operated by Chemical Products. These facilities have floor space aggregating approximately 1.8 million square feet. The facilities are located in the United States and produce synthetic rubber and rubber latices, synthetic resins, and other organic chemical products.

PLANT UTILIZATION. Our worldwide tire capacity utilization rate was approximately 88% during 2003, compared to approximately 86% during 2002 and 89% during 2001. We expect to have production capacity sufficient to satisfy presently anticipated demand for our tires and other products for the foreseeable future.

OTHER FACILITIES. Goodyear also owns and operates a rubber plantation and rubber processing facility in Indonesia, four research and development facilities and technical centers, and six tire proving grounds. We also operate approximately 1,535 retail outlets for the sale of our tires to consumers, approximately 103 tire retreading facilities and approximately 220 warehouse distribution facilities. Substantially all of these facilities are leased. We do not consider any one of these leased properties to be material to our operations. For additional information regarding leased properties, see Note 9, “Properties and Plants,” and Note 10, “Leased Assets,” of the Notes to Financial Statements.

Goodyear is subject to a number of lawsuits relating to a rubber hose product, Entran II, it supplied from 1989 to 1993 to Chiles Power Supply, Inc. (d/b/a Heatway Systems), a designer and marketer of hydronic radiant heating systems headquartered in Springfield, Missouri. Heating systems using Entran II are typically attached or embedded in either indoor flooring or outdoor pavement, and use Entran II hose as a conduit to circulate warm fluid as a source of heat.

In 1997, Goodyear sued Heatway in the United States District Court for the Northern District of Ohio, Eastern Division, for non-payment of approximately $2.0 million of hose supplied to Heatway. Heatway filed counterclaims alleging that the Entran II hose was defective and that Goodyear was liable to Heatway for any claims brought by homeowners. Following a trial, the jury rendered its verdict in favor of Goodyear, finding that Goodyear did not breach the implied warranty of merchantability in respect of the 25 million feet of

Entran II hose sold to Heatway. On February 4, 2000, the Court entered a final judgment in Goodyear’s favor on all of Heatway’s counterclaims and against Heatway for approximately $2 million, plus interest and costs. Heatway subsequently filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court, Western District of Missouri.

Beginning in late 1997, property owners, primarily homeowners, began to file lawsuits against Goodyear, Heatway and others relating to the alleged failure of Entran II in their heating systems. As to Goodyear, the plaintiffs in these lawsuits generally allege that Entran II undergoes progressive deterioration in the heating system and ultimately fails, resulting in leakage and property damage. The plaintiffs in these lawsuits typically seek recovery under various tort, contract and statutory causes of action, including breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, negligence, strict liability and violation of state consumer protection statutes. Goodyear denies that Entran II hose is unsafe or defective and contends that the hose was manufactured in accordance with specifications agreed upon with Heatway, for use in custom designed heating systems for which Heatway was responsible for supplying design and installation services and maintenance information. Goodyear maintains that any leakage is attributable to improper design, installation, and maintenance of heating systems by Heatway and by the unsupervised contractors to whom Heatway distributed Entran II in bulk quantities, contrary to its representations to Goodyear.

Goodyear is currently subject to 22 Entran II class actions and putative class actions in federal and state courts in Alaska, California, Colorado, New Jersey, New Mexico, New York, Massachusetts, Pennsylvania, South Dakota, Utah, Washington, Wisconsin and Wyoming and in Canada. These actions are:


	•	Anderson, et al. v. Goodyear, et al. (Case No. 98CV439, District Court of Eagle County, Colorado).
	•	Jane Bates, et al. v. Goodyear (Case No. D-0101-CV-2001-359, First Judicial District Court, Santa Fe County, New Mexico).
	•	Crawford, et al. v. Goodyear (Case No. 001206, Superior Court, Philadelphia County, Pennsylvania).
	•	Feldman v. Goodyear (Case No. 002790, Common Pleas Court, Philadelphia County, Pennsylvania).
	•	McFarland et al. v. Goodyear (Case No. 03-1653, Circuit Court for the Second Judicial Circuit, Minnehaha County, South Dakota).
	•	The Seth Peterson Cottage Conservancy, Inc. et al. v. Goodyear et al. (Case No. 03 CV 1399, Circuit Court, Dane County, Wisconsin).
	•	James E. Simon v. Goodyear, et al. (Case No. BC294423, Superior Court of California, County of Los Angeles).


	•	Bates, et al. v. Goodyear (Case No. 02-CV-0662A, United States District Court, Western District of New York).
	•	Ditlow, et al. v. Goodyear (Case No. CV-03-5004, United States District Court, District of New Jersey).
	•	Ronald J. Frank, et al. v. Goodyear (Case No. 02-CV-0985, United States District Court for the Northern District of New York).
	•	Galanti, et al. v. Goodyear (Case No. 03-209, United States District Court, Southern District of New Jersey).
	•	Glanville, et al. v. Goodyear (Case No. A03-018, United States District Court for the District of Alaska).
	•	Huber, et al. v. Goodyear (Case No. CO 31290 C, United States District Court, Western District of Washington).
	•	Mingalone et al. v. Goodyear (Case No. 03-3539, United States District Court, District of New Jersey).
	•	Nye et al. v. Goodyear (Case No. 03-CV-1037, United States District Court, District of Wyoming).


	•	Stephen Payne, et al. v. Goodyear (Case No. 01-10118-NG,United States District Court, District of Massachusetts).
	•	Pena, et al. v. Goodyear (Case No. 02-0600147, United States District Court, Central Division of Utah).


	•	Shirley and David Ford v. Goodyear Canada Inc. and Goodyear (Case Number 03-CV-255653CP, Superior Court, Ontario, Canada).
	•	Gary and Janis Kelman v. Goodyear and Goodyear Canada Inc., (Case No. 42665, Superior Court, Ontario, Canada).
	•	Mona Lahaie v. Goodyear Canada Inc. and Goodyear (Case No. 0303 13282, District Court, Alberta, Canada).
	•	Allen May v. Goodyear Canada Inc. and Goodyear (Case No. L 032196, Supreme Court of British Columbia).
	•	Mike Myshack Management Ltd. v. Goodyear and Goodyear Canada Inc. (Case No. 0301-15976, Court of Queen’s Bench of Alberta, District of Calgary, Canada).

In addition to the class actions and putative class actions, Goodyear is also a defendant in three cases involving homeowners in Colorado: Davis et al. v. Goodyear (Case No. 99CV594, District Court, Eagle County, Colorado); Albers v. Goodyear (Case No. 04CV2100, District Court, Arapahoe County, Colorado); and Holmes v. Goodyear (Case No. 98CV268-A, District Court, Pitkin County, Colorado). These individual cases involve between one and 38 property owners. Holmes, a case involving one site, is scheduled to go to trial on June 7, 2004. The plaintiff in Holmes has opted out of the Proposed Settlement (as defined below). Goodyear has also been named as a third party defendant in a case pending in New Mexico, Zubchenok, et al. v. Quintana, et al. v. Goodyear (Case No. D101-CV-2003-01980, District Court, Santa Fe County, New Mexico). Two additional cases are on appeal following a verdict. In Goodyear v. Vista Resorts, Inc. (Case No. 02CA1690, Colorado Court of Appeals), an action involving five homesites, a trial was held in Colorado state court, and on February 28, 2002, a jury rendered a verdict in favor of plaintiffs in the aggregate amount of approximately $5.9 million, which damages were trebled under the Colorado Consumer Protection Act. The total damages awarded are approximately $22.7 million, including interest, attorney’s fees and costs. In another case in Colorado state court involving six sites, Sumerel et al. v. Goodyear et al. (Case No. 02CA1997, Colorado Court of Appeals), a judgment was entered against Goodyear in the amount of $1.3 million plus interest and costs. Also, in Loughridge v. Goodyear and Chiles Power Supply, Inc. (Case No. 98-B-1302, United States District Court for the District of Colorado), a case consolidating claims involving 36 Entran II sites, on June 19, 2003, a federal jury in Colorado awarded 34 homeowners aggregate damages of $8.2 million. The jury allocated 50% of the fault to Goodyear and 50% to Heatway, resulting in a judgment against Goodyear of approximately $4.1 million. On September 8, 2003, judgment was entered in Loughridge and an additional $5.7 million in prejudgment interest was awarded to the plaintiffs, all of which is allocated to Goodyear. Post-trial motions have been filed in Loughridge by all parties seeking modifications to the judgment. In addition, in Malek, et al. v. Goodyear (Case No. 02-B-1172, United States District Court for the District of Colorado), a case involving 25 homesites, on May 13, 2004, a federal jury awarded the plaintiffs aggregate damages of $8.1 million. The jury allocated 40% of the fault to Goodyear and 60% to Heatway resulting in a judgment against Goodyear of $3.2 million.

On October 8, 2003, attorneys representing certain class members filed a proposed settlement (the “Proposed Settlement”) covering all pending Entran II actions in the United States and Canada except for the claims of persons arising from property they own or have owned in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. The Proposed Settlement was initiated through the filing of a national class action complaint in Galanti et al. v. Goodyear on October 6, 2003 and motion for preliminary approval of settlement filed October 8, 2003. On October 9, 2003, the judge in Galanti gave preliminary approval to the Proposed Settlement and conditionally certified the class. A national class has also been conditionally certified in Canada. On February 9, 2004, notice of the settlement was given to potential class members pursuant to a court approved notice plan. The Galanti court will conduct a fairness hearing to resolve any objections to final approval of the settlement. Class members who object to the settlement had the right to

opt out until May 7, 2004. Class members participating in the Proposed Settlement will be required to release all claims against Goodyear relating in any way to damage caused by Entran II hose. The plaintiffs in Vista, Sumerel, Loughridge and Malek will not participate in the Proposed Settlement. Goodyear will continue to pursue appeals of Vista, Sumerel and Loughridge and will decide whether or not to appeal Malek when the final order of judgment is issued. Goodyear reserves the right to withdraw from the settlement if it determines in its sole discretion that an excessive number of persons have opted out of the settlement. The notice period, during which claimants could exercise their right to opt out, ended May 7, 2004. As of May 17, 2004, the Company had received notice that at least 525 potential sites had been opted out of the Proposed Settlement. The Company is currently assessing its options with respect to the Proposed Settlement and expects to decide shortly whether or not to withdraw from the Proposed Settlement.

Under the Proposed Settlement, Goodyear will make annual cash contributions to a settlement fund of $40 million, $6 million, $6 million, $8 million and $16 million in 2004, 2005, 2006, 2007 and 2008, respectively. Goodyear will also make additional contingent payments of $10 million in each of 2005, 2006, 2007 and 2008 if Goodyear meets the following EBITDA targets: $1.2 billion in 2004 and $1.4 billion in each of 2005, 2006 and 2007. For purposes of the Proposed Settlement, EBITDA is defined by reference to the definition of “Consolidated EBITDA” in Goodyear’s $645 million U.S. term loan agreement. In the event the EBITDA target is not met in any given year, the contingent payment will remain payable in the first subsequent year in which the following cumulative EBITDA targets are met: $2.6 billion in 2005, $4.0 billion in 2006 and $5.4 billion in 2007. Please see page 50 for the appropriate calculation of Consolidated EBITDA for the year ended December 31, 2003. The settlement fund will be used to pay for damage awards to class members, class counsel’s attorney fees, the cost of notice to the class and the cost to administer the claims process. In addition to the required contributions of Goodyear, 80% of Goodyear’s insurance recoveries from Entran II claims will be paid into the settlement fund. The settlement agreement provides that if these insurance recoveries, plus any additional amounts that Goodyear elects to pay into the settlement fund, were less than $120 million by February 23, 2004, the plaintiffs may withdraw from the settlement. Since less than $120 million was paid into the settlement fund by February 23, 2004, the plaintiffs have the right, which has not yet been exercised, to withdraw from the settlement. No assurance can be given as to the Company’s ability to recover insurance proceeds sufficient to adequately fund the settlement.

Goodyear remains subject to Payne et al. v. Goodyear, a class action in the United States District Court for the District of Massachusetts covering six northeastern states. The members of the class in Payne are owners of real property or improvements in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont in which Entran II hose was or is installed in a hydronic heating system. According to the plaintiffs in Payne, approximately 5 million feet of Entran II hose sold to Heatway was installed in these states. On October 24, 2003, at the request of the plaintiffs’ attorneys, the judge in Payne enjoined Goodyear from entering into a settlement that would affect the class certified in Payne. This injunction is currently under appeal by Goodyear. The Payne case is presently scheduled for trial commencing September 30, 2004.

Goodyear is also subject to Anderson, et al. v. Goodyear, et al., a class action in state court in Colorado, and Jane Bates, et al. v. Goodyear, a class action in state court in New Mexico. Plaintiff attorneys in both Anderson and Bates filed motions seeking to exclude the Colorado and New Mexico state court plaintiffs from the Proposed Settlement. However, the judge in Galanti has issued an order enjoining the plaintiffs’ counsel in both Anderson and Bates from engaging in any activities that interfere with the settlement process. On March 2, 2004, the court in Galanti issued an order preventing the Anderson case from proceeding to trial during the settlement notice and opt-out period. The Anderson trial is now scheduled to begin on July 12, 2004.

On October 22, 2003, Goodyear announced that it would restate its financial results for the years ended 1998 through 2002 and for the first and second quarters of 2003. Following this announcement, the SEC advised the Company that the SEC had initiated an informal inquiry into the facts and circumstances related to the restatement. On February 5, 2004, the SEC advised Goodyear that it had approved the issuance of a formal order of investigation. The order authorizes an investigation into possible violations of the securities laws related to the restatement and previous public filings. Goodyear is cooperating fully with the SEC and has provided requested information as expeditiously as possible. Because the SEC investigation is currently ongoing, the outcome cannot be predicted at this time.

On October 23, 2003, following the announcement of the restatement, a purported class action lawsuit was filed against the Company in the United States District Court for the Northern District of Ohio on behalf of purchasers of Goodyear common stock alleging violations of the federal securities laws. After that date, a total of 20 of these purported class actions were filed against Goodyear in that court. These lawsuits name as defendants several of the Company’s present or former officers and directors, including Goodyear’s current chief executive officer, Robert J. Keegan, and Goodyear’s current chief financial officer, Robert W. Tieken, and allege, among other things, that Goodyear and the other named defendants violated federal securities laws by artificially inflating and maintaining the market price of Goodyear’s securities. Since October 24, 2003, three derivative lawsuits have also been filed by purported shareholders on behalf of Goodyear in the United States District Court for the Northern District of Ohio and two similar derivative lawsuits originally filed in the Court of Common Pleas for Summit County, Ohio were removed to federal court. The derivative actions are against present and former directors, Goodyear’s present and former chief executive officers and Goodyear’s chief financial officer and allege, among other things, breach of fiduciary duty and corporate waste arising out of the same events and circumstances upon which the securities class actions are based. The plaintiffs in the federal derivative actions also allege violations of Section 304 of the Sarbanes-Oxley Act of 2002, by certain of the named defendants. Finally, since October 27, 2003, at least 11 lawsuits have been filed in the United States District Court for the Northern District of Ohio against Goodyear, The Northern Trust Company, and current and/or former officers of Goodyear asserting breach of fiduciary claims under the Employee Retirement Income Security Act (ERISA) on behalf of a putative class of participants in Goodyear’s Employee Savings Plan for Bargaining Unit Employees and Goodyear’s Savings Plan for Salaried Employees. The plaintiffs’ claims in these actions arise out of the same events and circumstances upon which the securities class actions and derivative actions are based. All of the above actions have been consolidated before the Honorable Judge John Adams in the United States District Court for the Northern District of Ohio. While Goodyear believes these claims are without merit and intends to vigorously defend them, it is unable to predict their outcome.

Goodyear is currently one of several (typically 50 to 80) defendants in civil actions involving approximately 114,800 claimants (as of December 31, 2003) relating to their alleged exposure to materials containing asbestos in products manufactured by Goodyear or asbestos materials at Goodyear facilities. These cases are pending in various state courts, including primarily courts in Florida, Maryland, Michigan, Mississippi, New York, Ohio, Pennsylvania, Texas and West Virginia, and in certain federal courts relating to the plaintiffs’ alleged exposure to materials containing asbestos. Goodyear manufactured, among other things, rubber coated asbestos sheet gasket materials from 1914 through 1973 and aircraft brake assemblies containing asbestos materials prior to 1987. Some of the claimants are independent contractors or their employees who allege exposure to asbestos while working at certain Goodyear facilities. It is expected that in a substantial portion of these cases there will be no evidence of exposure to a Goodyear manufactured product containing asbestos or

asbestos in Goodyear facilities. The amount expended by Goodyear on defense and claim resolution during 2003 was approximately $29.6 million (before recovery of insurance proceeds). The plaintiffs in the pending cases allege that they were exposed to asbestos and, as a result of such exposure suffer from various respiratory diseases, including in some cases mesothelioma and lung cancer. The plaintiffs are seeking unspecified actual and punitive damages and other relief.

On December 4, 2003, Goodyear entered into a conditional settlement agreement resolving a national class action with respect to allegedly defective Goodyear, Kelly and house brand load range E light truck and recreational vehicle tires. On December 5, 2003, the settlement was preliminarily approved by the court in Baugh et al. v. Goodyear, Civil Action No. 00-L-1154, Circuit Court of the Third Judicial Circuit, Madison County, Illinois (formerly styled Julie Harper et al. v. Goodyear et al.). The settlement received final approval at an April 28, 2004, fairness hearing. The settlement class includes persons who purchased load range E tires manufactured between January 1, 1992 and June 30, 2000. Notwithstanding the settlement, Goodyear maintains that the subject tires are not defective.

Pursuant to the settlement, class members are eligible to receive benefits pursuant to an enhanced warranty program or a rebate program. Additionally, Goodyear has agreed to continue to provide consumer education regarding tire safety. Goodyear has also agreed to bear the costs associated with publishing notice to the class members and with the administration of the settlement. Subject to court approval, Goodyear will pay class counsel attorneys fees in the amount of $1.745 million plus interest. The class does not include, among others, persons who may have a claim for personal injury or damage to property, owners of 15 passenger vans notified under NHTSA campaign number 02X-001, or resellers of tires. Goodyear remains subject to a number of civil lawsuits related to death or injury involving allegedly defective Goodyear manufactured load range E light truck tires. The settlement does not include these actions. Actions related to alleged breaches of warranty or product defects relating to certain of Goodyear’s load range D light truck tires were dismissed in the fourth quarter of 2003.

On June 7, 1990, a civil action, Teresa Boggs, et al. v. Divested Atomic Corporation, et al. (Case No. C-1-90-450), was filed in the United States District Court for the Southern District of Ohio by Teresa Boggs and certain other named plaintiffs on behalf of themselves and a putative class comprised of certain other persons who resided near the Portsmouth Uranium Enrichment Complex, a facility owned by the United States Department of Energy located in Pike County, Ohio (the “DOE Plant”), against Divested Atomic Corporation (“DAC”), the successor by merger of Goodyear Atomic Corporation (“GAC”), the Company, and Lockheed Martin Energy Systems (“LMES”). GAC operated the DOE Plant for several years pursuant to a series of contracts with the DOE until LMES assumed operation of the DOE Plant on November 16, 1986. The plaintiffs allege that the operators of the DOE Plant contaminated certain areas near the DOE Plant with radioactive and/or other hazardous materials causing property damage and emotional distress. Plaintiffs claim $300 million in compensatory damages, $300 million in punitive damages and unspecified amounts for medical monitoring and cleanup costs. This civil action is no longer a class action as a result of rulings of the District Court decertifying the class. On June 8, 1998, a civil action, Adkins, et al. v. Divested Atomic Corporation, et al. (Case No. C2 98-595), was filed in the United States District Court for the Southern District of Ohio, Eastern Division, against DAC, the Company and LMES on behalf of approximately 276 persons who currently reside, or in the past resided, near the DOE Plant. The plaintiffs allege, on behalf of themselves and a putative class of all persons who were residents, property owners or lessees of property subject to alleged windborne particulates and water run off from the DOE Plant, that DAC (and, therefore, the Company) and LMES in their operation of the Portsmouth DOE Plant (i) negligently contaminated, and are strictly liable for contaminating, the plaintiffs and their property with allegedly toxic substances, (ii) have in the past maintained, and are continuing to maintain, a private nuisance, (iii) have committed, and continue to commit, trespass, and (iv) violated the Comprehensive Environmental Response, Compensation and Liability Act of 1980. The plaintiffs are seeking $30 million in actual damages,

On March 15, 1995, a civil action, Orion Tire Corporation, et al. v. Goodyear, et al. (Case No. SA CV 95-221), was filed in the United States District Court for the Central District of California, against the Company, Goodyear International Corporation, a subsidiary of the Company (“GIC”), and five individuals, including Samir G. Gibara, then Chairman of the Board and Chief Executive Officer of the Company, by Orion Tire Corporation (“Orion”), China Tire Holdings Limited (“China Tire”), and China Strategic Holdings Limited (“China Strategic”). The plaintiffs allege, among other things, that in connection with Goodyear’s 1994 acquisition of a 75% interest in a tire manufacturing facility in Dalian, People’s Republic of China (the “Dalian Facility”), the Company and GIC engaged in tortious interference with certain alleged contractual relationships of plaintiffs involving the Dalian Facility and committed trade libel and defamation by making oral defamatory and written libelous statements concerning the plaintiffs to various parties. On motions made by the Company, the District Court dismissed all individual defendants from the proceedings for lack of jurisdiction, dismissed all claims made by China Strategic and most of the claims made by Orion and China Tire, and, on August 12, 1999, entered an order dismissing the entire cause of action. The dismissal was reversed and vacated in part by the United States Court of Appeals for the Ninth Circuit. On June 28, 2002, China Tire and Orion filed a second amended complaint, which was dismissed by the District Court on January 13, 2003.

In addition to the legal proceedings described above, various other legal actions, claims and governmental investigations and proceedings covering a wide range of matters were pending against Goodyear at December 31, 2003, including claims and proceedings relating to several waste disposal sites that have been identified by the United States Environmental Protection Agency and similar agencies of various States for remedial investigation and cleanup, which sites were allegedly used by Goodyear in the past for the disposal of industrial waste materials. Based on available information, we do not consider any such action, claim, investigation or proceeding to be material, within the meaning of that term as used in Item 103 of Regulation S-K and the instructions thereto. For additional information regarding the Company’s legal proceedings, see Note 20, “Commitments and Contingent Liabilities” of the Notes to Financial Statements.

No matter was submitted to a vote of the security holders of the Company during the quarter ended December 31, 2003.

Set forth below are: (1) the names and ages of all executive officers of the Company at May 19, 2004, (2) all positions with the Company presently held by each such person and (3) the positions held by, and principal areas of responsibility of, each such person during the last five years.

No family relationship exists between any of the above named executive officers or between said executive officers and any director or nominee for director of the Company.

Each executive officer is elected by the Board of Directors of the Company at its annual meeting to a term of one year or until his or her successor is duly elected, except in those instances where the person is elected at other than an annual meeting in which event such person’s term will expire at the next annual meeting.

The principal market for Goodyear’s common stock is the New York Stock Exchange (Stock Exchange Symbol GT).

Information relating to the high and low sale prices of shares of Goodyear’s common stock and the dividends paid on such shares during 2003 and 2002 appears under the caption “Quarterly Data and Market Price Information” in Item 8 of this Annual Report, at page 124, and is incorporated herein by reference. Certain of the Company’s credit agreements prohibit the Company from paying dividends on its common stock. At April 30, 2004, there were 28,443 record holders of the 175,339,715 shares of Goodyear’s common stock then outstanding.

The information contained in the following notes has been restated. Refer to Note 2 to the financial statements for further information.

As discussed in Note 2, restatement adjustments were classified as “Accounting Irregularities,” “Account Reconciliations,” “Out-of-Period,” “Discount Rate,” “Chemical Products Segment” and “Tax Adjustments.”

The decrease in net income of $50.5 million in 2001 was principally the result of the timing of the recognition of manufacturing variances to reflect the actual cost of inventories of the Chemical Products Segment, the erroneous recording of cost of goods sold for the sale of inventory at Wingfoot Commercial Tire Systems, LLC, Accounting Irregularities adjustments and other Account Reconciliation adjustments. On November 1, 2000, Goodyear made a contribution, which included inventory, to Wingfoot Commercial Tire Systems, LLC, a consolidated subsidiary. On a consolidated basis, the inventory was valued at Goodyear’s historical cost. Upon the sale of the inventory, consolidated cost of goods sold was understated by $11 million. Additionally, inventory and fixed asset losses totaling $4.2 million were not expensed as incurred and were written off. The Chemical Products Segment adjustments were the result of a stand-alone audit conducted in 2003 of a portion of the Chemical Products business segment.

For the restatement of 2001, pretax income was reduced by $12.8 million due to the impact of Account Reconciliations, $13.2 million due to Accounting Irregularities, $18.9 million due to Chemical Products Segment, $14.5 million due to Out-of-Period and $5.5 million due to Discount Rate. The tax effect of restatement adjustments was a benefit of $14.4 million.

The increase in net income of $11.0 million in 2000 was principally the result of the Chemical Products Segment adjustments and the Account Reconciliation adjustments, primarily Interplant and Wingfoot Commercial Tire Systems, LLC.

For the restatement of 2000, pretax income was reduced by $21.7 million due to the impact of Account Reconciliations. Pretax income increased by $19.1 million due to the impact of Chemical Products Segment, $14.5 million due to Discount Rate, $5.8 million due to Out-of-Period and $0.6 million due to Accounting Irregularities. The tax effect of restatement adjustments was an expense of $7.3 million.

The decrease in net income of $18.2 million in 1999 was principally the result of the erroneous recording of accounts receivable, the improper deferral of manufacturing variances at one of the Company’s United States tire manufacturing plants in 1998 which was recorded in 1999 when it was discovered, and which was adjusted in the 1998 results in this restatement, and other Account Reconciliation adjustments. The adjustment to accounts receivable was attributable to amounts erroneously recorded in the Company’s general ledger. Goodyear had implemented certain modules of an ERP accounting system, which were not properly integrated with existing systems and resulted in an overstatement of sales and accounts receivable in the general ledger. However, billings to customers and cash collections were appropriate.

For the restatement of 1999, pretax income was reduced by $38.0 million due to the impact of Account Reconciliations and $4.9 million due to Chemical Products Segment. Pretax income was increased by $13.1 million due to the impact of Accounting Irregularities and $6.4 million due to Out-of-Period. The tax effect of restatement adjustments was a benefit of $5.2 million.


(2)	See “Principles of Consolidation” at Note 1 (“Accounting Policies”) to the Financial Statements.

(3)	Net Loss in 2003 included net after-tax charges of $524.5 million, or $2.73 per share-diluted, for rationalizations, asset sales, general and product liability-discontinued products, accelerated depreciation, asset impairments, asset writeoffs, favorable settlement of prior year tax liability and rationalization costs at Goodyear’s SPT equity investment.

(4)	Net Loss in 2002 included net after-tax benefit of $14.3 million (as restated), or $0.09 per share-diluted (as restated) for rationalizations, asset sales, writeoff of a miscellaneous investment and a net rationalization reversal at Goodyear’s SPT equity investment. Net loss in 2002 also included a non-cash charge of $1.20 billion (as restated), or $6.86 per share-diluted (as restated), to establish a valuation allowance against its net federal and state deferred tax assets.

(5)	Net Loss in 2001 included net after-tax charges of $172.4 million (as restated), or $1.08 per share-diluted (as restated), for rationalizations, the sale of the Specialty Chemical Business and other asset sales, costs related to a tire replacement program and rationalization costs at Goodyear’s SPT equity investment.

(6)	Net Income in 2000 included a net after-tax charge of $62.0 million (as restated), or $0.39 per share-diluted (as restated), for rationalizations and asset sales, change in Goodyear’s domestic inventory costing method from LIFO to FIFO and rationalization costs at Goodyear’s SPT equity investment.

(7)	Net Income in 1999 included net after-tax benefit of $14.9 million (as restated), or $0.08 per share-diluted (as restated), resulting from the net after-tax gains of $154.8 million, or $0.97 per share-diluted, from the change in control of the businesses contributed by the Company to the Goodyear Dunlop joint venture in Europe and the sale of certain rubber chemical assets and net rationalization charges of $139.9 million after tax (as restated), or $0.89 per share-diluted (as restated).

The Goodyear Tire & Rubber Company is one of the world’s leading manufacturers of tires and rubber products with one of the most recognized brand names in the world. We have a broad global footprint with 95 manufacturing facilities in 28 countries. Our business is run through seven operating segments: North American Tire; European Union Tire; Eastern Europe, Africa and Middle East Tire; Latin America Tire; Asia Tire; Engineered Products; and Chemical Products.

In each of the last three years we have experienced significant net losses. Our net losses for 2003, 2002 and 2001 were $802.1 million, $1,227.0 million (as restated and including a non-cash charge of $1.20 billion to establish a tax valuation allowance) and $254.1 million (as restated), respectively. Our results are highly dependent upon the results of our North American Tire segment, which accounted for approximately 45% of our consolidated net sales in 2003. In recent years, North American Tire results have been negatively impacted by several factors, including over-capacity which limits pricing leverage, weakness in the replacement tire market, increased competition from low cost manufacturers, a decline in market share and increases in medical and pension costs. In 2003, North American Tire has a segment operating loss of $128.7 million compared to a segment operating loss of $57.1 million (as restated) for 2002 and segment operating income of $100.9 million (as restated) for 2001. In our second largest segment, European Union Tire, we had segment operating income of $133.5 million, $100.2 million (as restated) and $44.2 million (as restated) in 2003, 2002 and 2001, respectively. Approximately 29% of the increase in segment operating income from 2002 to 2003 is attributable to the strength of the Euro. The segment operating income of our five other operating segments has remained strong and has increased each year since 2001.

In addition to the disappointing results of our North American Tire segment, increases in raw material and energy costs have offset many of the benefits of the numerous cost reduction actions we have taken over the past year. In particular, in 2003, the price of one of our most important raw materials, natural rubber, increased approximately 36% and the cost of oil increased approximately 25% over the same period. We estimate that the rise in raw material costs increased our Cost of Goods Sold by approximately $335 million in 2003. We expect that the price of oil and natural rubber will continue to increase in 2004. Increased interest expense and financing fees also negatively impacted our results in 2003. Interest expense increased from $241.7 million (as restated) in 2002 to $296.3 million in 2003 primarily due to our refinancing efforts. Fees and expenses related to our refinancing efforts in 2003 totaled approximately $120 million, of which $45.6 million was charged against income in 2003. The amount charged against income in 2003 of $45.6 million included the writeoff of unamortized fees associated with the facilities that were replaced. Financing activities completed in the first quarter of 2004 will further increase our interest expense.

A key indicator of our operating performance is market share, especially in our two largest regions, North America and western Europe. Listed below is our estimated market share in each of these two regions for our two primary tire markets: Original Equipment and Replacement.

The above percentages are estimates only and are based on a combination of industry publications and surveys and internal company surveys. In the North American replacement market, a significant increase in business in our dealer channel was not enough to offset a large loss in the lower margin private label market primarily due to aggressive competition by low cost foreign manufacturers. The North American original equipment market remained steady even as we became more selective in the fitments we pursued with vehicle manufacturers. In western Europe, the increase in the replacement market was due to the successful

introduction of several new products and an increased focus on sales by product. The reduction in our share of the western European original equipment market is largely due to our strategy to be more selective in pursuing original equipment fitments.

We refinanced most of our debt on April 1, 2003 with facilities that are secured by a substantial portion of our assets. While we completed additional debt refinancing in the first quarter of 2004, we must take additional actions, including accessing the capital markets or refinancing additional debt, to ensure that we have sufficient liquidity over the long term. For example, we have a number of obligations coming due over the next few years, including substantial required domestic pension plan obligations of approximately $160 million in 2004 and approximately $325 million to $350 million in 2005. In addition, after taking into account the paydown of certain obligations in connection with our recent financing activities, we have an aggregate of $1,343 million and $1,481 million of long-term debt coming due in 2005 and 2006, respectively. We expect to meet our obligations as they come due through available cash and cash equivalents, internally generated funds and borrowings. While new financing may be available to us, access to such financing cannot be assured given the recent performance of our business, our current debt ratings and restrictions on our ability to pledge additional assets as security. Failure to obtain new financing could have a material adverse effect on our liquidity.

Given these and other obligations, unanticipated events could significantly impact our liquidity. For example, although we have entered into a conditional settlement agreement to resolve a substantial portion of product liability claims relating to a rubber hose product we previously manufactured, unless this settlement is finalized, we will be subject to numerous claims, the resolution of which could have a material adverse effect on our results of operations, financial position and liquidity.

During the third quarter of 2003, our management and our Audit Committee determined that it was appropriate to restate our previously issued financial results to record adjustments resulting from various accounting matters. The results of an investigation into potential accounting improprieties in our overseas operations led to an additional restatement. The impact of these restatements is described in Note 2 to our Financial Statements. We are currently subject to an SEC investigation into the facts and circumstances surrounding the restatement. We cannot predict the outcome of the investigation, and any adverse developments in connection with the investigation, including the initiation of an enforcement action, could be costly and could seriously harm our business.

Net sales in 2003 were $15.12 billion, compared to $13.86 billion (as restated) in 2002 and $14.16 billion (as restated) in 2001.

A net loss of $802.1 million, $4.58 per share, was recorded in 2003. A net loss of $1.23 billion (as restated), $7.35 per share (as restated), was recorded in 2002, primarily resulting from a non-cash charge of $1.20 billion (as restated) to establish a valuation allowance against Goodyear’s net Federal and state deferred tax assets. The valuation allowance was determined in accordance with the provisions of Statement of Financial Accounting Standards No. 109 (SFAS 109), “Accounting for Income Taxes.” A net loss of $254.1 million (as restated), $1.59 per share (as restated), was recorded in 2001.

Goodyear’s worldwide tire unit sales decreased 0.3% in 2003 compared to 2002. North American Tire (U.S. and Canada) volume decreased 2.5% in 2003, while international unit sales increased 1.7%. Worldwide replacement unit sales increased 2.0% from 2002, due to increases in all regions except North American and Asia Tire. Original equipment unit sales decreased 5.6% in 2003, due to decreases in all regions except Eastern Europe, Africa and Middle East Tire and Asia Tire.

Goodyear’s worldwide tire unit sales in 2002 decreased 2.3% compared to 2001. North American Tire (U.S. and Canada) volume decreased 7.2% in 2002, while international unit sales increased 2.9%. Worldwide replacement unit sales decreased 4.9% from 2001, due to decreases in North American Tire and European Union Tire. Original equipment unit sales increased 4.0% in 2002, due to increases in all regions except Latin American Tire and Eastern Europe, Africa and Middle East Tire. Unit sales in North American Tire in 2002 included approximately 500 thousand tires in connection with the Ford Motor Company (“Ford”) tire replacement program, compared to approximately 5 million in 2001.

Revenues increased 9.1% in 2003 primarily due to favorable currency translation of approximately $737 million, largely related to the strong Euro. Favorable pricing and product mix in all business units, but primarily in Latin American Tire, Chemical Products and North American Tire, accounted for approximately $418 million of the increase in revenues. In Europe, strong replacement sales also had a favorable impact on 2003 net sales of approximately $104 million.

Revenues (as restated) decreased 2.2% in 2002 compared to 2001 primarily due to lower tire unit volume of approximately $250 million, largely in North American Tire, and the negative impact of currency translation on international results of approximately $102 million (as restated), primarily in Latin American Tire. Revenues in 2002 were also negatively impacted as a result of the sale of the Specialty Chemical Business in the fourth quarter of 2001. The Specialty Chemical Business contributed approximately $127 million of sales in 2001. Revenues were favorably affected by tire pricing and product mix improvements, mainly in Latin American Tire, of approximately $167 million.

Cost of goods sold (CGS) was 82.6% of sales in 2003, compared to 81.6% in 2002 and 82.5% in 2001. CGS in 2003 was adversely impacted by approximately $554 million due to currency movements, primarily in Europe, and by approximately $335 million in higher raw material costs, largely natural and synthetic rubber. CGS in 2003 was also unfavorably impacted by approximately $133 million related to accelerated depreciation charges, asset impairment charges and writeoffs, related to the 2003 rationalization actions. Changes in product mix of approximately $184 million, primarily in North American Tire and inflationary cost increases in Latin American Tire also negatively impacted 2003 CGS. Savings from rationalization programs of approximately $61 million, mainly European Union Tire and North American Tire, and the change in vacation policy described below of approximately $33 million favorably impacted 2003 CGS.

CGS (as restated) in 2002 benefited by approximately $204 million from lower raw material costs and other purchasing savings. CGS also decreased by approximately $220 million (as restated) as a result of lower sales volume compared to 2001 and the impact of the sale of the Specialty Chemical Business, which contributed approximately $103 million of CGS in 2001. CGS benefited by approximately $82 million (as restated) due to currency movements, primarily in Brazil, Argentina and South Africa partially offset by unfavorable currency movements in European Union and by approximately $30 million due to lower transportation costs in North American Tire. Savings from rationalization programs of approximately $20 million also favorably impacted CGS in 2002. 2002 CGS increased approximately $238 million as a result of changes in product mix, mainly North American Tire and inflationary cost increases in Latin American Tire. CGS was unfavorably impacted by $10 million related to the closure of Penske Automotive Centers in 2002. Compared to 2001, CGS in 2002 was adversely affected by lower demand and approximately $76 million (as restated) in higher unit costs primarily resulting from significantly lower levels of plant utilization. In addition, 2001 CGS included a charge of $30 million for a proactive tire replacement program covering certain tires in service on 15-passenger vans and ambulances.

Research and development expenses are included in CGS and were $350.4 million in 2003, compared to $385.8 million (as restated) in 2002 and $371.8 million (as restated) in 2001. Research and development expenditures in 2004 are expected to be approximately $369 million.

Selling, administrative and general expense (SAG) in 2003 was 15.7% of sales, compared to 15.9% in 2002 and 15.7% in 2001. SAG increased in 2003 primarily due to foreign currency translation, mainly the Euro, of approximately $132 million and higher wages and benefits of approximately $72 million. Also negatively impacting SAG was increased advertising expense, largely in European Union Tire and North American Tire, of approximately $29 million and increased corporate consulting fees of approximately $23 million. SAG was favorably impacted by rationalization programs of approximately $74 million and by the change in vacation policy described below of approximately $34 million.

SAG (as restated) decreased in dollars in 2002 compared to 2001 primarily as a result of the absence of expenses for amortization of goodwill and intangible assets with indefinite useful lives of approximately $19 million due to Goodyear’s adoption of Statement of Financial Accounting Standards No. 142 (SFAS 142), “Goodwill and Other Intangible Assets.” SAG also decreased as a result of the impact of the sale of the Specialty Chemical Business, which contributed approximately $12 million of SAG in 2001. In addition, reductions in media expense of approximately $31 million (as restated) (including advertising and administrative expenses), and reductions in computer related charges of approximately $20 million (as restated) also benefited SAG. SAG was adversely impacted by increased wage and benefit costs of approximately $60 million (as restated) in 2002 compared to 2001.

Net loss in 2001 included expenses related to amortization of goodwill and intangible assets with indefinite useful lives totaling $29.1 million before tax (as restated). In accordance with SFAS 142, amortization of goodwill and intangible assets with indefinite useful lives ceased at January 1, 2002. For further information, refer to the note to the financial statements No. 7, Goodwill and Other Intangible Assets.

During 2002, Goodyear announced the suspension of the matching contribution portion of its savings plans for all salaried associates, effective January 1, 2003. Effective April 20, 2003, the Company suspended the matching contribution portion of the savings plan for bargaining unit associates including those covered by Goodyear’s master contract with the United Steelworkers of America (“USWA”). Goodyear contributed approximately $38 million to the savings plans in 2002. In addition, the Company changed its vacation policy for domestic salaried associates in 2002. As a result of the changes to the policy, the Company did not incur vacation expense for domestic salaried associates in 2003. Vacation expense was approximately $67 million lower in 2003 compared to 2002 due to this change in vacation policy.

Interest expense in 2003 was $296.3 million, compared to $241.7 million (as restated) in 2002 and $297.1 million (as restated) in 2001. Interest expense increased in 2003 due to higher average debt outstanding. Interest expense decreased in 2002 compared to 2001 due to both lower average debt levels and lower interest rates.

Other (income) and expense was $267.3 million in 2003, compared to $56.8 million (as restated) in 2002 and $40.8 million (as restated) in 2001. Other (income) and expense included accounts receivable sales fees, debt refinancing fees and commitment fees totaling $99.4 million, $48.4 million and $50.1 million in 2003, 2002 and 2001, respectively. The increase in 2003 in financing fees and financial instruments is due to the costs incurred in connection with the restructuring and refinancing of the Company’s bank credit and receivables securitization facilities discussed below. Financing fees and financial instruments included $45.6 million in 2003 related to the new facilities. Refer to Note 11, Financing Arrangements and Derivative Financial Instruments, for further information about the restructuring and refinancing. Goodyear expects to incur additional financing fees in the future related to refinancings or capital market transactions.

Other (income) and expense in 2003 included a loss of $17.6 million ($8.9 million after tax or $0.05 per share) on the sale of 20,833,000 shares of Sumitomo Rubber Industries, Ltd. (“SRI”) in the second quarter. 2003 included a loss of $11.6 million ($11.2 million after tax or $0.07 per share) on the sale of assets in the Engineered Products, North American Tire and European Union Tire Segments. 2003 also included a gain of $7.7 million ($6.4 million after tax or $0.04 per share) resulting from the sale of land in the Asia Tire Segment and assets in the Latin American and European Union Tire Segments.

Other (income) and expense also includes General and product liability-discontinued products which includes charges for claims against Goodyear related to asbestos personal injury claims and for anticipated liabilities related to Entran II claims, primarily for a proposed settlement of such claims. Goodyear recorded net charges for General and product liability-discontinued products totaling approximately $145 million in 2003 which included recognition of a receivable of approximately $131 million from Goodyear’s insurance carriers. Refer to Note 20, Commitments and Contingent Liabilities, for further information about general and product liabilities.

Other (income) and expense in 2002 included gains of $28.0 million (as restated) ($23.7 million after tax or $0.14 per share (as restated)) resulting from the sale of land and buildings in the Latin American Tire, Engineered Products and European Union Tire Segments. The writeoff of a miscellaneous investment of $4.1 million ($4.1 million after tax or $0.02 per share) was also included in Other (income) and expense in 2002.

Other (income) and expense in 2001 included gains of $18.4 million (as restated) ($14.7 million after tax or $0.09 per share (as restated)) resulting from the sale of land and buildings in the European Union Tire Segment and $27.4 million ($16.9 million after tax or $0.10 per share) resulting from the sale of Goodyear’s Specialty Chemical Business.

For further information, refer to the note to the financial statements as restated No. 4, Other (Income) and Expense.

Foreign currency exchange loss was $40.2 million in 2003, compared to a gain of $9.7 million (as restated) in 2002 and a loss of $10.0 million (as restated) in 2001. Foreign currency exchange in 2003 was adversely impacted by approximately $48 million due to currency movements on U.S. dollar denominated monetary items in Brazil and Chile. Foreign currency exchange in 2002 benefited by approximately $16 million from currency movements on U.S. dollar denominated monetary items in Brazil. A loss of approximately $8 million resulting from currency movements on U.S. dollar denominated monetary items in Argentina was also incurred in 2002.

Equity in (earnings) losses of affiliates was $12.1 million in 2003, compared to $13.2 million (as restated) and $39.7 million (as restated) in 2002 and 2001, respectively. Equity in (earnings) losses of affiliates improved in 2002 compared to 2001 due to the rationalization charges incurred in 2001 by South Pacific Tyres (SPT), an Australian tire manufacturer in which Goodyear owns a 50% equity interest. Goodyear’s share of a net rationalization credit recorded by SPT was $1.1 million ($1.1 million after tax or $0.01 per share) in 2002. Goodyear’s share of rationalization charges recorded by SPT in 2001 totaled $24.0 million ($24.0 million after tax or $0.15 per share).

For 2003, Goodyear recorded tax expense of $112.2 million on a loss before income taxes and minority interest in net income of subsidiaries of $654.9 million. The difference between Goodyear’s effective tax rate and the U.S. statutory rate was primarily attributable to the Company continuing to maintain a full valuation allowance against its net Federal and state deferred tax assets. In 2002, a non-cash charge of $1.20 billion (as restated) ($6.86 per share (as restated)) was recorded to establish the valuation allowance against the net Federal and state deferred tax assets. Goodyear had a tax benefit at an effective rate of 24.6% (as restated) for 2001.

In 2002, Goodyear also determined that earnings of certain international subsidiaries would no longer be permanently reinvested in working capital. Accordingly Goodyear recorded a provision of $50.2 million for the incremental taxes incurred or to be incurred upon inclusion of such earnings in Federal taxable income.

For further information, refer to the note to the financial statements No. 14, Income Taxes.

To maintain global competitiveness, Goodyear has implemented rationalization actions over the past several years for the purpose of reducing excess capacity, eliminating redundancies and reducing costs. Goodyear recorded net rationalization costs of $291.5 million in 2003, $5.5 million (as restated) in 2002 and $210.3 million (as restated) in 2001. As of December 31, 2003, Goodyear has reduced employment levels by approximately 16,400 from December 31, 2000 and almost 25,400 since 1998, primarily as a result of rationalization activities.

During 2003, net charges of $291.5 million ($267.1 million after tax or $1.27 per share) were recorded, which included reversals of $15.7 million ($14.3 million after tax or $0.07 per share) for reserves from rationalization actions no longer needed for their originally intended purposes and new charges of $307.2 million ($281.4 million after tax or $1.34 per share). The 2003 rationalization actions consisted of manufacturing, research and development, administrative and retail consolidations in North America, Europe and Latin America. Of the $307.2 million of new charges, $174.8 million related to future cash outflows, primarily associate severance costs, and $132.4 million related primarily to non-cash special termination benefits and pension and retiree benefit curtailments. In 2003, $200.4 million and $15.5 million, respectively, was incurred primarily for severance payments and noncancellable lease costs. Approximately 4,400 associates will be released under the programs initiated in 2003, of which approximately 2,700 were exited in 2003. The majority of the remaining accrual balance for all programs of $141.9 million is expected to be utilized by the end of 2004.

As part of the 2003 rationalization program, Goodyear closed its Huntsville, Alabama tire facility in the fourth quarter. Of the $307.2 million of new charges, approximately $138 million related to the Huntsville closure primarily for associate-related costs, including severance, special termination benefits and pension and retiree benefit curtailments. The Huntsville closure also resulted in approximately $35 million of asset impairment charges and $85 million of accelerated depreciation charges and the writeoff of spare parts. Approximately $8 million of construction in progress was written off in the first quarter of 2003 related to the research and development rationalization plan. Approximately $5 million of accelerated depreciation charges were recorded for equipment taken out of service in the European Union related to two rationalization plans at

Goodyear recorded net rationalization charges totaling $210.3 million (as restated) ($161.4 million after tax or $1.00 per share (as restated)) in 2001, which included $4.1 million of reversals of prior year reserves no longer needed for their originally intended purposes. These actions were in response to continued competitive market conditions and worldwide economic uncertainty. Under these actions, Goodyear provided for worldwide associate reductions through retail and administrative consolidation and manufacturing plant downsizing and consolidation. Of this charge, $132.0 million (as restated) related to future cash outflows, primarily associate severance and noncancellable lease costs, and $82.4 million (as restated) related to non-cash charges, primarily for the writeoff of equipment taken out of service. Goodyear completed these actions during 2003 with the exception of ongoing severance and noncancellable lease payments.

Upon completion of the 2003 plans, the Company estimates that it will reduce annual operating costs by approximately $280 million (approximately $70 million SAG and approximately $210 million CGS). Goodyear estimates that SAG and CGS were reduced in 2003 by approximately $62 million as a result of the implementation of the 2003 plans, approximately $41 million as a result of the implementation of the 2002 plans and approximately $76 million as a result of the implementation of the 2001 plans. Plan savings have been substantially offset by higher SAG and conversion costs including increased compensation and benefit costs.

The remaining reserve for costs related to the completion of the Company’s rationalization actions was $141.9 million at December 31, 2003, compared to $69.2 million at December 31, 2002.

For further information, refer to the note to the financial statements No. 3, Costs Associated with Rationalization Programs.

On September 15, 2003, the United Steelworkers of America (the “USWA”) and Goodyear announced the ratification of a new labor agreement. The agreement covers workers at 14 tire and engineered products plants in the United States and contains provisions governing healthcare benefits, pension service and wages. The agreement assigns protected plant status to 12 of the 14 plants and permits a 13th plant to achieve protected status if certain productivity goals are met. A protected plant cannot be closed during the duration of the agreement and Goodyear is generally required to maintain the current level of capital expenditures at these plants. The agreement also gives Goodyear the option to reduce the hourly workforce at protected plants by 15% compared to August 2003 staffing levels. Goodyear has also agreed to give USWA plants first consideration on all new products intended for sale in North America to the extent covered plants have the capacity and capability to manufacture the product. Goodyear retains the right to import tires from the Company’s plants outside of the United States to the extent the USWA plant that is manufacturing the product is operating at full capacity. Under the agreement, the USWA has the right to nominate an individual for a seat on Goodyear’s Board of Directors. Goodyear has also agreed to remain neutral should the USWA attempt to organize one of Goodyear’s non-union facilities. Goodyear must also require a buyer of any of Goodyear’s plants to negotiate a labor agreement as a precondition of the sale.

Goodyear also committed under the agreement to consummate the issuance or placement of at least $250 million of debt securities and at least $75 million of equity or equity-linked securities by December 31, 2003. Goodyear did not meet this commitment. As a result, the USWA may file a grievance and strike. In the event of a strike, the Company’s financial position, results of operations and liquidity could be materially adversely affected. Goodyear has also committed to launch, by December 1, 2004, a refinancing of its U.S. term loan and revolving credit facilities due in April 2005 with loans or securities having a term of at least three years. If Goodyear fails to complete this refinancing commitment, the USWA would have the right to strike and Goodyear would be required to pay each covered union employee (approximately 13,700 as of December 31, 2003) $1,000 and each covered union retiree (approximately 13,800 as of December 31, 2003) $500. Finally, Goodyear committed to remain in compliance with the Interest Expense Coverage Ratio, Consolidated Net Worth, and Senior Secured Indebtedness Ratio covenants in its U.S. revolving credit facility. If Goodyear fails to remain in compliance with these covenants, it has agreed to use its best efforts to seek a substantial private equity investment. Such investment would be expected to provide the investor with significant influence in the management and direction of Goodyear.

Goodyear’s results of operations, financial position and liquidity could be adversely affected in future periods by loss of market share or lower demand in the replacement market or from the original equipment industry, which would result in lower levels of plant utilization that would increase unit costs. Also, Goodyear could experience higher raw material and energy prices in future periods. These costs, if incurred, may not be recoverable due to pricing pressures present in today’s highly competitive market. Goodyear is unable to predict future currency fluctuations. Sales and earnings in future periods would be unfavorably impacted if the U.S. dollar strengthens versus various foreign currencies. A continuation of the current economic conditions in the United States and Europe is likely to unfavorably impact Goodyear’s sales and earnings in future periods. Similarly, continued volatile economic conditions in emerging markets could adversely affect sales and earnings in future periods. Goodyear may also be impacted by economic disruptions associated with global events including war, acts of terror and civil obstructions.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to financial statements. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates, including those related to the allowance for doubtful accounts, recoverability of intangibles and other long-lived assets, deferred tax asset valuation allowance, warranty, workers’ compensation, litigation, general and product liabilities, environmental liabilities, pension and postretirement benefits, and various other operating allowances and accruals, based on currently available information. Changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods.

General and Product Liability and Other Litigation. Goodyear had recorded liabilities totaling $491.7 million at December 31, 2003 and $240.7 million (as restated) at December 31, 2002 for potential product liability and other tort claims, including related legal fees expected to be incurred. Of these amounts, $142.5 million and $75.4 million (as restated) were included in Other current liabilities at December 31, 2003 and 2002, respectively. The amounts recorded were estimated on the basis of an assessment of potential liability using an analysis of available information with respect to pending claims, historical experience and, where available, recent and current trends. The Company had recorded insurance receivables for potential product liability and other tort claims of $199.3 million at December 31, 2003 and $81.0 million at December 31, 2002. Of this amount, $100.1 million and $24.7 million was included in Current Assets as part of Accounts and notes receivable at December 31, 2003 and December 31, 2002, respectively.

In connection with the preparation of its 2003 financial statements, the Company engaged an independent asbestos valuation expert to assist the Company in reviewing its reserves for asbestos claims, and review the Company’s method of determining its receivables from probable insurance recoveries. Prior to the fourth quarter of 2003, the Company’s estimate for asbestos liability was based upon a review of the various characteristics of the pending claims by an experienced asbestos counsel.

The Company, based on the advice of the valuation expert, has recorded liabilities for both asserted and unasserted claims at December 31, 2003 totaling $131.1 million, inclusive of defense costs. The recorded liability represents the Company’s estimated liability through 2008, which represents the period over which the liability can be reasonably estimated. Due to the difficulties in making these estimates, analysis based on new data and/or changed circumstances arising in the future could result in an increase in the recorded obligation in an amount that cannot currently be reasonably estimated, and that increase could be significant. The portion of the liability associated with unasserted asbestos claims at December 31, 2003 is $31.9 million. Prior to the fourth quarter of 2003, the Company did not have an accrual for unasserted claims as sufficient information was deemed to be not available to reliably estimate such an obligation. This conclusion was further confirmed by the valuation expert during the preparation of the 2003 financial statements. At December 31, 2003, the Company’s liability with respect to asserted claims and related defense costs was $99.2 million compared to $139.2 million at December 31, 2002, notwithstanding an increase in the number of pending claims between December 31, 2002 and December 31, 2003. The reduction in the amount recorded at December 31, 2003 compared to December 31, 2002 is due to refinements in certain assumptions used by the valuation expert.

After reviewing the Company’s recent settlement history by jurisdiction, law firm, disease type and alleged date of first exposure, the valuation expert cited two primary reasons for the Company to refine its valuation assumptions. First, in calculating the Company’s estimated liability, the valuation expert determined that the Company had previously assumed that it would resolve more claims in the foreseeable future than is likely based on its historical record and nationwide trends. As a result, the Company now assumes that a smaller percentage of pending claims will be resolved within the predictable future. Second, the valuation expert determined that it was not possible to estimate a liability for as many non-malignancy claims as the Company had done in the past. As a result, the Company’s current estimated liability includes fewer liabilities associated with non-malignancy claims.

Goodyear maintains primary insurance coverage under coverage-in-place agreements as well as excess liability insurance with respect to asbestos liabilities. Goodyear records a receivable with respect to such policies when it determines that recovery is probable and it can reasonably estimate the amount of a particular recovery.

Prior to 2003, Goodyear did not record a receivable for expected recoveries from excess carriers in respect of asbestos related matters. Goodyear has instituted coverage actions against certain of these excess carriers. After consultation with its outside legal counsel and giving consideration to relevant factors including the ongoing legal proceedings with certain of its excess coverage insurance carriers, their financial viability, their legal obligations and other pertinent facts, Goodyear determined an amount it expects is probable of recovery from such carriers. Accordingly, Goodyear recorded a receivable during 2003, which represents an estimate of recovery from its excess coverage insurance carriers relating to potential asbestos related liabilities.

The valuation expert also reviewed the Company’s method of valuing its receivables recorded for probable insurance recoveries. Based upon the model employed by the valuation expert, as of December 31, 2003, the Company recorded a receivable related to asbestos claims of $110.4 million. Based on the Company’s current asbestos claim profile, the Company expects that approximately 85% of asbestos claim related losses will be recoverable up to its accessible policy limits. The receivable recorded consists of an amount the Company expects to collect under coverage-in-place agreements with certain primary carriers as well as an amount it believes is probable of recovery from certain of its excess coverage insurance carriers. Of this amount, $20.4 million was included in Current Assets as part of Accounts and notes receivable at

Goodyear believes that its reserve for asbestos claims, and the insurance assets recorded in respect of these claims, reflect reasonable and probable estimates of these amounts, subject to the exclusion of claims for which it is not feasible to make reasonable estimates. The estimate of the assets and liabilities related to pending and expected future asbestos claims and insurance recoveries is subject to numerous uncertainties, including, but not limited to, changes in (i) the litigation environment; (ii) federal and state law governing the compensation of asbestos claimants; (iii) the Company’s approach to defending and resolving claims; and (iv) the level of payments made to claimants from other sources, including other defendants. As a result, with respect to both asserted and unasserted claims, it is reasonably possible that the Company may incur a material amount in excess of the current reserve, however such amount cannot be reasonably estimated.

Heatway (Entran II). The Company is a defendant in 22 class actions or potential class actions and four other civil actions in various Federal, state and Canadian courts asserting non-asbestos property damage claims relating to Entran II, a rubber hose product that it supplied from 1989-1993 to Chiles Power Supply, Inc. (d/b/a Heatway Systems), a designer and seller of hydronic radiant heating systems in the United States. The plaintiffs in these actions are generally seeking recovery under various tort, contract and statutory causes of action, including breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, negligence, strict liability and violation of state consumer protection statutes. In one of the above mentioned class actions, on October 9, 2003, the United States District Court for District Court of New Jersey preliminarily approved a proposed national settlement agreement (the Proposed Settlement) for pending Entran II claims in the U.S. and Canada, except for claims related to property in six New England states, two judgments in Colorado state court, two judgments in Colorado Federal court, and any future judgments involving claimants that opt out of the Proposed Settlement. Claimants had until May 7, 2004, to opt out of the Proposed Settlement. The Company has the right to withdraw from the Proposed Settlement if it determines in good faith and in its sole discretion that an excessive number of persons have opted out of the class and the Proposed Settlement. As of May 17, 2004, the Company had received notice that at least 525 potential sites had been opted out of the Proposed Settlement. The Company is currently assessing its options with respect to the Proposed Settlement and expects to decide shortly whether or not to withdraw from the Proposed Settlement.

The ultimate cost of disposing of Entran II claims is dependent upon a number of factors, including the Company’s ability to satisfy the contingencies in any settlement, the number of claimants that opt out of any settlement, final approval of the terms of any settlement. Goodyear’s ability to resolve claims not subject to any settlement (including the cases in which the Company received adverse judgments), and, in the event Goodyear fails to consummate a settlement for any reason, future judgments by courts in other currently pending or yet unasserted actions. Depending on the resolution of these uncertainties, the costs associated with Entran II claims could be significant and could have a material adverse effect on the Company’s results of operations, financial position and liquidity in future periods. Due to the uncertainties inherent in Entran II matters, it is reasonably possible that there exists material liability beyond what Goodyear has already reserved for, but such amounts cannot be reasonably estimated.

Other Actions. The Company is currently a party to various claims and legal proceedings in addition to those noted above. If management believes that a loss arising from these matters is probable and can reasonably be estimated, the Company records the amount of the loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Based on currently available information, management believes that the ultimate outcome of these matters, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or overall trends in results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages or an injunction prohibiting the Company from selling one or more products. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or future periods.

Environmental Matters. Goodyear had recorded liabilities totaling $32.8 million at December 31, 2003 and $53.5 million at December 31, 2002 for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by Goodyear. Of these amounts, $7.7 million and $21.4 million were included in Other current liabilities at December 31, 2003 and December 31, 2002, respectively. The costs include legal and consulting fees, site studies, the design and implementation of remediation plans, post-remediation monitoring and related activities and will be paid over several years. The amount of Goodyear’s ultimate liability in respect of these matters may be affected by several uncertainties, primarily the ultimate cost of required remediation and the extent to which other responsible parties contribute. The liability was reduced in 2003 by approximately $17 million due to the resolution related to one site during the year.

Workers’ Compensation. Goodyear had recorded liabilities, on a discounted basis, totaling $194.0 million and $152.4 million (as restated) for anticipated costs related to workers’ compensation at December 31, 2003 and December 31, 2002, respectively. Of these amounts, $112.7 million and $66.4 million (as restated) were included in Current Liabilities as part of Compensation and benefits at December 31, 2003 and December 31, 2002, respectively. The costs include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on Goodyear’s assessment of potential liability using an analysis of available information with respect to pending claims, historical experience, and current cost trends. The amount of Goodyear’s ultimate liability in respect of these matters may differ from these estimates.

Goodwill. In January 2002, Goodyear adopted Statement of Financial Accounting Standards No. 142 (SFAS 142), “Goodwill and Other Intangible Assets.” Under this standard, Goodyear no longer amortizes goodwill, but tests it annually for impairment because it is an asset with an indefinite useful life. However, the occurrence of a potential indicator of impairment, such as a significant adverse change in legal factors or business climate, an adverse action or assessment by a regulator, unanticipated competition, loss of key personnel or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of, would result in Goodyear’s having to perform the impairment analysis more frequently than on an annual basis. These types of events and the resulting analysis could result in goodwill impairment charges in future periods.

The Company determined estimated fair values of the reporting units using a valuation methodology based largely on comparable company analysis. Under this method, the Company used an EBITDA multiple representative of the global automotive industry sector to arrive at the fair value of each reporting unit. The EBITDA multiple was adjusted to reflect local market conditions and recent transactions. The EBITDA of the reporting units was adjusted to exclude certain non-recurring or unusual items and corporate charges.

Deferred Tax Asset Valuation Allowance. At December 31, 2003, Goodyear had valuation allowances aggregating $2.00 billion against all of its net Federal and state and some of its international subsidiaries deferred tax assets.

The net Federal and state deferred tax assets are almost entirely composed of deductions available to reduce Federal and state taxable income in future years. The international deferred tax assets include loss carryforwards as well as deductions available to reduce future international taxable income.

The valuation allowance was calculated in accordance with the provisions of SFAS 109 which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance. In accordance with SFAS 109, evidence, such as operating results during the most recent three-year period, is given more weight than our expectations of future profitability which are inherently uncertain. Goodyear’s U.S. losses in recent periods represented sufficient negative evidence to require a full valuation allowance against its net Federal and state deferred tax assets under SFAS 109. Goodyear intends to maintain a valuation allowance against its deferred tax assets until sufficient positive evidence exists to support realization of the Federal and state deferred tax assets.

Pensions and Postretirement Benefits. Goodyear’s recorded liability for pensions and postretirement benefits other than pensions is based on a number of assumptions, including future health care costs, maximum

company covered benefit costs, life expectancies, retirement rates, discount rates, long term rates of return on plan assets and future compensation levels. Certain of these assumptions are determined with the assistance of outside actuaries. Assumptions about health care costs, life expectancies, retirement rates and future compensation levels are based on past experience and anticipated future trends, including an assumption about inflation. Discount rates are based on market indicators at the time these assumptions are established. These assumptions are regularly reviewed and revised when appropriate, and changes in one or more of them could affect the amount of Goodyear’s recorded expenses for these benefits. If the actual experience differs from expectations, Goodyear’s financial position, results of operations and liquidity in future periods could be affected.

As of December 31, 2003, the aggregate projected benefit obligation for Goodyear’s pension plans was $6.88 billion. A 25 basis point change in the U.S. discount rate would impact pension expense in 2004 by approximately $8 million. As of December 31, 2003, Goodyear’s accumulated postretirement benefit obligation was $3.08 billion. A 25 basis point change in the discount rate for its main U.S. plans would impact 2004 postretirement benefit expense by approximately $2 million.

Goodyear’s U.S. pension asset returns were 23.5% for the year ended December 31, 2003. The unfunded amount of Goodyear’s projected benefit obligation at December 31, 2003 was $2.75 billion, compared to $2.46 billion (as restated) at December 31, 2002. For the year ended December 31, 2003, Goodyear recorded a $128 million benefit to Accumulated Other Comprehensive Income (Loss) for unfunded pension benefit obligations, compared to a $1.28 billion charge for the year ended December 31, 2002. If market conditions deteriorate, charges could increase in future periods.

Although subject to change, based on current estimates, Goodyear expects to make contributions to its domestic pension plans of approximately $160 million in 2004, and approximately $325 million to $350 million in 2005 to satisfy statutory minimum funding requirements. Goodyear will be subject to additional statutory minimum funding requirements after 2005. The amount of funding requirements could be substantial and will be based on a number of factors, including the value of the pension assets at the time as well as the interest rate for the relevant period.

Segment information reflects the strategic business units of Goodyear, which are organized to meet customer requirements and global competition. The Tire business is managed on a regional basis. Engineered Products and Chemical Products are managed on a global basis.

Results of operations in the Tire and Engineered Products Segments were measured based on net sales to unaffiliated customers and segment operating income. Results of operations of the Chemical Products Segment were measured based on net sales (including sales to other SBUs) and segment operating income. Segment operating income included transfers to other SBUs. Segment operating income was computed as follows: Net Sales less CGS (excluding accelerated depreciation charges, asset impairment charges and asset writeoffs) and SAG (excluding corporate administrative expenses). Segment operating income also included equity (earnings) losses in affiliates. Segment operating income did not include the previously discussed rationalization charges and certain other items.

Total segment operating income was $516.0 million in 2003, $416.7 million (as restated) in 2002 and $321.1 million (as restated) in 2001. Total segment operating margin (segment operating income divided by segment sales) in 2003 was 3.3%, compared to 2.9% (as restated) in 2002 and 2.2% (as restated) in 2001.

Management believes that total segment operating income is useful because it represents the aggregate value of income created by the Company’s SBUs and excludes items not directly related to the SBUs for performance evaluation purposes. Total segment operating income is the sum of the individual SBUs’ segment operating income as measured in accordance with Statement of Financial Accounting Standard No. 131, “Disclosures about Segments of an Enterprise and Related Information.” Refer to the note to the financial statements No. 18, Business Segments, for further information and for a reconciliation of total segment operating income to Income (loss) before income taxes.

North American Tire Segment unit sales in 2003 decreased 2.7 million units or 2.5% from 2002 and 10.8 million units or 9.6% from 2001. Replacement unit sales in 2003 decreased 1.2 million units or 1.5% from 2002 and 11.1 million units or 13.9% from 2001. Original equipment volume in 2003 decreased 1.5 million units or 4.5% from 2002 and increased 0.3 million units or 0.7% from 2001.

Revenues in 2003 increased 0.6% from 2002 and decreased 5.9% from 2001. Net sales increased in 2003 due to improved pricing and product mix of approximately $118 million, primarily in the consumer replacement and original equipment markets, and lower product related adjustments of approximately $10 million. The production slowdown by automakers and a decrease in the consumer replacement custom brand channel contributed to lower volume of approximately $86 million in 2003.

Revenues (as restated) in 2002 decreased 6.5% from 2001. Sales in 2002 decreased compared to 2001 due to reduced volume of approximately $435 million, primarily in certain segments of the replacement market and the lower tire units delivered in connection with the Ford tire replacement program initiated in 2001, partially offset by increased sales to original equipment manufacturers in 2002 as automakers increased production. Unfavorable product mix in consumer and commercial replacement of approximately $27 million also negatively impacted sales compared to 2001.

During 2002, Goodyear supplied approximately 500 thousand tire units with a segment operating income benefit of approximately $10 million in connection with the Ford tire replacement program. Ford ended the replacement program on March 31, 2002. During 2001, Goodyear supplied approximately 5 million tire units with a segment operating income benefit of approximately $95 million in connection with the Ford replacement program.

North American Tire segment operating income in 2003 decreased significantly from 2002 and 2001. Higher raw materials costs of approximately $151 million, higher manufacturing conversion costs of approximately $86 million, primarily related to contractual increases, and lower consumer volume of approximately $12 million adversely impacted 2003 segment operating income. Segment operating income benefited by approximately $66 million in savings related to rationalization programs and by approximately $37 million due to lower research and development expenditures. One-time benefits of approximately $51 million due to the change in the salaried associates’ vacation policy discussed above and insurance recoveries related to general and product liabilities of approximately $20 million also positively impacted 2003 segment operating income.

North American Tire segment operating income (as restated) decreased substantially in 2002 from 2001 due to lower tonnage and higher plant compensation costs and operating expenses of approximately $161 million (as restated). Segment operating income was also negatively impacted by lower replacement sales volume, including the Ford program, of approximately $74 million (as restated). Product mix, primarily replacement consumer and commercial, unfavorably impacted segment operating income by approximately $122 million (as restated) as did the impact of the $10 million charge related to the closure of Penske Automotive Centers. Segment operating income in 2002 was favorably impacted by a decrease in raw material costs of approximately $120 million and lower transportation costs of approximately $30 million. Lower SAG expenses, due primarily to reduced advertising and information technology expenses, of approximately $20 million (as restated) and savings from rationalization programs of approximately $13 million also benefited 2002 segment operating income. In addition, 2001 included a charge of $30 million for a proactive tire replacement program covering certain tires in service on 15-passenger vans and ambulances.

Segment operating income in 2001 included expenses related to amortization of goodwill and intangible assets with indefinite useful lives totaling $3.5 million. In accordance with SFAS 142, amortization of goodwill and intangible assets with indefinite useful lives ceased at January 1, 2002.

Segment operating income did not include net rationalization charges (credits) totaling $191.9 million in 2003, $(1.9) million in 2002 and $31.6 million in 2001. Segment operating income also did not include the loss on asset sales of $3.8 million in 2003 and the writeoff of a miscellaneous investment totaling $4.1 million in 2002.

Revenues and segment operating income in the North American Tire Segment may be adversely affected in future periods by the effects of continued competitive pricing conditions, reduced demand in the replacement market, changes in product mix, continued increases in raw material and energy prices, higher wage and benefit costs and general economic conditions.

European Union Tire Segment unit sales in 2003 increased 0.7 million units or 1.2% from 2002 and 1.1 million units or 1.9% from 2001. Replacement unit sales in 2003 increased 2.6 million units or 6.3% from 2002 and 2.3 million units or 5.4% from 2001. Original equipment volume in 2003 decreased 1.9 million units or 9.2% from 2002 and 1.2 million units or 5.7% from 2001.

Revenue in 2003 increased 18.1% from 2002 and 25.5% from 2001. Net sales increased in 2003 compared to 2002 primarily due to the favorable impact of currency translation, mostly the Euro, of approximately $587 million. Higher volume of approximately $42 million in the consumer replacement markets also positively impacted 2003 sales, but were in part offset by approximately $30 million due to negative pricing and product mix in the segment’s retail operations.

Revenues (as restated) in 2002 increased 6.2% from 2001. Revenues increased in 2002 compared to 2001 primarily due to the favorable impact of currency translation of approximately $166 million (as restated). Revenues were also positively impacted by higher volume of approximately $21 million in the original equipment, high performance and winter tire markets.

European Union Tire segment operating income increased 33.2% from 2002 and substantially from 2001. Segment operating income in 2003 increased primarily due to savings from rationalization programs of approximately $57 million and the benefit from higher production tonnage and productivity improvements of approximately $17 million. The favorable impact of currency translation of approximately $26 million, improved volume of approximately $10 million, particularly in the replacement market, and favorable pricing and product mix of approximately $5 million, mainly consumer replacement and original equipment, also benefited 2003 segment operating income. Higher raw material costs of approximately $50 million, higher pension costs of approximately $18 million and higher SAG costs due to increased advertising of approximately $13 million negatively impacted 2003 segment operating income. In addition, 2003 included a charge of approximately $13 million for an unfavorable court settlement.

Segment operating income (as restated) increased substantially in 2002 from 2001. Segment operating income increased in 2002 due primarily to lower raw material costs of approximately $28 million, savings from rationalization programs of approximately $15 million, higher production tonnage and cost containment programs of approximately $13 million (as restated), the favorable impact of currency translation of approximately $6 million and higher volume of approximately $5 million. Higher SAG expenses of approximately $19 million (as restated) adversely impacted segment operating income in 2002.

Segment operating income in 2001 included expenses related to amortization of goodwill and intangible assets with indefinite useful lives totaling $13.0 million. In accordance with SFAS 142, amortization of goodwill and intangible assets with indefinite useful lives ceased at January 1, 2002.

Segment operating income did not include net rationalization charges totaling $54.3 million and a gain on asset sales of $2.1 million in 2003, net rationalization credits totaling $(0.4) million (as restated) and gains on asset sales of $13.6 million (as restated) in 2002, and net rationalization charges totaling $84.2 million (as restated) and gains on asset sales of $18.4 million (as restated) in 2001.

Revenues and segment operating income in the European Union Tire Segment may be adversely affected in future periods by the effects of continued competitive pricing conditions, changes in mix, unanticipated increases in raw material and energy prices, currency translation and the general economic slowdown in the region.

Eastern Europe, Africa and Middle East Tire Segment (“Eastern Europe Tire”) unit sales in 2003 increased 1.8 million units or 11.0% from 2002 and 3.9 million units or 28.3% from 2001. Replacement unit sales in 2003 increased 1.5 million units or 11.2% from 2002 and 3.6 million units or 33.3% from 2001. Original equipment volume in 2003 increased 0.3 million units or 10.5% from 2002 and 0.3 million units or 8.3% from 2001.

Revenue in 2003 increased 33.0% from 2002 and 52.7% from 2001. Net sales increased in 2003 compared to 2002 due largely to the favorable impact of currency translation, primarily in South Africa and Slovenia, of approximately $156 million. Higher volume in both the consumer replacement and original equipment markets of approximately $62 million and improved pricing and product mix, due primarily to higher sales of winter and high performance tires, of approximately $48 million also positively impacted 2003 revenues.

Revenues in 2002 increased 14.8% from 2001. Revenues in 2002 increased from 2001 due to higher consumer and commercial replacement volume of approximately $88 million, improved pricing and product mix, including improved retail performance, of approximately $41 million. Currency translation, primarily in South Africa, adversely impacted revenue in 2002 by approximately $25 million.

Eastern Europe Tire segment operating income in 2003 increased 57.3% from 2002 and significantly from 2001. Segment operating income increased in 2003 due to improved pricing and product mix of approximately $33 million, higher volume of approximately $24 million and the positive impact of currency translation of approximately $15 million, mainly in South Africa and Slovenia. Pricing, product mix and volume benefited from price improvements and increased sales of winter and high performance tires. Higher raw material costs of approximately $12 million and higher SAG costs of approximately $12 million, largely wages, benefits and advertising, adversely impacted segment operating income in 2003.

Segment operating income (as restated) in 2002 increased significantly from 2001. Segment operating income in 2002 increased due to the benefit of cost reduction programs and higher levels of plant utilization of approximately $42 million (as restated), a change in mix to higher margin replacement tires of approximately $20 million and higher replacement volume of approximately $19 million. Segment operating income was also favorably affected by lower raw material costs of approximately $7 million and the impact of currency translation of approximately $6 million mainly in South Africa. Higher SAG costs of approximately $13 million adversely impacted segment operating income in 2002 mainly due to expanded operations and increased distribution costs.

Segment operating income in 2001 included expenses related to amortization of goodwill totaling $4.2 million. In accordance with SFAS 142, amortization of goodwill ceased at January 1, 2002.

Segment operating income did not include net rationalization charges (credits) totaling $(0.1) million in 2003, $(0.4) million in 2002 and $11.2 million in 2001.

Revenues and segment operating income in the Eastern Europe Tire Segment may be adversely affected in future periods by the effects of continued competitive pricing conditions, changes in mix, unanticipated increases in raw material and energy prices, continued volatile economic conditions and currency translation.

Latin American Tire Segment unit sales in 2003 decreased 1.2 million units or 6.3% from 2002 and 1.3 million units or 6.5% from 2001. Replacement unit sales in 2003 increased 0.1 million units or 0.4% from 2002 and 0.3 million units or 2.1% from 2001. Original equipment volume in 2003 decreased 1.3 million units or 23.1% from 2002 and 1.6 million units or 26.8% from 2001.

Revenue in 2003 increased 9.8% from 2002 and 2.7% from 2001. Net sales increased in 2003 due to improvements in price and product mix of approximately $212 million. The impact of foreign currency translation of approximately $79 million, mainly in Brazil and Venezuela, and lower volume of approximately $38 million, primarily in the consumer and commercial original equipment segments, negatively impacted 2003 sales.

Revenues (as restated) in 2002 decreased 6.5% from 2001. Revenues in 2002 were adversely impacted by approximately $227 million due to the effects of currency translation, particularly in Argentina, Brazil and Venezuela. Revenues were favorably impacted by price increases and improved replacement consumer and commercial product mix of approximately $158 million to partially offset the effect of currency translation.

Latin American Tire segment operating income in 2003 increased 38.1% from 2002 and 73.6% from 2001. Segment operating income in 2003 was favorably affected by improvements in pricing and product mix of approximately $134 million and higher replacement volume of approximately $3 million. Partially offsetting these improvements were higher raw material costs of approximately $50 million, the negative impact of currency translation of approximately $20 million, mainly Brazil and Venezuela, higher conversion costs related to utilities of approximately $12 million and increased SAG costs of approximately $11 million, mainly blimp-related expenses, increased reserve for doubtful accounts and increased wages and benefits due to inflationary cost increases.

Latin American Tire segment operating income (as restated) in 2002 increased 25.7% from 2001. Segment operating income in 2002 was favorably impacted by approximately $45 million related to pricing and product mix, approximately $20 million related to lower raw material costs and higher sales volume, primarily in the replacement market, of approximately $4 million. Segment operating income in 2002 was adversely impacted by the effects of currency translation of approximately $46 million, mainly in Argentina, Brazil and Venezuela, and increased SAG expenses of approximately $3 million due to higher wages and benefits largely due to inflationary cost increases.

Segment operating income in 2001 included expenses related to the amortization of goodwill totaling $0.1 million. In accordance with SFAS 142, amortization of goodwill ceased at January 1, 2002.

Segment operating income did not include net rationalization charges totaling $10.0 million and the gain from asset sales of $2.0 million in 2003, the gain from the sale of land and buildings in Mexico totaling $13.7 million in 2002 and rationalization charges totaling $0.2 million in 2001.

Revenues and segment operating income in the Latin American Tire Segment may be adversely affected in future periods by the effects of continued competitive pricing conditions, changes in mix, unanticipated increases in raw material and energy prices, continued volatile economic and government conditions, future adverse economic conditions in the region and currency translation.

Asia Tire Segment unit sales in 2003 increased 0.6 million units or 4.7% from 2002 and 1.3 million units or 10.5% from 2001. Replacement unit sales in 2003 decreased 0.1 million units or 1.0% from 2002 and increased 0.3 million units or 2.6% from 2001. Original equipment volume in 2003 increased 0.7 million units or 18.9% from 2002 and 1.0 million units or 31.3% from 2001.

Revenue in 2003 increased 9.5% from 2002 and 17.6% from 2001. Net sales increased in 2003 due to increased volume of approximately $29 million primarily a result of strong original equipment demand. Favorable currency translation, largely in India and Australia, of approximately $16 million also improved net sales.

Revenues (as restated) in 2002 increased 7.4% from 2001. Revenues in 2002 increased compared to 2001 due primarily to higher original equipment and replacement volumes of approximately $26 million and improved selling prices on replacement consumer and commercial tires of approximately $9 million. The effects of currency translation also had a favorable impact on sales of approximately $2 million in 2002.

Asia Tire segment operating income in 2003 increased 14.0% from 2002 and substantially from 2001. Segment operating income in 2003 increased primarily due to improvements in consumer and farm product mix and higher selling prices in both replacement and original equipment markets of approximately $14 million, favorable currency translation of approximately $8 million, and increased volume of approximately $7 million due to strong original equipment demand. Segment operating income in 2003 was favorably impacted by approximately $3 million due to increased sales of miscellaneous products and improved equity income. Higher raw material costs of approximately $27 million negatively impacted 2003 segment operating income.

Segment operating income (as restated) in 2002 increased substantially from 2001. Segment operating income in 2002 increased compared to 2001 due to lower raw material costs of approximately $8 million, improved replacement consumer and commercial pricing and product mix of approximately $7 million, higher original equipment and replacement volume of approximately $4 million and lower conversion costs as a result of cost containment programs of approximately $3 million (as restated). Segment operating income in 2002 improved due to the favorable effects of currency translation of approximately $2 million and savings from rationalization actions of approximately $3 million. Segment operating income in 2002 was adversely affected by higher SAG expenses of approximately $5 million.

Segment operating income in 2001 included expenses related to the amortization of goodwill totaling $1.7 million (as restated). In accordance with SFAS 142, amortization of goodwill ceased at January 1, 2002.

Segment operating income did not include the gain from asset sales of $2.1 million in 2003, rationalization charges (credits) totaling $(1.7) million in 2002 and $47.0 million (as restated) in 2001.

Revenues and segment operating income in the Asia Tire Segment may be adversely affected in future periods by the effects of continued competitive pricing conditions, changes in mix, unanticipated increases in raw material and energy costs and currency translation.

In addition, Goodyear owns a 50% interest in SPT, the largest tire manufacturer, marketer and exporter in Australia and New Zealand. Results of operations of SPT are not reported in segment results, and are reflected in Goodyear’s Consolidated Statement of Operations using the equity method.

SPT net sales in 2003 increased 22.6% from 2002 and 33.4% from 2001. SPT net sales in 2003 increased from 2002 primarily due to higher sales volume and the strengthening of the Australian dollar against the U.S. dollar. SPT net sales in 2002 increased from 2001 due to the strengthening of the Australian dollar against the U.S. dollar.

SPT operating income in 2003 increased substantially from 2002 and 2001. SPT operating income in 2003 increased from 2002 and in 2002 from 2001 due to the benefits of the rationalization programs in the prior years.

SPT operating income did not include net rationalization charges (credits) totaling $4.9 million in 2003, $(2.1) million in 2002 and $48.0 million in 2001.

SPT debt totaled $196.9 million at December 31, 2003, of which $72.0 million was payable to Goodyear. SPT debt totaled $131.3 million at December 31, 2002, of which $26.3 million was payable to Goodyear.

Engineered Products Segment sales in 2003 increased 6.9% from 2002 and 7.3% from 2001. Revenues in 2003 increased from 2002 due to the favorable impact of currency translation of approximately $39 million, mainly in Canada, South Africa and Europe, and improved volume of approximately $30 million as a result of increased military sales. Improved pricing and product mix, mainly industrial, of approximately $8 million also positively impacted 2003 revenues.

Revenues in 2002 increased from 2001 due largely to increased volume of approximately $36 million, mainly military and custom products. Partially offsetting this variance compared to 2001 is the unfavorable effects of currency translation of approximately $24 million, mainly in Brazil, and unfavorable product mix of approximately $8 million.

Engineered Products segment operating income in 2003 increased from 2002 and 2001. Segment operating income in 2003 increased 16.1% from 2002 due to volume increases of approximately $7 million related to military sales, lower raw material costs of approximately $5 million, and favorable effects of currency translation of approximately $5 million. The change in salaried vacation policy described above also favorably impacted 2003 segment operating income by approximately $8 million. Segment operating income was adversely impacted by unfavorable price/mix of approximately $11 million due to increased sales of original equipment and heavy duty product and higher SAG costs, excluding the impact of the vacation policy change, of approximately $9 million, primarily related to increased sales efforts.

Segment operating income (as restated) in 2002 increased significantly from 2001 due to improved productivity of approximately $13 million (as restated), volume increases of approximately $12 million and decreased SAG expenses of approximately $12 million (as restated) primarily due to aggressive cost containment measures. Segment operating income in 2002 was adversely impacted by an unfavorable change in price/mix of approximately $5 million and the effects of currency translation of approximately $3 million.

Segment operating income in 2001 included expenses related to amortization of goodwill totaling $1.0 million. In accordance with SFAS 142, amortization of goodwill ceased at January 1, 2002.

Segment operating income did not include a loss from the sale of assets totaling $6.3 million and rationalization charges of $29.4 million in 2003, a gain from the sale of land and buildings totaling $0.6 million and net rationalization charges of $4.6 million in 2002 and net rationalization charges of $1.5 million in 2001.

In conjunction with the restatement, certain adjustments related to Engineered Products were recorded. It was not possible to allocate the amount of this adjustment to applicable periods and accordingly, Goodyear recorded substantially all of this adjustment in the first quarter of 2003. This account reconciliation adjustment includes the write-off of $21.3 million consisting of $3.7 million in intercompany accounts and $17.6 million related to payables and other accounts. Segment operating income was negatively impacted by approximately $19 million in 2003 due to these adjustments. Several factors relating to the Company’s ERP systems implementation resulted in EPD’s inability to locate or recreate account reconciliations for prior periods.

Revenues and segment operating income in the Engineered Products Segment may be adversely affected in future periods by lower original equipment demand, competitive pricing pressures, expected continuing unfavorable economic conditions in certain markets, adverse economic conditions globally in the mining, construction and agriculture industries, unanticipated increases in raw material and energy prices, anticipated higher wage and benefit costs and currency translation.

Chemical Products Segment sales in 2003 increased 29.8% from 2002 and 17.8% from 2001. Approximately 63% of the total pounds of synthetic materials sold by the Chemical Products segment in 2003 were to Goodyear’s other segments. Natural rubber plantations, a rubber processing facility and natural rubber purchasing operations are included in the Chemical Products Segment.

Revenues in 2003 increased from 2002 largely due to higher net selling prices resulting from the pass through of increased raw material and energy costs of approximately $145 million and increases in synthetic rubber volume of approximately $42 million. Also favorably impacting 2003 revenues were higher pricing and volume from the natural rubber operations of approximately $76 million and the relatively strong Euro of approximately $18 million.

Revenues (as restated) in 2002 decreased from 2001 primarily due to the impact of selling the Specialty Chemical Business in December 2001, which contributed approximately $127 million of revenue in 2001. Revenues in 2002 were also unfavorably impacted approximately $33 million by lower net selling prices, which were caused by decreased raw material costs. 2002 revenues were favorably impacted approximately $37 million due to increased revenue for natural rubber operations, approximately $20 million due to increased synthetic volume, and approximately $6 million in favorable currency translation largely a result of the strong Euro.

Chemical Products segment operating income in 2003 increased significantly from 2002 and 2001. Segment operating income increased in 2003 compared to 2002 primarily due to higher net selling prices of approximately $145 million, currency translation of approximately $18 million and improved pricing and

volume for natural rubber operations of approximately $16 million. Increased raw material costs of approximately $127 million and increased conversion costs of approximately $22 million unfavorably impacted 2003 segment operating income.

The Specialty Chemical Business was sold in December 2001. Segment operating income (as restated) in 2002 increased substantially from 2001 despite the absence of approximately $12 million contributed by the Specialty Chemical Business in 2001. Segment operating income in 2002 increased primarily due to lower raw material costs of approximately $46 million and lower conversion costs of approximately $33 million (as restated) partially offset by lower net selling prices of approximately $33 million.

Segment operating income did not include gains on asset sales of $27.4 million in 2001.

The Company is exploring the possible sale of its Chemical business, or portions thereof, to both enhance its financial flexibility and focus future investments on its core business.

Revenues and segment operating income in the Chemical Products Segment may be adversely affected in future periods by competitive pricing pressures, lower aggregate demand levels for its products and unanticipated increases in raw material and energy prices.

At December 31, 2003, the Company had $1.56 billion in cash and cash equivalents as well as $335.0 million of unused availability under its various credit agreements. Based upon the Company’s projected operating results, the Company expects that cash flow from operations together with available borrowing under its restructured credit facilities and other sources of liquidity will be adequate to meet the Company’s anticipated cash and cash equivalent requirements including working capital, debt service and capital expenditures through December 31, 2004. However, several contingencies could affect the Company’s ability to meet its future obligations, including (i) the failure to successfully implement its turnaround strategy for the North American Tire Segment and restore the segment to profitability; (ii) a significant adverse ruling or development in the Company’s legal proceedings, especially with respect to the Company’s Entran II litigation; (iii) a further increase in our interest expense from an unexpected and significant increase in interest rates; and (iv) the failure to refinance certain of our credit facilities maturing in 2005 and 2006.

Net cash used in operating activities was $306.7 million during 2003, as reported on the Company’s Consolidated Statement of Cash Flows. Working capital increased $2.07 billion to $3.30 billion at December 31, 2003, from $1.23 billion (as restated) at December 31, 2002, due primarily to increased cash and cash equivalents and accounts receivable. The increased accounts receivable is due primarily to the termination of Goodyear’s domestic accounts receivable securitization program effective April 1, 2003. For further information, refer to the note to the financial statements, No. 5, Accounts and Notes Receivable.

Net cash used in investing activities was $236.0 million during 2003. Capital expenditures in 2003 were $375.4 million, of which $221.2 million was used on projects to increase capacity and improve productivity and $154.2 million was used for tire molds and various other projects. Capital expenditures have been reduced in response to current economic and business conditions. Capital expenditures are expected to approximate $488 million in 2004, including approximately $294 million for manufacturing improvements and approximately $194 million for molds and various other projects.

Depreciation and amortization in 2003 included approximately $78 million of accelerated depreciation charges related to the 2003 Huntsville and Wolverhampton restructuring plans. Depreciation and amortization in 2001 included $29.1 million (as restated) of amortization related to goodwill and intangible assets with indefinite useful lives that are no longer amortized in accordance with SFAS 142.

Investing activities in 2003 included net proceeds from the sale of assets in the United States of $85.8 million, in Latin America of $2.0 million, in Asia of $2.1 million and in Europe of $14.5 million. Included in the United States total of $85.8 million is $82.9 million for the sale of 20.8 million shares of Goodyear’s investment in SRI. Goodyear also purchased Arkansas Best Corporation’s 19% ownership interest in Wingfoot Commercial Tire Systems, LLC (“Wingfoot”) for $71.2 million. Wingfoot was a joint venture company formed by Goodyear and Arkansas Best Corporation to sell and service commercial truck tires, provide retread services and conduct related business. Goodyear now owns 100% of Wingfoot.

At December 31, 2003, Goodyear had binding commitments for raw materials and investments in land, buildings and equipment of $520.1 million and off-balance-sheet financial guarantees written and other commitments totaling $74.4 million.

For further information on investing activities, refer to the note to the financial statements No. 8, Investments.

Certain of Goodyear’s affiliates are restricted from remitting funds to the parent company by means of dividends, advances or loans, primarily due to credit facility restrictions currently in place in those locations. At December 31, 2003, approximately $259 million of net assets were restricted.

On April 1, 2003, the Company completed a comprehensive restructuring and refinancing of its bank credit and receivables securitization facilities which replaced a total of $2,938 million in finance facilities with a total of $3,345 million of the following finance facilities:


	•	$750 million Senior Secured U.S. Revolving Credit Facility due April 2005;

	•	$645 million Senior Secured U.S. Term Facility due April 2005;

	•	$650 million Senior Secured European Facilities due April 2005; and

	•	$1.30 billion Senior Secured Asset-Backed Facilities due March 2006.

With the exception of approximately $700 million in domestic accounts receivable securitizations and $63 million in Canadian accounts receivable securitizations, each of the replaced finance facilities was unsecured.

The accounts receivable and debt that are subject to the new $1.30 billion asset-backed facilities are included on Goodyear’s consolidated balance sheet at December 31, 2003. Accounts receivable subject to the terminated $763 million domestic and Canadian accounts receivable programs were not included on the consolidated balance sheet at December 31, 2002 due to the securitization programs which resulted in off-balance-sheet treatment.

At December 31, 2003, the Company had $125.6 million of committed credit available under the facilities described above. In aggregate, the Company had committed and uncommitted credit facilities of $5.90 billion available at December 31, 2003, of which $335.0 million were unused.

Subsequent to the fiscal year end, on February 23, 2004, we completed the addition of a $650 million tranche to our $1.30 billion Senior Secured Asset-Backed Facility. Approximately $335 million of the proceeds of the tranche were used to partially reduce amounts outstanding under the U.S. term facility discussed below. On March 12, 2004, we completed a private offering of $650 million in senior secured notes, consisting of $450 million of 11% senior secured notes due 2011 and $200 million of floating rate notes at LIBOR plus 8%. The proceeds of the notes were used to repay the remaining outstanding amount under the U.S. term facility, to permanently reduce our commitment under the U.S. revolving credit facility by $70 million, and for general corporate purposes. In connection with these financing activities, each of the above restructured credit facilities was amended on February 19, 2004. The Company’s credit agreements were further amended on April 16, 2004, to extend until May 19, 2004, the deadline for filing the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 and on May 18, 2004, to extend until June 4, 2004, the deadline for providing audited financial statements for the year ended December 31, 2003 of Goodyear Dunlop Tires Europe B.V. to lenders.

As of December 31, 2003, the balance due on the U.S. term facility was $583.3 million due to a partial pay down of the balance during the second quarter. The U.S. term facility was originally scheduled to mature on April 30, 2005. In connection with our recent financing activities discussed above, on March 12, 2004, all outstanding amounts under the facility were prepaid and the facility was retired.

The Company’s $750 million revolving credit facility matures on April 30, 2005. Up to $600 million of the facility is available for the issuance of letters of credit. Under the facility, as of December 31, 2003, there were borrowings of $200.0 million and $485.4 million in letters of credit issued. The Company pays an annual commitment fee of 75 basis points on the undrawn portion of the commitment under the U.S. revolving credit facility. On March 12, 2004, in connection with our recent financing activities, our commitment under this facility was permanently reduced to $680 million.

We may obtain loans under the U.S. revolving credit facility bearing interest at LIBOR plus 400 basis points or an alternative base rate (the higher of JPMorgan’s prime rate or the federal funds rate plus 50 basis points) plus 300 basis points.

The U.S. revolving credit facility contains certain covenants that, among other things, limit our ability to incur additional secured indebtedness (including a limit of 275 million Euros in accounts receivable transactions), make investments, and sell assets beyond specified limits. The facility prohibits us from paying dividends on our common stock. We must also maintain a minimum consolidated net worth (as such term is defined in the U.S. facility) of at least $2.80 billion and $2.50 billion for quarters ending in 2003 and 2004, respectively, and $2.00 billion for the quarter ending March 31, 2005.

The facilities have customary representations, warranties and covenants including, as a condition of borrowing, material adverse change representations in the Company’s financial condition since December 31, 2002. In addition, under the facilities, Goodyear was not permitted to fall below a ratio of 2.25 to 1.00 of consolidated EBITDA to consolidated interest expense (as such terms are defined in each of the restructured credit facilities) for any period of four consecutive fiscal quarters. On February 19, 2004, in connection with an amendment to the credit facilities, the ratio was reduced to 2.00 to 1.00. In addition, Goodyear’s ratio of consolidated senior secured indebtedness to consolidated EBITDA (as such terms are defined in each of the restructured credit facilities) is not permitted to be greater than 4.00 to 1.00 at any time. As of December 31, 2003, the Company was in compliance with the financial covenants under the credit facilities.

Consolidated EBITDA is a non-GAAP financial measure that is presented not as a measure of operating results, but rather as a measure of the Company’s ability to service debt. It should not be construed as an alternative to either (i) income from operations or (ii) cash flows from operating activities. The Company’s failure to comply with the financial covenants in the restructured credit facilities could have a material adverse effect on Goodyear’s liquidity and operations. Accordingly, management believes that the presentation of consolidated EBITDA will provide investors with information needed to assess the Company’s ability to continue to comply with these covenants.

The following table presents the calculation of EBITDA and Consolidated EBITDA for 2003. Other companies may calculate similarly titled measures differently than Goodyear does. Certain line items are presented as defined in the restructured credit facilities, and do not reflect amounts as presented in the Consolidated Statement of Operations.

The U.S. facilities also limit the amount of capital expenditures the Company may make to $360 million, $500 million, and $500 million in 2003, 2004 and 2005 ($200 million through April 30, 2005), respectively. The amounts of permitted capital expenditures may be increased by the amount of net proceeds retained by the Company from permitted asset sales and equity and debt issuances after application of the prepayment requirement in the U.S. term facility described above. As a result of certain activities, the capital expenditure limit for 2003 was increased from $360 million to approximately $381 million. In addition, to the extent the Company does not reach the limit of permitted capital expenditures in any given year, such shortfall may be carried over into the next year. The capital expenditure limit for 2004 has increased approximately $270 million as a result of capital market transactions completed during the first quarter of 2004 and carryovers from 2003.

Goodyear Dunlop Tires Europe B.V. (“GDTE”) is party to a $250 million senior secured revolving credit facility and a $400 million senior secured term loan facility. These facilities mature on April 30, 2005. As of December 31, 2003, there were borrowings of $250.0 million and $400.0 million under the European revolving and term facilities, respectively.

Consistent with the covenants applicable to Goodyear in the U.S. facilities, the European facilities contain certain covenants applicable to GDTE and its subsidiaries which, among other things, limit GDTE’s ability to incur additional indebtedness (including a limit of 275 million Euros in accounts receivable transactions), make investments, sell assets beyond specified limits, pay dividends and make loans or advances to Goodyear companies that are not subsidiaries of GDTE. The European facilities also contain certain representations, warranties and covenants applicable to the Company identical to those in the U.S. facilities. The European facilities also limit the amount of capital expenditures that GDTE may make to $180 million, $250 million and $100 million in 2003, 2004 and 2005 (through April 30), respectively.

Subject to the provisions in the European facilities and agreements with Goodyear’s joint venture partner, SRI (which include limitations on loans and advances from GDTE to Goodyear and a requirement that transactions with affiliates be consistent with past practices or on arms-length terms), GDTE is permitted to transfer funds to Goodyear.

The Company has also entered into senior secured asset-backed credit facilities in an aggregate principal amount of $1.30 billion, consisting of a $500 million revolving credit facility and an $800 million term loan facility. As of December 31, 2003, there were borrowings of $389.0 million and $800.0 million under the revolving credit and term loan asset-backed facilities, respectively. The facilities mature on March 31, 2006 and contain certain representations, warranties and covenants which are materially the same as those in the U.S. facility, with capital expenditures of $500 million and $150 million permitted in 2005 and 2006 (through March 31), respectively. Goodyear must also maintain a minimum consolidated net worth (as such term is defined in the U.S. facilities) of at least $2.80 billion and $2.50 billion for quarters ending in 2003 and 2004, respectively, and $2.00 billion for the quarter ending March 31, 2005. On February 20, 2004, the Company added a $650 million tranche to the existing $1.30 billion facility.

As of December 31, 2003, Goodyear had short term committed and uncommitted bank credit arrangements totaling $347.0 million, of which $209.3 million were unused. The continued availability of these arrangements is at the discretion of the relevant lender, and a portion of these arrangements may be terminated at any time.

Various international subsidiaries of the Company have also established accounts receivable continuous sales programs whereunder these subsidiaries may receive proceeds from the sale of certain of their receivables. These subsidiaries retain servicing responsibilities.

As of December 31, 2003, international subsidiaries of Goodyear had $122.8 million of available borrowings under non-domestic accounts receivable securitization facilities.

As of December 31, 2003, the amount outstanding and fully utilized under the program maintained by GDTE totaled $104.2 million. The Company is currently working to refinance this facility and the commitment period has been extended to September 2004. If the Company is unable to replace this facility, the Company would pursue short term financing alternatives.

In addition to the $104.2 million of GDTE receivable programs, the Company had an additional $18.6 million outstanding under other non-domestic receivable financing programs.

At December 31, 2003, the net proceeds for all sales of receivables by Goodyear were $122.8 million. Net cash outflows of $831.8 million were recorded in 2003 for transfers of accounts receivable under these and other programs. For further information, refer to the note to the financial statements No. 5, Accounts and Notes Receivable.

While Goodyear does not request ratings from Fitch, the rating agency rates the Company’s secured facilities “B” and the Company’s unsecured debt “CCC+.” Moody’s currently maintains a negative outlook for the Company, while S&P has placed us on “credit watch.” Unless the Company’s debt credit ratings and operating performance improve, its access to the credit markets in the future may be limited. Moreover, a further reduction in the Company’s credit ratings would further increase the cost of any financing initiatives the Company may pursue.

As a result of these ratings and other related events, the Company believes that its access to capital markets may be limited. In addition, financing and related expenses under some existing arrangements have increased as a result of the Company’s non-investment grade ratings.

A rating reflects only the view of a rating agency, and is not a recommendation to buy, sell or hold securities. Any rating can be revised upward or downward at any time by a rating agency if such rating agency decides that circumstances warrant such a change.

The Company is currently implementing a turnaround strategy for the North American Tire Segment that will require the Company to 1) stabilize margins and market shares, 2) simplify the sales and supply chain process, 3) execute key cost-cutting, brand and distribution strategies and 4) grow the business through new product introductions and new sales channels. The ability of the Company to successfully implement its cost-cutting strategy is also dependent upon its ability to realize anticipated savings and operational benefits from its recently ratified new master contract with the USWA. There is no assurance that the Company will successfully implement this turnaround strategy. In particular, this strategy and the Company’s liquidity could be affected adversely by trends that affected the North American Tire Segment negatively in 2003 and prior years, including industry overcapacity which limits pricing leverage, weakness in the replacement tire market, increased competition from low cost manufacturers and a related decline in Goodyear’s market share, weak U.S. economic conditions, and increases in medical and pension costs. In addition, the turnaround strategy has been, and may continue to be, impacted negatively by higher than expected raw materials and energy prices. The price of natural rubber, one of our most important raw materials, increased approximately 36% in 2003 and is expected to increase in 2004. In addition, the price of oil, an important feedstock for several other raw materials, increased approximately 25% in 2003. Our turnaround plan could continue to be impacted by higher raw material costs. Furthermore, market conditions may prevent us from passing these increases on to our customers through timely price increases.

locations as well as restrictions imposed by local laws and applicable credit facility agreements. As of December 31, 2003, approximately $215 million of cash was held in locations where significant tax or legal impediments would make it difficult or costly to execute monetary transfers. Based upon the Company’s projected operating results, the Company expects that cash flow from operations together with available borrowing under its restructured credit facilities and other sources of liquidity will be adequate to meet the Company’s anticipated cash and cash equivalent requirements including working capital, debt service and capital expenditures through December 31, 2004.

At December 31, 2003, the Company also had $335.0 million of unused availability under its various credit agreements.

The Company’s restructured and refinanced credit facilities mature in 2005 and 2006 and the Company would have to refinance these facilities in the capital markets if they were not renewed by the banks. After taking into account the paydown of certain obligations in connection with recent financing activities, the aggregate amount of long-term debt maturing in 2005 and 2006 is $1,343 million and $1,481 million, respectively. Because of our debt ratings, recent operating performance and other factors, access to such markets cannot be assured. The Company’s ongoing ability to access the capital markets is highly dependent on successfully implementing its North American Tire turnaround strategy. In addition to facilitating access to the capital markets, successful implementation of the turnaround strategy is also crucial to ensuring that the Company has sufficient cash flow from operations to meet its obligations. There is no assurance that the Company will be successful in implementing its turnaround strategy. Failure to complete the turnaround strategy successfully could have a material adverse effect on the Company’s financial position, results of operations and liquidity.

Although the Company is highly leveraged, it may become necessary for it to incur additional debt to ensure that it has adequate liquidity. This additional debt would need to be secured or unsecured. A substantial portion of the Company’s assets are already subject to liens securing its indebtedness. The Company is limited in its ability to pledge its remaining assets as security for additional secured indebtedness. In addition, unless the Company’s financial performance improves, its ability to raise unsecured debt may be significantly limited.

Under the Company’s master contract with the USWA, the Company committed to consummate the issuance or placement of at least $250 million of debt securities and at least $75 million of equity or equity-linked securities by December 31, 2003. It did not meet this commitment. As a result, the USWA may file a grievance and strike. In the event of a strike, the Company’s financial position, results of operations and liquidity could be materially adversely affected. The Company has also committed to launch, by December 1, 2004, a refinancing of its U.S. term loan and revolving credit facilities due in April 2005, with loans or securities having a term of at least three years. If the Company fails to complete this refinancing commitment, the USWA would have the right to strike and the Company would be required to pay each covered union employee (approximately 13,700 as of December 31, 2003) $1,000 and each covered union retiree (approximately 13,800 as of December 31, 2003) $500. In addition, if the Company failed to comply with the covenants in its credit agreements, the lenders would have the right to cease further loans to the Company and demand the repayment of all outstanding loans under these facilities.

The Company is subject to various legal proceedings, including the Entran II litigation described in Note 20, Commitments and Contingent Liabilities. The ultimate cost of disposing of Entran II claims is dependent upon a number of factors, including the Company’s ability to satisfy the contingencies in a proposed settlement, the number of claimants that opt out of any settlement, final approval of the terms of the settlement at a fairness hearing, Goodyear’s ability to resolve claims not subject to the settlement (including the cases in which the Company received adverse judgments), and, in the event Goodyear fails to consummate the proposed settlement for any reason, future judgments by courts in other currently pending or yet unasserted actions. Depending on the resolution of these uncertainties, the costs associated with Entran II claims could be significant and could have a material adverse effect on the Company’s results of operations, financial position and liquidity in future periods. In the event the Company wishes to appeal any future adverse judgment in any Entran II or other proceeding, it would be required to post an appeal bond with the relevant

court. If the Company does not have sufficient availability under its U.S. revolving credit facility to issue a letter of credit to support an appeal bond, it may be required to pay down borrowings under the facility in order to increase the amount available for issuing letters of credit or deposit cash collateral in order to stay the enforcement of the judgment pending an appeal. A significant deposit of cash collateral may have a material adverse effect on the Company’s liquidity.

A substantial portion of Goodyear’s borrowings are at variable rates of interest and expose the Company to interest rate risk. If interest rates rise, the Company’s debt service obligations would increase. An unanticipated significant rise in interest rates could have a material adverse effect on the Company’s liquidity in future periods.

In addition, Goodyear expects to make contributions to its pension plans of approximately $210 million in 2004. Contributions to domestic pension plans are expected to be approximately $160 million in 2004 and approximately $325 million to $350 million in 2005 in order to satisfy statutory minimum funding requirements.

On February 4, 2003, the Company announced that it eliminated its quarterly cash dividend. The dividend reduction was decided on by the Board of Directors in order to conserve cash. Under our restructured credit agreements, we are not permitted to pay dividends on our common stock.

The following table presents, at December 31, 2003, Goodyear’s obligations and commitments to make future payments under contracts and contingent commitments.


(1)	Long term debt payments include notes payable and reflect long term debt maturities as of December 31, 2003. In connection with the Company’s financing activities in the first quarter of 2004, our long term debt commitments in 2005 and 2006 were reduced by $665 million and $64 million, respectively.

(2)	The present value of capital lease obligations is $48.1 million.

(3)	Operating leases do not include minimum sublease rentals of $43.8 million, $33.7 million, $25.0 million, $18.0 million, $12.2 million, and $13.6 million in each of the periods above, respectively, for a total of $146.3 million. Net operating lease payments total $1,316.1 million. The present value of operating leases is $812.3 million. The operating leases relate to, among other things, computers and office equipment, real estate and miscellaneous other assets. No asset is leased from any related party.

(4)	Binding commitments are for normal operations of the Company and include investments in land, buildings and equipment and raw materials purchased through short term supply contracts at fixed prices or at formula prices related to market prices or negotiated prices.

In addition to the commitments summarized above, Goodyear is required to make contributions to its defined benefit pension plans. These contributions are required under the minimum funding requirements of the Employee Retirement Pension Plan Income Security Act (“ERISA”). Subject to change, Goodyear expects to make contributions to its domestic pension plans of approximately $160 million in 2004 and approximately $325 million to $350 million in 2005 in order to satisfy these statutory minimum funding requirements. These estimates reflect legislation passed by Congress in 2004 providing for changes to ERISA

funding requirements to defer certain contributions to subsequent periods. Due to uncertainties regarding significant assumptions involved in estimating future required contributions to its defined benefit pension plans, such as interest rate levels and the amount and timing of asset returns, Goodyear is not able to reasonably estimate its future required contributions beyond 2005.

In addition, the following contingent contractual obligations, the amounts of which can not be estimated, are not included in the table above:


	•	The terms and conditions of Goodyear’s global alliance with Sumitomo as set forth in the Umbrella Agreement between Goodyear and Sumitomo provide for certain minority exit rights available to Sumitomo commencing in 2009. In addition, the occurrence of certain other events enumerated in the Umbrella Agreement, including certain bankruptcy events or changes in control of Goodyear, could trigger a right of Sumitomo to require Goodyear to purchase these interests immediately. Sumitomo’s exit rights, in the unlikely event of exercise, could require Goodyear to make a substantial payment to acquire Sumitomo’s interest in the alliance.

	•	Pursuant to an agreement entered into in 2001, Ansell Ltd. (Ansell) has the right, during the period beginning August 2005 and ending one year later, to require Goodyear to purchase Ansell’s 50% interest in SPT at a formula price based on the earnings of SPT. If Ansell does not exercise its right, Goodyear may require Ansell to sell its interest to Goodyear during the 180 days following the expiration of Ansell’s right at a price established using the same formula.

	•	Pursuant to an agreement entered into in 2001, Goodyear shall purchase minimum amounts of carbon black from a certain supplier from January 1, 2003 through December 31, 2006, at agreed upon base prices that are subject to quarterly adjustments for changes in raw material costs and natural gas costs and a one time adjustment for other manufacturing costs.

The Company does not engage in the trading of commodity contracts or any related derivative contracts. The Company generally purchases raw materials and energy through short term, intermediate and long term supply contracts at fixed prices or at formula prices related to market prices or negotiated prices. The Company will, however, from time to time, enter into contracts to hedge its energy costs.

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated entity under which a company has (1) made guarantees, (2) a retained or a contingent interest in transferred assets, (3) an obligation under certain derivative instruments or (4) any obligation arising out of a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the company, or that engages in leasing, hedging or research and development arrangements with the company.

(1)

Off-balance-sheet arrangements include, at December 31, 2003, approximately $50.4 million related to an option held by Goodyear’s minority partner in Sava Tires to require Goodyear to purchase the partner’s 20% equity interest in Sava Tires. Goodyear has a similar call option on the remaining 20% interest. The minority partner could exercise its option and Goodyear could exercise its call option during various periods beginning in 2003 and extending through 2005. On April 7, 2004, Goodyear announced that it would exercise its call option and purchase the remaining 20% of Sava Tires. The transaction is expected to be completed in June 2004 and Goodyear expects to pay approximately $52 million at that time.

Goodyear continuously monitors its fixed and floating rate debt mix. Within defined limitations, Goodyear manages the mix using refinancing and unleveraged interest rate swaps. Goodyear will enter into fixed and floating interest rate swaps to alter its exposure to the impact of changing interest rates on consolidated results of operations and future cash outflows for interest. Fixed rate swaps are used to reduce Goodyear’s risk of increased interest costs during periods of rising interest rates, and are normally designated as cash flow hedges. Floating rate swaps are used to convert the fixed rates of long-term borrowings into short-term variable rates, and are normally designated as fair value hedges. Interest rate swap contracts are thus used by Goodyear to separate interest rate risk management from debt funding decisions. At December 31, 2003, the interest rates on 47% of Goodyear’s debt were fixed by either the nature of the obligation or through the interest rate swap contracts, compared to 70% at December 31, 2002. The decrease in the percent of fixed rate debt was primarily due to the maturity of the 8 1/8% notes during 2003. Goodyear also has from time to time entered into interest rate lock contracts to hedge the risk-free component of anticipated debt issuances. As a result of credit ratings actions and other related events, the Company’s access to these instruments may be limited.

The pro forma fair value assumes a 10% increase in variable market interest rates at December 31 of each year, and reflects the estimated fair value of contracts outstanding at that date under that assumption.

The pro forma information assumes a 100 basis point decrease in market interest rates at December 31 of each year, and reflects the estimated fair value of fixed rate debt outstanding at that date under that assumption.

The sensitivity to changes in interest rates of Goodyear’s interest rate contracts and fixed rate debt was determined with a valuation model based upon net modified duration analysis. The model assumes a parallel shift in the yield curve. The precision of the model decreases as the assumed change in interest rates increases.

In order to reduce the impact of changes in foreign exchange rates on consolidated results of operations and future foreign currency-denominated cash flows, Goodyear enters into foreign currency contracts. These contracts reduce exposure to currency movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted transactions resulting primarily from trade receivables and payables, equipment acquisitions, intercompany loans and royalty agreements and forecasted purchases and sales. In addition, the principal and interest on Goodyear’s Swiss franc bond due 2006 and Euro100 million of the Euro Notes due 2005 are hedged by currency swap agreements.

Contracts hedging the Swiss franc bond and the Euro Notes are designated as cash flow hedges. Contracts hedging short-term trade receivables and payables normally have no hedging designation.

The following table presents foreign currency contract information at December 31:

The pro forma change in fair value assumes a 10% change in foreign exchange rates at December 31 of each year, and reflects the estimated change in the fair value of contracts outstanding at that date under that assumption.

At December 31, 2002, Goodyear held foreign currency Euro put options, exercisable during 2003, to reduce exposure to currency movements on 2003 forecasted intercompany sales. These options were designated as cash flow hedges. At December 31, 2002, the underlying contract value of these options totaled $42.6 million, and the fair value totaled $0.2 million. At December 31, 2003, the Company did not hold any outstanding foreign currency options.

The sensitivity to changes in exchange rates of Goodyear’s foreign currency positions was determined using current market pricing models.

For further information on interest rate contracts and foreign currency exchange contracts, refer to the note to the financial statements No. 11, Financing Arrangements and Derivative Financial Instruments.

Schedules not listed above have been omitted since they are not applicable or are not required, or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto.

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of The Goodyear Tire & Rubber Company and Subsidiaries at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedules listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedules are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 7 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” as of January 1, 2002.

As described in Note 2, “Restatement,” the Company has restated its previously issued consolidated financial statements.

A summary of the significant accounting policies used in the preparation of the accompanying financial statements follows:

The consolidated financial statements include the accounts of all majority-owned subsidiaries in which no substantive participating rights are held by minority shareholders. Goodyear has no majority-owned subsidiaries in which substantive participating rights are held by minority shareholders. All intercompany transactions have been eliminated.

Goodyear’s investments in 20% to 50% owned companies in which it has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. Accordingly, Goodyear’s share of the earnings of these companies is included in consolidated net income (loss). Investments in other companies are carried at cost.

In January 2003, the Financial Accounting Standards Board (the “FASB”) issued Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51.” FIN 46 requires companies to consolidate, at fair value, the assets, liabilities and results of operations of variable interest entities (VIEs) in which the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties or in which they hold a controlling financial interest through means other than the majority ownership of voting equity. Controlling financial interests typically are present when a company either 1) has the direct or indirect ability to make decisions about the VIE’s activities, 2) holds an obligation to absorb expected losses of a VIE, or 3) is entitled to receive the expected residual returns of a VIE. FIN 46 became effective immediately for all VIEs created after January 31, 2003 and required certain disclosures in financial statements issued after January 31, 2003 about the nature, purpose, size and activities of all VIEs covered by its provisions, and their maximum exposure to loss. FIN 46 also required companies to consolidate VIEs created before February 1, 2003, in financial statements for periods ending after June 15, 2003. During 2003, the FASB delayed the required implementation date of FIN 46 for entities that are not special purpose entities (SPEs) until the first reporting period ending after March 15, 2004.

The Company applied the provisions of FIN 46, effective July 1, 2003, to those VIEs representing lease-financing arrangements with SPEs. The Company is a party to lease agreements with several unrelated SPEs that are VIEs as defined by FIN 46. The agreements are related to certain North American distribution facilities and certain corporate aircraft. The fair value of the assets and liabilities, and the Company’s maximum exposure to loss prior to insurance recoveries, is approximately $60 million in these SPEs. The assets, liabilities and results of operations of these SPEs were consolidated in the third quarter of 2003 resulting in an increase in long-term liabilities of approximately $34 million and an increase in net property of approximately $28 million. The Company also recorded a $6.1 million charge in other (income) and expense due to the adoption of this new standard. Financing costs recognized in the Company’s financial statements are not expected to change significantly. Financing costs related to these SPEs were included in Selling, Administrative & General Expense (SAG) prior to the third quarter 2003. Effective with the third quarter 2003, the financing costs are recognized as Interest Expense.

The Company has evaluated the impact of FIN 46 for entities that are not SPEs and has elected to defer, until the first quarter of 2004, the application of FIN 46 to two joint venture investments; South Pacific Tyres (SPT), a tire manufacturer, marketer and exporter of tires in Australia and New Zealand and T&WA, a wheel mounting operation in the United States which ships to original equipment manufacturers. The

Company will consolidate these joint venture investments effective January 1, 2004. The application of FIN 46 in the first quarter of 2004 is not expected to have a material impact on the Company’s results of operations, cash flows or financial position. For further information, refer to the notes to the financial statements No. 20, Commitments and Contingent Liabilities — Affiliate Financing and No. 18, Business Segments.

The Company will from time to time maintain balances on deposit at various financial institutions primarily as collateral for borrowings incurred by various subsidiaries. The availability of these balances is restricted to the extent of the borrowings. At December 31, 2003, cash balances totaling $23.9 million were subject to such restrictions.

Cash and cash equivalents include cash on hand and in the bank as well as all short term securities held for the primary purpose of general liquidity. Such securities normally mature within three months from the date of acquisition. Cash flows associated with items intended as hedges of identifiable transactions or events are classified in the same category as the cash flows from the items being hedged. Book overdrafts are recorded within accounts payable-trade and were $139.6 million at December 31, 2003, and $131.5 million at December 31, 2002. Cash flows related to such amounts are classified as financing activities and, for the three years ended December 31, 2003, totaled $8.1 million, $3.6 million and $23.9 million, respectively.

Revenues are recognized when finished products are shipped to unaffiliated customers and both title and the risks and rewards of ownership are transferred, or services have been rendered and accepted. Appropriate provision is made for uncollectible accounts.

Goodyear offers warranties on the sale of certain of its products and services and records an accrual for estimated future claims at the time revenue is recognized. Tire replacement under most of the warranties offered by Goodyear is on a prorated basis. Warranty reserves are based on past claims experience, sales history and other considerations. Refer to Note 20.

The Company adopted Statement of Financial Accounting Standards No. 146 (SFAS 146), “Accounting for Costs Associated with Exit or Disposal Activities,” effective for all exit or disposal activities initiated after December 31, 2002. SFAS 146 requires, among other things, that liabilities for costs associated with exit or disposal activities be recognized when the liabilities are incurred, rather than when an entity commits to an exit plan. SFAS 146 changes the timing of liability and expense recognition related to exit or disposal activities, but not the ultimate amount of such expenses. Refer to Note 3.

Expenses for transportation of products to customers are recorded as a component of cost of goods sold.

The Company records a liability for estimated legal and defense costs related to pending general and product liability claims, environmental matters and workers’ compensation claims. Refer to Note 20.

Worldwide inventories are stated at the lower of cost or market. Cost is determined using FIFO or the average cost method. Costs include direct material, direct labor and applicable manufacturing and engineering overhead. Refer to Note 6.

Investments in marketable equity securities are stated at fair value. Fair value is determined using quoted market prices at the end of the reporting period and, when appropriate, exchange rates at that date. Unrealized gains and losses on marketable equity securities classified as available-for-sale are recorded in Accumulated Other Comprehensive Income (Loss), net of tax. Refer to Notes 8 and 19.

Goodyear adopted Statement of Financial Accounting Standards No. 142 (SFAS 142), “Goodwill and Other Intangible Assets,” effective January 1, 2002. Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are tested for impairment annually or when events or circumstances indicate that impairment may have occurred. Goodyear has elected to perform the goodwill impairment test annually as of July 31. If considered impaired, the goodwill or intangible asset with an indefinite useful life is written down to fair value. Prior to January 1, 2002, Goodyear was amortizing goodwill over its estimated useful life, based on an evaluation of all relevant factors. The carrying amount and estimated useful life of goodwill were reviewed whenever events or circumstances indicated that revisions might have been warranted. Refer to Note 7.

Properties and plants are stated at cost. Depreciation is computed using the straight-line method. Refer to Note 9.

Costs incurred for producing and communicating advertising are generally expensed when incurred. Costs incurred under Goodyear’s cooperative advertising program with dealers and franchisees are recorded as reductions of sales as related revenues are recognized. Refer to Note 17.

Financial statements of international subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted-average exchange rate for each period for revenues, expenses, gains and losses. Where the local currency is the functional currency, translation adjustments are recorded as Accumulated Other Comprehensive Income (Loss). Where the U.S. dollar is the functional currency, translation adjustments are recorded in income.

Goodyear expenses environmental expenditures related to existing conditions resulting from past or current operations and from which no current or future benefit is discernible. Expenditures that extend the life of the related property or mitigate or prevent future environmental contamination are capitalized. Goodyear determines its liability on a site by site basis and records a liability at the time when it is probable and can be reasonably estimated. Goodyear’s estimated liability is reduced to reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. The estimated liability of Goodyear is not discounted or reduced for possible recoveries from insurance carriers. Refer to Note 20.

The Company used the intrinsic value method to measure compensation cost for stock-based compensation. Accordingly, compensation cost for stock options is measured as the excess, if any, of the quoted market price of the Company’s common stock at the date of the grant over the amount an employee must pay to acquire the stock. Compensation cost for stock appreciation rights and performance units is recorded based on the quoted market price of the Company’s stock at the end of the reporting period. Refer to Note 12.

The following table presents the pro forma effect from using the fair value method to measure compensation cost:

Basic earnings per share has been computed based on the average number of common shares outstanding. Diluted earnings per share reflects the dilutive impact of outstanding stock options (computed using the treasury stock method). All earnings per share amounts in these notes to financial statements are diluted, unless otherwise noted. Refer to Note 12.

Income taxes are recognized during the year in which transactions enter into the determination of financial statement income, with deferred taxes being provided for temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. Refer to Note 14.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to financial statements. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates, including those related to the allowance for doubtful accounts, recoverability of intangibles and other long-lived assets, deferred tax asset valuation allowances, warranty, workers’ compensation, litigation, general and product liabilities, environmental liabilities, pension and postretirement benefits, and various other operating allowances and accruals, based on currently available information. Changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods.

Derivative financial instrument contracts and nonderivative instruments are utilized by Goodyear to manage interest rate, foreign exchange and commodity price risks. Goodyear has established a control environment that includes policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. Company policy prohibits holding or issuing derivative financial instruments for trading purposes.

To qualify for hedge accounting, hedging instruments must be designated as hedges and meet defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or financial statement effects of the hedging instrument substantially offset those of the position being hedged.

Derivative contracts are reported at fair value on the Consolidated Balance Sheet as both current and long term Accounts Receivable or Other Liabilities. Deferred gains and losses on contracts designated as cash flow hedges are recorded in Accumulated Other Comprehensive Income (Loss) (OCI). Ineffectiveness in hedging relationships is recorded as Other (Income) and Expense in the current period.

Interest Rate Contracts — Gains and losses on contracts designated as cash flow hedges are initially deferred and recorded in OCI. Amounts are transferred from OCI and recognized in income as Interest Expense in the same period that the hedged item is recognized in income. Gains and losses on contracts designated as fair value hedges are recognized in income in the current period as Interest Expense. Gains and losses on contracts with no hedging designation are recorded in income in the current period as Other (Income) and Expense.

Foreign Currency Contracts — Gains and losses on contracts designated as cash flow hedges are initially deferred and recorded in OCI. Amounts are transferred from OCI and recognized in income in the same period and on the same line that the hedged item is recognized in income. Gains and losses on contracts with no hedging designation are recorded in income currently as Foreign Currency Exchange.

Goodyear does not include premiums paid on forward currency contracts in its assessment of hedge effectiveness. Premiums on contracts designated as hedges are recognized in income as Foreign Currency Exchange over the life of the contract.

Net Investment Hedging — Nonderivative instruments denominated in foreign currencies are used to hedge net investments in foreign subsidiaries. Gains and losses on these instruments are deferred and recorded in OCI as Foreign Currency Translation Adjustment. These gains and losses are only recognized in income upon the complete or partial sale of the related investment or the complete liquidation of the investment.

Termination of Contracts — Gains and losses (including deferred gains and losses in OCI) are recognized in income as Other (Income) and Expense when contracts are terminated concurrently with the

termination of the hedged position. To the extent that such position remains outstanding, gains and losses are amortized to Interest Expense or Foreign Currency Exchange over the remaining life of that position. Gains and losses on contracts that Goodyear temporarily continues to hold after the early termination of a hedged position, or that otherwise no longer qualify for hedge accounting, are recognized in income as Other (Income) and Expense.

At December 31, 2003, approximately 60% of the Company’s employees were covered by collective bargaining agreements. 30% of the Company’s employees were covered by collective bargaining agreements that will expire in 2004. It is uncertain at this time whether agreements will be reached without interruption of production, and the terms of the agreements ultimately reached could result in higher wage and benefit costs.

Certain items previously reported in specific financial statement captions have been reclassified to conform to the 2003 presentation. Charges related to general and product liability-discontinued products for claims against Goodyear related to asbestos personal injury claims and for other products no longer manufactured by the Company have been reclassified from Selling, Administrative & General Expense (SAG) to Other (Income) and Expense due to the non-operational nature of these claims. Charges for general and product liabilities related to ongoing operations continue to be recorded as SAG. Refer to Note 4, Other (Income) and Expense and Note 20, Commitments and Contingent Liabilities, for further information about general and product liabilities.

These financial statements have been restated to reflect adjustments to the Company’s financial information previously reported on Form 10-K for the years ended December 31, 2002 and 2001. The Company’s 2003 and 2002 quarterly financial information also has been restated to reflect adjustments to the Company’s previously reported financial information on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003, and September 30, 2003. Amounts disclosed in this note that are as of or for the periods ended March 31, 2003; June 30, 2003; or September 30, 2003 are all unaudited. The restatement also affects periods prior to 2001. The Company identified adjustments through the current date that were required to be recorded which reduced previously reported after-tax income by a total of $280.8 million. Of this amount, $56.2 million was included in 2003 net income. The impact on net income for the years ended December 31, 2002 and 2001 was $121.2 million and $50.5 million, respectively. The impact related to years prior to 2001 was a decrease in retained earnings of $52.9 million at January 1, 2001. Total shareholders’ equity at September 30, 2003 was also reduced by adjustments to Accumulated Other Comprehensive Income (Loss) (OCI) of $183.9 million. The restated financial statements have been prepared by management and reflect all adjustments known to management.

The total reductions in net income of $280.8 million include $31.3 million recorded in the quarter ended June 30, 2003; $84.7 million in additional items previously reflected in the restated financial results included in the Form 8-K filed on November 20, 2003 and the Form 10-Q for the quarter ended September 30, 2003 filed on November 19, 2003; and $164.8 million in additional items reflected in the financial statements included in the Form 10-K for the year ended December 31, 2003 filed on May 19, 2004.

The restatements initially arose out of an intensified effort to reconcile certain general ledger accounts in the second and third quarters of 2003. As a result of the Company’s efforts to reconcile these accounts, the

Company identified various adjustments that were recorded in the second quarter and needed to be recorded in the third quarter of 2003 arising out of account reconciliations. Based on an assessment of the impact of the adjustments, management and the Audit Committee decided to restate the Company’s previously issued financial statements on the Form 10-Q for the quarter ended September 30, 2003 and for prior periods. Following the identification of these adjustments, PricewaterhouseCoopers LLP (PwC) advised the Company in October 2003 that the failure to identify or monitor certain conditions with respect to certain general ledger accounts collectively resulted in a material weakness in internal controls that required strengthening.

In December 2003, the Company discovered accounting irregularities in its European Union Tire business segment. The Audit Committee initiated a special investigation of these irregularities, and this investigation was subsequently expanded to other overseas locations. The investigations identified accounting irregularities primarily related to earnings management whereby accrual accounts were improperly adjusted between periods or expenses were improperly deferred. In the first and second quarters of 2004, the Company identified other adjustments. Some of these adjustments resulted from accounting irregularities resulting in the understatement of workers’ compensation liability and related to the valuation of real estate received in payment of trade accounts receivable in Chile. The Audit Committee also initiated an investigation into these adjustments. As a result of these investigations, management and the Audit Committee decided that a further restatement was necessary.

In May 2004, PwC advised the Company that the circumstances it previously identified to the Company as collectively resulting in a material weakness had each individually become a material weakness. PwC advised the Company that this determination was due to the number of previously undetected errors that were attributable to the material weakness previously identified. A significant portion of these errors were detected by the Company. PwC further identified an additional material weakness resulting from intentional overrides of internal controls by those in authority, particularly related to the European Union Tire segment and workers’ compensation liability in the United States. These material weaknesses, if unaddressed, could result in material errors in the Company’s financial statements. In addition, PwC advised the Company that it had identified as reportable conditions the Company’s need to enhance certain finance personnel’s knowledge of U.S. GAAP and internal controls and the need to enhance controls related to the establishment of bank accounts.

This Form 10-K for the year ended December 31, 2003 also includes changes to the timing of certain previously recognized adjustments not arising from account reconciliations as well as other adjustments identified during the restatement process.

The adjustments resulting from the Company’s initial restatement efforts, the special overseas accounting and workers’ compensation investigations, and the 2003 year-end closing process are described as follows:

Accounting Irregularities. This category includes adjustments reducing income before tax by a total of $29.0 million related to periods ending September 30, 2003 and earlier. These adjustments resulted from the overseas special accounting investigation, the understatement of the Company’s liability for workers’ compensation payments, the improper deferral of manufacturing variances in 1998, and certain adjustments in Chile, including the correction of the valuation of real estate received in payment for trade accounts receivable.

Adjustments reducing income by a total of $9.2 million before tax were included in the restatement as a result of the special accounting investigation in Europe and Asia. The majority of the adjustments addressed accrual accounts that were improperly adjusted between periods or expenses that were improperly deferred beyond the third quarter of 2003. These adjustments primarily related to accounts receivable, fixed assets, accounts payable-trade and other long-term liability accounts that were improperly adjusted. As part of this

investigation, an adjustment was made to defer income of $3.9 million before tax beyond the third quarter of 2003 that was improperly recognized in prior periods.

The workers’ compensation adjustments totaled $17.7 million before tax related to periods ending on September 30, 2003 and earlier. These adjustments resulted from an understatement of the Company’s potential liability for estimated payments relating to workers’ compensation claims by employees. In the first quarter of 2004, it was noted that claims arising from one of the Company’s United States tire manufacturing plants were under-reserved. As a result, the Company, with the assistance of the outside administrator, reviewed approximately 85% of the open claims handled by this administrator at this plant as well as other facilities and determined that reserves needed to be increased to accurately value the claims. The under-reserving resulted in part from improper efforts to reduce, or restrict the amount of increase in, the reserves for certain workers’ compensation claims leading to claims data in the Company’s workers’ compensation claims database that did not reflect the probable ultimate exposure to the Company. Of the $17.7 million before tax adjustment, $4.1 million affected income before tax for the nine months ended 2003, $5.6 million and $2.3 million affected income before tax for the years ended December 31, 2002 and 2001, respectively, and $5.7 million affected pre-2001 income before tax. In addition, in the fourth quarter of 2003, $6.2 million before tax was recorded relating to the understatement.

In the second quarter of 1999, the Company discovered that $18.1 million of manufacturing variances at one of its United States tire manufacturing plants had been improperly deferred from 1998 to 1999. When the matter was discovered in the second quarter of 1999, the Company recorded the remaining costs that had not previously been recorded. As part of this restatement, the Company reduced income before tax in 1998 by $18.1 million and increased income before tax in 1999 by the same amount.

In 2000, the Company received approximately 13 acres of land in Santiago, Chile, in payment for trade accounts receivable from one of its Chilean customers. At the time, the Company recorded the land based upon an inappropriate appraisal. In the first quarter of 2004, the Company had an additional appraisal performed that appropriately valued the land at a much lower value. The Audit Committee requested an investigation into the matter, and as a result, the Company recorded an adjustment to reduce the valuation of the land. The adjustment reduced income before tax by $1.5 million in 2000. The Company also identified other adjustments in Chile whereby accrual accounts were improperly adjusted between periods or expenses were improperly deferred. Adjustments of $0.6 million before tax were recorded related to these accounts.

A summary of the accounting irregularities adjustments and the time periods affected follows:

Account Reconciliations. This category includes adjustments totaling $144.9 million before tax resulting from the failure to either reconcile accounts or resolve certain reconciliation issues in a timely manner. The most significant adjustments in this category relate to certain reconciliations for accounts receivable, inventories, fixed assets, intercompany accounts, prepaid expenses and accounts payable-trade. Certain of these adjustments were associated with the integration of a new enterprise resource planning system (ERP) into the Company’s accounting processes beginning in 1999.

The following categories represent a majority of the account reconciliation adjustments included in the restatement (all amounts are before tax unless otherwise noted):

Interplant. Goodyear uses an internal system, the Interplant System, to track the procurement and transfer of fixed assets, raw materials and spare parts acquired or manufactured by Goodyear units in the United States for its foreign manufacturing locations. The $28.8 million Interplant charge corrects an overstatement of income and assets. The most significant items in this category are 1) fixed assets and inventory of $26.0 million which were not properly relieved from the Interplant System when they were billed to the foreign manufacturing locations and accordingly now have to be expensed and 2) the correction of a failure to depreciate $2.8 million of fixed assets.

North American Tire (NAT) Receivables. The adjustment to accounts receivable of $25.0 million is attributable to amounts erroneously recorded in Goodyear’s general ledger during the period April 1999 to November 2000. During this period, Goodyear implemented certain modules of an ERP accounting system. These modules were not properly integrated with existing systems resulting in an overstatement of sales and accounts receivable in the general ledger. This overstatement had to be reversed. Billings to customers and cash collections were appropriate during this period.


C.	Engineered Products (EPD). It was not possible to allocate the amount of this adjustment to applicable periods and accordingly, Goodyear recorded substantially all of this adjustment in the first quarter of 2003. This adjustment includes the write-off of $21.3 million consisting of $3.7 million in intercompany accounts and $17.6 million related to payables and other accounts. Several factors relating to the Company’s ERP systems implementation resulted in EPD’s inability to locate or recreate account reconciliations for prior periods.

D.	Wingfoot Commercial Tire Systems, LLC. On November 1, 2000, Goodyear made a contribution, which included inventory, to Wingfoot Commercial Tire Systems, LLC, a consolidated subsidiary. On a consolidated basis, the inventory was valued at Goodyear’s historical cost. Upon the sale of the inventory, consolidated cost of goods sold was understated by $11.0 million. Additionally, inventory and fixed asset losses totaling $4.2 million were not expensed as incurred and were written off in connection with the restatement.


E.	Fixed Assets. The adjustments to other fixed assets totaled $13.1 million and related primarily to the understatement of depreciation expenses and the write-off of assets previously disposed.

F.	General and Product Liability. The expense for general and product claims increased $11.6 million for the third quarter and nine months ended September 30, 2003, and related to the timing of the recognition of certain liabilities for Entran II claims. Goodyear reached final agreement with one of its insurers in November 2003, prior to filing the third quarter 10-Q, and recorded both a receivable and separately a corresponding liability related to Entran II matters. This amount will be reflected in the Company’s amended quarterly report on Form 10-Q for the period ended September 30, 2003 when filed.

In addition, adjustments totaling $23.0 million were recorded in OCI. An adjustment was made to record an $18 million charge to deferred derivative losses, with an offsetting credit to liabilities. This adjustment was associated with three interest rate swaps and a cross-currency contract for the period March 2001 through

March 2003. An adjustment was also made to record a $6.8 million charge to currency translation, with an offsetting credit to long-term assets. The adjustment affected the period from January 1, 2003 to September 30, 2003. These adjustments were identified in conjunction with the completion of account reconciliations.

Out-of-Period Adjustments. This category includes adjustments previously identified but deemed to be immaterial and recorded in the period the Company identified the error or in a subsequent period. Adjustments in this category change the timing of income and expense items that were previously recognized. The cumulative amount of out-of-period adjustments was a decrease to income before tax of $0.6 million.

The most significant item in this category relates to the timing of the recognition of certain SAG expenses. As a result of the integration of the new enterprise resource planning system into the Company’s accounting processes beginning in 1999, certain expenses were incorrectly capitalized in inventory during 2001, 2000 and 1999. The Company recorded an adjustment totaling $16.8 million before tax during 2002 to correct the impact on prior years. Of this amount, $13.9 million before tax applied to 2001.

Discount Rate Adjustments. In preparing the 2003 financial statements, the Company reassessed the estimate of the discount rate used in determining the net periodic benefit cost and benefit obligations of the Company’s domestic pension, workers’ compensation and other postretirement benefit plans. Consistent with that effort and the restatement process, the Company determined that it would be appropriate to make similar reassessments for discount rates for all periods presented. As a result, the discount rate was revised to 6.75%, 7.25% and 7.50% from 7.25%, 7.75% and 8.00% for 2003, 2002 and 2001, respectively. Total reductions to income before tax for 2000-2003 were $18.9 million, of which $13.0 million decreased income before tax for the nine months ended September 30, 2003, and $14.9 million and $5.5 million decreased income before tax for the years ended December 31, 2002 and 2001, respectively. Pre-2001 income before tax was increased by $14.5 million as a result of these adjustments. This change also resulted in a charge to deferred pension costs in accumulated other comprehensive income (loss) (OCI) totaling $150.1 million for the years ended December 31, 2002 and 2001. Additionally, in 2002, the Company had established a valuation allowance against its net Federal and state deferred tax assets. Accordingly, this restatement includes a charge to income tax expense of $81.2 million to provide a valuation allowance against the tax benefit included in the adjustment to OCI in 2001, and a charge to OCI of $10.8 million to provide a valuation allowance against the tax benefit included in the adjustment to OCI in 2002.

Chemical Products Segment. This category primarily includes adjustments identified as a result of a stand-alone audit conducted in 2003 of a portion of the Chemical Products business segment. The most significant adjustments in this category relate to the timing of the recognition of manufacturing variances to reflect the actual cost of inventories, the fair value adjustment of a hedge for natural gas, and the correction of intercompany profit elimination in inventory to eliminate selling and administrative expenses in inventory. The cumulative effect of Chemical Product segment adjustments at September 30, 2003 was a decrease to income before tax of $7.7 million.

Tax Adjustments. As a result of the restatement adjustments, an additional Federal and state valuation allowance of $121.6 million (including the $81.2 million charge for discount rate adjustments) was required to be recognized in 2002, the period in which the Company previously provided for its valuation allowance. The remaining amounts relate to the correction of errors in the computation of deferred tax assets and liabilities.

Effect of restatement adjustments on Goodyear’s previously issued financial statements

The following table sets forth the effects of the restatement adjustments discussed above on the Consolidated Statement of Operations for each of the years ended December 31, 2002 and 2001, respectively.

The following table sets forth the effects of the restatement adjustments discussed above on the Consolidated Balance Sheet at December 31, 2002.

The following table shows the reconciliation of the liability balance between periods:

During 2003, net charges of $291.5 million ($267.1 million after tax or $1.27 per share) were recorded, which included reversals of $15.7 million ($14.3 million after tax or $0.07 per share) for reserves from rationalization actions no longer needed for their originally intended purposes and new charges of $307.2 million ($281.4 million after tax or $1.34 per share). The 2003 rationalization actions consisted of manufacturing, research and development, administrative and retail consolidations in North America, Europe and Latin America. Of the $307.2 million of new charges, $174.8 million related to future cash outflows, primarily associate severance costs, and $132.4 million related primarily to non-cash special termination benefits and pension and retiree benefit curtailments. Approximately 4,400 associates will be released under the programs initiated in 2003, of which approximately 2,700 were exited in 2003. The reversals are primarily the result of lower than initially estimated associate-related payments of approximately $12 million, sublease contract signings in the European Union of approximately $3 million and lower contract termination costs in the United States of approximately $1 million. These reversals do not represent a change in the plan as originally approved by management.

In 2003, $200.4 million and $15.5 million, respectively, was incurred primarily for severance payments and noncancellable lease costs. The majority of the remaining accrual balance for all programs of $141.9 million is expected to be utilized by the end of 2004.

As part of the 2003 rationalization program, Goodyear closed its Huntsville, Alabama tire facility in the fourth quarter. Of the $307.2 million of new rationalization charges, approximately $138 million related to the Huntsville closure primarily for associate-related costs for approximately 1,100 associates, including severance, special termination benefits and pension and retiree benefit curtailments. The Huntsville closure also resulted in approximately $35 million of asset impairment charges and $85 million of asset writeoffs and accelerated depreciation charges. These amounts are recorded as cost of goods sold (CGS) on the Consolidated Statement of Operations. The accelerated depreciation charges were recorded on the machinery

& equipment and spare parts that were being disposed as of the date of the shutdown for the period from the date the shutdown was announced to the date the plant was closed. An asset impairment charge was recorded for the land and buildings to write down the balance to fair value based on expected future cash flows.

Approximately $8 million of construction in progress was written off in CGS in the first quarter 2003 related to the research and development rationalization plan. CGS also included accelerated depreciation charges of approximately $5 million for equipment taken out of service in the European Union related to two rationalization plans in 2003 at Goodyear’s Wolverhampton facility.

Goodyear recorded a net rationalization charge totaling $5.5 million (as restated) ($6.4 million after tax or $0.03 per share (as restated)) in 2002, which included reversals of $18.0 million (as restated) ($14.3 million after tax or $0.09 per share (as restated)) for reserves from rationalization actions no longer needed for their originally intended purposes, new charges of $26.5 million ($23.0 million after tax or $0.14 per share) and other credits of $3.0 million (as restated) ($2.3 million after tax or $0.02 per share (as restated)). The 2002 rationalization actions consisted of a manufacturing facility consolidation in Europe, the closure of a mold manufacturing facility and a plant consolidation in the United States, and administrative consolidations. Of the $26.5 million charge, $24.2 million related to future cash outflows, primarily associate severance costs, and $2.3 million related to a non-cash writeoff of equipment taken out of service in the Engineered Products and North American Tire Segments. The reversals are primarily the result of lower than initially estimated associate-related payments of approximately $6 million, lower lease cancellation fees in the European Union of approximately $6 million and sublease contract signings in North America of approximately $3 million. $1.7 million of the reversals represents a portion of a legal reserve related to a previous rationalization plan in the Asia region, determined to be no longer necessary as a result of a court ruling in Goodyear’s favor. The $3.0 million of other credits to restructuring expense represent the writeoff of a deferred gain from a sale leaseback transaction. Goodyear exited the location in the fourth quarter of 2002 and wrote off the remaining deferred gain against restructuring to offset the restructuring charge recorded for that location. The reversals do not represent a change in the plan originally approved by management. Goodyear provided for the release of approximately 1,000 manufacturing and administrative associates in Europe and the United States under the programs initiated in 2002. As of December 31, 2003, approximately 810 associates have been released, including approximately 540 associates in 2003.

Goodyear recorded net rationalization charges totaling $210.3 million (as restated) ($161.4 million after tax or $1.00 per share (as restated)) in 2001, which included $4.1 million of reversals of prior year reserves no longer needed for their originally intended purposes. These actions were in response to continued competitive market conditions and worldwide economic uncertainty. Under these actions, Goodyear provided for worldwide associate reductions through retail and administrative consolidation and manufacturing plant downsizing and consolidation. Of this charge, $132.0 million (as restated) related to future cash outflows, primarily associate severance and noncancellable lease costs, and $82.4 million (as restated) related to non-cash charges, primarily for the writeoff of equipment taken out of service. Goodyear provided for the release of approximately 3,700 associates around the world, primarily production and administrative associates under the programs initiated in 2001. As of December 31, 2003, approximately 3,570 associates have been released, as opposed to the 3,700 originally planned for, including approximately 70 associates in 2003. Goodyear completed these actions during 2003 with the exception of ongoing severance and noncancellable lease payments.

The following table summarizes, by segment, the total charges expected to be recorded, the total amounts recorded in 2003, the total costs incurred in 2003 and the total amounts reversed in 2003, related to the new charges taken in 2003:

The additional restructuring costs not yet recorded are expected to be incurred and recorded in 2004 and subsequent periods.

Other (Income) and Expense in 2003 included a loss of $17.6 million ($8.9 million after tax or $0.05 per share) on the sale of 20,833,000 shares of Sumitomo Rubber Industries, Ltd. (“SRI”) in the second quarter. 2003 included a loss of $11.6 million ($11.2 million after tax or $0.07 per share) on the sale of assets in the Engineered Products, North American Tire and European Union Tire Segments. 2003 also included a gain of $7.7 million ($6.4 million after tax or $0.04 per share) resulting from the sale of land in the Asia Tire Segment and assets in the Latin American and European Union Tire Segments. During 2002, Goodyear recorded a gain of $28.0 million (as restated) ($23.7 million after tax or $0.14 per share (as restated)) resulting from the sale of land and buildings in the Latin American Tire, Engineered Products and European Union Tire Segments. 2002 also included the writeoff of a miscellaneous investment of $4.1 million ($4.1 million after tax or $0.02 per share). In 2001, Goodyear recorded a gain of $18.4 million (as restated) ($14.7 million after tax or $0.09 per share (as restated)) resulting from the sale of land and buildings in the European Union Tire Segment in the first quarter. Additionally, Goodyear recorded a gain of $27.4 million ($16.9 million after tax or $0.10 per share) resulting from the sale of the Specialty Chemical Business in the 2001 fourth quarter. Refer to Note 18 for further information on Business Segments.

Interest income consists of amounts earned on deposits. At December 31, 2003, $648.6 million or 41.4% of Goodyear’s cash, cash equivalents and short term securities was concentrated in Europe, primarily western Europe, ($354.2 million or 37.6% at December 31, 2002), $176.3 million or 11.3% was concentrated in Latin America, primarily Brazil, ($142.6 million or 15.1% at December 31, 2002) and $116.8 million or 7.5% was concentrated in Asia ($68.8 million (as restated) or 7.3% at December 31, 2002).

Financing fees and financial instruments increased in 2003 due to the costs incurred in connection with the restructuring and refinancing of the Company’s bank credit and receivables securitization facilities. Financing fees and financial instruments included $45.6 million in 2003 related to the new facilities. Refer to Note 11, Financing Arrangements and Derivative Financial Instruments, for further information about the restructuring and refinancing.

General and product liability-discontinued products includes charges for claims against Goodyear related to asbestos personal injury claims and for anticipated liabilities related to Entran II claims, primarily for a proposed settlement of such claims. Goodyear recorded net charges for General and product liability-discontinued products totaling approximately $145 million in 2003 which included recognition of a receivable of approximately $131 million from Goodyear’s insurance carriers. Refer to Note 20, Commitments and Contingent Liabilities, for further information about general and product liabilities.

Accounts and Notes Receivable includes other non-trade receivables of $363.2 million and $253.2 million (as restated) at December 31, 2003 and 2002, respectively.

Prior to April 1, 2003, Goodyear maintained a program for the continuous sale of substantially all of its domestic trade accounts receivable to Wingfoot A/ R LLC, a wholly-owned limited liability subsidiary company that was a bankruptcy-remote special purpose entity. A similar program also was maintained for substantially all of the Company’s Canadian trade accounts receivable. The results of operations and financial position of Wingfoot A/ R LLC were not included in the consolidated financial statements of Goodyear as provided by Statement of Financial Accounting Standards No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” Wingfoot A/ R LLC purchased Goodyear’s receivables with (a) the cash proceeds of borrowings from a group of four bank-affiliated issuers of commercial paper, which borrowings ($624.1 million at December 31, 2002) were secured by the trade accounts receivable purchased from Goodyear, (b) the proceeds of Goodyear’s equity investment in Wingfoot A/ R LLC, and (c) a subordinated note payable to Goodyear. Goodyear retained the responsibility for servicing the receivables. As the receivables were collected, the cash proceeds were used to purchase additional receivables. Goodyear paid fees under the program based on certain variable market interest rates and other agreed amounts. These fees were reported as Other (Income) and Expense. Wingfoot A/ R LLC could borrow up to $700 million from the note purchasers. The amount that could be borrowed from time to time by Wingfoot A/ R LLC depended on, among other things, the total uncollected balance of receivables owned by it. The Company retained the risk of the non-payment of receivables it sold to Wingfoot A/ R LLC to the extent of its investment in the equity of Wingfoot A/ R LLC and in the subordinated note issued by Wingfoot A/ R LLC to Goodyear. The aggregate amount of Goodyear’s investments in Wingfoot A/ R LLC was $313.1 million at December 31, 2002. This program was terminated on April 1, 2003. Accordingly, accounts receivable sold under this program are now recognized on Goodyear’s Consolidated Balance Sheet, and the related subordinated note receivable and investment in the equity of Wingfoot A/ R LLC were derecognized. Goodyear’s consolidated debt increased by $577.5 million and Wingfoot A/ R LLC transferred cash to Goodyear totaling $32.2 million at April 1, 2003. This cash represented collections of accounts receivable which had not yet been reinvested in additional Goodyear receivables prior to the termination of the program.

International subsidiaries of Goodyear have established accounts receivable continuous sales programs whereunder these subsidiaries may receive proceeds from the sale of certain of their receivables to affiliates of certain banks. These subsidiaries retained servicing responsibilities. At December 31, 2003, the value in U.S. dollars of which these international subsidiaries could borrow was $104.2 million, compared to $283.5 million at December 31, 2002. The following table presents certain cash flows related to these programs:

In addition, various other international subsidiaries of Goodyear sold certain of their trade receivables during 2003 and 2002. The receivable financing programs of these international subsidiaries did not utilize an SPE at December 31, 2003. At December 31, 2003, the value in U.S. dollars of which these international subsidiaries could borrow was $18.6 million, compared to $129.8 million at December 31, 2002. The total amount of financing provided from all domestic and international agreements worldwide was $122.8 million at December 31, 2003, compared to $916.1 million at December 31, 2002.

Goodyear adopted SFAS 142 effective January 1, 2002. This standard specifies, among other things, that goodwill no longer be amortized. The standard requires goodwill to be periodically tested for impairment and written down to fair value if considered impaired. In accordance with the provisions of SFAS 142, Goodyear completed the initial impairment testing by June 30, 2002. Based on the results of the testing, no impairment was indicated. In addition, Goodyear completed the required annual impairment testing of goodwill as of July 31, 2003 and 2002, and based on the results of the testing, no impairment was indicated.

SFAS 142 also required Goodyear to reassess the useful lives of intangible assets and adjust the remaining amortization periods accordingly. For those intangible assets deemed to have indefinite lives, amortization ceased effective January 1, 2002, and the intangible assets will be periodically tested for impairment and written down to fair value if considered impaired. Goodyear has ceased amortization related to $107.1 million of intangible assets as a result of this reassessment.

The following table presents goodwill, intangible assets and accumulated amortization balances at December 31, 2003 and 2002:

During 2003, net goodwill increased by approximately $23 million due to currency translation.

During the fourth quarter of 2002, Goodyear recorded $10.4 million of goodwill and other intangible assets in connection with the acquisition of a chain of retail outlets, which was assigned to the North American Tire Segment. During the second quarter of 2002, Goodyear’s minority partner in Sava Tires, a tire manufacturing subsidiary in Slovenia, exercised its option to sell equity interests to Goodyear representing a 20% interest in Sava Tires for $38.9 million, which increased Goodyear’s ownership interest to 80%. Goodyear recorded $6.8 million of goodwill related to this transaction, which was assigned to the Eastern Europe, Africa and Middle East Tire Segment.

Also, during the fourth quarter of 2002, Goodyear recorded AUD$28.5 million (approximately US$16 million at December 31, 2002) of other intangible assets for a supply agreement with South Pacific Tyres (SPT), a tire manufacturer in Australia and New Zealand in which Goodyear owns a 50% interest. The agreement provides that Goodyear will be the exclusive provider of certain tires to SPT for the ten-year period ending December 31, 2012. The AUD$28.5 million will be amortized over the ten-year life of the agreement.

Amortization expense for intangible assets totaled $6.6 million, $4.3 million (as restated) and $2.4 million for 2003, 2002 and 2001, respectively. Goodyear estimates that annual amortization expense related to intangible assets will range from approximately $4 million to $6 million during each of the next five years and the weighted average remaining amortization period is approximately 17 years.

The total carrying amount of intangible assets not subject to amortization totaled $107.1 million at December 31, 2003 and 2002. This amount is related to a non-compete agreement resulting from the global alliance with Sumitomo Rubber Industries, Ltd. that commenced operations on September 1, 1999 and a trademark in Europe. In accordance with SFAS 142, Goodyear completed the initial impairment testing prior to March 31, 2002. Based on the results of the testing, no impairment was indicated. In addition, Goodyear completed the required annual impairment testing for 2003 and 2002, and based on the results of the testing, no impairment was indicated.

The Company owns 3,421,305 shares of Sumitomo Rubber Industries, Ltd. (“SRI”) at December 31, 2003 (the “Sumitomo Investment”) (24,254,306 shares at December 31, 2002). The fair value of the Sumitomo Investment was $18.6 million and $97.5 million at December 31, 2003 and 2002, respectively, and is included in Other Assets on the Consolidated Balance Sheet. Goodyear has classified the Sumitomo Investment as available-for-sale, as provided in Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” Changes in the fair value of the Sumitomo Investment are reported in the Consolidated Balance Sheet as OCI. At December 31, 2003, the gross unrealized holding gain on the Sumitomo Investment totaled $2.1 million ($3.6 million after tax), compared to the unrealized holding loss of $19.5 million ($9.3 million after tax) at December 31, 2002.

During 2003, the Company sold 20,833,000 shares of SRI for approximately $83 million and recorded a loss of $17.6 million ($8.9 million after tax or $0.05 per share). Goodyear had acquired a 10% ownership of SRI as part of the 1999 global alliance between the two companies. Goodyear now holds approximately 1.5% of SRI’s outstanding shares. Also during 2003, the Company transferred its 80% ownership of Sava Tires Joint Venture Holding d.o.o. (“Sava Tire”), a tire manufacturing subsidiary in Slovenia, to Goodyear Dunlop Tires Europe B.V. (“GDTE”) for $282.3 million. Goodyear owns 75% of GDTE. As a result of this transaction, Goodyear now indirectly owns 60% of Sava Tire. Refer to Note 23, Subsequent Events, for further information about Sava Tire. Additionally in 2003, the Company purchased Arkansas Best Corporation’s 19% ownership interest in Wingfoot Commercial Tire Systems, LLC, a joint venture company formed by Goodyear and Arkansas Best Corporation to sell and service commercial truck tires, provide retread services and conduct related business, for $71.2 million.

During 2002, the Company acquired additional shares of Sava Tire at a cost of $38.9 million. The Company’s ownership of this subsidiary increased from 60% to 80%. Also, during 2002, the Company acquired additional shares of its tire manufacturing subsidiary in Turkey at a cost of $15.9 million. The Company’s ownership of this subsidiary increased from 59.4% to 74.6%.

Dividends received by the Company from its consolidated subsidiaries for 2003, 2002 and 2001 were $219.0 million, $113.1 million and $114.8 million, respectively. Dividends received by the Company from its unconsolidated affiliates accounted for using the equity method for 2003, 2002 and 2001 were $2.8 million, $1.6 million and $3.0 million, respectively.

The Consolidated Statement of Cash Flows is presented net of the following transactions:

On July 7, 2000, Goodyear and Sumitomo amended the Note Agreement and on August 15, 2000: (1) Sumitomo converted ¥6,536,535,167 principal amount of the Company’s Note into approximately 1,138,030 shares of the Common Stock of the Company; (2) the Company paid ¥223,933,167 of interest on the Note; and (3) Sumitomo surrendered the Note and the Company issued a replacement note in the principal amount of ¥6,536,535,767 due on August 16, 2001 and payable at the Company’s option in cash or in shares of Common Stock at a conversion price of ¥5,731, subject to adjustment. The replacement note bore interest at the rate of 1.2% per annum from August 15, 2000 until the fifteenth day prior to its conversion into 1,140,866 shares of the Company’s Common Stock on February 6, 2001.

In 2002, the Company issued 11.3 million shares of its Common Stock and recorded $137.9 million as a contribution to certain domestic pension plans. In 2001, the Company issued 4.3 million shares of its Common Stock and recorded $100.0 million as a contribution to certain domestic pension plans.

The weighted average useful lives of property used in arriving at the annual amount of depreciation provided are as follows: buildings and improvements, approximately 18 years; machinery and equipment, approximately 10 years.

Goodyear enters into capital and operating leases primarily for its vehicles, data processing equipment and its wholesale and retail distribution facilities under varying terms and conditions. Goodyear subleases some of its domestic retail distribution network to independent dealers. Many of the leases provide that Goodyear will pay taxes assessed against leased property and the cost of insurance and maintenance.

While substantially all subleases and some operating leases are cancellable for periods beyond 2004, management expects that in the normal course of its business nearly all of its independent dealer distribution network will be actively operated. As leases and subleases for existing locations expire, Goodyear would normally expect to renew the leases or substitute another more favorable retail location.

The Company is a party to lease agreements with several unrelated SPEs that are VIEs as defined by FIN 46. The agreements are related to certain North American distribution facilities and certain corporate aircraft. The fair value of the assets and liabilities, and the Company’s maximum exposure to loss prior to insurance recoveries, is approximately $60 million in these SPEs. The assets, liabilities and results of operations of these SPEs were consolidated in the third quarter of 2003 resulting in an increase in long term liabilities of approximately $34 million and an increase in net property of approximately $28 million. The Company also recorded a $6.1 million charge in other (income) and expense due to the adoption of this new standard. Financing costs recognized in the Company’s financial statements are not expected to change significantly. Financing costs related to these SPEs were included in SAG prior to the third quarter 2003. Effective with the third quarter 2003, the financing costs are recognized as Interest Expense.

Goodyear had credit arrangements of $5.90 billion available at December 31, 2003, of which $335.0 million were unused.

At December 31, 2003, Goodyear had short term committed and uncommitted credit arrangements totaling $347.0 million, of which $209.3 million were unused. These arrangements are available to the Company or certain of its international subsidiaries through various domestic and international banks at quoted market interest rates. There are no commitment fees associated with these arrangements.

Goodyear had outstanding debt obligations, which by their terms are due within one year, amounting to $251.2 million at December 31, 2003, compared to $653.2 million at December 31, 2002. Current maturities of long term debt represented $113.5 million of this total, with a weighted average interest rate of 5.25% at December 31, 2003 ($369.8 million and 7.83% at December 31, 2002, respectively). The remaining $137.7 million was short term debt of international subsidiaries, with a weighted average interest rate of 4.81% at December 31, 2003 ($283.4 million and 5.31% at December 31, 2002, respectively).

At December 31, 2003, Goodyear had long term credit arrangements totaling $5.55 billion, of which $125.6 million were unused.

At December 31, 2003, the fair value of Goodyear’s long term fixed rate debt amounted to $2.11 billion, compared to its carrying amount of $2.23 billion. At December 31, 2002, the fair value of Goodyear’s long term fixed rate debt amounted to $2.10 billion, compared to its carrying amount of $2.48 billion. The difference between the carrying value in 2003 and 2002 was attributable primarily to lower long term fixed rate debt resulting from the maturity of notes in March of 2003. The difference between the fair market and carrying values year over year was attributable to lower yields in 2003. The fair value was estimated using quoted market prices or discounted future cash flows. The fair value of the 6 5/8% Notes due 2006 was hedged by floating interest rate contracts of $200 million and $250 million at December 31, 2003 and 2002, respectively. The fair value of Goodyear’s variable rate debt approximated its carrying amount at December 31, 2003 and 2002.

The Notes and Euro Notes have an aggregate face amount of $1.96 billion and are reported net of unamortized discounts aggregating $1.7 million ($2.17 billion and $2.2 million, respectively, at December 31, 2002).

At December 31, 2003, the bank term loans due 2005 and 2006 were comprised of $1.78 billion of variable rate agreements based upon LIBOR plus a fixed spread, bearing interest at a weighted average rate of 5.17% per annum, of which the interest rate on $325.0 million principal amount of bank term loans due 2005 and 2006 was hedged by fixed interest rate contracts. At December 31, 2002, the bank term loans due 2004 and 2005 were comprised of $850.0 million of variable rate agreements based upon LIBOR plus a fixed spread bearing interest at a weighted average rate of 3.82% per annum, of which the interest rate on $325 million principal amount of bank term loans due 2004 and 2005 was hedged by interest rate contracts. There were no domestic short term bank borrowings outstanding at December 31, 2003 or 2002.

At December 31, 2003, borrowings under the revolving credit facilities due 2005 and 2006 were comprised of $839.0 million of variable rate agreements based upon LIBOR plus a fixed spread bearing interest at a weighted average rate of 5.15% per annum.

Other domestic and international debt at December 31, 2003, consisted of fixed and floating rate loans denominated in U.S. dollars and other currencies that mature in 2004-2023. Other domestic and international debt that was outstanding at December 31, 2002, was scheduled to mature in 2003-2012. The weighted average interest rate in effect under these loans was 6.25% at December 31, 2003, compared to 6.15% at December 31, 2002.

On April 1, 2003, the Company completed a comprehensive restructuring and refinancing of its bank credit and receivables securitization facilities. After completing the restructuring and refinancing, the Company replaced a total of $2,938 million in finance facilities with a total of $3,345 million of finance facilities including:


	•	$750 million Senior Secured U.S. Revolving Credit Facility due April 2005;

	•	$645 million Senior Secured U.S. Term Facility due April 2005;

	•	$650 million Senior Secured European Facilities due April 2005; and

	•	$1.30 billion Senior Secured Asset-Backed Facilities due March 2006.

The Company’s amended and restated senior secured $750 million revolving credit facility provides for borrowing up to the $750 million commitment at any time until April 30, 2005. Up to $600 million of the facility is available for the issuance of letters of credit. Under the facility, as of December 31, 2003, there were borrowings of $200.0 million and $485.4 million in letters of credit issued. The Company pays an annual commitment fee of 75 basis points on the undrawn portion of the commitment under the U.S. revolving credit facility. On March 12, 2004, in connection with the Company’s recent financing activities, $70.0 million of the outstanding balance was prepaid and the bank commitments under this facility were permanently reduced to $680 million.

As of December 31, 2003, the balance due on the U.S. term facility was $583.3 million due to a partial pay down of the balance during the second quarter of 2003. In connection with the Company’s recent financing


Note 11.	Financing Arrangements and Derivative Financial Instruments (continued)

activities, on March 12, 2004, all outstanding amounts under the facility were prepaid and the facility was retired. The U.S. term facility had a maturity date of April 30, 2005.

In 2003, the Company obtained loans under the U.S. revolving credit facility and the U.S. term facility (collectively, the “U.S. facilities”) bearing interest at LIBOR plus 400 basis points or an alternative base rate (the higher of JPMorgan’s prime rate or the federal funds rate plus 50 basis points) plus 300 basis points.


	•	subject to certain exceptions, all of the capital stock of the Company’s domestic subsidiaries and 65% of the capital stock of its direct-owned foreign subsidiaries;

	•	perfected first-priority security interests in and mortgages on certain property, plant and equipment with a book value of at least $1.00 billion;

	•	perfected first-priority security interests in and mortgages on substantially all of Goodyear’s other tangible and intangible assets including equipment, contract rights and intellectual property; and

	•	perfected third-priority security interests in all accounts receivable and inventory pledged as security under the Company’s $1.30 billion senior secured asset-backed facilities, cash and cash accounts, and 65% of the capital stock of Goodyear Finance Holding S.A.

The indenture for the Company’s Swiss franc denominated bonds limits its ability to use its domestic tire and automotive parts manufacturing facilities as collateral for secured debt without triggering a requirement that bond holders be secured on an equal and ratable basis. The manufacturing facilities indicated above will be pledged to ratably secure the Company’s Swiss franc denominated bonds to the extent required under the applicable indenture. However, the aggregate amount collateralized by these manufacturing facilities will be limited to 15% of the Company’s shareholders’ equity, in order that the security interests granted to the lenders under the restructured facilities will not be required to be shared with the holders of indebtedness outstanding under the Company’s other existing bond indentures.

The facilities have customary representations and warranties including, as a condition of borrowing, material adverse change representations in the Company’s financial condition since December 31, 2002. In addition, the U.S. facilities contain certain covenants that, among other things, limit the Company’s ability to incur additional secured indebtedness (including a limit, subject to certain exceptions, of 275 million Euros in accounts receivable transactions), make investments, and sell assets beyond specified limits. The facilities prohibit Goodyear from paying dividends on its common stock. Goodyear must also maintain a minimum consolidated net worth (as such term is defined in the U.S. facilities) of at least $2.80 billion and $2.50 billion for quarters ending in 2003 and 2004, respectively, and $2.00 billion for the quarter ending March 31, 2005. Under the facilities, Goodyear was not permitted to fall below a ratio of 2.25 to 1.00 of consolidated EBITDA to consolidated interest expense (as such terms are defined in each of the restructured credit facilities) for any period of four consecutive fiscal quarters. On February 19, 2004, in connection with an amendment to the credit facilities, the ratio was reduced to 2.00 to 1.00. In addition, Goodyear’s ratio of consolidated senior secured indebtedness to consolidated EBITDA (as such terms are defined in the U.S. facilities) is not permitted to be greater than 4.00 to 1.00 at any time. As of December 31, 2003, the Company was in compliance with the financial covenants under the credit facilities.

limit for 2003 was increased from $360 million to approximately $381 million. In addition, to the extent the Company does not reach the limit of permitted capital expenditures in any given year, such shortfall may be carried over into the next year. With respect to 2004, increases totaling $270 million are permitted as a result of capital market transactions completed during the first quarter 2004 and unused allowances from 2003.

GDTE is party to a $250 million senior secured revolving credit facility and a $400 million senior secured term loan facility (collectively, the “European facilities”). These facilities mature on April 30, 2005. As of December 31, 2003, there were borrowings of $250.0 million and $400.0 million under the European revolving and term facilities, respectively.

GDTE pays an annual commitment fee of 75 basis points on the undrawn portion of the commitments under the European revolving facility. GDTE may obtain loans under the European facilities bearing interest at LIBOR plus 400 basis points or an alternative base rate (the higher of JPMorgan’s prime rate or the federal funds rate plus 50 basis points) plus 300 basis points.


	•	all of the capital stock of Goodyear Finance Holding S.A. and certain subsidiaries of GDTE; and

	•	a perfected first-priority interest in and mortgages on substantially all the tangible and intangible assets of GDTE in the United Kingdom, Luxembourg, France and Germany, including certain accounts receivable, inventory, real property, equipment, contract rights and cash and cash accounts, but excluding certain accounts receivable used in securitization programs.

Consistent with the covenants applicable to Goodyear in the U.S. facilities, the European facilities contain certain representations, warranties and covenants applicable to GDTE and its subsidiaries which, among other things, limit GDTE’s ability to incur additional indebtedness (including a limit of 275 million Euros in accounts receivable transactions), make investments, sell assets beyond specified limits, pay dividends and make loans or advances to Goodyear companies that are not subsidiaries of GDTE. The European facilities also contain certain covenants applicable to the Company identical to those in the U.S. facilities. The European facilities also limit the amount of capital expenditures that GDTE may make to $180 million, $250 million and $100 million in 2003, 2004 and 2005 (through April 30), respectively.


	•	75% of the net cash proceeds of all sales and dispositions of assets by GDTE and its subsidiaries greater than $5 million; and

	•	50% of the net cash proceeds of debt and equity issuances by GDTE and its subsidiaries.

The U.S. and European facilities can be used, if necessary, to fund ordinary course of business needs, to repay maturing debt, and for other needs as they arise.

facility. As of December 31, 2003, there were borrowings of $389.0 million and $800.0 million under the revolving credit and term loan asset-backed facilities, respectively. The facilities mature on March 31, 2006.

Availability under the facilities is limited by a borrowing base equal to the sum of (a) 85% of adjusted eligible accounts receivable and (b) (i) if the effective advance rate for inventory is equal to or greater than 85% of the recovery rate (as determined by a third party appraisal) of such inventory, 85% of the recovery rate of such inventory, or (ii) if the effective advance rate for inventory is less than 85% of the recovery rate, (A) the sum of 35% of eligible raw materials, 65% of adjusted eligible finished goods relating to the North American Tire Segment, and 60% of adjusted eligible finished goods relating to the retail division, Engineered Products Segment and Chemical Products Segment minus (B) a rent reserve equal to three months’ rent and warehouse charges at facilities where inventory is stored.

The calculation of the borrowing base and reserves against inventory and accounts receivable included in the borrowing base are subject to adjustment from time to time by the administrative agent and the majority lenders in their discretion (not to be exercised unreasonably), based on the results of ongoing collateral and borrowing base evaluations and appraisals. Availability under the facilities is further limited by a $50 million availability block. If at any time the amount of outstanding borrowings under the facilities exceeds the borrowing base, the Company will be required to prepay borrowings sufficient to eliminate the excess or maintain compensating deposits with the agent bank.

The facilities are collateralized by a first-priority security interest in all accounts receivable and inventory of Goodyear and its domestic and Canadian subsidiaries (excluding accounts receivable and inventory related to the Company’s North American joint venture with SRI) and, effective as of February 20, 2004, second-priority security interest on the other assets securing the U.S. facilities. The facilities contain certain representations, warranties and covenants which are materially the same as those in the U.S. facilities, with capital expenditures of $500 million and $150 million permitted in 2005 and 2006 (through March 31), respectively. On February 20, 2004, the Company added a $650 million tranche to the facility, not subject to the borrowing base, and with junior lien on the collateral securing the facility.

Until April 1, 2003, the Company was a party to two revolving credit facilities, consisting of a $750 million five-year revolving credit facility and a $575 million 364-day revolving credit facility. The Company was also a party to an $800 million term loan agreement, a $50 million term loan agreement, a $700 million accounts receivable facility with respect to its domestic trade accounts receivable and an aggregate of $346 million of non-domestic accounts receivable facilities. With the exception of (i) $275 million of the non-domestic accounts receivable facilities, which remained in place as of April 1, 2003, and (ii) the $750 million five-year revolving credit facility, which was amended and restated, each of these arrangements was terminated as of April 1, 2003, in connection with the restructuring and refinancing.


Note 11.	Financing Arrangements and Derivative Financial Instruments (continued)

The annual aggregate maturities of long term debt and capital leases for the five years subsequent to 2003 are presented below. Maturities of debt supported by the availability of the revolving credit agreements have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of their current terms.

In connection with the Company’s financing activities during the first quarter of 2004, Goodyear’s long-term debt commitments in 2005 and 2006 were reduced by $665 million and $64 million, respectively. Refer to Note 23 for further information about the Company’s financing activities in 2004.

Goodyear adopted Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” as amended and interpreted, on January 1, 2001.

Goodyear manages its fixed and floating rate debt mix, within defined limitations, using refinancings and unleveraged interest rate swaps. Goodyear will enter into fixed and floating interest rate swaps to hedge against the effects of adverse changes in interest rates on consolidated results of operations and future cash outflows for interest. Fixed rate swaps are used to reduce Goodyear’s risk of increased interest costs during periods of rising interest rates, and are normally designated as cash flow hedges. Floating rate swaps are used to convert the fixed rates of long term borrowings into short term variable rates, and are normally designated as fair value hedges. Interest rate swap contracts are used by Goodyear to separate interest rate risk management from the debt funding decision. At December 31, 2003, the interest rate on 47% of Goodyear’s debt was fixed by either the nature of the obligation or through the interest rate contracts, compared to 70% at December 31, 2002.

The following tables present contract information and weighted average interest rates. Current market pricing models were used to estimate the fair values of interest rate exchange contracts.


		2003			2002			2001
(Dollars in millions)
Fixed rate contracts:
	Notional principal amount	$	325.0		$	325.0		$	129.0
	Pay fixed rate		5.00	%		5.00	%		5.43	%
	Receive variable LIBOR		1.24			1.91			3.58
Floating rate contracts:
	Notional principal amount	$	207.0		$	210.0			—
	Pay variable LIBOR		3.03	%		3.68	%		—
	Receive fixed rate		6.63			6.63			—

Goodyear will use, when appropriate, interest rate lock contracts to hedge the risk-free rate component of anticipated long term debt issuances. These contracts are designated as cash flow hedges of forecasted transactions. Gains and losses on these contracts are amortized to income over the life of the debt. No contracts were outstanding at December 31, 2003 or 2002.

In order to reduce the impact of changes in foreign exchange rates on consolidated results of operations and future foreign currency-denominated cash flows, Goodyear will enter into foreign currency contracts. These

contracts reduce exposure to currency movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted transactions resulting primarily from trade receivables and payables, equipment acquisitions, intercompany loans, royalty agreements and forecasted purchases and sales. In addition, the principal and interest on Goodyear’s Swiss franc bond due 2006 and Euro100 million of Euro Notes due 2005 are hedged by currency swap agreements.

Contracts hedging the Swiss franc bond and the Euro Notes are designated as cash flow hedges. Contracts hedging short term trade receivables and payables normally have no hedging designation.

Amounts are reclassified from OCI into earnings each period to offset the effects of exchange rate movements on the principal and interest of the Swiss franc bond and the Euro Notes. Amounts are also reclassified concurrently with the recognition of intercompany royalty expense and sales of intercompany purchases to third parties.

At December 31, 2002, Goodyear held foreign currency Euro put options, exercisable during 2003, to reduce exposure to currency movements on 2003 forecasted intercompany sales. These options were designated as cash flow hedges. At December 31, 2002, the underlying contract value of these options totaled $42.6 million and the fair value totaled $0.2 million. At December 31, 2003, the Company did not hold any outstanding foreign currency options.

The counterparties to Goodyear’s interest rate swaps and foreign exchange contracts were substantial and creditworthy multinational commercial banks or other financial institutions that are recognized market makers. Due to the creditworthiness of the counterparties, Goodyear considers the risk of counterparty nonperformance associated with these contracts to be remote. However, the inability of a counterparty to fulfill its obligations when due could be material relative to the consolidated financial position, results of operations or liquidity of Goodyear in the period in which it occurs.

In order to reduce the impact of changes in foreign exchange rates on consolidated shareholders’ equity, Goodyear has designated certain foreign currency-denominated non-derivative instruments as hedges of its net investment in various foreign operations.

Throughout 2002, Euro100 million of Goodyear’s 6.375% Euro Notes due 2005 was designated as hedging Goodyear’s net investment in certain European subsidiaries that have the Euro as the functional currency. During 2003, the Company eliminated this hedge in order to more effectively manage other foreign currency exposures.

Ineffectiveness and premium amortization pretax charges totaled $1.0 million and $0.5 million during the twelve months ended December 31, 2003 and 2002, respectively. Deferred net pretax losses totaling $3.3 million on hedges of forecasted transactions are anticipated to be recognized in income during the twelve months ending December 31, 2004, due to pay/receive interest rate differentials on fixed rate interest rate contracts. It is not practicable to estimate the amount of deferred gains and losses that will be recognized in income resulting from the remeasurement of certain long term currency exchange agreements.

Deferred pretax losses totaling $4.2 million and gains totaling $16.0 million were recorded as Foreign Currency Translation Adjustment during the twelve months ended December 31, 2003 and 2002, respectively, as a result of the designation of nonderivative instruments as net investment hedges. These gains and losses are only recognized in earnings upon the complete or partial sale of the related investment or the complete liquidation of the investment.

The Company’s 1989 Goodyear Performance and Equity Incentive Plan, the 1997 Performance Incentive Plan of The Goodyear Tire & Rubber Company and the 2002 Performance Plan of The Goodyear Tire & Rubber Company provide for the granting of stock options and stock appreciation rights (SARs), restricted stock, performance grants and other stock-based awards. For options granted in tandem with SARs, the exercise of a SAR cancels the stock option; conversely, the exercise of the stock option cancels the SAR. The 1989 Plan expired on April 14, 1997, and the 1997 Plan expired on December 31, 2001, except, in each case, with respect to grants and awards outstanding. The 2002 Plan will expire by its terms on April 15, 2005, except with respect to grants and awards then outstanding. A maximum of 12,000,000 shares of the Company’s Common Stock are available for issuance pursuant to grants and awards made under the 2002 Plan through April 15, 2005. Stock options and related SARs granted under the above plans generally have a maximum term of ten years and vest pro rata over four years.

Performance units granted during 2002 and 2001 are earned based on Return on Invested Capital and Total Shareholder Return relative to the S&P Auto Parts & Equipment Companies (each weighted at 50%) over a three year performance period beginning January 1 of the year subsequent to the year of grant. To the extent earned, a portion of the performance units will generally be paid 50% in cash and 50% in stock (subject to deferral under certain circumstances). A portion may be automatically deferred in the form of units until the participant is no longer an employee of the company. Each unit is equivalent to a share of the Company’s Common Stock and payable in cash, shares of the Company’s Common Stock or a combination thereof at the election of the participant.

On December 4, 2000, the Company adopted The Goodyear Tire & Rubber Company Stock Option Plan for Hourly Bargaining Unit Employees, under which options in respect of up to 3,500,000 shares of the Common Stock of the Company may be granted, and the Hourly and Salaried Employee Stock Option Plan, under which options in respect of up to 600,000 shares of the Company’s Common Stock may be granted. Stock options granted under these plans generally have a maximum term of ten years and vest over one to three years. The Hourly Bargaining Unit Plan expired on September 30, 2001, and the Hourly and Salaried Plan expired on December 31, 2002, except, in each case, with respect to options then outstanding.

Stock-based compensation activity for the years 2003, 2002 (as restated) and 2001 follows:

Significant option groups outstanding at December 31, 2003 and related weighted average price and remaining life information follows:

The 1,963,669 options in the “All other” category were outstanding at exercise prices ranging from $5.52 to $74.25, with a weighted average exercise price of $29.45. All options and SARs were granted at an exercise price equal to the fair market value of the Company’s Common Stock at the date of grant.

Weighted average fair values at date of grant for grants in 2003, 2002 and 2001 follow:

The above fair value of options at date of grant was estimated using the Black-Scholes model with the following weighted average assumptions:

The fair value of performance units at date of grant was equal to the market value of the Company’s Common Stock at that date.

Stock-based compensation expense (income) included in income before tax for 2003, 2002 and 2001 was $1.3 million, $(5.6) million and $5.3 million, respectively.

Basic earnings per share has been computed based on the average number of common shares outstanding. The following table presents the number of incremental weighted average shares used in computing diluted per share amounts:

The average shares outstanding-diluted totals for 2003, 2002 and 2001 do not include the antidilutive impact of 0.1 million, 0.8 million and 1.8 million shares, respectively, of potential common stock associated with stock options. 2001 does not include 0.1 million shares associated with the Sumitomo 1.2% Convertible Note Payable.

Goodyear and its subsidiaries provide substantially all employees with pension benefits. The principal domestic hourly plan provides benefits based on length of service. The principal domestic plans covering salaried employees provide benefits based on final five-year average earnings formulas. Salaried employees making voluntary contributions to these plans receive higher benefits. Other plans provide benefits similar to the principal domestic plans as well as termination indemnity plans at certain international subsidiaries. At the end of 2003 and 2002, assets exceeded accumulated benefits in certain plans and accumulated benefits exceeded assets in others.

The Company and its subsidiaries provide substantially all domestic employees and employees at certain international subsidiaries with health care and life insurance benefits upon retirement. Insurance companies provide life insurance and certain health care benefits through premiums based on expected benefits to be paid during the year. Substantial portions of the health care benefits for domestic retirees are not insured and are paid by Goodyear. Benefit payments are funded from operations. The December 31, 2003, benefit obligation for other postretirement benefits includes $11.0 million for the increase in the Company’s contribution requirements based upon the attainment of certain profit levels by certain businesses in 2004 and 2005. On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act (the “Act”) was signed into law. In accordance with FASB Staff Position 106-1, all amounts are presented without reflecting any potential effects of the Act. Specific authoritative guidance on the accounting implications of the Act is pending. Such guidance, when issued, may require restatement of previously disclosed amounts.

Goodyear recognized a settlement loss of $7.1 million, a curtailment loss of $38.1 million and a special termination loss of $43.0 million during 2003. Goodyear recognized a curtailment loss of $0.3 million and a special termination loss of $0.8 million during 2002. During 2001, Goodyear recognized a settlement gain of $1.1 million, a curtailment gain of $0.8 million and a special termination loss of $25.1 million. Refer to Note 3.


Note 13.	Pension, Other Postretirement Benefit and Savings Plans (continued)

As a result of rationalization actions in 2003, Goodyear recognized a curtailment loss of $23.6 million and a loss from special termination benefits of $20.0 million. Goodyear recognized a curtailment gain of $0.2 million and a special termination loss of $6.5 million as a result of rationalization actions in 2001. Refer to Note 3.

The change in benefit obligation and plan assets for 2003 and 2002 and the amounts recognized in Goodyear’s Consolidated Balance Sheet at December 31, 2003 and 2002 are as follows:


Note 13.	Pension, Other Postretirement Benefit and Savings Plans (continued)

The accumulated benefit obligation for all defined benefit pension plans was $6,508 million and $5,769 million (as restated) at December 31, 2003 and 2002, respectively.

Certain international subsidiaries maintain unfunded pension plans consistent with local practices and requirements. At December 31, 2003, these plans accounted for $208.3 million of Goodyear’s accumulated benefit obligation, $215.9 million of its projected benefit obligation and $22.0 million of its minimum pension liability adjustment ($177.0 million, $187.2 million and $16.9 million, respectively, at December 31, 2002).

The increase (decrease) in minimum liability (net of tax) included in other comprehensive income follows:


Note 13.	Pension, Other Postretirement Benefit and Savings Plans (continued)

The following table presents significant weighted-average assumptions used to determine benefit obligations at December 31:

The following table presents significant weighted-average assumptions used to determine net periodic pension/benefit cost for the years ended December 31:

For 2003, an assumed long-term rate of return of 8.50% was used for the U.S. pension plans. In developing this rate, the Company evaluated the compound annualized returns of its U.S. pension fund over periods of 15 years or more (through December 31, 2002). In addition, the Company evaluated input from its pension fund consultant on asset class return expectations and long-term inflation. For the Company’s international locations, a weighted average assumed long-term rate of return of 8.40% was used. Input from local pension fund consultants concerning asset class return expectations and long-term inflation form the basis of this assumption.

A 1% change in the assumed health care cost trend would have increased (decreased) the accumulated benefit obligation at December 31, 2003 and the aggregate service and interest cost for the year then ended as follows:

Goodyear’s pension plan weighted-average asset allocation at December 31, 2003 and 2002, by asset category, are as follows:

The Company’s pension investment policy recognizes the long-term nature of pension liabilities, the benefits of diversification across asset classes and the effects of inflation. The diversified portfolio is designed to maximize returns consistent with levels of liquidity and investment risk that are prudent and reasonable. All assets are managed externally according to guidelines established individually with investment managers. The manager guidelines prohibit the use of any type of investment derivative without prior approval of the Company. Portfolio risk is controlled by having managers comply with guidelines, establishing the maximum size of any single holding in their portfolios and by using managers with different investment styles. The Company periodically undertakes asset and liability modeling studies to determine the appropriateness of the investments. The portfolio includes holdings of domestic, international, and private equities, global high quality and high yield fixed income, and short-term interest bearing deposits. The target asset allocation of the U.S. pension fund is 70% equities and 30% fixed income.

Equity securities include the Company’s common stock in the amounts of $35.6 million (0.9% of total plan assets) and $104.7 million (2.9% of total plan assets) at December 31, 2003 and 2002, respectively.

The Company expects to contribute approximately $210 million to its major U.S. and international pension plans in 2004.

Substantially all domestic employees are eligible to participate in one of seven savings plans. The main Hourly Bargaining Plans provided for matching contributions, through April 20, 2003, (up to a maximum of 6% of the employee’s annual pay or, if less, $12,000) at the rate of 50%. Goodyear suspended the matching contributions for all participants in the main Salaried Plan effective January 1, 2003. Goodyear’s domestic matching contributions were $9.8 million, $41.9 million and $40.2 million for 2003, 2002 and 2001, respectively.

In addition, defined contribution pension plans are available for certain foreign employees. Company contributions for these plans were $5.2 million, $3.8 million (as restated), and $3.8 million (as restated) in 2003, 2002 and 2001, respectively.

The components of Income (Loss) before Income Taxes, adjusted for Minority Interest in Net Income (Loss) of Subsidiaries, follow:

A reconciliation of income taxes at the U.S. statutory rate to income taxes provided follows:

The components of the provision (benefit) for income taxes by taxing jurisdiction follow:

Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31, 2003 and 2002 follow:

In the fourth quarter of 2002, Goodyear recorded a non-cash charge of $1.20 billion (as restated), or $6.86 (as restated) per share ($7.20 (as restated) per share on a year to date basis), to establish a valuation allowance against net Federal and state deferred tax assets. In addition, a valuation allowance of $352.9 million (as restated) was established against tax benefits that were recorded in OCI in 2002. Goodyear intends to maintain a valuation allowance until sufficient positive evidence exists to support realization of the Federal and state deferred tax assets.

At December 31, 2003, Goodyear had $286.7 million of tax assets for net operating loss carryforwards related to certain international subsidiaries, some of which are subject to expiration beginning in 2004. A valuation allowance totaling $209.0 million has been recorded against these and other deferred tax assets where recovery of the asset or carryforward is uncertain. In addition, Goodyear had $139.9 million of tax assets for tax credit carryforwards, some of which are subject to expiration beginning in 2007. A full valuation allowance has been recorded against these deferred tax assets as recovery is uncertain.

Goodyear determined that earnings of certain international subsidiaries would no longer be permanently reinvested in working capital. Accordingly, Goodyear recorded a provision of $50.2 million in 2002 for the incremental taxes incurred or to be incurred upon inclusion of such earnings in Federal taxable income.

No provision for Federal income tax or foreign withholding tax on undistributed earnings of international subsidiaries of $1.73 billion is required because the amount has been or will be reinvested in properties and plants and working capital. It is not practicable to calculate the deferred taxes associated with the remittance of these investments.

Goodyear made net cash payments for income taxes in 2003, 2002 and 2001 of $73.0 million, $125.9 million and $50.8 million, respectively.

Interest expense includes interest and amortization of debt discounts, less amounts capitalized as follows:

Goodyear made cash payments for interest in 2003, 2002 and 2001 of $280.6 million, $260.6 million (as restated) and $292.6 million, respectively.

Research and development costs for 2003, 2002 and 2001 were $350.4 million, $385.8 million (as restated) and $371.8 million (as restated), respectively.

Advertising costs, including costs for Goodyear’s cooperative advertising programs with dealers and franchisees, for 2003, 2002 and 2001 were $331.3 million, $281.4 million (as restated) and $292.8 million (as restated), respectively.

Segment information reflects the strategic business units of Goodyear (SBUs), which are organized to meet customer requirements and global competition.

The Tire business is comprised of five regional SBUs. The Engineered Products and Chemical Products businesses are each managed on a global basis. Segment information is reported on the basis used for reporting to Goodyear’s President and Chief Executive Officer.

Each of the five regional tire business segments is involved in the development, manufacture, distribution and sale of tires. Certain of the tire business segments also provide related products and services, which include retreads, automotive repair services and merchandise purchased for resale.

North American Tire provides original equipment and replacement tires for autos, motorcycles, trucks, farm, aircraft and construction applications in the United States, Canada and export markets. North American Tire also provides related products and services including tread rubber, tubes, retreaded tires, automotive repair services and merchandise purchased for resale.

European Union Tire provides original equipment and replacement tires for autos, motorcycles, trucks, farm and construction applications in western Europe and export markets. European Union Tire also retreads truck and aircraft tires.

Eastern Europe, Africa and Middle East Tire provides original equipment and replacement tires for autos, trucks, farm, bicycle, construction and mining applications in Eastern Europe, Africa, the Middle East and export markets.

Latin American Tire provides original equipment and replacement tires for autos, trucks, tractors, aircraft and construction applications in Central and South America, Mexico and export markets. Latin American Tire also manufactures materials for tire retreading.

Asia Tire provides original equipment and replacement tires for autos, trucks, farm, aircraft and construction applications in Asia, the Pacific and export markets. Asia Tire also retreads aircraft tires.

Engineered Products develops, manufactures and sells belts, hoses, molded products, airsprings, tank tracks and other products for original equipment and replacement transportation applications and industrial markets worldwide.

Chemical Products develops, manufactures and sells synthetic rubber and rubber latices, synthetic resins, and other organic chemical products for internal and external customers worldwide. Chemical Products also engages in plantation and natural rubber purchasing operations.

Results of operations in the Tire and Engineered Products Segments were measured based on net sales to unaffiliated customers and segment operating income. Results of operations of the Chemical Products Segment were measured based on net sales (including sales to other SBUs) and segment operating income. Segment operating income included transfers to other SBUs. Segment operating income was computed as follows: net sales less cost of goods sold (excluding accelerated depreciation charges, asset impairment charges and asset writeoffs) and selling, administrative and general expense (excluding corporate administrative expenses). Segment operating income also included equity (earnings) losses in affiliates. Inter-SBU sales by Chemical Products were at a formulated price or market. Purchases from Chemical Products were included in the purchasing SBU’s segment operating income at Chemical Products cost. Segment assets included those assets under the management of the SBU.

In addition to its consolidated operations in the Asia region, Goodyear owns a 50% interest in SPT, a partnership with Ansell Ltd. of Australia. SPT is the largest tire manufacturer, marketer and exporter in Australia and New Zealand. Results of operations of SPT are not reported in segment results, but are reflected in Goodyear’s Consolidated Statement of Operations using the equity method.

The following table presents 100% of the sales and operating income (loss) of SPT:

SPT operating income (loss) did not include net rationalization charges (credits) of approximately $4.9 million in 2003, $(2.1) million in 2002 and $48.0 million in 2001. SPT debt totaled $196.9 million at December 31, 2003, of which $72.0 million was payable to Goodyear. SPT debt totaled $131.3 million at December 31, 2002, of which $26.3 million was payable to Goodyear.

Portions of the items described in Note 3, Rationalizations, and Note 4, Other (Income) and Expense, were not charged (credited) to the SBUs for performance evaluation purposes but were attributable to the SBUs as follows:

Segment operating income in 2003 and 2002, compared to 2001, benefited from the non-amortization of goodwill and intangible assets with indefinite useful lives under the provisions of SFAS 142. Segment

operating income in 2001 included amortization expense for goodwill and intangible assets with indefinite useful lives as follows:

The following table presents geographic information. Net sales by country were determined based on the location of the selling subsidiary. Long-lived assets consisted primarily of properties and plants, deferred charges and other miscellaneous assets. Management did not consider the net sales or long-lived assets of individual countries outside the United States to be significant to the consolidated financial statements.

At December 31, 2003, Goodyear had binding commitments for raw materials and investments in land, buildings and equipment of $520.1 million, and off-balance-sheet financial guarantees written and other commitments totaling $74.4 million.

At December 31, 2003, Goodyear recorded, in other current liabilities, $12.3 million ($11.0 million (as restated) at December 31, 2002) for potential claims under warranties offered by the Company. Tire replacement under most of the warranties offered by Goodyear is on a prorated basis. Warranty reserves are based on past claims experience, sales history and other considerations. The amount of Goodyear’s ultimate liability in respect of these matters may differ from these estimates.

The following table presents changes in the warranty reserve during 2003 and 2002:

Goodyear had recorded liabilities totaling $32.8 million at December 31, 2003 and $53.5 million at December 31, 2002 for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by Goodyear. Of these amounts, $7.7 million and $21.4 million were included in Other current liabilities at December 31, 2003 and December 31, 2002, respectively. The costs include legal and consulting fees, site studies, the design and implementation of remediation plans, post-remediation monitoring and related activities and will be paid over several years. The amount of Goodyear’s ultimate liability in respect of these matters may be affected by several uncertainties, primarily the ultimate cost of required remediation and the extent to which other responsible parties contribute. The liability was reduced in 2003 by approximately $17 million due to the resolution related to one site during the year.

Goodyear had recorded liabilities, on a discounted basis, totaling $194.0 million and $152.4 million (as restated) for anticipated costs related to workers’ compensation at December 31, 2003 and December 31, 2002, respectively. Of these amounts, $112.7 million and $66.4 million (as restated) were included in Current Liabilities as part of Compensation and benefits at December 31, 2003 and December 31, 2002, respectively. The costs include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on Goodyear’s assessment of potential liability using an analysis of available information with respect to pending claims, historical experience, and current cost trends. The amount of Goodyear’s ultimate liability in respect of these matters may differ from these estimates. The restatement included an aggregate adjustment of $23.9 million before tax to address an understatement of the Company’s potential workers’ compensation liability. Refer to Note 2 for additional information on adjustments to the Company’s workers’ compensation liabilities.

Goodyear had recorded liabilities totaling $491.7 million at December 31, 2003 and $240.7 million (as restated) at December 31, 2002 for potential product liability and other tort claims, including related legal fees expected to be incurred. Of these amounts, $142.5 million and $75.4 million (as restated) were included in Other current liabilities at December 31, 2003 and 2002, respectively. The amounts recorded were estimated on the basis of an assessment of potential liability using an analysis of available information with respect to pending claims, historical experience and, where available, recent and current trends. The Company had recorded insurance receivables for potential product liability and other tort claims of $199.3 million at December 31, 2003 and $81.0 million at December 31, 2002. Of this amount, $100.1 million and $24.7 million was included in Current Assets as part of Accounts and notes receivable at December 31, 2003 and December 31, 2002, respectively.

Asbestos. Goodyear is a defendant in numerous lawsuits alleging various asbestos related personal injuries purported to result from alleged exposure to asbestos in certain rubber encapsulated products or aircraft braking systems manufactured by Goodyear in the past or to asbestos in certain Goodyear facilities. Typically, these lawsuits have been brought against multiple defendants in state and Federal courts. To date, Goodyear has disposed of approximately 25,300 cases by defending and obtaining the dismissal thereof or by entering into a settlement. The sum of the Company’s accrued asbestos related liability and gross payments to date, including legal costs, totaled approximately $208 million through December 31, 2003 and approximately $187 million through December 31, 2002.

A summary of approximate asbestos claims activity in recent years follows. Because claims are often filed and disposed of by dismissal or settlement in large numbers, the amount and timing of settlements and the number of open claims during a particular period can fluctuate significantly from period to period.


(1)	Changes in claims tracking methods resulted in a modification of previously reported pending claims. The number of pending claims was previously reported as 97,000 and 62,000 at December 31, 2002 and 2001, respectively.

(2)	Represents amount spent on asbestos litigation defense and claim resolution before recovery of insurance proceeds.

Prior to 2003, Goodyear did not record a receivable for expected recoveries from excess carriers in respect of asbestos related matters. Goodyear has instituted coverage actions against certain of these excess carriers. After consultation with its outside legal counsel and giving consideration to relevant factors including the ongoing legal proceedings with certain of its excess coverage insurance carriers, their financial viability, their legal obligations and other pertinent facts, Goodyear determined an amount it expects is probable of recovery from such carriers. Accordingly, Goodyear recorded a receivable during 2003 which represents an estimate of recovery from its excess coverage insurance carriers relating to potential asbestos related liabilities.

Based upon the model employed by the valuation expert, as of December 31, 2003, the Company recorded a receivable related to asbestos claims of $110.4 million. Based on the Company’s current asbestos claim profile, the Company expects that approximately 85% of asbestos claim related losses will be recoverable up to its accessible policy limits. The receivable recorded consists of an amount the Company expects to collect under coverage-in-place agreements with certain primary carriers as well as an amount it believes is probable of recovery from certain of its excess coverage insurance carriers. Of this amount, $20.4 million was included in Current Assets as part of Accounts and notes receivable at December 31, 2003. Goodyear had recorded insurance receivables of $69.7 million at December 31, 2002. Of this amount, $20.0 million was included in Current Assets as part of Accounts and notes receivable.

The Company believes that at December 31, 2003, it had approximately $410 million in aggregate limits of excess level policies potentially applicable to indemnity payments for asbestos products claims in addition to limits of available primary insurance policies. Some of these excess policies provide for payment of defense costs in addition to indemnity limits. A portion of the availability of the excess level policies is included in the $110.4 million insurance receivable recorded at December 31, 2003. The Company also had approximately $30 million in aggregate limits for products claims as well as coverage for premise claims on a per occurrence basis and defense costs available with its primary insurance carriers through coverage-in-place agreements at December 31, 2003.

Goodyear believes that its reserve for asbestos claims, and the insurance receivables recorded in respect of these claims, reflect reasonable and probable estimates of these amounts. The estimate of the assets and liabilities related to pending and expected future asbestos claims and insurance recoveries is subject to numerous uncertainties, including, but not limited to, changes in (i) the litigation environment; (ii) federal and state law governing the compensation of asbestos claimants; (iii) the Company’s approach to defending and resolving claims; and (iv) the level of payments made to claimants from other sources, including other defendants. As a result, with respect to both asserted and unasserted claims, it is reasonably possible that the Company may incur a material amount in excess of the current reserve, however such amount cannot be reasonably estimated. Coverage under insurance policies is subject to varying characteristics of asbestos claims including, but not limited to, the type of claim (premise vs. product exposure), alleged date of first exposure to the Company’s products or premises and disease alleged. Depending upon the nature of these characteristics, as well as the resolution of certain legal issues, some portion of the insurance may not be accessible by the Company.

Heatway (Entran II). The Company is a defendant in 22 class actions or potential class actions and three other civil actions in various Federal, state and Canadian courts asserting non-asbestos property damage claims relating to Entran II, a rubber hose product that it supplied from 1989-1993 to Chiles Power Supply, Inc. (d/b/a Heatway Systems), a designer and seller of hydronic radiant heating systems in the United States. The plaintiffs in these actions are generally seeking recovery under various tort, contract and statutory causes of action, including breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for a particular purpose, negligence, strict liability and violation of state consumer protection statutes. In one of the above mentioned class actions, on October 9, 2003, the United States District Court in New Jersey preliminarily approved a proposed national settlement agreement (the Proposed Settlement) for pending Entran II claims in the U.S. and Canada, except for claims related to property in six New England states, two judgments in Colorado state court, two judgments in Colorado Federal court and any future judgments involving claimants that opt out of the Proposed Settlement. The Company has the right to withdraw from the Proposed Settlement if it determines in good faith and in its sole discretion that an excessive number of persons have opted out of the class and the Proposed Settlement. Potential claimants had until May 7, 2004 to exercise their right to opt out of the Proposed Settlement. As of May 17, 2004, the Company had received notice that at least 525 potential sites had been opted out of the Proposed Settlement. The Company is currently assessing its options with respect to the Proposed Settlement and expects to decide shortly whether or not it will withdraw from the Proposed Settlement.

the first subsequent year in which the following cumulative EBITDA targets are met: $2.6 billion in 2005, $4.0 billion in 2006 and $5.4 billion in 2007. In addition to the required contributions of Goodyear, 80% of Goodyear’s insurance recoveries from Entran II claims will be paid into the settlement fund. The Company estimates that contributions to the settlement fund from insurance recoveries could total $120 million. Because the insurance recoveries were less than $120 million at February 27, 2004, the terms of the Proposed Settlement give the plaintiffs the right to withdraw from the settlement. Nevertheless, the parties have jointly requested that the court stay all Entran II litigation (with certain exceptions) pending final approval of the settlement.

In 2002, two state courts in Colorado entered judgments against the Company in Entran II cases of $22.7 million and $1.3 million, respectively. These cases are excluded from the Proposed Settlement, and the Company will continue to pursue appeals of these judgments.

On June 19, 2003, a jury in Colorado Federal court awarded a judgment in an Entran II case against the Company of $4.1 million. An additional $5.7 million in prejudgment interest was awarded on September 8, 2003. Post-trial motions have been filed by all parties seeking modifications to the judgment. On May 13, 2004, in another Entran II case, a federal jury in Colorado awarded a judgment against the Company of $3.2 million. These cases are also excluded from the Proposed Settlement.

The ultimate cost of disposing of Entran II claims is dependent upon a number of factors, including the Company’s ability to satisfy the contingencies in any settlement, the number of claimants that opt out of any settlement, final approval of the terms of any settlement, Goodyear’s ability to resolve claims not subject to any settlement (including the cases in which the Company received adverse judgments), and, in the event Goodyear fails to consummate a settlement for any reason, future judgments by courts in other currently pending or yet unasserted actions. Depending on the resolution of these uncertainties, the costs associated with Entran II claims could have a material adverse effect on the Company’s results of operations, financial position and liquidity in future periods.

Refer to Item 3, Legal Proceedings, for further information about Heatway matters.

Load Range D and E. On December 5, 2003, a conditional settlement agreement resolving a national class action with respect to certain allegedly defective Load Range E light truck and recreational vehicle tires was preliminarily approved. On April 28, 2004, the settlement received final court approval. The Company has accrued for the cost of the settlement, including legal fees. The cost of the settlement did not have a material impact on the Company’s financial statements. Refer to Item 3, Legal Proceedings, for further information about Load Range E claims. During the fourth quarter of 2003, actions related to alleged breaches of warranty or product defects relating to certain of Goodyear’s Load Range D light truck tires, previously reported by Goodyear, were dismissed.

The Company is a party to various agreements under which it has undertaken obligations resulting from the issuance of certain guarantees. Guarantees have been issued on behalf of the Company’s affiliates or customers of the Company. Normally there is no separate premium received by the Company as consideration for the issuance of guarantees. The Company’s performance under these guarantees would normally be triggered by the occurrence of one or more events as provided in the specific agreements. Collateral and recourse provisions available to the Company under these agreements were not significant.

At December 31, 2003, the Company had guarantees outstanding under which the maximum potential amount of payments totaled $4.1 million, and which expire at various times through 2012.

The Company will from time to time issue guarantees to financial institutions on behalf of certain of its affiliates, which are accounted for using the equity method. The financing arrangements of the affiliates may be for either working capital or capital expenditures. The Company generally does not require collateral in connection with the issuance of these guarantees. In the event of non-payment by an affiliate, the Company is obligated to make payment to the financial institution, and will typically have recourse to the assets of that affiliate. At December 31, 2003, the Company had guarantees outstanding under which the maximum potential amount of payments totaled $17.5 million, and which expire at various times through 2011. The Company is unable to estimate the extent to which its affiliates’ assets would be adequate to recover the maximum amount of potential payments with that affiliate.

The Company holds a 50% equity interest in South Pacific Tyres (SPT), a partnership in Australia that manufactures and distributes tires. The terms of the partnership agreement provide that the Company is jointly and severally liable for all liabilities of the partnership. At December 31, 2003, SPT had debt totaling $196.9 million, of which $72.0 million was payable to Goodyear. The Company also owns a 50% undivided interest in all of the assets of the partnership.

The Company’s percentage ownership of the net assets of the above affiliates is included on the Consolidated Balance Sheet as Investments in and Advances to Affiliates.

At December 31, 2003, the Company was a party to various agreements under which it had assumed obligations to indemnify the counterparties from certain potential claims and losses. These agreements typically involve standard commercial activities undertaken by the Company in the normal course of business; the sale of assets by the Company; the formation of joint venture businesses to which the Company has contributed assets in exchange for ownership interests; and other financial transactions. Indemnifications provided by the Company pursuant to these agreements relate to various matters including, among other things, environmental, tax and shareholder matters; intellectual property rights; government regulations and employment-related matters; and dealer, supplier and other commercial matters.

Certain indemnifications expire from time to time, and certain other indemnifications are not subject to an expiration date. In addition, the Company’s potential liability under certain indemnifications is subject to maximum caps, while other indemnifications are not subject to caps. Although the Company has been subject to indemnification claims in the past, the Company cannot reasonably estimate the number, type and size of

indemnification claims that may arise in the future. Due to these and other uncertainties associated with the indemnifications, the Company’s maximum exposure to loss under these agreements cannot be estimated.

The Company has determined that there are no guarantees other than liabilities for which amounts are already recorded or reserved in its financial statements under which it is probable that it has incurred a liability.

In June 1996, the Company authorized 7,000,000 shares of Series B Preferred Stock (“Series B Preferred”) issuable only upon the exercise of rights (“Rights”) issued under the Preferred Stock Purchase Rights Plan set forth in the Rights Agreement dated June 4, 1996, and amended and restated on April 15, 2002. Each share of Series B Preferred issued would be non-redeemable, non-voting and entitled to (i) cumulative quarterly dividends equal to the greater of $25.00 or, subject to adjustment, 100 times the per year amount of dividends declared on Goodyear Common Stock (“the Common Stock”) during the preceding quarter and (ii) a liquidation preference.

Under the Rights Plan, each shareholder of record on July 29, 1996 received a dividend of one Right per share of the Common Stock. Each Right, when exercisable, will entitle the registered holder thereof to purchase from the Company one one-hundredth of a share of Series B Preferred Stock at a price of $250 (the “Purchase Price”), subject to adjustment. The Rights will expire on July 29, 2006, unless earlier redeemed at $.001 per Right. The Rights will be exercisable only in the event that an acquiring person or group purchases, or makes — or announces its intention to make — a tender offer for, 15% or more of the Common Stock.

In the event that any acquiring person or group acquires 15% or more of the Common Stock (20% for certain institutional investors), each Right will entitle the holder to purchase that number of shares of Common Stock (or in certain circumstances, other securities, cash or property) which at the time of such transaction would have a market value of two times the Purchase Price.

If the Company is acquired or a sale or transfer of 50% or more of the Company’s assets or earnings power is made after the Rights become exercisable, each Right (except those held by an acquiring person or group) will entitle the holder to purchase common stock of the acquiring entity having a market value then equal to two times the Purchase Price. In addition, when exercisable the Rights under certain circumstances may be exchanged by the Company at the ratio of one share of Common Stock (or the equivalent thereof in other securities, property or cash) per Right, subject to adjustment.

On March 1, 2004, the Rights Plan was amended to accelerate the expiration date of the Rights Plan to June 1, 2004 from July 29, 2006. As a result, the Rights Plan will be effectively terminated on June 1, 2004.

As of December 31, 2003, the Company had $1.56 billion in cash and cash equivalents, of which $612.7 million was held in the United States and $432.8 million was in accounts of GDTE. The remaining amounts were held in the Company’s other non-U.S. operations. The Company’s ability to move cash and cash equivalents among its various operating locations is subject to the operating needs of the operating locations as well as restrictions imposed by local laws and applicable credit facility agreements. As of December 31, 2003, approximately $215 million of cash was held in locations where significant tax or legal impediments would make it difficult or costly to execute monetary transfers. Based upon the Company’s projected operating results, the Company expects that cash flow from operations together with available borrowing under its restructured credit facilities and other sources of liquidity will be adequate to meet the

Company’s anticipated cash and cash equivalent requirements including working capital, debt service and capital expenditures through December 31, 2004.

At December 31, 2003, the Company also had $335.0 million of unused availability under its various credit agreements.

The Company’s restructured and refinanced credit facilities mature in 2005 and 2006 and the Company would have to refinance these facilities in the capital markets if they were not renewed by the banks. After taking into account the pay down of certain obligations in connection with recent financing activities, the aggregate amount of long-term debt maturing in 2005 and 2006 is $1,343 million and $1,481 million, respectively. Because of the Company’s debt ratings, recent operating performance and other factors, access to such markets cannot be assured. The Company’s ongoing ability to access the capital markets is highly dependent on successfully implementing its North American Tire turnaround strategy. In addition to facilitating access to the capital markets, successful implementation of the turnaround strategy is also crucial to ensuring that the Company has sufficient cash flow from operations to meet its obligations. There is no assurance that the Company will be successful in implementing its turnaround strategy. Failure to successfully complete the turnaround strategy could have a material adverse effect on the Company’s financial position, results of operations and liquidity.

Under the Company’s master contract with the USWA, the Company committed to consummate the issuance or placement of at least $250 million of debt securities and at least $75 million of equity or equity-linked securities by December 31, 2003. It did not meet this commitment. As a result, the USWA may file a grievance and strike. In the event of a strike, the Company’s financial position, results of operations and liquidity could be materially adversely affected. The Company has also committed to launch, by December 1, 2004, a refinancing of its U.S. term loan and revolving credit facilities due in April 2005 with loans or securities having a term of at least three years. If the Company fails to complete this refinancing commitment, the USWA would have the right to strike and the Company would be required to pay each covered union employee (approximately 13,700 as of December 31, 2003) $1,000 and each covered union retiree (approximately 13,800 as of December 31, 2003) $500. In addition, if the Company failed to comply with the covenants in its credit agreements, the lenders would have the right to cease further loans to the Company and to demand the repayment of all outstanding loans under these facilities.

The Company is subject to various legal proceedings, including the Entran II litigation described in Note 20, Commitments and Contingent Liabilities. The ultimate cost of disposing of Entran II claims is dependent upon a number of factors, including the Company’s ability to satisfy the contingencies in a proposed settlement, the number of claimants that opt out of any settlement, final approval of the terms of the settlement at a yet-to-be scheduled fairness hearing, Goodyear’s ability to resolve claims not subject to the settlement (including the cases in which the Company received adverse judgments), and, in the event Goodyear fails to consummate the proposed settlement for any reason, future judgments by courts in other currently pending or yet unasserted actions. Depending on the resolution of these uncertainties, the costs associated with Entran II claims could be significant and could have a material adverse effect on the Company’s results of operations, financial position and liquidity in future periods. In the event the Company wishes to appeal any future adverse judgment in any Entran II or other proceeding, it would be required to

post an appeal bond with the relevant court. If the Company does not have sufficient availability under its U.S. revolving credit facility to issue a letter of credit to support an appeal bond, it may be required to pay down borrowings under the facility in order to increase the amount available for issuing letters of credit or deposit cash collateral in order to stay the enforcement of the judgment pending an appeal. A significant deposit of cash collateral may have a material adverse effect on the Company’s liquidity.

On February 23, 2004, Goodyear completed the addition of a $650 million tranche to the Company’s $1.30 billion Senior Secured Asset-Backed Facility. Approximately $335 million of the proceeds of the tranche were used to partially reduce amounts outstanding under the U.S. term facility. On March 12, 2004, Goodyear completed a private offering of $650 million in senior secured notes, consisting of $450 million of 11% senior secured notes due 2011 and $200 million of floating rate notes at LIBOR plus 8% due 2011. The proceeds of the notes were used to repay the remaining outstanding amount under the U.S. term facility, to permanently reduce the Company’s commitment under the U.S. revolving credit facility by $70 million, and for general corporate purposes. In connection with these financing activities, each of the restructured credit facilities discussed in Note 11 was amended on February 19, 2004, principally to permit additional financings. The Company’s credit agreements were further amended on April 16, 2004, to extend until May 19, 2004, the deadline for filing the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. Refer to Note 11 for further information on the Company’s credit facilities and term loan agreements.

On May 11, 2004, the Company announced that it would not file the first quarter 2004 Form 10-Q by May 30, 2004, as required in the Company’s loan agreements, and that it would initiate discussions with its lenders to extend the deadline for filing by 30 days. While Goodyear does not expect to need to access the facilities during this 30-day period, in the absence of an extension, the Company would not be able to access them. If Goodyear does not obtain an extension, it would still have until June 30 to file the Form 10-Q and regain access, but if it does not file the Form 10-Q by then, there could be an event of default under the loan agreements and thereafter under other debt instruments.

On May 18, 2004, Goodyear obtained an amendment from the European credit facility lenders to allow until June 4, 2004 for delivery to the lenders of the 2003 audited financial statements for the Company’s Goodyear Dunlop Tires Europe B.V. joint venture. These financial statements, which have historically been completed after the Form 10-K was filed, were previously required to be delivered by May 19, 2004. Goodyear must complete these financial statements by June 4, 2004 in order to avoid defaults under the principal credit facilities.

On April 7, 2004, the Company announced that it will exercise its call option and purchase the remaining 20 percent of Sava Tires d.o.o. (Sava Tire), a joint venture tire manufacturing company in Kranj, Slovenia, for approximately $52 million. The transaction is expected to be completed in June 2004. Goodyear’s stake in Sava Tire is held by GDTE.

On April 16, 2004, the Company announced that it will purchase the remaining 50 percent of Dackia, one of Sweden’s major retail tire groups, for approximately $10 million. The transaction is expected to be completed in June 2004.

Effect of restatement adjustments on Goodyear’s previously issued 2003 quarterly financial statements

The second quarter of 2003 (as originally reported) included net charges for adjustments totaling $25.6 million before tax ($31.3 million after tax). These adjustments related primarily to Interplant, Engineered Products and Tax adjustments, and have been restated to prior periods. Several factors relating to Goodyear’s enterprise resource planning systems implementation resulted in Engineered Products’ inability to locate or recreate account reconciliations for prior periods in the amount of $19.0 million before tax ($18.6 million after tax). As a result, Engineered Products was unable to allocate the amount to applicable periods and accordingly, recorded this adjustment in the first quarter of 2003.

The first quarter included a net after-tax charge of $19.1 million resulting from general and product liability — discontinued products and a net after-tax charge of $57.7 million for rationalizations. The second quarter included a net after-tax gain of $9.1 million resulting from general and product liability — discontinued products, a net after-tax charge of $11.5 million for rationalizations and an $8.8 million after-tax loss on the sale of 20,833,000 shares of SRI. The third quarter included a net after-tax charge of $62.5 million resulting from general and product liability — discontinued products and a net after-tax charge of $44.8 million for rationalizations. The fourth quarter included a net after-tax charge of $72.9 million from general and product liability — discontinued products and a net after-tax charge of $153.1 million for rationalizations. The fourth quarter also included accelerated depreciation charges, asset writeoffs and impairment charges of $131.4 million after tax. Additionally, the fourth quarter included $9.5 million after tax related to a labor litigation judgment against Goodyear in European Union Tire.

Effect of restatement adjustments on Goodyear’s previously issued 2002 quarterly financial statements

The restated 2002 net income (loss) for all quarters differs from that which was originally reported due primarily to amounts related to the Chemical Products business segment. Certain items were identified as a result of a stand-alone audit conducted in 2003 of a portion of the Chemical Products business segment which were recorded in 2002 but which related to prior periods and were restated out of 2002. The most significant adjustments related to the timing of the recognition of manufacturing variances to reflect the actual cost of inventories and the fair value adjustment of a hedge for natural gas.

The second quarter included a net after-tax gain of $0.8 million (as restated) resulting from asset sales. The third quarter included a net after-tax gain of $10.7 million resulting from asset sales and a net after-tax charge of $8.9 million for rationalizations. The third quarter also included the writeoff of a miscellaneous investment of $2.5 million after tax. The fourth quarter included a net after-tax gain of $12.0 million (as restated) resulting from asset sales and a net after-tax benefit of $3.8 million (as restated) from rationalization actions and reversals. The fourth quarter also included a non-cash charge of $1.20 billion (as restated) to establish a valuation allowance against net Federal and state deferred tax assets.

Quarterly per share amounts do not add to the year 2002 per share amount due to issuance of 11.3 million shares of common stock in the third quarter.

The Company’s financial statements have been restated to reflect adjustments to the Company’s previously reported financial information on Form 10-K for the years ended December 31, 2002 and 2001. The Company’s 2003 and 2002 quarterly financial information also has been restated to reflect adjustments to the Company’s previously reported financial information on Form 10-Q for the quarters ended March 31, 2003, June 30, 2003, and September 30, 2003. The restatement also affects periods prior to 2001. During 2003, the Company identified adjustments through the current date that were required to be recorded which reduced previously reported after-tax income by a total of $280.8 million. Of this amount, $56.2 million was included in 2003 net income. The reduction to net income for the years ended December 31, 2002 and 2001 was $121.2 million and $50.5 million, respectively. The impact related to years prior to 2001 was a decrease in retained earnings of $52.9 million at January 1, 2001. Total shareholders’ equity at September 30, 2003 was also reduced by adjustments to Accumulated Other Comprehensive Income (Loss) of $183.9 million.

The restatement initially arose out of an intensified effort to reconcile certain general ledger accounts, which were out of balance largely as a result of problems associated with the implementation of enterprise resource planning software, and following the receipt of a management letter dated March 11, 2003, from the Company’s independent public accountant, PricewaterhouseCoopers LLP (“PwC”), in which PwC noted the need for increased attention to the account reconciliation process.

As a result of Goodyear’s efforts to reconcile these accounts, the Company initially recorded adjustments that reduced net income for the quarter ended June 30, 2003 by $31.3 million. The Company subsequently determined in the third quarter of 2003 that it needed to make additional adjustments arising out of account reconciliations. Based on an assessment of the impact of the adjustment to the expected 2003 results, management and the Audit Committee decided to restate the Company’s previously issued financial statements. PwC advised the Company that the failure to identify certain issues that had affected several years related to the monitoring and review of general ledger accounts collectively resulted in a material weakness in internal controls that required strengthening of procedures for account reconciliation, and internal reporting and monitoring of these matters. The restatement, which was contained in the Company’s Report on Form 8-K filed concurrently with its Form 10-Q for the quarter ended September 30, 2003, resulted in a decrease in cumulative net income through June 30, 2003. The restatement also included changes to the timing of certain previously recognized adjustments not arising from account reconciliations as well as other adjustments identified during the restatement process.

On December 10, 2003, the Company announced that it was delaying the filing of its 2002 Form 10-K/ A containing restated financial statements in order to permit the Audit Committee to conduct an internal investigation into potential improper accounting issues in its European Union business segment. The investigation subsequently expanded to other locations of the Company’s overseas operations. The investigation identified accounting irregularities primarily related to earnings management whereby accrual accounts were adjusted or expenses were improperly deferred in order to increase the segments’ operating income.

In the first and second quarters of 2004, the Company identified other matters requiring adjustment. Some of these adjustments resulted from an improper understatement of workers’ compensation liability and improper accounting related to the valuation of real estate received in payment of trade accounts receivable. The Audit Committee also initiated an investigation into these adjustments. As a result of these investigations, management and the Audit Committee decided that a further restatement was necessary.

attributable to the material weakness previously identified. A significant portion of these errors were detected by the Company. PwC further identified an additional material weakness resulting from intentional overrides of internal controls by those in authority, particularly related to the European Union Tire segment and workers’ compensation liability in the United States. These material weaknesses, if unaddressed, could result in material errors in the Company’s financial statements. In addition, PwC advised the Company that it had identified as reportable conditions the Company’s need to enhance certain finance personnel’s knowledge of U.S. GAAP and internal controls and the need to enhance controls related to the establishment of bank accounts. PwC also identified a number of other internal control weaknesses/business recommendations.

The Company has initiated the implementation of various measures to strengthen its account reconciliation control processes. The Company established a requirement that the finance director of each operating unit that maintains a general ledger or sub-ledger confirm on a quarterly basis that all balance sheet accounts for which he or she has responsibility have been reconciled accurately and on a timely basis. At the corporate level, each employee responsible for an account is required to certify, on a quarterly basis, that such account has been accurately reconciled. The Company’s Internal Audit Department has commenced targeted reviews of selected account reconciliations. In connection with the overseas accounting investigation, senior finance personnel visited various locations and reviewed and confirmed the accuracy of selected account reconciliations, analyzed reported results, reviewed items identified by prior audits to ensure corrective actions were in place and reviewed the certification process with local management.

In connection with the restatement process and the internal investigation by the Audit Committee, the Company has dedicated substantial resources to the review of its control processes and procedures. As a result of that review, the Company has determined that it will strengthen its internal controls by (i) making personnel and organizational changes, (ii) improving communications and reporting, (iii) improving monitoring controls, (iv) increasing oversight to reduce opportunities for intentional overrides of control procedures, and (v) simplifying and improving financial processes and procedures. Specific remedial measures that have already been undertaken, principally since the beginning of 2004, include the following:


	•	Various disciplinary actions (ranging from reprimand to termination) against numerous employees;

	•	Restructured reporting relationships within the finance function such that the finance directors of all seven strategic business units report directly to the Chief Financial Officer and the controllers of these business units report to the Corporate Controller;

	•	Changed compensation structures for business unit finance directors so that compensation is no longer directly tied to financial performance of the business unit;

	•	Increased staffing (including the use of temporary personnel) in various aspects of the Company’s finance and internal audit functions;

	•	Increased management oversight by creating a new Disclosure Committee comprised of senior managers with responsibility for responding to issues raised during the financial reporting process;

	•	Streamlined the organization of its European Business Unit to eliminate a level of management and financial reporting;

	•	Conducted enhanced training on the certification process whereby senior finance management explained each matter to be certified with each of the seven strategic business units and their local management teams;

	•	Commissioned a review of a significant portion of open workers’ compensation claims, including a certification by an outside administrator that such claims had been properly valued; and

	•	Revised procedures with respect to opening bank accounts to ensure appropriate oversight by the Treasury Department.

A number of other initiatives to strengthen the Company’s internal controls are currently in process or under development. These include:


	•	Expanding the personnel, resources and responsibilities of the internal audit function;

	•	Increasing finance staff and upgrading the technical capabilities of individuals within the finance function, through improved and formalized training;

	•	Development of new and enhanced monitoring controls;

	•	Simplification of financial processes and information technology systems;

	•	Creation of a Remediation Project Management Office responsible for the design and implementation of the Company’s long-term remediation plan;

	•	Establishing a communications program to improve inter-department and cross-functional communications, maintain awareness of the financial statement certification process and finance issues in general and to encourage associates to raise issues for review and/or resolution; and

	•	Review all accounting policies and procedures, and where appropriate make modifications.

The Company will continue to evaluate the effectiveness of its controls and procedures on an ongoing basis, including consideration of the internal control weaknesses/business recommendations identified by PwC, and will implement further actions as necessary in its continuing efforts to strengthen the control process. PwC has not completed its assessment of the effectiveness of the Company’s actions.

In addition, the Company is undertaking a thorough review of its internal controls, including information technology systems and financial reporting, as part of the Company’s preparation for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. Given the effort needed to fully remedy the internal control weaknesses identified by PwC, the Company may not be able to remedy these weaknesses and take the other actions required for compliance with Section 404 of the Sarbanes-Oxley Act by the March 1, 2005 deadline for Section 404 compliance.

The Company’s senior management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2003. Based upon that evaluation, combined with a consideration of the additional procedures described above, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, notwithstanding the material weaknesses and reportable conditions described above, after taking into account the remedial measures implemented by the Company, as of the evaluation date, the Company’s disclosure controls and procedures are designed, and are effective, to give reasonable assurance that information the Company must disclose in reports filed with the SEC is properly recorded, processed and summarized, and then reported as required.

Other than as described above, there have been no changes in the Company’s internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Information regarding Goodyear’s directors responsive to Item 401 of Regulation S-K is set forth in Exhibit 99.1, which information is incorporated herein by reference. For information regarding Goodyear’s executive officers, reference is made to Part I, at pages 21 through 25, inclusive, of this Annual Report.

Goodyear has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the Audit Committee are James C. Boland (Chair), John G. Breen, Gary D. Forsee, William J. Hudson and Shirley D. Peterson.

The Board of Directors of Goodyear has determined that each of James C. Boland, Chair of the Audit Committee, and Audit Committee members John G. Breen, Gary D. Forsee and William J. Hudson, Jr. is an audit committee financial expert as defined by Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is independent within the meaning of Item 7(d)(3)(iv) of Schedule 14A of the Exchange Act.

Goodyear has adopted a code of business conduct and ethics for directors, officers and employees, known as the Business Conduct Manual. Goodyear also has adopted a conflict of interest policy applicable to directors and executive officers. Both of these documents are available on Goodyear’s website at http://www.goodyear.com/investor/governance.html. Shareholders may request a free copy of these documents from:

Goodyear’s Code of Ethics for its Chief Executive Officer and its Senior Financial Officers (the “Code of Ethics”) is also posted on Goodyear’s website. Amendments to and waivers from the Code of Ethics will be disclosed on the website.

Goodyear has adopted Corporate Governance Guidelines as well as charters for each of its Audit, Compensation and Nominating and Board Governance Committees. These documents are available on Goodyear’s website at http://www.goodyear.com/investor/governance.html. Shareholders may request a free copy of any of these documents from the address and phone numbers set forth above under “Code of Business Conduct and Code of Ethics.”

Section 16(a) of the Exchange Act requires directors and officers to file reports of ownership and changes in ownership in Goodyear’s equity securities with the Securities and Exchange Commission, the New York Stock Exchange and Goodyear. Based solely on a review of the copies of Forms 3, 4 and 5 received, and on written representations from certain directors and officers that no updating Section 16(a) forms were required to be filed by them, Goodyear believes that no Goodyear director or officer filed a late report or failed to file a required report under Section 16(a) of the Exchange Act during or in respect of the year ended December 31, 2003 with the exception of Samir G. Gibara who, due to an administrative error on the part of Goodyear in communicating a cash distribution from Goodyear’s 401(k) plan in connection with Mr. Gibara’s retirement, filed a report on January 15, 2003 relating to a January 6, 2003 distribution of cash; and Eric A. Berg who, due to an administrative error on the part of Goodyear in communicating the lapse of restrictions on a prior grant of restricted stock and a related withholding of shares for payment of withholding taxes, filed a report on March 21, 2003 reporting the March 6, 2003 withholding transaction.

Information responsive to Item 402 of Regulation S-K is set forth in Exhibit 99.2, which information is incorporated herein by reference.

(a) In accordance with Item 201(d) of Regulation S-K, set forth in the table below is certain information regarding the number of shares of our common stock that were subject to outstanding stock options or other compensation plan grants and awards at December 31, 2003. See Note 12, “Stock Compensation Plans and Dilutive Securities” of the Notes to Financial Statements.


(1)	Under Goodyear’s 1989 Performance and Equity Incentive Plan, 1997 Performance Incentive Plan and 2002 Performance Plan, performance units have been awarded for up to 98,190 shares of Common Stock in respect of performance periods ending subsequent to December 31, 2003. Each unit is equivalent to one share of Common Stock. In addition, up to 858,182 shares of Common Stock may be issued in respect of the deferred payout of awards made under Goodyear’s 1989 Performance and Equity Incentive Plan, the 1997 Performance Incentive Plan and the 2002 Performance Plan. The number of units indicated assumes the maximum possible payout that may be earned during the relevant deferral periods. The 1989 and 1997 Plans have expired except with respect to outstanding options and other grants. The 2002 Performance Plan will expire on April 15, 2005.

(2)	Goodyear’s Stock Option Plan for Hourly Bargaining Unit Employees at Designated Locations provided for the issuance of up to 3.5 million shares of Common Stock upon the exercise of stock options granted

to employees represented by the United Steelworkers of America at 16 Goodyear manufacturing plants. No eligible employee received an option to purchase more than 200 shares of Common Stock. Options were granted on December 4, 2000 and September 3, 2001 to 19,982 eligible employees. Each option has a term of ten years and is subject to certain vesting requirements over two or three year periods. The options granted on December 4, 2000 have an exercise price of $17.68 per share. The options granted on September 3, 2001 have an exercise price of $25.03 per share. No additional options may be granted under this Plan, which expired September 30, 2001, except with respect to options then outstanding.

(3)

The Hourly and Salaried Employees Stock Option Plan provided for the issuance of up to 600,000 shares of Common Stock pursuant to stock options granted to selected hourly and non-executive salaried employees of Goodyear and its subsidiaries. Options in respect of 117,610 shares of Common Stock were granted on December 4, 2000, each having an exercise price of $17.68 per share and options in respect of 294,690 shares of Common Stock were granted on September 30, 2002, each having an exercise price of $8.82 per share. Each option granted has a ten year term and is subject to certain vesting requirements. The Plan expired on December 31, 2002, except with respect to options then outstanding.

(b) Information regarding security ownership of certain beneficial owners, directors and executive officers is set forth in Exhibit 99.3, which information is incorporated herein by reference.

Information regarding certain relationships and related transactions is set forth in Exhibit 99.2, which information is incorporated herein by reference.

Information regarding principal accountant fees and services is set forth in Exhibit 99.4, which information is incorporated herein by reference.


	1.	Financial Statements: See Index on page 58 of this Annual Report.

	2.	Financial Statement Schedules: See Index To Financial Statement Schedules attached to this Annual Report at page FS-1. The Financial Statement Schedules at pages FS-2 through FS-7 are incorporated into and made a part of this Annual Report.

	3.	Exhibits required to be filed by Item 601 of Regulation S-K: See the Index of Exhibits at pages X-1 through X-5, inclusive, which is attached to and incorporated into and made a part of this Annual Report.

The following Current Reports on Form 8-K were filed or furnished, as the case may be, by the Company with the Securities and Exchange Commission during the quarter ended December 31, 2003:


	(1)	Form 8-K, dated October 23, 2003 (Items 5 and 12)*.

	(2)	Form 8-K, dated November 20, 2003 (Item 5).

	(3)	Form 8-K, dated November 20, 2003 (Item 12)*.

	(4)	Form 8-K, dated December 12, 2003 (Items 5 and 7).


	*	The information, or certain portions thereof, furnished in the report shall not be deemed to be filed for purposes of Section 18 of the Securities and Exchange Act of 1934.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Financial statements relating to 50 percent or less owned companies, the investments in which are accounted for by the equity method, have been omitted as permitted because, these companies would not constitute a significant subsidiary.

At December 31, 2003, the Parent Company was a party to various long-term financing facilities. Under the terms of these facilities, the Parent Company pledged a significant portion of its assets as collateral. The collateral included the capital stock of certain subsidiaries, first-priority security interests in certain property, plant and equipment and other tangible and intangible assets, and second-priority security interests in accounts receivable, inventory and cash. In addition, the facilities contain certain covenants that, among other things, limit the Parent Company’s ability to secure additional indebtedness, make investments, and sell assets beyond specified limits. The facilities prohibit the Parent Company from paying dividends on its common stock and limit the amount of capital expenditures the Parent Company, together with its consolidated subsidiaries, may make. The facilities also contain certain financial covenants including the maintenance of a minimum consolidated net worth, a ratio of consolidated EBITDA to consolidated interest expense, and a ratio of consolidated senior secured indebtedness to consolidated EBITDA (as such terms are defined in the respective facility agreements). Repayment of the facilities is required with a defined percentage of the proceeds from certain asset sales and debt or equity issuances. For further information, refer to the Note to the Financial Statements No. 11, Financing Arrangements and Derivative Financial Instruments.

The annual aggregate maturities of long-term debt and capital leases for the five years subsequent to 2003 are presented below. Maturities of debt supported by the availability of revolving credit agreements have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of their current terms.

At December 31, 2003, the Parent Company had off-balance-sheet financial guarantees written and other commitments totaling $67.9 million.

At December 31, 2003, the Parent Company had recorded costs related to a wide variety of contingencies. These contingencies included, among other things, environmental matters, workers’ compensation, general and product liability and other matters. For further information, refer to the Note to the Financial Statements No. 20, Commitments and Contingent Liabilities.

The Parent Company used the equity method of accounting for investments in consolidated subsidiaries during 2003, 2002 and 2001.

Dividends received from consolidated subsidiaries included stock dividends of $152.1 million, $31.9 million and $14.5 million in 2003, 2002 and 2001, respectively.

The Parent Company made cash payments for interest in 2003, 2002 and 2001 of $234.8 million, $221.2 million and $214.3 million, respectively. The Parent Company made net cash payments (receipts) for income taxes in 2003, 2002 and 2001 of $(43.9) million, $16.7 million and $2.9 million, respectively.

The following amounts included in the Parent Company Statement of Operations have been eliminated in the preparation of the consolidated financial statements:

X-5 EX-4.1 2 l07358aexv4w1.txt EX-4.1 AMENDMENT #1 TO RIGHTS AGREEMENT - 3/1/04 EXHIBIT 4.1 AMENDMENT NO. 1 TO RIGHTS AGREEMENT AMENDMENT NO. 1 dated as of March 1, 2004 (this "AMENDMENT") between THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "COMPANY") and EQUISERVE TRUST COMPANY, N.A. (the "RIGHTS AGENT"). WHEREAS, the Company and the Rights Agent have previously entered into that certain Amended and Restated Rights Agreement dated as of April 15, 2002 (the "RIGHTS AGREEMENT"); and WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to amend the Rights Agreement as hereinafter set forth and has duly approved this Amendment and authorized its execution and delivery. NOW, THEREFORE, the parties hereto agree as follows: 1. All capitalized terms used herein, unless otherwise defined herein, shall have the meanings given to them in the Rights Agreement, and each reference in the Rights Agreement to "this Agreement", "hereof", "herein", "hereunder" or "hereby" and each other similar reference shall be deemed to refer to the Rights Agreement as amended hereby. 2. Section 1 of the Rights Agreement is hereby amended by amending and restating the definition of "Final Expiration Date" to read in its entirety as follows: "FINAL EXPIRATION DATE" shall mean the close of business on June 1, 2004. 3. Section 18(a) of the Rights Agreement is hereby amended and restated to read in its entirety as follows: The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent (including the reasonable fees and expenses of counsel), for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises. 4. Section 20(c) of the Rights Agreement is hereby amended and restated to read in its entirety as follows: The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or willful misconduct. 5. Exhibit B to the Rights Agreement is hereby amended by amending and restating such Exhibit to read in its entirety as set forth in Attachment 1 hereto. 6. Exhibit C to the Rights Agreement is hereby amended by amending and restating such Exhibit to read in its entirety as set forth in Attachment 2 hereto. 7. This Amendment shall be deemed to be a contract made under the laws of the State of Ohio and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts to be made and performed entirely with such State. 8. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. 9. Except as expressly amended hereby, the Rights Agreement shall remain in full force and effect. THE GOODYEAR TIRE & RUBBER COMPANY Attest: /s/ Bertram Bell By: /s/ C. Thomas Harvie --------------------- ---------------------------- Name: Bertram Bell Name: C. Thomas Harvie Title: Assistant Secretary Title: Senior Vice President, General Counsel and Secretary EQUISERVE TRUST COMPANY, N.A. By: /s/ Daniel J. McGrory ----------------------------- Name: Daniel J. McGrory Title: Managing Director ATTACHMENT 1 EXHIBIT B (Form of Right Certificate] Certificate No. R- Rights NOT EXERCISABLE AFTER JUNE 1, 2004 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES RIGHTS MAY NOT BE EXERCISABLE. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]* EQUISERVE TRUST COMPANY, N.A. Right Certificate This certifies that___________ , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Amended and Restated Rights Agreement dated as of April 15, 2002 (the "Rights Agreement") between THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "Company"), and EQUISERVE TRUST COMPANY, N.A., a Delaware corporation (the "Rights Agent"), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (Akron time) on June 1, 2004 at the office of the Rights Agent, or its successors as Rights Agent, in New York, New *The portion of the legend in brackets shall be inserted only if applicable. B-1 York, one one-hundredth of a fully paid and nonassessable share of the Series B Preferred Stock, without par value (the "Preferred Stock"), of the Company, at a purchase price of $250.00 per share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase and related certificate duly executed. The number of Rights evidenced by this Right Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of July 29, 1996, based on the Preferred Stock of the Company as constituted at such date. Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Right Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate of Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who after such transfer, became an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event. As provided in the Rights Agreement, the Purchase Price and the number of shares of Preferred Stock or other securities which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events (as such term is defined in the Rights Agreement). This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and at the executive offices of the Company. This Right Certificate, with or without other Right Certificates, upon surrender at the designated office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one one-hundredths of a share of Preferred Stock as the.Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof, along with a signature guarantee and such other and further documentation as the Rights Agent may reasonably request, another Right Certificate or Right Certificates for the number of whole Rights not exercised. Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (a) may be redeemed by the Company at its option at a redemption price of $.001 per Right at any *The portion of the legend in brackets shall be inserted only if applicable. B-2 time prior to the earlier of the close of business on (i) the tenth Business Day following the Shares Acquisition Date or (ii) the Final Expiration Date, or (b) may be exchanged in whole or in part for shares of the Common Stock, and/or other securities, cash or other assets of the Company deemed to have the same value as shares of the Common Stock, at any time after a Section 11(a)(ii) Event. No fractional shares of the Preferred Stock (or other securities) will be issued upon the exercise or exchange of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock which may, at the option of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Common Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised or exchanged for shares of the Common Stock as provided in the Rights Agreement. This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent. B-3 WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of , . [SEAL] ATTEST: THE GOODYEAR TIRE & RUBBER COMPANY By: _______________________ By: Name: Name: Title: Title: Countersigned: EQUISERVE TRUST COMPANY, N.A. as Rights Agent By: Authorized Signature Date: B-4 (Form of Reverse Side of Right Certificate] FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the Right Certificates.) FOR VALUE RECEIVED__________________________ hereby sells, assigns and transfers unto (Please print name and address of transferee) this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint_______________ Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution. Dated: ______________, Signature Signature Guaranteed: (Signatures must be guaranteed.) B-5 CERTIFICATE The undersigned hereby certifies by checking the appropriate boxes that: (1) This Right Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement); (2) After due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. (3) Exercising this Right Certificate will [ ] will not [ ] enable the undersigned, its Affiliates, its Associates, and/or any other Person with which the undersigned or any of the undersigned's Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing of securities of the Company, to become an Acquiring Person. Dated: _______________ Signature Signature Guaranteed: (Signatures must be guaranteed.) NOTICE The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. B-6 FORM OF ELECTION TO PURCHASE (To be executed if holder desires to exercise Rights evidenced by the Right Certificate.) To The Goodyear Tire & Rubber Company: The undersigned hereby irrevocably elects to exercise_____________ Rights represented by this Right Certificate to purchase the shares of the Series B Preferred Stock issuable upon the exercise of such Rights (or such other securities of the Company or of any other Person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of: Please insert social security or other taxpayer identifying number (Please print name and address) If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: Please insert social security or other taxpayer identifying number (Please print name and address) Dated: _________________ Signature Signature Guaranteed: Signature must conform in all respects to name (Signatures must be guaranteed.) of holder as specified on the face of this Right Certificate) B-7 CERTIFICATE The undersigned hereby certifies by checking the appropriate box that: (1) This Right Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement); (2) After due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person. (3) Exercising this Right Certificate will [ ] will not [ ] enable the undersigned, its Affiliates, its Associates, and/or any other Person with which the undersigned or any of the undersigned's Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) for the purpose of acquiring, holding, voting or disposing of securities of the Company, to become an Acquiring Person. Dated: _____________ Signature Signature Guaranteed: (Signatures must be guaranteed.) NOTICE The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Right Certificate in every particular, without alteration or.enlargement or any change whatsoever. B-8 ATTACHMENT 2 EXHIBIT C SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK On June 4, 1996 the Board of Directors of THE GOODYEAR TIRE & RUBBER COMPANY (the "Company") declared a dividend distribution of one Right for each outstanding share of Common Stock, without par value (the "Common Stock"), of the Company. The distribution is payable on July 29, 1996 (the "Record Date") to the shareholders of record on the Record Date. Each Right entitles the registered holder to purchase from the Company one one-hundredth of a share of Series B Preferred Stock, without par value (the "Preferred Stock"), or in certain circumstances, Common Stock, other securities, cash or assets as summarized below, at a price of $250.00 (the "Purchase Price"), subject to adjustment. The description and terms of the Rights are set forth in a Amended and Restated Rights Agreement (the "Rights Agreement") between the Company and EquiServe Trust Company, N.A., as Rights Agent (the "Rights Agent"). Distribution Date; Transfer of Rights Until the earlier to occur of (i) ten days following the date (the "Shares Acquisition Date") of the public announcement that a person or group of affiliated or associated persons (an "Acquiring Person") has acquired, or obtained the right to acquire, beneficial ownership of a number of shares of the Common Stock equal to 15% or more (20% or more in certain limited circumstances) of the outstanding shares of the Common Stock or (ii) ten Business Days following the commencement or announcement of an intention to make a tender offer or exchange offer if, upon consummation thereof, such person would be an Acquiring Person (the earlier of such dates being called the "Distribution Date"), the Rights will be evidenced, with respect to any of the Common Stock certificates outstanding as of the Record Date, by such Common Stock certificate. The Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Common Stock. Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Stock certificates issued after the Record Date upon transfer or new issuance of the common Stock will contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any of the Common Stock certificates outstanding as of the Record Date will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights ("Right Certificates") will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and such separate Right Certificates alone will evidence the Rights. C-1 The Rights are not exercisable until the Distribution Date. The Rights will expire at the close of business on June 1, 2004, unless earlier redeemed or exchanged by the Company as described below. Exercise of Rights for Shares of the Common Stock of the Company In the event that a Person becomes an Acquiring Person at any time following the Rights Dividend Declaration Date, each holder of a Right will, after the Distribution Date, have the right to receive, upon exercise, shares of Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times the Purchase Price of the Right then in effect. Notwithstanding any of the foregoing, following the occurrence of the event set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. Exercise of Rights for Shares of the Acquiring Company In the event that, at any time following a Section 11(a)(ii) Event, (i) the Company is acquired in a merger or other business combination transaction, or (ii) 50% or more of the Company's assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall thereafter have the right to receive, upon exercise, the common stock or other capital stock of the acquiring company having a value equal to two times the Purchase Price of the Right then in effect. The events set forth in this paragraph and in the preceding paragraph are referred to as "Triggering Events." Adjustments to Purchase Price The Purchase Price payable, and the number of shares of Preferred Stock (or Common Stock or other securities, as the case may be) issuable upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a dividend of shares on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of certain rights or warrants to subscribe for shares of the Preferred Stock or convertible securities at less than the current market price of the Preferred Stock or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in the Preferred Stock) or of subscription rights or warrants (other than those referred to above). Prior to the Distribution Date, the Board of Directors of the Company may make such equitable adjustments as it deems appropriate in the circumstances in lieu of any adjustment otherwise required by the foregoing. With certain exceptions, no adjustment in the Purchase Price will be required until the time at which cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Common Stock on the last trading date prior to the date of exercise. C-2 Redemption and Exchange of Rights At any time prior to 5:00 P.M. Akron time on the tenth day following the Shares Acquisition Date, the Company may redeem the Rights in whole, but not in part, at a price of $.001 per Right (the "Redemption Price"). Under certain circumstances set forth in the Rights Agreement, the decision to redeem shall require the concurrence of a majority of the Independent Directors. Immediately upon the action of the Board of Directors of the Company electing to redeem the Rights with, if required, the concurrence of the Independent Directors, the Company shall make announcement thereof, and upon such action, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. At any time after the occurrence of any of the events set forth under the heading "Exercise of Rights for shares of the Common Stock of the Company" above, the Board of Directors may exchange the Rights (other than Rights owned by an Acquiring Person, which have become void), in whole or in part, at an exchange ratio of one share of the Common Stock, and/or other securities, cash or other property deemed to have the same value as one share of the Common Stock, per Right, subject to adjustment. Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. Amendments to Terms of the Rights Any of the provisions of the Amended and Restated Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity, defect or inconsistency, or to make changes which do not adversely affect the interests of holders of Rights (excluding the interest of any Acquiring Person); provided, that no supplement or amendment may be made on or after the Distribution Date which changes those provisions relating to the principal economic terms of the Rights. The Board may also, with the concurrence of a majority of the Independent Directors, extend the redemption period for up to an additional twenty Business Days. A copy of the Rights Agreement will be filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated on May 2, 2002. A copy of the Rights Agreement is available free of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference. C-3 EX-4.2 3 l07358aexv4w2.txt EX-4.2 1ST AMEND-AMEND&RESTD REV CRED AGRE 2/19/04 EXHIBIT 4.2 FIRST AMENDMENT dated as of February 19, 2004 (this "Amendment"), to the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003 (the "Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "Borrower"); the lenders party thereto (together with their successors and permitted assigns thereunder, the "Lenders"); and JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). WHEREAS, pursuant to the terms and conditions of the Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrower; and WHEREAS, the Borrower has requested, and the Majority Lenders are willing to agree, that certain provisions of the Credit Agreement and of the Security Documents be amended on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings given to them in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended hereby or pursuant hereto. SECTION 2. Amendments to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended as follows: (a) The definition of "Capital Expenditures" is hereby amended by deleting the word "and" immediately before "(ii)" in the second sentence thereof and inserting immediately before the period at the end of such sentence "and (iii) "Capital Expenditures" in respect of any period shall be reduced by the amount of Customer Capital Expenditures that are directly paid by customers during such period and by the amount of reimbursements the Borrower or any Subsidiary shall have received during such period from customers in respect of Customer Capital Expenditures; provided that the aggregate amount of such reductions shall not exceed $50,000,000 in any fiscal year". (b) The definition of "Consolidated Net Worth" is hereby amended by inserting "(including the $84,700,000 of charges incurred in connection with the Borrower's restatement of its financial statements from 1998 through the second quarter of 2003, reflected in SEC filings made in the fourth quarter of 2003)" immediately after the phrase "non-cash non-recurring charges" in clause (c)(i) of such definition. (c) The definition of "Consolidated Senior Secured Indebtedness" is hereby amended by inserting "(other than up to $2,500,000,000 aggregate principal amount of Senior Subordinated-Lien Indebtedness)" immediately after the word "Indebtedness" in clause (a) of such definition. (d) The definition of "Credit Documents" is hereby amended by replacing the word "and" with a comma and by inserting immediately before the period at the end thereof "and the Lien Subordination and Intercreditor Agreement". (e) The definition of "Net Cash Proceeds" is hereby amended by inserting immediately before the period at the end thereof "; provided, that the Net Cash Proceeds of any event that is not a Prepayment Event shall be determined as if such event were a Prepayment Event". (f) Clause (c) of the definition of "Permitted Encumbrances" is hereby amended by inserting therein immediately after the phrase "deposits made" the phrase "(including cash deposits to secure obligations in respect of letters of credit provided)". (g) Clause (f) of the definition of "Permitted Investments" is hereby amended by replacing the word "or" immediately before clause (ii) thereof with a comma and inserting immediately before the period at the end thereof the following: ", (iii) investments of the type and maturity described in clause (c) in any obligor organized under the laws of a jurisdiction other than the United States that (A) is a branch or subsidiary of a Lender or the ultimate parent company of a Lender under one of the New Facilities Credit Agreements (but only if such Lender meets the ratings and capital, surplus and undivided profits requirements of such clause (c)) or (B) carries a rating at least equivalent to the rating of the sovereign nation in which it is located, and (iv) other investments of the type and maturity described in clause (c) in obligors organized under the laws of a jurisdiction other than the United States in any country in which such Subsidiary is located; provided, that the investments permitted under this subclause (iv) shall not exceed $10,000,000 for all such Subsidiaries in any such country or $50,000,000 in the aggregate for all such Subsidiaries and all countries". (h) The definition of "Securitization Transaction" is hereby amended by inserting immediately before the period at the end of the first sentence thereof the following: "; provided that "Securitization Transaction" shall not include (A) the sale by any Foreign Subsidiary, in the ordinary course of its business, of drafts with a bank or other financial institution as the maker (or otherwise primarily responsible for the payment -2- thereof), bankers acceptances or similar instruments received by such Foreign Subsidiary from a customer operating in a jurisdiction other than the United States or any of its territories or possessions or any political subdivision thereof in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer or (B) the sale, in the ordinary course of business, of drafts not payable on demand received by the Borrower or any Subsidiary from a customer in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer pursuant to an arrangement (1) initiated by and entered into a the request of such customer, and (2) under which a financial institution has agreed as part of a financing program established for and at the request of such customer to buy such drafts from such customer's vendors (which arrangements may be modified by the Borrower or any Subsidiary to contemplate the repurchase of such drafts by such customer, or other actions by such customer to reinstate or to pay receivables in respect of which such drafts were created, in the event of any failure by such financial institution to buy such drafts)". (i) The definition of "Security Documents" is hereby amended by inserting therein immediately after the phrase "document delivered" the phrase "in connection with the cash collateralization of Letters of Credit or". The following new definitions are hereby inserted in their appropriate alphabetical positions: "Cash Collateral Requirement" means an obligation of the Borrower to have on deposit with the Administrative Agent, to collateralize reimbursement obligations in respect of Letters of Credit, cash in an amount equal on any date of determination to 105% of the positive difference (if any) derived by subtracting (i) the aggregate Regular Way Commitments from (ii) the aggregate Revolving Credit Exposures. "Customer Capital Expenditures" shall mean all or any portion of the purchase price of equipment or other fixed assets purchased for use in the business of the Borrower or any Subsidiary that is paid directly, or reimbursed to the Borrower or any Subsidiary, by customers of the Borrower or any of the Subsidiaries that are not Affiliates of the Borrower. "Designated Debt" means Indebtedness of the Borrower that matures during any of the calendar years 2005, 2006, 2007 and 2008. "First Amendment" means the First Amendment dated as of February 19, 2004, to this Agreement. "First Amendment Date" means February 19, 2004. -3- "Junior Securities" means, collectively, any Senior Subordinated-Lien Indebtedness and any Indebtedness or preferred Equity Interests issued under Section 6.01(q). "Lien Subordination and Intercreditor Agreement" means a Lien Subordination and Intercreditor Agreement, to be dated on or about the first date on which Senior Subordinated-Lien Indebtedness is incurred, issued or sold, among the Collateral Agent, the applicable Senior Subordinated-Lien Collateral Agent, the Borrower and the Subsidiary Guarantors, in substantially the form of the draft made available to the Lenders prior to the First Amendment Date with such changes as shall have been approved by the Administrative Agent. "Principal Issuing Bank" means JPMCB and any other Issuing Bank whom the Borrower and JPMCB agree will be a Principal Issuing Bank (or any of their Affiliates that shall act as Issuing Banks hereunder). "Regular Way Commitment" means, with respect to each Lender as of any date of determination, the Commitment then in effect for such Lender or, if lower, the Commitment that would then have been in effect for such Lender but for the provisos set forth in Section 2.07(c) and (d). "Senior Subordinated-Lien Collateral Agent" means, as to any Senior Subordinated-Lien Indebtedness, the collateral agent under the applicable Senior Subordinated-Lien Indebtedness Security Documents. "Senior Subordinated-Lien Governing Documents" means each Indenture or other agreement or instrument providing for the issuance or setting forth the terms of any Senior Subordinated-Lien Indebtedness. "Senior Subordinated-Lien Indebtedness" means Indebtedness of the Borrower issued after the First Amendment Date that (a) is secured by Liens permitted under Section 6.02(m), but that is not secured by Liens on any additional assets, (b) constitutes Initial Junior Indebtedness or Designated Junior Obligations under the Lien Subordination and Intercreditor Agreement, and the Liens securing which are subordinated under the Lien Subordination and Intercreditor Agreement to the Liens securing the Obligations and (c) does not contain provisions inconsistent with the provisions of Annex A to the First Amendment. "Senior Subordinated-Lien Obligations" means, as to any Senior Subordinated-Lien Indebtedness, (a) the principal of and all premium or make-whole amounts, if any, and interest payable in respect of such Senior Subordinated-Lien Indebtedness, (b) any amounts payable under Guarantees of such Senior Subordinated-Lien Indebtedness by Subsidiaries and (c) all other amounts payable by the Borrower or any Subsidiary under such Senior Subordinated-Lien Indebtedness, the applicable Senior Subordinated-Lien Security Documents (to the extent such amounts relate to such Senior Subordinated-Lien Indebtedness) or the applicable Senior Subordinated-Lien Governing Documents. -4- "Senior Subordinated-Lien Security Documents" means, as to any Senior Subordinated-Lien Indebtedness, the security agreements, pledge agreements, mortgages and other documents creating Liens on assets of the Borrower and the Subsidiary Guarantors to secure the applicable Senior Subordinated-Lien Obligations. SECTION 3. Amendments to Section 1.02 of the Credit Agreement. Section 1.02 of the Credit Agreement is hereby amended by inserting the following at the end thereof: "For purposes of determining compliance as of any date with Section 6.08, amounts incurred in euros during 2003 shall be translated into dollars at the exchange rate in effect on March 31, 2003, and amounts incurred in euros during any subsequent year shall be translated into dollars at the exchange rate determined by the Borrower and used in its Annual Operating Plan for such year (which exchange rate shall be determined reasonably and set forth in the first certificate delivered pursuant to Section 5.01(c) during such year)." SECTION 4. Amendments to Section 2.01. Section 2.01 is hereby amended by inserting at the end of the first sentence thereof the following: "or the aggregate outstanding amount of such Lender's Loans exceeding such Lender's Regular Way Commitment. Notwithstanding any other provision of the Agreement, a Loan shall not be made unless after giving effect to such Loan, the Cash Collateral Requirement shall be satisfied". SECTION 5. Amendments to Section 2.04. Section 2.04 is hereby amended by: (a) replacing clause (i) of the final sentence of paragraph (b) thereof with the following clause: "the LC Exposure shall not when taken together with the LC Exposure under (and as defined in) the ABL Facilities Agreement exceed $600,000,000"; (b) inserting at the end of paragraph (b) thereof the following sentences: "Notwithstanding any other provision of the Agreement, a Letter of Credit shall not be issued, increased, renewed or extended at any time that the aggregate amount of the Regular Way Commitments is less than the aggregate amount of the Commitments unless (i) the Borrower shall at such time not be entitled to obtain the issuance of a letter of credit under the ABL Facilities Agreement in a like amount and (ii) after giving effect to such issuance, increase, renewal or extension, the aggregate amount of cash deposited with the Administrative Agent to collateralize reimbursement obligations in respect of Letters of Credit shall be not less than the Cash Collateral Requirement."; (c) adding at the end of paragraph (d) thereof the following sentence: "Each Lender hereby agrees that in the event any Letter of Credit shall be -5- redesignated as a Letter of Credit under (and as defined in) the ABL Facilities Agreement, then immediately upon the effectiveness of such redesignation in accordance with the terms of the ABL Facilities Agreement, such Lender's participation in such Letter of Credit shall terminate and such Letter of Credit shall cease to be a 'Letter of Credit' hereunder."; and (d) inserting in the first sentence of paragraph (j) thereof immediately after the phrase "an amount in cash" the phrase "that, when added to cash on deposit with the Administrative Agent in compliance with the Cash Collateral Requirement, shall be". SECTION 6. Amendments to Section 2.07 of the Credit Agreement. Section 2.07 of the Credit Agreement is hereby amended and restated to read in its entirety as follows: "SECTION 2.07 Termination of Commitments; Reductions of Commitments. (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date. (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.09, the total Revolving Credit Exposures would exceed the total Commitments. (c) In the event and on each occasion that the Borrower shall receive any proceeds from borrowings under the ABL Facilities Agreement pursuant to commitments becoming effective substantially concurrently with the First Amendment Date, the Regular Way Commitments and, if applicable, the Commitments shall be automatically reduced, substantially concurrently with such borrowings, by an amount equal to (i) the aggregate amount by which the proceeds from borrowings under the ABL Facilities Agreement pursuant to commitments becoming effective substantially concurrently with the First Amendment Date exceeds $300,000,000, net of the aggregate fees and out-of-pocket expenses paid by the Borrower in connection with the borrowings under the ABL Facilities and the related bank amendments, minus (ii) the aggregate amount of such proceeds (A) that shall have been applied to prepay Loans under and as defined in the US Term Facility Agreement or (B) in respect of which the Regular Way Commitments and, if applicable, the Commitments shall previously have been reduced pursuant to this paragraph; provided that the aggregate amount of the Commitments shall not be reduced under this paragraph (c) to an amount less than $250,000,000. (d) In the event and on each occasion that the Borrower shall receive any Net Cash Proceeds from the incurrence, issuance or sale of Senior Subordinated- -6- Lien Indebtedness, the Regular Way Commitments and, if applicable, the Commitments shall be automatically reduced, substantially concurrently with the incurrence, issuance or sale of the Senior Subordinated-Lien Indebtedness by the greater of zero and an amount equal to (i) 50% of the aggregate Net Cash Proceeds received from all incurrence, issuances and sales of Senior Subordinated-Lien Indebtedness minus (ii) the aggregate amount of the Net Cash Proceeds from all such incurrences, issuances and sales (A) that shall have been applied to prepay Loans under and as defined in the US Term Facility Agreement or (B) in respect of which the Regular Way Commitments and, if applicable, the Commitments shall previously have been reduced pursuant to this paragraph; provided that the aggregate amount of the Commitments shall not be reduced under this paragraph (d) to an amount less than $250,000,000. (e) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof, and shall promptly notify the Administrative Agent of any required reduction of the Commitments or the Regular Way Commitments under paragraph (c) or (d) of this Section, specifying the effective date of such reduction. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower pursuant to paragraph (b) above may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments or the Regular Way Commitments shall be permanent. Each reduction of the Commitments or the Regular Way Commitments shall be made ratably among the Lenders in accordance with their respective Commitments." SECTION 7. Amendments to Section 2.09 of the Credit Agreement. Section 2.09 of the Credit Agreement is hereby amended and restated to read in its entirety as follows: "SECTION 2.09. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (d) of this Section. (b) In the event that, after giving effect to any reduction of the Regular Way Commitments and, if applicable, the Commitments pursuant to Section 2.07, the aggregate Revolving Credit Exposures would exceed the aggregate Regular Way Commitments, the Borrower will, on the date of such reduction (i) prepay Loans in an amount sufficient to eliminate such excess, and (ii) if any portion of such excess remains after the repayment of all outstanding Loans (and any concurrent redesignation of Letters of Credit as Letters of Credit under and as -7- defined in the ABL Facilities Agreement), the Borrower will satisfy the Cash Collateral Requirement. Any cash so deposited (and any cash previously deposited in satisfaction of the Cash Collateral Requirement) with the Administrative Agent shall be held in an account over which the Administrative Agent shall have dominion and control to the exclusion of the Borrower and its Subsidiaries, including the exclusive right of withdrawal. Other than any interest earned on the investment of such deposits, which investment shall be in Permitted Investments and shall be made in the discretion of the Administrative Agent (or, at any time when no Default or Event of Default has occurred and is continuing, shall be made at the direction of the Borrower) and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposures representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower has provided cash collateral to satisfy the Cash Collateral Requirement, then, so long as no Event of Default shall exist, such cash collateral shall be released to the Borrower if so requested by the Borrower at any time if and to the extent that, after giving effect to such release, the amount of cash remaining on deposit with the Administrative Agent would not be less than the Cash Collateral Requirement. (c) If (i) under the terms of any agreement or instrument governing Junior Securities the Borrower is required to apply or offer to apply any proceeds of any sales of assets to prepay, redeem, repurchase or defease such Junior Securities in the event such proceeds are not applied within a prescribed period to one or more other permitted uses ("Alternate Permitted Uses"), and (ii) such Alternate Permitted Uses would include the prepayment of Loans under and as defined in the Credit Agreement or the US Term Facility Agreement and/or the deposit of cash collateral to secure reimbursement obligations in respect of Letters of Credit, then the Borrower shall within such prescribed period either (A) apply such proceeds to an Alternate Permitted Use not involving the prepayment of Indebtedness or (B) prepay Loans under and as defined in the Credit Agreement or the US Term Facility Agreement and/or deposit cash collateral to secure reimbursement obligations in respect of Letters of Credit (and, in connection with any prepayment of Loans or cash collateralization of Letters of Credit under this Agreement, reduce the Commitments), in each case to the extent necessary in order that the Borrower will not be required to apply or offer to apply such proceeds to prepay, redeem, repurchase or defease such Junior Securities. Any cash collateral deposited pursuant to this paragraph to secure reimbursement obligations in respect of Letters of Credit shall be held and applied in accordance with the provisions of paragraph (b) above. -8- (d) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 3:00 p.m., New York City time, three Business Days before the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment; provided that if the Borrower shall be required to make any prepayment hereunder by reason of the receipt of Net Cash Proceeds of any Senior Subordinated-Lien Indebtedness, it shall not be required to notify the Administrative Agent of such prepayment prior to the receipt of such Net Cash Proceeds. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment under paragraph (a) above is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.07, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.07. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.11." SECTION 8. Amendments to Section 5.01 of the Credit Agreement. Paragraph (c) of Section 5.01 of the Credit Agreement is hereby amended by (a) deleting the words "at the time of" at the beginning of such paragraph and inserting in their place the words "not later than one Business Day after", (b) removing the word "and" immediately preceding clause (iii) thereof and (c) adding at the end of clause (iii) and immediately preceding the semicolon the following clause: "and (iv) specifying the exchange rate determined by the Borrower and used in its Annual Operating Plan for the then current fiscal year (which rate the Borrower agrees to determine reasonably)". SECTION 9. Amendments to Section 6.01 of the Credit Agreement. (a) Paragraph (b) of Section 6.01 is hereby amended by replacing "$1,600,000,000" with "$1,950,000,000" and by inserting immediately at the end thereof the following: "or, at any time when (i) the Loans under and as defined in the US Term Facility Agreement have been repaid in full and (ii) no Loans are outstanding hereunder and the Regular Way Commitments have been reduced to zero, $2,000,000,000; provided, that the amount of Indebtedness permitted by this paragraph or any other paragraph of this Section to exist under the US Term Facility Agreement and this Agreement shall be reduced (i) in the case of the US Term Facility Agreement, by the aggregate amount of all prepayments of the loans outstanding thereunder and (ii) in the case of this Agreement, by the -9- aggregate amount of all permanent reductions of the commitments hereunder (it being agreed, however, that up to $250,000,000 of Indebtedness under this Agreement in the form of cash-collateralized letters of credit will in any event be permitted);" (b) Paragraph (g) of Section 6.01 of the Credit Agreement is hereby amended to read as follows: "(g) Securitization Transactions (other than those permitted by paragraphs (f), (j), (l), (r) and (u) of this Section) in an aggregate amount not greater than (euro)275,000,000 outstanding at any time;" (c) Section 6.01 of the Credit Agreement is hereby further amended by deleting the word "and" at the end of clause (r), redesignating clause (s) as clause (u) and inserting after clause (r) the following new clauses: "(s) Senior Subordinated-Lien Indebtedness for borrowed money of the Borrower not maturing or required to be prepaid, redeemed, repurchased or defeased prior to the Maturity Date, whether on one or more scheduled dates or upon the happening of one or more events (other than as a result of events of default or change of control events or pursuant to customary provisions requiring that the Borrower offer to purchase such Senior Subordinated-Lien Indebtedness with the proceeds of asset sales to the extent such proceeds have not been invested in assets used in the Borrower's business or used to prepay, redeem or purchase other Indebtedness (including Loans hereunder and Loans under and as defined in the US Term Facility Agreement) or to provide cash collateral for reimbursement obligations in respect of letters of credit (including the Letters of Credit)) (it being understood that provisions comparable to those contained in Annex A hereto are customary), and related Guarantees by the Subsidiary Guarantors; provided that (i) the Borrower shall substantially concurrently make any prepayments, deposits of cash collateral to secure reimbursement obligations in respect of Letters of Credit and reductions of Regular Way Commitments and Commitments required in connection with the issuance of such Senior Subordinated-Lien Indebtedness under the US Term Facility Agreement and this Agreement, (ii) the Senior Subordinated-Lien Collateral Agent for such Senior Subordinated-Lien Indebtedness shall have executed and delivered to the Administrative Agent, on its own behalf and on behalf of the obligees on such Senior Subordinated-Lien Indebtedness, the Lien Subordination and Intercreditor Agreement, and (iii) after no Loans or Regular Way Commitments are outstanding under the US Term Facility Agreement and this Agreement, the portion of the Net Cash Proceeds of such Senior Subordinated-Lien -10- Indebtedness in excess of required prepayments under the US Term Facility Agreement and Commitment reductions and Regular Way Commitment reductions under this Agreement shall, except to the extent a like amount of Net Cash Proceeds of Senior Subordinated-Lien Indebtedness shall have been so applied prior to the time at which all amounts outstanding under the US Term Facility Agreement and this Agreement shall have been prepaid and the Regular Way Commitments shall have been reduced to zero, be applied, within 180 days after the receipt by the Borrower of such Net Cash Proceeds, solely (A) to prepay Loans under and as defined in the New Facilities Credit Agreements (it being agreed that at the time of any such prepayment of revolving loans the related commitments will be reduced by the amount of such prepayment), (B) to repurchase, repay or prepay Designated Debt or (C) to make reasonably anticipated required contributions to Plans of the Borrower and the Subsidiaries; (t) Securitization Transactions of Foreign Subsidiaries (other than those permitted by paragraphs (f), (g), (j), (l) and (r) of this Section) in an aggregate amount not greater than $15,000,000 outstanding at any time; and" SECTION 10. Amendments to Section 6.02 of the Credit Agreement. (a) Section 6.02 of the Credit Agreement is amended by deleting from the introductory clause thereof the phrase "(other than sales of delinquent receivables and sales of receivables in the ordinary course of business (other than Securitization Transactions and factoring transactions) for the purpose of accelerating collection of such receivables)" and replacing it with the phrase "(other than sales of delinquent or doubtful receivables and other than any transaction excluded from the definition of "Securitization Transaction" under the proviso thereto)". (b) Paragraph (f) of Section 6.02 of the Credit Agreement is hereby amended to read as follows: "(f)(i) Liens on assets of Foreign Subsidiaries (other than the European JV and its subsidiaries and Luxembourg Finance) securing Indebtedness incurred under Section 6.01(f), and (ii) in connection with Securitization Transactions permitted under Section 6.01(f) or (t);" (c) Section 6.02 of the Credit Agreement is amended by deleting the word "and" at the end of clause (l), redesignating clause (m) as clause (q) and inserting after clause (l) the following new clauses (m), (n), (o) and (p): "(m) Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on the Borrower's headquarters -11- building in Akron, Ohio, created under any Senior Subordinated-Lien Security Documents to secure any Senior Subordinated-Lien Indebtedness incurred under Section 6.01(s); provided, that such Liens shall be subordinate and junior to the Liens securing the Obligations on the terms set forth in the Lien Subordination and Intercreditor Agreement; (n) Liens on assets constituting ABL Facilities Collateral securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the ABL Facilities Agreement, but only if all Indebtedness under the ABL Facilities Agreement shall have been repaid and discharged in full and the Commitments under and as defined in the ABL Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred; (o) Liens on assets constituting European Facilities Collateral and Luxembourg Finance Pledged Collateral (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement) securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the European Facilities Agreement, but only if all Indebtedness under the European Facilities Agreement shall have been repaid in full and the Commitments under and as defined in the European Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred; (p) at the time of and after the initial incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness, Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on the Borrower's headquarters building in Akron, Ohio, to secure the Guarantees by the Borrower and the Subsidiary Guarantors of the Obligations under and as defined in the European Facilities Agreement (or of Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the European Facilities Agreement, but only if all Indebtedness under the European Facilities Agreement shall have been repaid in full and the Commitments under and as defined in the European Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred); provided that such Liens shall be pari passu with the Liens securing Senior Subordinated-Lien Indebtedness and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement; and" SECTION 11. Amendments to Section 6.05 of the Credit Agreement. Section 6.05(e) of the Credit Agreement is amended to read as follows: -12- "(e) on or after June 30, 2003, the acquisition of any Equity Interest; provided that the aggregate consideration paid by the Borrower and the Subsidiaries in all such acquisitions (including Indebtedness assumed by the Borrower or any Subsidiary) shall not exceed $100,000,000 plus the aggregate Net Cash Proceeds from Prepayment Events or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness after the date hereof that (i) shall not have been required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under any of the New Facilities Credit Agreements, and (ii) shall not have been used (and shall not be required to be used) (A) to make Capital Expenditures that would otherwise have been prohibited by Section 6.08 or (B) to repurchase, repay or prepay Designated Debt;" SECTION 12. Amendments to Section 6.07 of the Credit Agreement. Paragraph (b) of Section 6.07 of the Credit Agreement is amended by deleting the word "and" at the end of clause (iii), replacing the period at the end of clause (iv) with ";" and inserting after clause (iv) the following new clauses (v) and (vi): "(v) if the Loans under and as defined in the US Term Facility Agreement shall have been repaid in full and no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds from the issuance and sale of Senior Subordinated-Lien Indebtedness not required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under this Agreement or the US Term Facility Agreement, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.08 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e); and (vi) if no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds of securities issued and sold pursuant to Section 6.01(q) not required to be applied to prepay loans under the US Term Facility Agreement, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.08 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e)." SECTION 13. Amendments to Section 6.08 of the Credit Agreement. Section 6.08 of the Credit Agreement is amended (a) by inserting after the words "Prepayment Events" the words "or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness", (b) by inserting after the words "prepay loans" the -13- words "or cash collateralize letters of credit", (c) by inserting "(A)" after the words "and shall not have been used" in the parenthetical therein and (d) by inserting at the end of the parenthetical therein the words "or (B) to repurchase, repay or prepay Designated Debt". SECTION 14. Amendment to Section 6.09 of the Credit Agreement. Section 6.09 of the Credit Agreement is hereby amended by inserting immediately following the words "2.25 to 1.00" the words "or, at any time after the Borrower shall have received gross cash proceeds of at least $500,000,000 from issuances and sales after the First Amendment Date of Senior Subordinated-Lien Indebtedness, 2.00 to 1.00". SECTION 15. Amendment to Section 9.04(b) of the Credit Agreement. Section 9.04(b) of the Credit Agreement is hereby amended by (a) deleting the word "and" at the end of clause (i)(A) thereof, (b) replacing the period at the end of clause (i)(B) thereof with "; and" and (c) inserting after such clause (i)(B) the following new clause (i)(C): "(C) in the case of any assignment of a Commitment or any interests in a Letter of Credit or LC Disbursement, a Principal Issuing Bank, provided that no consent of a Principal Issuing Bank shall be required for an assignment to an assignee that is a Federal Reserve Bank." SECTION 16. Amendments to the Guarantee and Collateral Agreement; Security Documents; Lien Subordination and Intercreditor Agreement. (a) The undersigned Lenders authorize the Collateral Agent to execute and deliver an instrument or instruments amending the Guarantee and Collateral Agreement (and, in the case of clauses (i), (ii) and (vi) below, the other Security Documents) as follows: (i) to provide that all ABL Facilities Obligations will be secured by a second Lien, junior to the Lien securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations and the Collateral Agent Obligations, by all the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement, to the extent the securing of the ABL Facilities Obligations with such Collateral would require that Indebtedness under the Indentures be ratably secured), and by the Borrower's headquarters building in Akron, Ohio; (ii) to provide that, at such time as any Senior Subordinated-Lien Indebtedness shall be issued, the Guarantees by the Borrower and the Subsidiary Guarantors of the Revolving Obligations (and, if the Borrower and the Collateral Agent shall at any time hereafter so agree, the Term Obligations) under and as defined in the European Facilities Agreement will be secured, equally and ratably with the Senior Subordinated-Lien Indebtedness (and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement), by the ABL Facilities Collateral, the US Facilities Pledged Collateral and the US -14- Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement), and by the Borrower's headquarters building in Akron, Ohio; (iii) to provide that amounts received by the holders of Obligations secured by Junior Liens as a result of the subordination to such Junior Liens of the Liens securing any Senior Subordinated-Lien Indebtedness will be treated in the same manner under the subordination provisions of the Guarantee and Collateral Agreement as amounts received from the Borrower; (iv) to modify Section 11.03(b) to confirm that the Junior Lien on the ABL Facilities Collateral will be senior to the Lien on such Collateral securing any Senior Subordinated-Lien Indebtedness notwithstanding the use of any proceeds of any Senior Subordinated-Lien Indebtedness to repay amounts outstanding under the ABL Facilities; (v) to modify Section 11.04 to provide that the Junior Lien on the Intellectual Property consisting of Trademarks securing the ABL Facilities Obligations will be senior to the Lien on such Intellectual Property securing any Senior Subordinated-Lien Indebtedness; (vi) to effect such other changes as the Collateral Agent shall deem appropriate in connection with the issuance of any Senior Subordinated-Lien Indebtedness, the creation of the Liens securing such Indebtedness, the subordination of such Liens to the Liens created by the Guarantee and Collateral Agreement and the implementation of the matters set forth in this Section 16; and (vii) to modify Section 13.13 to provide for the release of the security interests in up to 14% of the stock of C A Goodyear de Venezuela held by the Borrower in connection with the sale of such stock by the Borrower to Goodyear do Brasil Productos de Borraca Ltda (Brasil) in a transaction permitted by the Credit Agreements (as defined therein) for consideration consisting of up to $10,000,000 of cash. (b) The undersigned Lenders further authorize and direct the Collateral Agent to execute and deliver such amendments to the Security Documents as may in its judgment be appropriate for the following purposes: (i) to provide that the Liens securing the ABL Facilities Obligations will, insofar as they are applicable to cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to Section 2.04(b) of the Credit Agreement, be subordinate to the Liens securing such Letter of Credit reimbursement obligations; -15- (ii) to provide that all ABL Facilities Obligations will be secured by a second Lien on all real property subject to Liens securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations or the Collateral Agent Obligations to the extent the securing of the ABL Facilities Obligations with such Collateral would not require that Indebtedness under the Indentures be ratably secured; and (iii) to confirm that the US Term Facility Obligations, the US Revolving Facility Obligations, the ABL Facilities Obligations and the US Miscellaneous Obligations are and will be secured by not more than 65% of the issued and outstanding voting Equity Interests of Luxembourg Finance. (c) The undersigned Lenders further authorize and direct the Collateral Agent, on or after the Effective Date, to execute and deliver the Lien Subordination and Intercreditor Agreement. Each Lender party to the Credit Agreement from time to time will be deemed to have agreed to be bound by the provisions of the Lien Subordination and Intercreditor Agreement to the same extent as if it had executed such Agreement as a party thereto. SECTION 17. Notices. The address for notices to the Administrative Agent under each Credit Document is hereby amended to read as follows: "if to the Administrative Agent, to JPMorgan Chase Bank, Loan & Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of Debbie Meche and Cliff Trapani (Telecopy No. (713) 750-2938), with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017, Attention of Robert Kellas (Telecopy No. (212) 270-3089);" SECTION 18. Representations, Warranties and Agreements. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that: (a) On the date hereof and at the time the amendments provided for herein become effective under Section 20, no Default shall have occurred and be continuing. (b) The execution, delivery and performance by the Borrower of this Amendment and the performance by the Borrower of the Credit Agreement as amended hereby have been duly authorized by all necessary corporate and other action and, except to the extent that no Material Adverse Change would be materially likely to result, do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. (c) This Amendment and the Credit Agreement as amended hereby constitute the legal, valid and binding obligations of the Borrower, enforceable -16- against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (d) All representations and warranties of the Borrower set forth herein, and the representations and warranties of the Borrower set forth in the Credit Agreement, are true and correct in all material respects on and as of the date hereof, and will be true and correct on the date hereof and at the time the amendments provided for herein become effective under Section 20, except to the extent such representations and warranties relate to an earlier date. SECTION 19. Amendment Fee. In consideration of the agreements contained in this Amendment, the Borrower agrees to pay to the Administrative Agent, for the account of each Lender that delivers an executed counterpart of this Amendment prior to noon, New York City time, on February 17, 2004, an amendment fee (the "Amendment Fee") to be agreed upon between the Borrower and J.P. Morgan Securities Inc., payable on the Effective Date (as defined below). SECTION 20. Conditions Precedent to Effectiveness. This Amendment shall become effective upon the satisfaction of the condition set forth in paragraph (a) below; provided that the amendments set forth in Sections 2 through 15, the authorization set forth in Section 16 and the agreement set forth in Section 19 shall become effective only upon the satisfaction, on a date (the "Effective Date") on or prior to February 28, 2004, of each of the conditions set forth below (and failing such satisfaction by such date, such amendments, authorization and agreements shall cease to be of any further force or effect): (a) The Administrative Agent shall have received counterparts hereof duly executed and delivered by the Borrower and the Majority Lenders. (b) The Administrative Agent shall have received such evidence as it shall reasonably have requested as to the corporate power and authority of the Borrower to enter into this Amendment and to perform its obligations hereunder and under the Credit Agreement as amended hereby. (c) The Administrative Agent shall have received a certificate of an officer of the Borrower to the effect that the representations and warranties set forth in Section 18 are true and correct in all material respects on and as of the Effective Date. (d) The Administrative Agent shall have received the Amendment Fees payable by the Borrower pursuant to Section 19 and all other fees payable to the Arrangers and the Administrative Agent. (e) The Security Documents shall have been amended as necessary to provide that the Liens securing the ABL Facilities Obligations will, insofar as they are applicable to cash deposited to collateralize Letter of Credit reimbursement -17- obligations pursuant to Section 2.04(b) of the Credit Agreement, be subordinate to the Liens securing such Letter of Credit reimbursement obligations. (f) The US Term Facility Agreement shall have been amended to require that (i) if proceeds from borrowings under the ABL Facilities Agreement pursuant to commitments becoming effective substantially concurrently with the Effective Date shall exceed $300,000,000, the Borrower shall prepay loans under the US Term Facility Agreement in an aggregate amount equal to 100% of such proceeds in excess of $300,000,000, net of the aggregate fees and out-of-pocket expenses paid by the Borrower in connection with the borrowings under the ABL Facilities and the related bank amendments and (ii) the Borrower shall apply 50% of the Net Cash Proceeds of incurrences or issuances of Senior Subordinated-Lien Indebtedness to prepay loans under the US Term Facility Agreement. (g) The US Term Facility Agreement, the ABL Facilities Agreement and the European Facilities Agreement shall have been or shall simultaneously be amended in a manner reasonably satisfactory to the Administrative Agent to permit the incurrence, issuance and sale of Senior Subordinated-Lien Indebtedness and the other transactions contemplated hereby, in each case in a manner substantially corresponding to the amendments to the Credit Agreement effected hereby, to the extent applicable. The Administrative Agent shall notify the Lenders when it determines that the foregoing conditions have been satisfied and that this Amendment has become fully effective, and such notice shall be conclusive and binding upon the Lenders. SECTION 21. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Credit Agreement. SECTION 22. Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 23. Indemnity. It is agreed that for all purposes of Section 9.03(b) of the Credit Agreement, any offering, incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness and any other securities issued and sold pursuant to Section 6.01(q) of the Credit Agreement, the execution, delivery and performance of this Amendment and of the Lien Subordination and Intercreditor Agreement, the amendment of the Guarantee and Collateral Agreement as contemplated by Section 16 and the other transactions contemplated hereby shall all be deemed to be transactions contemplated by the Credit Agreement. -18- SECTION 24. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 25. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. SECTION 26. Headings. The section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting this Amendment. SECTION 27. Amendment to Article VIII of the Credit Agreement. Article VIII of the Credit Agreement is hereby amended by adding the following at the end thereof: "Without prejudice to the provisions of this Article VIII, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) to act as the person holding the power of attorney (in such capacity, the "fonde de pouvoir") of the Lenders as contemplated under Article 2692 of the Civil Code of Quebec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are conferred upon the fonde de pouvoir under any hypothec. Moreover, without prejudice to such appointment and authorization to act as the person holding the power of attorney as aforesaid, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) (in such capacity, the "Custodian") to act as agent and custodian for and on behalf of the Lenders to hold and to be the sole registered holder of any debenture which may be issued under any hypothec, the whole notwithstanding Section 32 of the Act respecting the special powers of legal persons (Quebec) or any other applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of any such debenture and owing to each Lender, and (ii) each Lender will be entitled to the benefits of any charged property covered by any hypothec and will participate in the proceeds of realization of any such charged property, the whole in accordance with the terms hereof. "Each of the fonde de pouvoir and the Custodian shall (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all -19- rights and remedies given to fonde de pouvoir and the Custodian (as applicable) with respect to the charged property under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise, (b) benefit from and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders, and (c) be entitled to delegate from time to time any of its powers or duties under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise and on such terms and conditions as it may determine from time to time. Any person who becomes a Lender shall be deemed to have consented to and confirmed: (y) the fonde de pouvoir as the person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the agent and custodian as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the Custodian in such capacity." -20- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, By /s/ D. R. Wells ----------------------------------- Name: D. R. Wells Title: Vice President JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ B. Joseph Lillis ----------------------------------- Name: B. Joseph Lillis Title: Managing Director -21- [Remaining Signature Pages Intentionally Omitted] ANNEX A Senior Subordinated-Lien Indebtedness - Capitalized terms used and not defined herein shall have the meanings given to them in the First Amendment, or, if not defined therein, in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended by the First Amendment or pursuant thereto. - All Senior Subordinated-Lien Indebtedness and the related Liens shall satisfy the requirements set forth in the definition of Senior Subordinated-Lien Indebtedness and in Sections 6.01(s) and 6.02(m). - Prior to the date (the "US Facilities Termination Date") on which all the loans under the US Term Facility Agreement and the US Revolving Facility Agreement have been repaid in full and the remaining commitments under the US Revolving Facility Agreement, if any, are available only for the issuance of cash collateralized letters of credit, the documentation establishing or evidencing any Senior Subordinated-Lien Indebtedness ("SSLI Documentation") shall contain no maintenance financial covenants (i.e., covenants requiring the maintenance of any balance sheet, income statement or other financial level or ratio). After the US Facilities Termination Date, the SSLI Documentation shall contain no maintenance financial covenants that are not contained in the Credit Agreement, and the financial levels or ratios required to be maintained by any such covenants shall be no more restrictive than those required to be maintained by the corresponding covenants of the Credit Agreement (it being understood that additional maintenance financial covenants may be included in any SSLI Documentation and, if they are, they shall automatically be included in this Agreement). - The SSLI Documentation shall permit (specifically, and not through a basket that could be exhausted by other financings) the refinancing of all Indebtedness under the New Facilities Credit Agreements (or any refinancing Indebtedness in respect thereof) with new Indebtedness having a maturity no sooner than, a weighted average life no shorter than, and an aggregate principal amount or accreted value no greater than the fully drawn amount (plus fees and expenses, including any premium and defeasance costs of refinancing) of the refinanced indebtedness or commitments thereunder and secured on the same basis as the Indebtedness refinanced. - The SSLI Documentation shall not restrict (except for restrictions that a Financial Officer of the Borrower shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with the Borrower's ability to effect) the securing of Indebtedness under the New Facilities Credit Agreements or any refinancing Indebtedness in respect thereof or the cash collateralization of any letter of credit exposure thereunder (but may require that if Indebtedness under any New Facilities Credit Agreement or related refinancing Indebtedness is secured by assets not securing the Indebtedness under any of the New Facilities Credit Agreements on the First Amendment Date, a junior lien on such assets, subordinated under the Lien Subordination and Intercreditor Agreement, (or in the case of any lien granted by any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to secure indebtedness under the European Facility Agreement, a ratable or junior lien on such assets) must be granted to secure the Senior Subordinated-Lien Indebtedness). - The SSLI Documentation shall not restrict (except for restrictions a Financial Officer of the Borrower shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with the Borrower's ability to effect) the use of proceeds from any sale, transfer or other disposition of assets owned directly by (a) the Borrower or any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to repay or prepay Indebtedness under the New Facilities Credit Agreements (other than the European Facilities Agreement) or refinancing Indebtedness in respect thereof or, until the commitments under the US Revolving Facility Agreement and the ABL Facilities Agreement have been terminated and no letter of credit remains outstanding under either such agreement, to cash collateralize any letter of credit exposure thereunder, or (b) the European JV or any of its subsidiaries to repay or prepay Indebtedness under the European Facilities Agreement or refinancing Indebtedness in respect thereof. - Prior to the US Facilities Termination Date, no SSLI Documentation shall contain any provision under which a default or event of default (however denominated) or requirement to make or offer to make a prepayment or redemption under any other Indebtedness (the "Other Debt") would constitute a default or event of default or result in a requirement to make or offer to make a prepayment or redemption under such SSLI Documentation, unless such default or event of default under such Other Debt is a payment default or the Other Debt is as a result thereof accelerated. 2 EX-4.3 4 l07358aexv4w3.txt EX-4.3 2ND AMEND-AMEND&RESTD REV CRED AGRE 4/16/04 EXHIBIT 4.3 SECOND AMENDMENT dated as of April 16, 2004 (this "Amendment"), to the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, as amended as of February 19, 2004 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY (the "Borrower"), the lenders from time to time party thereto (the "Lenders") and JPMORGAN CHASE BANK, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). WHEREAS, pursuant to the terms and conditions of the Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrower; and WHEREAS, the Borrower has requested, and the Majority Lenders are willing to agree, that the Credit Agreement be amended on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings assigned to them in the Credit Agreement. SECTION 2. Amendment to Section 5.01 of the Credit Agreement. Section 5.01(a) of the Credit Agreement is hereby amended by inserting after the phrase "within 110 days after the end of each fiscal year of the Borrower" the following: "(or, in the case of the fiscal year ended December 31, 2003, within 140 days after the end of such fiscal year)". SECTION 3. Amendment to Section 6.07 of the Credit Agreement. Clause (v) of paragraph (a) of Section 6.07 is hereby amended to read as follows: "(v) the Borrower and its Subsidiaries may make Investments in Subsidiaries expressly permitted by Section 6.05(b), Section 6.05(e) or Section 6.05(s) and Investments expressly permitted under Section 6.05(j)." SECTION 4. Amendment to Article VII of the Credit Agreement. Paragraph (d) of Article VII of the Credit Agreement is hereby amended by inserting after the word "Section" the following: "5.01(a) (solely with respect to the Borrower's fiscal year ended December 31, 2003), ". SECTION 5. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that: (a) No Default has occurred and is continuing on the date hereof or will have occurred and be continuing at the time the amendments provided for herein become effective under Section 7. (b) All representations and warranties of the Borrower set forth in the Credit Agreement are true and correct in all respects material to the rights or interests of the Lenders on and as of the date hereof, and will be true and correct at the time the amendments provided for herein become effective under Section 7, except to the extent such representations and warranties relate to an earlier date. SECTION 6. Amendment Fee. In consideration of the agreements contained in this Amendment, the Borrower agrees to pay to the Administrative Agent on the Effective Date (as defined below), for the account of each Lender that delivers an executed counterpart of this Amendment prior to noon, New York City time, on April 16, 2004, an amendment fee equal to 0.03% of the sum of such Lender's Revolving Credit Exposure and unused Revolving Commitment on the Effective Date. SECTION 7. Conditions Precedent to Effectiveness. This Amendment shall become effective when the Administrative Agent shall have received counterparts hereof duly executed and delivered by Lenders representing the Majority Lenders (the date on which this Amendment becomes effective being called the "Effective Date"). SECTION 8. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect as set forth in the Credit Agreement. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Credit Agreement. SECTION 9. Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 10. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 11. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. -2- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, By /s/ R. W. Tieken --------------------------------- Name: R. W. Tieken Title: Chief Financial Officer JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ Robert P. Kellas ---------------------------------- Name: Robert P. Kellas Title: Vice President -3- [Remaining Signature Pages Intentionally Omitted] EX-4.4 5 l07358aexv4w4.txt EX-4.4 1ST AMENDMENT - TERM LOAN AGREEMENT 2/19/04 EXHIBIT 4.4 FIRST AMENDMENT dated as of February 19, 2004 (this "Amendment"), to the $645,454,545 Term Loan Agreement dated as of March 31, 2003 (the "Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "Borrower"); the lenders party thereto (together with their successors and permitted assigns thereunder, the "Lenders"); and JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). WHEREAS, pursuant to the terms and conditions of the Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrower; and WHEREAS, the Borrower has requested, and the Majority Lenders are willing to agree, that certain provisions of the Credit Agreement and of the Security Documents be amended on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings given to them in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended hereby or pursuant hereto. SECTION 2. Amendments to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended as follows: (a) The definition of "Capital Expenditures" is hereby amended by deleting the word "and" immediately before "(ii)" in the second sentence thereof and inserting immediately before the period at the end of such sentence "and (iii) "Capital Expenditures" in respect of any period shall be reduced by the amount of Customer Capital Expenditures that are directly paid by customers during such period and by the amount of reimbursements the Borrower or any Subsidiary shall have received during such period from customers in respect of Customer Capital Expenditures; provided that the aggregate amount of such reductions shall not exceed $50,000,000 in any fiscal year". (b) The definition of "Consolidated Net Worth" is hereby amended by inserting "(including the $84,700,000 of charges incurred in connection with the Borrower's restatement of its financial statements from 1998 through the second quarter of 2003, reflected in SEC filings made in the fourth quarter of 2003)" immediately after the phrase "non-cash non-recurring charges" in clause (c)(i) of such definition. (c) The definition of "Consolidated Senior Secured Indebtedness" is hereby amended by inserting "(other than up to $2,500,000,000 aggregate principal amount of Senior Subordinated-Lien Indebtedness)" immediately after the word "Indebtedness" in clause (a) of such definition. (d) The definition of "Credit Documents" is hereby amended by replacing the word "and" with a comma and by inserting immediately before the period at the end thereof "and the Lien Subordination and Intercreditor Agreement". (e) The definition of "Net Cash Proceeds" is hereby amended by inserting immediately before the period at the end thereof "; provided, that the Net Cash Proceeds of any event that is not a Prepayment Event shall be determined as if such event were a Prepayment Event". (f) Clause (c) of the definition of "Permitted Encumbrances" is hereby amended by inserting therein immediately after the phrase "deposits made" the phrase "(including cash deposits to secure obligations in respect of letters of credit provided)". (g) Clause (f) of the definition of "Permitted Investments" is hereby amended by replacing the word "or" immediately before clause (ii) thereof with a comma and inserting immediately before the period at the end thereof the following: ", (iii) investments of the type and maturity described in clause (c) in any obligor organized under the laws of a jurisdiction other than the United States that (A) is a branch or subsidiary of a Lender or the ultimate parent company of a Lender under one of the New Facilities Credit Agreements (but only if such Lender meets the ratings and capital, surplus and undivided profits requirements of such clause (c)) or (B) carries a rating at least equivalent to the rating of the sovereign nation in which it is located, and (iv) other investments of the type and maturity described in clause (c) in obligors organized under the laws of a jurisdiction other than the United States in any country in which such Subsidiary is located; provided, that the investments permitted under this subclause (iv) shall not exceed $10,000,000 for all such Subsidiaries in any such country or $50,000,000 in the aggregate for all such Subsidiaries and all countries". (h) The definition of "Securitization Transaction" is hereby amended by inserting immediately before the period at the end of the first sentence thereof the following: "; provided that "Securitization Transaction" shall not include (A) the sale by any Foreign Subsidiary, in the ordinary course of its business, of drafts with a bank or other financial institution as the maker (or otherwise primarily responsible for the payment thereof), bankers acceptances or similar instruments received by such Foreign Subsidiary from a customer operating in a jurisdiction other than the United States or any of its -2- territories or possessions or any political subdivision thereof in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer or (B) the sale, in the ordinary course of business, of drafts not payable on demand received by the Borrower or any Subsidiary from a customer in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer pursuant to an arrangement (1) initiated by and entered into a the request of such customer, and (2) under which a financial institution has agreed as part of a financing program established for and at the request of such customer to buy such drafts from such customer's vendors (which arrangements may be modified by the Borrower or any Subsidiary to contemplate the repurchase of such drafts by such customer, or other actions by such customer to reinstate or to pay receivables in respect of which such drafts were created, in the event of any failure by such financial institution to buy such drafts)". The following new definitions are hereby inserted in their appropriate alphabetical positions: "Customer Capital Expenditures" shall mean all or any portion of the purchase price of equipment or other fixed assets purchased for use in the business of the Borrower or any Subsidiary that is paid directly, or reimbursed to the Borrower or any Subsidiary, by customers of the Borrower or any of the Subsidiaries that are not Affiliates of the Borrower. "Designated Debt" means Indebtedness of the Borrower that matures during any of the calendar years 2005, 2006, 2007 and 2008. "First Amendment" means the First Amendment dated as of February 19, 2004, to this Agreement. "First Amendment Date" means February 19, 2004. "Junior Securities" means, collectively, any Senior Subordinated-Lien Indebtedness and any Indebtedness or preferred Equity Interests issued under Section 6.01(q). "Lien Subordination and Intercreditor Agreement" means a Lien Subordination and Intercreditor Agreement, to be dated on or about the first date on which Senior Subordinated-Lien Indebtedness is incurred, issued or sold, among the Collateral Agent, the applicable Senior Subordinated-Lien Collateral Agent, the Borrower and the Subsidiary Guarantors, in substantially the form of the draft made available to the Lenders prior to the First Amendment Date with such changes as shall have been approved by the Administrative Agent. "Senior Subordinated-Lien Collateral Agent" means, as to any Senior Subordinated-Lien Indebtedness, the collateral agent under the applicable Senior Subordinated-Lien Indebtedness Security Documents. -3- "Senior Subordinated-Lien Governing Documents" means each Indenture or other agreement or instrument providing for the issuance or setting forth the terms of any Senior Subordinated-Lien Indebtedness. "Senior Subordinated-Lien Indebtedness" means Indebtedness of the Borrower issued after the First Amendment Date that (a) is secured by Liens permitted under Section 6.02(m), but that is not secured by Liens on any additional assets, (b) constitutes Initial Junior Indebtedness or Designated Junior Obligations under the Lien Subordination and Intercreditor Agreement, and the Liens securing which are subordinated under the Lien Subordination and Intercreditor Agreement to the Liens securing the Obligations and (c) does not contain provisions inconsistent with the provisions of Annex A to the First Amendment. "Senior Subordinated-Lien Obligations" means, as to any Senior Subordinated-Lien Indebtedness, (a) the principal of and all premium or make-whole amounts, if any, and interest payable in respect of such Senior Subordinated-Lien Indebtedness, (b) any amounts payable under Guarantees of such Senior Subordinated-Lien Indebtedness by Subsidiaries and (c) all other amounts payable by the Borrower or any Subsidiary under such Senior Subordinated-Lien Indebtedness, the applicable Senior Subordinated-Lien Security Documents (to the extent such amounts relate to such Senior Subordinated-Lien Indebtedness) or the applicable Senior Subordinated-Lien Governing Documents. "Senior Subordinated-Lien Security Documents" means, as to any Senior Subordinated-Lien Indebtedness, the security agreements, pledge agreements, mortgages and other documents creating Liens on assets of the Borrower and the Subsidiary Guarantors to secure the applicable Senior Subordinated-Lien Obligations. SECTION 3. Amendments to Section 1.02 of the Credit Agreement. Section 1.02 of the Credit Agreement is hereby amended by inserting the following at the end thereof: "For purposes of determining compliance as of any date with Section 6.08, amounts incurred in euros during 2003 shall be translated into dollars at the exchange rate in effect on March 31, 2003, and amounts incurred in euros during any subsequent year shall be translated into dollars at the exchange rate determined by the Borrower and used in its Annual Operating Plan for such year (which exchange rate shall be determined reasonably and set forth in the first certificate delivered pursuant to Section 5.01(c) during such year)." SECTION 4. Amendments to Section 2.07 of the Credit Agreement. Section 2.07 of the Credit Agreement is hereby amended by redesignating paragraphs (d) and (e) thereof as paragraphs (g) and (h), making corresponding changes to all references to such paragraphs adding the following new paragraphs (d), (e) and (f): -4- "(d) In the event and on each occasion that the Borrower shall receive any Net Cash Proceeds from the incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness, the Borrower shall, substantially concurrently with the incurrence, issuance or sale of the Senior Subordinated-Lien Indebtedness, prepay Loans in an aggregate amount equal to 50% of such Net Cash Proceeds. (e) If proceeds from borrowings under the ABL Facilities Agreement pursuant to commitments becoming effective substantially concurrently with the First Amendment Date shall exceed $300,000,000, the Borrower shall prepay Loans in an aggregate amount equal to 100% of such proceeds in excess of $300,000,000, net of the aggregate fees and out-of-pocket expenses paid by the Borrower in connection with the borrowings under the ABL Facilities and the related bank amendments. (f) If (i) under the terms of any agreement or instrument governing Junior Securities the Borrower is required to apply or offer to apply any proceeds of any sales of assets to prepay, redeem, repurchase or defease such Junior Securities in the event such proceeds are not applied within a prescribed period to one or more other permitted uses ("Alternate Permitted Uses"), and (ii) such Alternate Permitted Uses would include the prepayment of Loans, then the Borrower shall within such prescribed period either (A) apply such proceeds to an Alternate Permitted Use not involving the prepayment of Indebtedness or (B) prepay Loans, to the extent necessary in order that the Borrower will not be required to apply or offer to apply such proceeds to prepay, redeem, repurchase or defease such Junior Securities." SECTION 5. Amendments to Section 5.01 of the Credit Agreement. Paragraph (c) of Section 5.01 of the Credit Agreement is hereby amended by (a) deleting the words "at the time of" at the beginning of such paragraph and inserting in their place the words "not later than one Business Day after", (b) removing the word "and" immediately preceding clause (iii) thereof and (c) adding at the end of clause (iii) and immediately preceding the semicolon the following clause: "and (iv) specifying the exchange rate determined by the Borrower and used in its Annual Operating Plan for the then current fiscal year (which rate the Borrower agrees to determine reasonably)". SECTION 6. Amendments to Section 6.01 of the Credit Agreement. (a) Paragraph (b) of Section 6.01 is hereby amended by replacing "$1,600,000,000" with "$1,950,000,000; provided, that the amount of Indebtedness permitted by this paragraph or any other paragraph of this Section to exist under this Agreement and the US Revolving Facility Agreement shall be reduced (i) in the case of this Agreement, by the aggregate amount of all prepayments of the loans outstanding hereunder and (ii) in the case of the US Revolving Facility Agreement, by the aggregate amount of all permanent reductions of the commitments thereunder (it being agreed, however, that up to $250,000,000 of Indebtedness under the US Revolving Facility Agreement in the form of cash-collateralized letters of credit will in any event be permitted)." -5- (b) Paragraph (g) of Section 6.01 of the Credit Agreement is hereby amended to read as follows: "(g) Securitization Transactions (other than those permitted by paragraphs (f), (j), (l), (r) and (u) of this Section) in an aggregate amount not greater than (euro)275,000,000 outstanding at any time;" (c) Section 6.01 of the Credit Agreement is hereby further amended by deleting the word "and" at the end of clause (r), redesignating clause (s) as clause (u) and inserting after clause (r) the following new clauses: "(s) Senior Subordinated-Lien Indebtedness for borrowed money of the Borrower not maturing or required to be prepaid, redeemed, repurchased or defeased prior to the Maturity Date, whether on one or more scheduled dates or upon the happening of one or more events (other than as a result of events of default or change of control events or pursuant to customary provisions requiring that the Borrower offer to purchase such Senior Subordinated-Lien Indebtedness with the proceeds of asset sales to the extent such proceeds have not been invested in assets used in the Borrower's business or used to prepay, redeem or purchase other Indebtedness (including Loans hereunder and Loans under and as defined in the US Revolving Facility Agreement) or to provide cash collateral for reimbursement obligations in respect of letters of credit (including the Letters of Credit under and as defined in the US Revolving Facility Agreement)) (it being understood that provisions comparable to those contained in Annex A hereto are customary), and related Guarantees by the Subsidiary Guarantors; provided that (i) the Borrower shall substantially concurrently make any prepayments hereunder required in connection with the issuance of such Senior Subordinated-Lien Indebtedness and (ii) the Senior Subordinated-Lien Collateral Agent for such Senior Subordinated-Lien Indebtedness shall have executed and delivered to the Administrative Agent, on its own behalf and on behalf of the obligees on such Senior Subordinated-Lien Indebtedness, the Lien Subordination and Intercreditor Agreement; (t) Securitization Transactions of Foreign Subsidiaries (other than those permitted by paragraphs (f), (g), (j), (l) and (r) of this Section) in an aggregate amount not greater than $15,000,000 outstanding at any time; and" SECTION 7. Amendments to Section 6.02 of the Credit Agreement. (a) Section 6.02 of the Credit Agreement is amended by deleting from the introductory clause thereof the phrase "(other than sales of delinquent receivables and sales of receivables in the ordinary course of business (other than Securitization Transactions and factoring transactions) for the purpose of accelerating collection of such receivables)" and replacing it with the phrase "(other -6- than sales of delinquent or doubtful receivables and other than any transaction excluded from the definition of "Securitization Transaction" under the proviso thereto)". (b) Paragraph (f) of Section 6.02 of the Credit Agreement is hereby amended to read as follows: "(f)(i) Liens on assets of Foreign Subsidiaries (other than the European JV and its subsidiaries and Luxembourg Finance) securing Indebtedness incurred under Section 6.01(f), and (ii) in connection with Securitization Transactions permitted under Section 6.01(f) or (t);" (c) Section 6.02 of the Credit Agreement is amended by deleting the word "and" at the end of clause (l), redesignating clause (m) as clause (q) and inserting after clause (l) the following new clauses (m), (n), (o) and (p): "(m) Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on the Borrower's headquarters building in Akron, Ohio, created under any Senior Subordinated-Lien Security Documents to secure any Senior Subordinated-Lien Indebtedness incurred under Section 6.01(s); provided, that such Liens shall be subordinate and junior to the Liens securing the Obligations on the terms set forth in the Lien Subordination and Intercreditor Agreement; (n) Liens on assets constituting ABL Facilities Collateral securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the ABL Facilities Agreement, but only if all Indebtedness under the ABL Facilities Agreement shall have been repaid and discharged in full and the Commitments under and as defined in the ABL Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred; (o) Liens on assets constituting European Facilities Collateral and Luxembourg Finance Pledged Collateral (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement) securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the European Facilities Agreement, but only if all Indebtedness under the European Facilities Agreement shall have been repaid in full and the Commitments under and as defined in the European Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred; -7- (p) at the time of and after the initial incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness, Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on the Borrower's headquarters building in Akron, Ohio, to secure the Guarantees by the Borrower and the Subsidiary Guarantors of the Obligations under and as defined in the European Facilities Agreement (or of Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the European Facilities Agreement, but only if all Indebtedness under the European Facilities Agreement shall have been repaid in full and the Commitments under and as defined in the European Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred); provided that such Liens shall be pari passu with the Liens securing Senior Subordinated-Lien Indebtedness and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement; and" SECTION 8. Amendments to Section 6.05 of the Credit Agreement. Section 6.05(e) of the Credit Agreement is amended to read as follows: "(e) on or after June 30, 2003, the acquisition of any Equity Interest; provided that the aggregate consideration paid by the Borrower and the Subsidiaries in all such acquisitions (including Indebtedness assumed by the Borrower or any Subsidiary) shall not exceed $100,000,000 plus the aggregate Net Cash Proceeds from Prepayment Events or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness after the date hereof that (i) shall not have been required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under any of the New Facilities Credit Agreements, and (ii) shall not have been used (and shall not be required to be used) (A) to make Capital Expenditures that would otherwise have been prohibited by Section 6.08 or (B) to repurchase, repay or prepay Designated Debt;" SECTION 9. Amendments to Section 6.07 of the Credit Agreement. Paragraph (b) of Section 6.07 of the Credit Agreement is amended by deleting the word "and" at the end of clause (iii), replacing the period at the end of clause (iv) with ";" and inserting after clause (iv) the following new clause (v): (vi) if no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds of securities issued and sold pursuant to Section 6.01(q) not required to be applied to prepay loans -8- hereunder, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.08 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e)." SECTION 10. Amendments to Section 6.08 of the Credit Agreement. Section 6.08 of the Credit Agreement is amended (a) by inserting after the words "Prepayment Events" the words "or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness", (b) by inserting "(A)" after the words "and shall not have been used" in the parenthetical therein and (c) by inserting at the end of the parenthetical therein the words "or (B) to repurchase, repay or prepay Designated Debt". SECTION 11. Amendment to Section 6.09 of the Credit Agreement. Section 6.09 of the Credit Agreement is hereby amended by inserting immediately following the words "2.25 to 1.00" the words "or, at any time after the Borrower shall have received gross cash proceeds of at least $500,000,000 from issuances and sales after the First Amendment Date of Senior Subordinated-Lien Indebtedness, 2.00 to 1.00". SECTION 12. Notices. The address for notices to the Administrative Agent under each Credit Document is hereby amended to read as follows: "if to the Administrative Agent, to JPMorgan Chase Bank, Loan & Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of Debbie Meche and Cliff Trapani (Telecopy No. (713) 750-2938), with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017, Attention of Robert Kellas (Telecopy No. (212) 270-3089);" SECTION 13. Amendments to the Guarantee and Collateral Agreement; Security Documents; Lien Subordination and Intercreditor Agreement. (a) The undersigned Lenders authorize the Collateral Agent to execute and deliver an instrument or instruments amending the Guarantee and Collateral Agreement (and, in the case of clauses (i), (ii) and (vi) below, the other Security Documents) as follows: (i) to provide that all ABL Facilities Obligations will be secured by a second Lien, junior to the Lien securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations and the Collateral Agent Obligations, by all the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement, to the extent the securing of the ABL Facilities Obligations with such Collateral would require that Indebtedness under the Indentures be ratably secured), and by the Borrower's headquarters building in Akron, Ohio; (ii) to provide that, at such time as any Senior Subordinated-Lien Indebtedness shall be issued, the Guarantees by the Borrower and the -9- Subsidiary Guarantors of the Revolving Obligations (and, if the Borrower and the Collateral Agent shall at any time hereafter so agree, the Term Obligations) under and as defined in the European Facilities Agreement will be secured, equally and ratably with the Senior Subordinated-Lien Indebtedness (and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement), by the ABL Facilities Collateral, the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement), and by the Borrower's headquarters building in Akron, Ohio; (iii) to provide that amounts received by the holders of Obligations secured by Junior Liens as a result of the subordination to such Junior Liens of the Liens securing any Senior Subordinated-Lien Indebtedness will be treated in the same manner under the subordination provisions of the Guarantee and Collateral Agreement as amounts received from the Borrower; (iv) to modify Section 11.03(b) to confirm that the Junior Lien on the ABL Facilities Collateral will be senior to the Lien on such Collateral securing any Senior Subordinated-Lien Indebtedness notwithstanding the use of any proceeds of any Senior Subordinated-Lien Indebtedness to repay amounts outstanding under the ABL Facilities; (v) to modify Section 11.04 to provide that the Junior Lien on the Intellectual Property consisting of Trademarks securing the ABL Facilities Obligations will be senior to the Lien on such Intellectual Property securing any Senior Subordinated-Lien Indebtedness; (vi) to effect such other changes as the Collateral Agent shall deem appropriate in connection with the issuance of any Senior Subordinated-Lien Indebtedness, the creation of the Liens securing such Indebtedness, the subordination of such Liens to the Liens created by the Guarantee and Collateral Agreement and the implementation of the matters set forth in this Section 12; and (vii) to modify Section 13.13 to provide for the release of the security interests in up to 14% of the stock of C A Goodyear de Venezuela held by the Borrower in connection with the sale of such stock by the Borrower to Goodyear do Brasil Productos de Borraca Ltda (Brasil) in a transaction permitted by the Credit Agreements (as defined therein) for consideration consisting of up to $10,000,000 of cash. (b) The undersigned Lenders further authorize and direct the Collateral Agent to execute and deliver such amendments to the Security Documents as may in its judgment be appropriate for the following purposes: -10- (i) to provide that the Liens securing the ABL Facilities Obligations will, insofar as they are applicable to cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to Section 2.04(b) of the Credit Agreement, be subordinate to the Liens securing such Letter of Credit reimbursement obligations; (ii) to provide that all ABL Facilities Obligations will be secured by a second Lien on all real property subject to Liens securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations or the Collateral Agent Obligations to the extent the securing of the ABL Facilities Obligations with such Collateral would not require that Indebtedness under the Indentures be ratably secured; and (iii) to confirm that the US Term Facility Obligations, the US Revolving Facility Obligations, the ABL Facilities Obligations and the US Miscellaneous Obligations are and will be secured by not more than 65% of the issued and outstanding voting Equity Interests of Luxembourg Finance. (c) The undersigned Lenders further authorize and direct the Collateral Agent, on or after the Effective Date, to execute and deliver the Lien Subordination and Intercreditor Agreement. Each Lender party to the Credit Agreement from time to time will be deemed to have agreed to be bound by the provisions of the Lien Subordination and Intercreditor Agreement to the same extent as if it had executed such Agreement as a party thereto. SECTION 14. Representations, Warranties and Agreements. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that: (a) On the date hereof and at the time the amendments provided for herein become effective under Section 16, no Default shall have occurred and be continuing. (b) The execution, delivery and performance by the Borrower of this Amendment and the performance by the Borrower of the Credit Agreement as amended hereby have been duly authorized by all necessary corporate and other action and, except to the extent that no Material Adverse Change would be materially likely to result, do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. (c) This Amendment and the Credit Agreement as amended hereby constitute the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting creditors' -11- rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (d) All representations and warranties of the Borrower set forth herein, and the representations and warranties of the Borrower set forth in the Credit Agreement, are true and correct in all material respects on and as of the date hereof, and will be true and correct on the date hereof and at the time the amendments provided for herein become effective under Section 16, except to the extent such representations and warranties relate to an earlier date. SECTION 15. Amendment Fee. In consideration of the agreements contained in this Amendment, the Borrower agrees to pay to the Administrative Agent, for the account of each Lender that delivers an executed counterpart of this Amendment prior to noon, New York City time, on February 17, 2004, an amendment fee (the "Amendment Fee") to be agreed upon between the Borrower and J.P. Morgan Securities Inc., payable on the Effective Date (as defined below). SECTION 16. Conditions Precedent to Effectiveness. This Amendment shall become effective upon the satisfaction of the condition set forth in paragraph (a) below; provided that the amendments set forth in Sections 2 through 12, the authorization set forth in Section 13 and the agreement set forth in Section 15 shall become effective only upon the satisfaction, on a date (the "Effective Date") on or prior to February 28, 2004, of each of the conditions set forth below (and failing such satisfaction by such date, such amendments, authorization and agreements shall cease to be of any further force or effect): (a) The Administrative Agent shall have received counterparts hereof duly executed and delivered by the Borrower and the Majority Lenders. (b) The Administrative Agent shall have received such evidence as it shall reasonably have requested as to the corporate power and authority of the Borrower to enter into this Amendment and to perform its obligations hereunder and under the Credit Agreement as amended hereby. (c) The Administrative Agent shall have received a certificate of an officer of the Borrower to the effect that the representations and warranties set forth in Section 14 are true and correct in all material respects on and as of the Effective Date. (d) The Administrative Agent shall have received the Amendment Fees payable by the Borrower pursuant to Section 14 and all other fees payable to the Arrangers and the Administrative Agent. (e) The Security Documents shall have been amended as necessary to provide that the Liens securing the ABL Facilities Obligations will, insofar as they are applicable to cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to Section 2.04(b) of the Credit Agreement, be subordinate to the Liens securing such Letter of Credit reimbursement obligations. -12- (f) The US Revolving Facility Agreement, the ABL Facilities Agreement and the European Facilities Agreement shall have been or shall simultaneously be amended in a manner reasonably satisfactory to the Administrative Agent to permit the incurrence, issuance and sale of Senior Subordinated-Lien Indebtedness and the other transactions contemplated hereby, in each case in a manner substantially corresponding to the amendments to the Credit Agreement effected hereby, to the extent applicable. The Administrative Agent shall notify the Lenders when it determines that the foregoing conditions have been satisfied and that this Amendment has become fully effective, and such notice shall be conclusive and binding upon the Lenders. SECTION 17. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Credit Agreement. SECTION 18. Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 19. Indemnity. It is agreed that for all purposes of Section 9.03(b) of the Credit Agreement, any offering, incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness and any other securities issued and sold pursuant to Section 6.01(q) of the Credit Agreement, the execution, delivery and performance of this Amendment and of the Lien Subordination and Intercreditor Agreement, the amendment of the Guarantee and Collateral Agreement as contemplated by Section 16 and the other transactions contemplated hereby shall all be deemed to be transactions contemplated by the Credit Agreement. SECTION 20. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 21. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. SECTION 22. Headings. The section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting this Amendment. -13- SECTION 23. Amendment to Article VIII of the Credit Agreement. Article VIII of the Credit Agreement is hereby amended by adding the following at the end thereof: "Without prejudice to the provisions of this Article VIII, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) to act as the person holding the power of attorney (in such capacity, the "fonde de pouvoir") of the Lenders as contemplated under Article 2692 of the Civil Code of Quebec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are conferred upon the fonde de pouvoir under any hypothec. Moreover, without prejudice to such appointment and authorization to act as the person holding the power of attorney as aforesaid, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) (in such capacity, the "Custodian") to act as agent and custodian for and on behalf of the Lenders to hold and to be the sole registered holder of any debenture which may be issued under any hypothec, the whole notwithstanding Section 32 of the Act respecting the special powers of legal persons (Quebec) or any other applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of any such debenture and owing to each Lender, and (ii) each Lender will be entitled to the benefits of any charged property covered by any hypothec and will participate in the proceeds of realization of any such charged property, the whole in accordance with the terms hereof. "Each of the fonde de pouvoir and the Custodian shall (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to fonde de pouvoir and the Custodian (as applicable) with respect to the charged property under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise, (b) benefit from and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders, and (c) be entitled to delegate from time to time any of its powers or duties under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise and on such terms and conditions as it may determine from time to time. Any person who becomes a Lender shall be deemed to have consented to and confirmed: (y) the fonde de pouvoir as the person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the agent and custodian as aforesaid and to have ratified, as -14- of the date it becomes a Lender, all actions taken by the Custodian in such capacity." -15- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ B. Joseph Lillis ------------------------------------- Name: B. Joseph Lillis Title: Managing Director [Remaining Signature Pages Intentionally Omitted] ANNEX A Senior Subordinated-Lien Indebtedness - Capitalized terms used and not defined herein shall have the meanings given to them in the First Amendment, or, if not defined therein, in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended by the First Amendment or pursuant thereto. - All Senior Subordinated-Lien Indebtedness and the related Liens shall satisfy the requirements set forth in the definition of Senior Subordinated-Lien Indebtedness and in Sections 6.01(s) and 6.02(m). - Prior to the date (the "US Facilities Termination Date") on which all the loans under the US Term Facility Agreement and the US Revolving Facility Agreement have been repaid in full and the remaining commitments under the US Revolving Facility Agreement, if any, are available only for the issuance of cash collateralized letters of credit, the documentation establishing or evidencing any Senior Subordinated-Lien Indebtedness ("SSLI Documentation") shall contain no maintenance financial covenants (i.e., covenants requiring the maintenance of any balance sheet, income statement or other financial level or ratio). After the US Facilities Termination Date, the SSLI Documentation shall contain no maintenance financial covenants that are not contained in the Credit Agreement, and the financial levels or ratios required to be maintained by any such covenants shall be no more restrictive than those required to be maintained by the corresponding covenants of the Credit Agreement (it being understood that additional maintenance financial covenants may be included in any SSLI Documentation and, if they are, they shall automatically be included in this Agreement). - The SSLI Documentation shall permit (specifically, and not through a basket that could be exhausted by other financings) the refinancing of all Indebtedness under the New Facilities Credit Agreements (or any refinancing Indebtedness in respect thereof) with new Indebtedness having a maturity no sooner than, a weighted average life no shorter than, and an aggregate principal amount or accreted value no greater than the fully drawn amount (plus fees and expenses, including any premium and defeasance costs of refinancing) of the refinanced indebtedness or commitments thereunder and secured on the same basis as the Indebtedness refinanced. - The SSLI Documentation shall not restrict (except for restrictions that a Financial Officer of the Borrower shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with the Borrower's ability to effect) the securing of Indebtedness under the New Facilities Credit Agreements or any refinancing Indebtedness in respect thereof or the cash collateralization of any letter of credit exposure thereunder (but may require that if Indebtedness under any New Facilities Credit Agreement or related refinancing Indebtedness is secured by assets not securing the Indebtedness under any of the New Facilities Credit Agreements on the First Amendment Date, a junior lien on such assets, subordinated under the Lien Subordination and Intercreditor Agreement, (or in the case of any lien granted by any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to secure indebtedness under the European Facility Agreement, a ratable or junior lien on such assets) must be granted to secure the Senior Subordinated-Lien Indebtedness). - The SSLI Documentation shall not restrict (except for restrictions a Financial Officer of the Borrower shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with the Borrower's ability to effect) the use of proceeds from any sale, transfer or other disposition of assets owned directly by (a) the Borrower or any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to repay or prepay Indebtedness under the New Facilities Credit Agreements (other than the European Facilities Agreement) or refinancing Indebtedness in respect thereof or, until the commitments under the US Revolving Facility Agreement and the ABL Facilities Agreement have been terminated and no letter of credit remains outstanding under either such agreement, to cash collateralize any letter of credit exposure thereunder, or (b) the European JV or any of its subsidiaries to repay or prepay Indebtedness under the European Facilities Agreement or refinancing Indebtedness in respect thereof. - Prior to the US Facilities Termination Date, no SSLI Documentation shall contain any provision under which a default or event of default (however denominated) or requirement to make or offer to make a prepayment or redemption under any other Indebtedness (the "Other Debt") would constitute a default or event of default or result in a requirement to make or offer to make a prepayment or redemption under such SSLI Documentation, unless such default or event of default under such Other Debt is a payment default or the Other Debt is as a result thereof accelerated. 2 EX-4.5 6 l07358aexv4w5.txt EX-4.5 1STAMEND-TERMLOANAGREE-DUNLOPTIRES 2/19/04 EXHIBIT 4.5 FIRST AMENDMENT dated as of February 19, 2004 (this "Amendment"), to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003 (the "Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation ("Goodyear"); GOODYEAR DUNLOP TIRES EUROPE B.V., a corporation organized under the laws of the Netherlands (the "European J.V."); GOODYEAR DUNLOP TIRES GERMANY GMBH, a corporation organized under the laws of the Federal Republic of Germany ("GDTG"); GOODYEAR GMBH & CO KG, a partnership organized under the laws of the Federal Republic of Germany ("Goodyear KG"); DUNLOP GMBH & CO KG, a partnership organized under the laws of the Federal Republic of Germany ("Dunlop KG"); GOODYEAR LUXEMBOURG TIRES SA, a societe anonyme organized under the laws of Luxembourg ("Lux Tires"); the lenders party thereto (together with their successors and permitted assigns thereunder, the "Lenders"); and JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). WHEREAS, pursuant to the terms and conditions of the Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrowers; and WHEREAS, Goodyear and the Borrowers have requested, and the Majority Lenders are willing to agree, that certain provisions of the Credit Agreement and of the Security Documents be amended on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings given to them in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended hereby or pursuant hereto. SECTION 2. Amendments to Section 1.01 of the Credit Agreement. Section 1.01 of the Credit Agreement is hereby amended as follows: (a) The definition of "Capital Expenditures" is hereby amended by deleting the word "and" immediately before "(ii)" in the second sentence thereof and inserting immediately before the period at the end of such sentence "and (iii) "Capital Expenditures" in respect of any period shall be reduced by the amount of Customer Capital Expenditures that are directly paid by customers during such period and by the amount of reimbursements Goodyear or any Subsidiary shall have received during such period from customers in respect of Customer Capital Expenditures; provided that the aggregate amount of such reductions shall not exceed $50,000,000 in any fiscal year". (b) The definition of "Consolidated Net Worth" is hereby amended by inserting "(including the $84,700,000 of charges incurred in connection with Goodyear's restatement of its financial statements from 1998 through the second quarter of 2003, reflected in SEC filings made in the fourth quarter of 2003)" immediately after the phrase "non-cash non-recurring charges" in clause (c)(i) of such definition. (c) The definition of "Consolidated Senior Secured Indebtedness" is hereby amended by inserting "(other than up to $2,500,000,000 aggregate principal amount of Senior Subordinated-Lien Indebtedness)" immediately after the word "Indebtedness" in clause (a) of such definition. (d) The definition of "Credit Documents" is hereby amended by replacing the word "and" with a comma and by inserting immediately before the period at the end thereof "and the Lien Subordination and Intercreditor Agreement". (e) The definition of "Net Cash Proceeds" is hereby amended by inserting at the end thereof, "The Net Cash Proceeds of any event that is not a Prepayment Event shall be determined as if such event were a Prepayment Event." (f) Clause (c) of the definition of "Permitted Encumbrances" is hereby amended by inserting therein immediately after the phrase "deposits made" the phrase "(including cash deposits to secure obligations in respect of letters of credit provided)". (g) Clause (f) of the definition of "Permitted Investments" is hereby amended by replacing the word "or" immediately before clause (ii) thereof with a comma and inserting immediately before the period at the end thereof the following: ", (iii) investments of the type and maturity described in clause (c) in any obligor organized under the laws of a jurisdiction other than the United States that (A) is a branch or subsidiary of a Lender or the ultimate parent company of a Lender under one of the New Facilities Credit Agreements (but only if such Lender meets the ratings and capital, surplus and undivided profits requirements of such clause (c)) or (B) carries a rating at least equivalent to the rating of the sovereign nation in which it is located, and (iv) other investments of the type and maturity described in clause (c) in obligors organized under the laws of a jurisdiction other than the United States in any country in which such Subsidiary is located; provided, that the investments permitted under this subclause (iv) shall not exceed $10,000,000 for all such Subsidiaries in any such country or $50,000,000 in the aggregate for all such Subsidiaries and all countries". -2- (h) The definition of "Securitization Transaction" is hereby amended by inserting immediately before the period at the end of the first sentence thereof the following: (i) "; provided that "Securitization Transaction" shall not include (A) the sale by any Foreign Subsidiary, in the ordinary course of its business, of drafts with a bank or other financial institution as the maker (or otherwise primarily responsible for the payment thereof), bankers acceptances or similar instruments received by such Foreign Subsidiary from a customer operating in a jurisdiction other than the United States or any of its territories or possessions or any political subdivision thereof in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer or (B) the sale, in the ordinary course of business, of drafts not payable on demand received by Goodyear or any Subsidiary from a customer in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer pursuant to an arrangement (1) initiated by and entered into at the request of such customer, and (2) under which a financial institution has agreed as part of a financing program established for and at the request of such customer to buy such drafts from such customer's vendors (which arrangements may be modified by Goodyear or any Subsidiary to contemplate the repurchase of such drafts by such customer, or other actions by such customer to reinstate or to pay receivables in respect of which such drafts were created, in the event of any failure by such financial institution to buy such drafts)". The following new definitions are hereby inserted in their appropriate alphabetical positions: "Customer Capital Expenditures" shall mean all or any portion of the purchase price of equipment or other fixed assets purchased for use in the business of Goodyear or any Subsidiary that is paid directly, or reimbursed to Goodyear or any Subsidiary, by customers of Goodyear or any of the Subsidiaries that are not Affiliates of Goodyear. "Designated Debt" means Indebtedness of Goodyear that matures during any of the calendar years 2005, 2006, 2007 and 2008. "First Amendment" means the First Amendment dated as of February 19, 2004, to this Agreement. "First Amendment Date" means February 19, 2004. "Junior Securities" means, collectively, any Senior Subordinated-Lien Indebtedness and any Indebtedness or preferred Equity Interests issued under Section 6.01(q). "Lien Subordination and Intercreditor Agreement" means a Lien Subordination and Intercreditor Agreement, to be dated on or about the first date on which Senior Subordinated-Lien Indebtedness is incurred, issued or sold, among the -3- Collateral Agent, the applicable Senior Subordinated-Lien Collateral Agent, Goodyear and the US Subsidiary Guarantors, in substantially the form of the draft made available to the Lenders prior to the First Amendment Date with such changes as shall have been approved by the Administrative Agent. "Senior Subordinated-Lien Collateral Agent" means, as to any Senior Subordinated-Lien Indebtedness, the collateral agent under the applicable Senior Subordinated-Lien Indebtedness Security Documents. "Senior Subordinated-Lien Governing Documents" means each Indenture or other agreement or instrument providing for the issuance or setting forth the terms of any Senior Subordinated-Lien Indebtedness. "Senior Subordinated-Lien Indebtedness" means Indebtedness of Goodyear issued after the First Amendment Date that (a) is secured by Liens permitted under Section 6.02(m), but that is not secured by Liens on any additional assets, (b) constitutes Initial Junior Indebtedness or Designated Junior Obligations under the Lien Subordination and Intercreditor Agreement, and the Liens securing which are subordinated under the Lien Subordination and Intercreditor Agreement to the Liens securing the Obligations and (c) does not contain provisions inconsistent with the provisions of Annex A to the First Amendment. "Senior Subordinated-Lien Obligations" means, as to any Senior Subordinated-Lien Indebtedness, (a) the principal of and all premium or make-whole amounts, if any, and interest payable in respect of such Senior Subordinated-Lien Indebtedness, (b) any amounts payable under Guarantees of such Senior Subordinated-Lien Indebtedness by Subsidiaries and (c) all other amounts payable by Goodyear or any Subsidiary under such Senior Subordinated-Lien Indebtedness, the applicable Senior Subordinated-Lien Security Documents (to the extent such amounts relate to such Senior Subordinated-Lien Indebtedness) or the applicable Senior Subordinated-Lien Governing Documents. "Senior Subordinated-Lien Security Documents" means, as to any Senior Subordinated-Lien Indebtedness, the security agreements, pledge agreements, mortgages and other documents creating Liens on assets of Goodyear and the US Subsidiary Guarantors to secure the applicable Senior Subordinated-Lien Obligations. SECTION 3. Amendments to Section 1.02 of the Credit Agreement. Section 1.02 of the Credit Agreement is hereby amended by inserting the following at the end thereof: (a) "For purposes of determining compliance as of any date with Section 6.09, amounts incurred in euros during 2003 shall be translated into dollars at the exchange rate in effect on March 31, 2003, and amounts incurred in euros during any subsequent year shall be translated into dollars at the exchange rate determined by Goodyear and used in its Annual Operating Plan for such year -4- (which exchange rate shall be determined reasonably and set forth in the first certificate delivered pursuant to Section 5.01(c) during such year)." SECTION 4. Amendments to Section 5.01 of the Credit Agreement. Paragraph (c) of Section 5.01 of the Credit Agreement is hereby amended by (a) deleting the words "at the time of" at the beginning of such paragraph and inserting in their place the words "not later than one Business Day after", (b) removing the word "and" immediately preceding clause (iii) thereof and (c) adding at the end of clause (iii) and immediately preceding the semicolon the following clause: "and (iv) specifying the exchange rate determined by Goodyear and used in its Annual Operating Plan for the then current fiscal year (which rate Goodyear agrees to determine reasonably)". SECTION 5. Amendment to Section 5.08 of the Credit Agreement. Section 5.08 of the Credit Agreement is hereby amended by adding the following paragraph at the end thereof: "(f) Substantially simultaneously with the initial incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness, Goodyear will and will cause the US Facilities Grantors (as defined in the Guarantee and Collateral Agreement) to create security interests in the US Facilities Collateral (as defined in the Guarantee and Collateral Agreement) to secure the Guarantee by Goodyear of the Revolving Obligations on a pari passu basis with the Liens securing such initial Senior Subordinated-Lien Indebtedness and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement, all pursuant to documentation reasonably satisfactory to the Collateral Agent, and take all such further actions as may be reasonably requested by the Collateral Agent in order to cause the security interests required to be created under the terms of this paragraph (f) to constitute valid security interests, perfected in accordance with this Agreement." SECTION 6. Amendments to Section 6.01 of the Credit Agreement. (a) Paragraph (b) of Section 6.01 is hereby amended by replacing "$1,600,000,000" with "$1,950,000,000" and by inserting immediately at the end thereof the following: "or, at any time when (i) the Loans under and as defined in the US Term Facility Agreement have been repaid in full and (ii) no Loans are outstanding under the US Revolving Facility Agreement and the Regular Way Commitments (as defined in such Agreement) have been reduced to zero, $2,000,000,000; provided, that the amount of Indebtedness permitted by this paragraph or any other paragraph of this Section to exist under the US Term Facility Agreement and the US Revolving Facility Agreement shall be reduced (i) in the case of the US Term Facility Agreement, by the -5- aggregate amount of all prepayments of the loans outstanding thereunder and (ii) in the case of the US Revolving Facility Agreement, by the aggregate amount of all permanent reductions of the commitments thereunder (it being agreed, however, that up to $250,000,000 of Indebtedness under the US Revolving Facility Agreement in the form of cash-collateralized letters of credit will in any event be permitted);" (b) Paragraph (g) of Section 6.01 of the Credit Agreement is hereby amended to read as follows: "(g) Securitization Transactions (other than those permitted by paragraphs (f), (j), (l), (r) and (u) of this Section) in an aggregate amount not greater than (euro)275,000,000 outstanding at any time;" (c) Section 6.01 of the Credit Agreement is hereby further amended by deleting the word "and" at the end of clause (r), redesignating clause (s) as clause (u) and inserting after clause (r) the following new clauses: "(s) Senior Subordinated-Lien Indebtedness for borrowed money of Goodyear not maturing or required to be prepaid, redeemed, repurchased or defeased prior to the Maturity Date, whether on one or more scheduled dates or upon the happening of one or more events (other than as a result of events of default or change of control events or pursuant to customary provisions requiring that Goodyear offer to purchase such Senior Subordinated-Lien Indebtedness with the proceeds of asset sales to the extent such proceeds have not been invested in assets used in Goodyear 's business or used to prepay, redeem or purchase other Indebtedness (including Loans under and as defined in the US Revolving Facility Agreement and the US Term Facility Agreement) or to provide cash collateral for reimbursement obligations in respect of letters of credit (including the Letters of Credit under and as defined in the US Revolving Facility Agreement)) (it being understood that provisions comparable to those contained in Annex A hereto are customary), and related Guarantees by the US Subsidiary Guarantors; provided that (i) Goodyear shall substantially concurrently make any prepayments, deposits of cash collateral to secure reimbursement obligations in respect of Letters of Credit and reductions of Regular Way Commitments (as defined in the US Revolving Facility Agreement) and Commitments required in connection with the issuance of such Senior Subordinated-Lien Indebtedness under the US Revolving Facility Agreement and the US Term Facility Agreement, (ii) the Senior Subordinated-Lien Collateral Agent for such Senior Subordinated-Lien Indebtedness shall have executed and delivered to the Administrative Agent, on its own behalf and on behalf of the obligees on such Senior Subordinated-Lien Indebtedness, the Lien Subordination and Intercreditor Agreement, and (iii) after no Loans or Regular Way Commitments are outstanding under the US Term Facility Agreement and the US Revolving Facility Agreement, the portion of the Net Cash Proceeds of such Senior Subordinated-Lien Indebtedness in excess of required prepayments under the US Term Facility Agreement -6- and Commitment reductions and Regular Way Commitment reductions under the US Revolving Facility Agreement shall, except to the extent a like amount of Net Cash Proceeds of Senior Subordinated-Lien Indebtedness shall have been so applied prior to the time at which all amounts outstanding under the US Term Facility Agreement and the US Revolving Facility Agreement shall have been prepaid and the Regular Way Commitments shall have been reduced to zero, be applied, within 180 days after the receipt by Goodyear of such Net Cash Proceeds, solely (A) to prepay Loans under and as defined in the New Facilities Credit Agreements (it being agreed that at the time of any such prepayment of revolving loans the related commitments will be reduced by the amount of such prepayment), (B) to repurchase, repay or prepay Designated Debt or (C) to make reasonably anticipated required contributions to Plans of Goodyear and the Subsidiaries; (t) Securitization Transactions of Foreign Subsidiaries (other than those permitted by paragraphs (f), (g), (j), (l) and (r) of this Section) in an aggregate amount not greater than $15,000,000 outstanding at any time; and" SECTION 7. Amendments to Section 6.02 of the Credit Agreement. (a) Section 6.02 of the Credit Agreement is amended by deleting from the introductory clause thereof the phrase "(other than sales of delinquent receivables and sales of receivables in the ordinary course of business (other than Securitization Transactions and factoring transactions) for the purpose of accelerating collection of such receivables)" and replacing it with the phrase "(other than sales of delinquent or doubtful receivables and other than any transaction excluded from the definition of "Securitization Transaction" under the proviso thereto)". (b) Paragraph (a) of Section 6.02 of the Credit Agreement is hereby amended by replacing "New Facility Documents" with "New Facilities Documents or the Credit Documents". (c) Paragraph (f) of Section 6.02 of the Credit Agreement is hereby amended to read as follows: "(f)(i) Liens on assets of Foreign Subsidiaries (other than the European J.V. and the J.V. subsidiaries and Luxembourg Finance) securing Indebtedness incurred under Section 6.01(f), and (ii) in connection with Securitization Transactions permitted under Section 6.01(f) or (t);" (d) Section 6.02 of the Credit Agreement is amended by deleting the word "and" at the end of clause (l), redesignating clause (m) as clause (p) and inserting after clause (l) the following new clauses (m), (n) and (o): -7- "(m) Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on Goodyear's headquarters building in Akron, Ohio, created under any Senior Subordinated-Lien Security Documents to secure any Senior Subordinated-Lien Indebtedness incurred under Section 6.01(s); provided, that such Liens shall be subordinate and junior to the Liens securing the Obligations under and as defined in each of the New Facilities Credit Agreements and shall be equal in priority to the Liens securing the Guarantees by Goodyear and the US Subsidiary Guarantors of the Obligations, in each case on the terms set forth in the Lien Subordination and Intercreditor Agreement; (n) Liens on assets constituting ABL Facilities Collateral securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the ABL Facilities Agreement, but only if all Indebtedness under the ABL Facilities Agreement shall have been repaid and discharged in full and the Commitments under and as defined in the ABL Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred; (o) Liens on assets constituting US Facilities Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement), and on the Borrower's headquarters building in Akron, Ohio, securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the US Term Facility Agreement or the US Revolving Facility Agreement, but only if (i) all Indebtedness under both the US Term Facility Agreement and the US Revolving Facility Agreement shall have been repaid in full and the Commitments under and as defined in the US Revolving Facility Agreement shall have been terminated not later than the time at which such Liens are incurred and (ii) such Liens secure Indebtedness in an amount not greater than the amount of the Indebtedness under the US Term Facility Agreement and/or the US Revolving Facility Agreement repaid with the proceeds of such Indebtedness;" SECTION 8. Amendments to Section 6.05 of the Credit Agreement. Section 6.05(e) of the Credit Agreement is amended to read as follows: "(e) on or after June 30, 2003, the acquisition of any Equity Interest; provided that the aggregate consideration paid by Goodyear and the Subsidiaries in all such acquisitions (including Indebtedness assumed by Goodyear or any Subsidiary) shall not exceed $100,000,000 plus the -8- aggregate Net Cash Proceeds from New Facilities Prepayment Events or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness after the date hereof that (i) shall not have been required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under any of the New Facilities Credit Agreements, and (ii) shall not have been used (and shall not be required to be used) (A) to make Capital Expenditures that would otherwise have been prohibited by Section 6.09 or (B) to repurchase, repay or prepay Designated Debt;" SECTION 9. Amendments to Section 6.07 of the Credit Agreement. Paragraph (b) of Section 6.07 of the Credit Agreement is amended by deleting the word "and" at the end of clause (iii), replacing the period at the end of clause (iv) with ";" and inserting after clause (iv) the following new clauses (v) and (vi): "(v) if the Loans under and as defined in the US Term Facility Agreement shall have been repaid in full and no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds from the issuance and sale of Senior Subordinated-Lien Indebtedness not required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under the US Revolving Facility Agreement or the US Term Facility Agreement, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.09 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e); and (vi) if no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds of securities issued and sold pursuant to Section 6.01(q) not required to be applied to prepay loans under the US Term Facility Agreement, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.09 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e)." SECTION 10. Amendments to Section 6.09 of the Credit Agreement. Section 6.09 of the Credit Agreement is amended (a) by inserting after the words "Prepayment Events" the words "or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness", (b) by inserting after the words "prepay loans" the words "or cash collateralize letters of credit", (c) by inserting "(A)" after the words "and shall not have been used" in the parenthetical therein and (d) by inserting at the end of the parenthetical therein the words "or (B) to repurchase, repay or prepay Designated Debt". -9- SECTION 11. Amendment to Section 6.10 of the Credit Agreement. Section 6.10 of the Credit Agreement is hereby amended by inserting immediately following the words "2.25 to 1.00" the words "or, at any time after Goodyear shall have received gross cash proceeds of at least $500,000,000 from issuances and sales after the First Amendment Date of Senior Subordinated-Lien Indebtedness, 2.00 to 1.00". SECTION 12. Amendment to Article VII of the Credit Agreement. The final paragraph of Section 7.01 is hereby amended by deleting the words "Goodyear or" from the phrase "event with respect to Goodyear or any Borrower described in clause (h) or (i) of this Section" in each of the two occurrences of such phrase in such final paragraph. SECTION 13. Amendments to the Guarantee and Collateral Agreement; Security Documents; Lien Subordination and Intercreditor Agreement. (a) The undersigned Lenders authorize the Collateral Agent to execute and deliver an instrument or instruments amending the Guarantee and Collateral Agreement (and, in the case of clauses (i), (ii) and (vi) below, the other Security Documents) as follows: (i) to provide that all ABL Facilities Obligations will be secured by a second Lien, junior to the Lien securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations and the Collateral Agent Obligations, by all the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement, to the extent the securing of the ABL Facilities Obligations with such Collateral would require that Indebtedness under the Indentures be ratably secured), and by the Borrower's headquarters building in Akron, Ohio; (ii) to provide that, at such time as any Senior Subordinated-Lien Indebtedness shall be issued, the Guarantees by Goodyear and the US Subsidiary Guarantors of the Revolving Obligations (and, if the Borrower and the Collateral Agent shall at any time hereafter so agree, the Term Obligations) will be secured, equally and ratably with the Senior Subordinated-Lien Indebtedness (and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement), by the ABL Facilities Collateral, the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement), and by Goodyear's headquarters building in Akron, Ohio; (iii) to provide that amounts received by the holders of Obligations secured by Junior Liens as a result of the subordination to such Junior Liens of the Liens securing any Senior Subordinated-Lien Indebtedness will be treated in the same manner under the subordination provisions of -10- the Guarantee and Collateral Agreement as amounts received from Goodyear; (iv) to modify Section 11.03(b) to confirm that the Junior Lien on the ABL Facilities Collateral will be senior to the Lien on such Collateral securing any Senior Subordinated-Lien Indebtedness notwithstanding the use of any proceeds of any Senior Subordinated-Lien Indebtedness to repay amounts outstanding under the ABL Facilities; (v) to modify Section 11.04 to provide that the Junior Lien on the Intellectual Property consisting of Trademarks securing the ABL Facilities Obligations will be senior to the Lien on such Intellectual Property securing any Senior Subordinated-Lien Indebtedness; (vi) to effect such other changes as the Collateral Agent shall deem appropriate in connection with the issuance of any Senior Subordinated-Lien Indebtedness, the creation of the Liens securing such Indebtedness, the subordination of such Liens to the Liens created by the Guarantee and Collateral Agreement and the implementation of the matters set forth in this Section 13; (vii) to modify Section 13.13 to provide for the release of the security interests in up to 14% of the stock of C A Goodyear de Venezuela held by Goodyear in connection with the sale of such stock by Goodyear to Goodyear do Brasil Productos de Borraca Ltda (Brasil) in a transaction permitted by the Credit Agreements (as defined therein) for consideration consisting of up to $10,000,000 of cash; (b) The undersigned Lenders further authorize and direct the Collateral Agent to execute and deliver such amendments to the Security Documents and the New Facilities Documents as may in its judgment be appropriate for the following purposes: (i) to provide that the Liens securing the ABL Facilities Obligations will, insofar as they are applicable to cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to Section 2.04(b) of the US Revolving Facility Agreement, be subordinate to the Liens securing such Letter of Credit reimbursement obligations; (ii) to provide that all ABL Facilities Obligations will be secured by a second Lien on all real property subject to Liens securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations or the Collateral Agent Obligations to the extent the securing of the ABL Facilities Obligations with such Collateral would not require that Indebtedness under the Indentures be ratably secured; and -11- (iii) to confirm that the US Term Facility Obligations, the US Revolving Facility Obligations, the ABL Facilities Obligations and the US Miscellaneous Obligations are and will be secured by not more than 65% of the issued and outstanding voting Equity Interests of Luxembourg Finance. (c) The undersigned Lenders further authorize and direct the Collateral Agent, on or after the Effective Date, to execute and deliver the Lien Subordination and Intercreditor Agreement. Each Lender party to the Credit Agreement from time to time will be deemed to have agreed to be bound by the provisions of the Lien Subordination and Intercreditor Agreement to the same extent as if it had executed such Agreement as a party thereto. SECTION 14. Notices. The address for notices to the Administrative Agent under each Credit Document is hereby amended to read as follows: "if to the Administrative Agent, to JPMorgan Chase Bank, Loan & Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of Debbie Meche and Cliff Trapani (Telecopy No. (713) 750-2938), with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017, Attention of Robert Kellas (Telecopy No. (212) 270-3089);" SECTION 15. Representations, Warranties and Agreements. Each of Goodyear and the European J.V. represents and warrants to the Administrative Agent and the Lenders that: (a) On the date hereof and at the time the amendments provided for herein become effective under Section 17, no Default shall have occurred and be continuing. (b) The execution, delivery and performance by Goodyear and each Borrower of this Amendment and the performance by Goodyear and each Borrower of the Credit Agreement as amended hereby have been duly authorized by all necessary corporate and other action and, except to the extent that no Material Adverse Change would be materially likely to result, do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. (c) This Amendment and the Credit Agreement as amended hereby constitute the legal, valid and binding obligations of each of Goodyear and each Borrower, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (d) All representations and warranties of Goodyear and the European J.V. set forth herein, and the representations and warranties of Goodyear and each Borrower set forth in the Credit Agreement, are true and correct in all material -12- respects on and as of the date hereof, and will be true and correct on the date hereof and at the time the amendments provided for herein become effective under Section 16, except to the extent such representations and warranties relate to an earlier date. SECTION 16. Amendment Fee. In consideration of the agreements contained in this Amendment, Goodyear agrees to pay to the Administrative Agent, for the account of each Lender that delivers an executed counterpart of this Amendment prior to noon, New York City time, on February 17, 2004, an amendment fee (the "Amendment Fee") to be agreed upon between Goodyear and J.P. Morgan Securities Inc., payable on the Effective Date (as defined below). SECTION 17. Conditions Precedent to Effectiveness. This Amendment shall become effective upon the satisfaction of the condition set forth in paragraph (a) below; provided that the amendments set forth in Sections 2 through 12, the authorization set forth in Section 13 and the agreement set forth in Section 16 shall become effective only upon the satisfaction, on a date (the "Effective Date") on or prior to February 28, 2004, of each of the conditions set forth below (and failing such satisfaction by such date, such amendments, authorization and agreements shall cease to be of any further force or effect): (a) The Administrative Agent shall have received counterparts hereof duly executed and delivered by Goodyear, each Borrower and the Majority Lenders. (b) The Administrative Agent shall have received such evidence as it shall reasonably have requested as to the corporate power and authority of Goodyear and each of the Borrowers to enter into this Amendment and to perform its obligations hereunder and under the Credit Agreement as amended hereby. (c) The Administrative Agent shall have received a certificate of an officer of each of Goodyear and the European J.V. to the effect that the representations and warranties set forth in Section 15 are true and correct in all material respects on and as of the Effective Date. (d) The Administrative Agent shall have received the Amendment Fees payable by Goodyear pursuant to Section 16 and all other fees payable to the Arrangers and the Administrative Agent. (e) The US Term Facility Agreement shall have been amended to require that (i) if proceeds from borrowings under the ABL Facilities Agreement pursuant to commitments becoming effective substantially concurrently with the Effective Date shall exceed $300,000,000, Goodyear shall prepay loans under the US Term Facility Agreement in an aggregate amount equal to 100% of such proceeds in excess of $300,000,000, net of the aggregate fees and out-of-pocket expenses paid by Goodyear in connection with the borrowings under the ABL Facilities and the related bank agreements and (ii) Goodyear shall apply 50% of the -13- Net Cash Proceeds of incurrences or issuances of Senior Subordinated-Lien Indebtedness to prepay loans under the US Term Facility Agreement. (f) The US Revolving Facility Agreement shall have been amended to require that (i) 50% of the Net Cash Proceeds (as defined therein) of all issuances or incurrences of Senior Subordinated-Lien Indebtedness be applied to permanently reduce or restrict the Regular Way Commitments (as defined therein), or, if applicable, the Commitments thereunder after the US Term Facility has been repaid in full and (ii) if proceeds from borrowings under the ABL Facilities Agreement pursuant to commitments becoming effective substantially concurrently with the Effective Date shall exceed $300,000,000, Goodyear shall apply to the reduction or restriction of commitments under the US Revolving Facility after the US Term Facility has been repaid in full an aggregate amount equal to 100% of such proceeds in excess of $300,000,000, net of the aggregate fees and out-of-pocket expenses paid by the Borrower in connection with the borrowings under the ABL Facilities and the related bank amendments. (g) The US Revolving Facility Agreement, the US Term Facility Agreement and the ABL Facilities Agreement shall have been or shall simultaneously be amended in a manner reasonably satisfactory to the Administrative Agent to permit the incurrence, issuance and sale of Senior Subordinated-Lien Indebtedness and the other transactions contemplated hereby, in each case in a manner substantially corresponding to the amendments to the Credit Agreement effected hereby, to the extent applicable. The Administrative Agent shall notify the Lenders when it determines that the foregoing conditions have been satisfied and that this Amendment has become fully effective, and such notice shall be conclusive and binding upon the Lenders. SECTION 18. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect. Nothing herein shall be deemed to entitle Goodyear to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Credit Agreement. SECTION 19. Expenses. Goodyear agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 20. Indemnity. It is agreed that for all purposes of Section 9.03(b) of the Credit Agreement, any offering, incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness and any other securities issued and sold pursuant to Section 6.01(q) of the Credit Agreement, the execution, delivery and performance of this Amendment and of the Lien Subordination and Intercreditor Agreement, the amendment -14- of the Guarantee and Collateral Agreement as contemplated by Section 12 and the other transactions contemplated hereby shall all be deemed to be transactions contemplated by the Credit Agreement. SECTION 21. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 22. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. SECTION 23. Headings. The section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting this Amendment. SECTION 24. Amendment to Article VIII of the Credit Agreement. Article VIII of the Credit Agreement is hereby amended by adding the following at the end thereof: "Without prejudice to the provisions of this Article VIII, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) to act as the person holding the power of attorney (in such capacity, the "fonde de pouvoir") of the Lenders as contemplated under Article 2692 of the Civil Code of Quebec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are conferred upon the fonde de pouvoir under any hypothec. Moreover, without prejudice to such appointment and authorization to act as the person holding the power of attorney as aforesaid, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) (in such capacity, the "Custodian") to act as agent and custodian for and on behalf of the Lenders to hold and to be the sole registered holder of any debenture which may be issued under any hypothec, the whole notwithstanding Section 32 of the Act respecting the special powers of legal persons (Quebec) or any other applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of any such debenture and owing to each Lender, and (ii) each Lender will be entitled to the benefits of any charged property covered by any hypothec and will participate in the proceeds of realization of any such charged property, the whole in accordance with the terms hereof. -15- "Each of the fonde de pouvoir and the Custodian shall (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to fonde de pouvoir and the Custodian (as applicable) with respect to the charged property under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise, (b) benefit from and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders, and (c) be entitled to delegate from time to time any of its powers or duties under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise and on such terms and conditions as it may determine from time to time. Any person who becomes a Lender shall be deemed to have consented to and confirmed: (y) the fonde de pouvoir as the person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the agent and custodian as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the Custodian in such capacity." -16- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President GOODYEAR DUNLOP TIRES EUROPE B.V., By /s/ Phillips Reynault ------------------------------------ Name: Phillips Reynault Title: Director / Secretary By /s/ Errol Scialom ----------------------------------- Name: Errol Scialom Title: Director GOODYEAR DUNLOP TIRES GERMANY GMBH, By /s/ Gerhard Grunenwald ------------------------------------ Name: Gerhard Grunenwald Title: Managing Director By /s/ Gottfried Hess ----------------------------------- Name: Gottfried Hess Title: Managing Director GOODYEAR GMBH & CO. KG, By /s/ Gerhard Grunenwald ----------------------------------- Name: Gerhard Grunenwald Title: Managing Director By /s/ Gottfried Hess ----------------------------------- Name: Gottfried Hess Title: Managing Director DUNLOP GMBH & CO. KG, By /s/ Gerhard Grunenwald ----------------------------------- Name: Gerhard Grunenwald Title: Managing Director By /s/ Gottfried Hess ----------------------------------- Name: Gottfried Hess Title: Managing Director GOODYEAR LUXEMBOURG TIRES SA, By /s/ L. Reiles /s/ H. Lange ------------------------------------ Name: L. Reiles H. Lange Title: Authorized Signor Finance Director JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ B. Joseph Lillis ------------------------------------- Name: B. Joseph Lillis Title: Managing Director [Remaining Signature Pages Intentionally Omitted] ANNEX A Senior Subordinated-Lien Indebtedness - Capitalized terms used and not defined herein shall have the meanings given to them in the First Amendment, or, if not defined therein, in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended by the First Amendment or pursuant thereto. - All Senior Subordinated-Lien Indebtedness and the related Liens shall satisfy the requirements set forth in the definition of Senior Subordinated-Lien Indebtedness and in Sections 6.01(s) and 6.02(m). - Prior to the date (the "US Facilities Termination Date") on which all the loans under the US Term Facility Agreement and the US Revolving Facility Agreement have been repaid in full and the remaining commitments under the US Revolving Facility Agreement, if any, are available only for the issuance of cash collateralized letters of credit, the documentation establishing or evidencing any Senior Subordinated-Lien Indebtedness ("SSLI Documentation") shall contain no maintenance financial covenants (i.e., covenants requiring the maintenance of any balance sheet, income statement or other financial level or ratio). After the US Facilities Termination Date, the SSLI Documentation shall contain no maintenance financial covenants that are not contained in the Credit Agreement, and the financial levels or ratios required to be maintained by any such covenants shall be no more restrictive than those required to be maintained by the corresponding covenants of the Credit Agreement (it being understood that additional maintenance financial covenants may be included in any SSLI Documentation and, if they are, they shall automatically be included in this Agreement). - The SSLI Documentation shall permit (specifically, and not through a basket that could be exhausted by other financings) the refinancing of all Indebtedness under the New Facilities Credit Agreements or the Credit Agreement (or any refinancing Indebtedness in respect thereof) with new Indebtedness having a maturity no sooner than, a weighted average life no shorter than, and an aggregate principal amount or accreted value no greater than the fully drawn amount (plus fees and expenses, including any premium and defeasance costs of refinancing) of the refinanced indebtedness or commitments thereunder and secured on the same basis as the Indebtedness refinanced. - The SSLI Documentation shall not restrict (except for restrictions that a Financial Officer of Goodyear shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with Goodyear's ability to effect) the securing of Indebtedness under the New Facilities Credit Agreements or the Credit Agreement or any refinancing Indebtedness in respect thereof or the cash collateralization of any letter of credit exposure thereunder (but may require that if Indebtedness under any New Facilities Credit Agreement or related refinancing Indebtedness is secured by assets not securing the Indebtedness under any of the New Facilities Credit Agreements or the Credit Agreement on the First Amendment Date, a junior lien on such assets, subordinated under the Lien Subordination and Intercreditor Agreement, (or in the case of any lien granted by any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to secure indebtedness under the European Facility Agreement, a ratable or junior lien on such assets) must be granted to secure the Senior Subordinated-Lien Indebtedness). - The SSLI Documentation shall not restrict (except for restrictions a Financial Officer of Goodyear shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with Goodyear's ability to effect) the use of proceeds from any sale, transfer or other disposition of assets owned directly by (a) Goodyear or any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to repay or prepay Indebtedness under the New Facilities Credit Agreements (other than the European Facilities Agreement) or refinancing Indebtedness in respect thereof or, until the commitments under the US Revolving Facility Agreement and the ABL Facilities Agreement have been terminated and no letter of credit remains outstanding under either such agreement, to cash collateralize any letter of credit exposure thereunder, or (b) the European JV or any of its subsidiaries to repay or prepay Indebtedness under the European Facilities Agreement or refinancing Indebtedness in respect thereof. - Prior to the US Facilities Termination Date, no SSLI Documentation shall contain any provision under which a default or event of default (however denominated) or requirement to make or offer to make a prepayment or redemption under any other Indebtedness (the "Other Debt") would constitute a default or event of default or result in a requirement to make or offer to make a prepayment or redemption under such SSLI Documentation, unless such default or event of default under such Other Debt is a payment default or the Other Debt is as a result thereof accelerated. 2 EX-4.6 7 l07358aexv4w6.txt EX-4.6 2NDAMEND-TERMLOANAGREE-DUNLOPTIRES 4/16/04 EXHIBIT 4.6 SECOND AMENDMENT dated as of April 16, 2004 (this "Amendment"), to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, as amended as of February 19, 2004 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation ("Goodyear"), GOODYEAR DUNLOP TIRES EUROPE B.V., a corporation organized under the laws of the Netherlands (the "European J.V."), GOODYEAR DUNLOP TIRES GERMANY GMBH, a corporation organized under the laws of the Federal Republic of Germany ("GDTG"), GOODYEAR GMBH & CO KG, a partnership organized under the laws of the Federal Republic of Germany ("Goodyear KG"), DUNLOP GMBH & CO KG, a partnership organized under the laws of the Federal Republic of Germany ("Dunlop KG"), GOODYEAR LUXEMBOURG TIRES SA, a societe anonyme organized under the laws of Luxembourg ("Lux Tires" and, together with the European J.V., GDTG, Goodyear KG and Dunlop KG, the "Borrowers"), the lenders party thereto (the "Lenders"), and JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"). WHEREAS, pursuant to the terms and conditions of the Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrowers; and WHEREAS, Goodyear and the Borrowers have requested, and the Majority Lenders are willing to agree, that the Credit Agreement be amended on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings assigned to them in the Credit Agreement. SECTION 2. Amendment to Section 5.01 of the Credit Agreement. Section 5.01(a) of the Credit Agreement is hereby amended by inserting after the phrase "within 110 days after the end of each fiscal year" the following: "(or, in the case of the fiscal year ended December 31, 2003, within 140 days after the end of such fiscal year)". SECTION 3. Amendment to Section 6.02 of the Credit Agreement. Paragraph (o) of Section 6.02 of the Credit Agreement is hereby amended to read as follows: "(o) Liens on (i) assets constituting US Facilities Pledged Collateral and US Facilities Article 9 Collateral, and real property and interests in real property covered by US Facilities Mortgages, and (ii) assets constituting ABL Facilities Collateral and Luxembourg Finance Pledged Collateral and any other assets securing obligations under the US Revolving Facility Agreement at the time such obligations are refinanced with Indebtedness incurred under Section 6.01(m), in each case securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the US Revolving Facility Agreement, but only if (A) all Indebtedness under the US Revolving Facility Agreement shall have been repaid in full and the Commitments under and as defined in the US Revolving Facility Agreement shall have been terminated not later than the time at which such Liens are incurred, (B) such Liens secure Indebtedness in an amount not greater than the amount of the Indebtedness under the US Revolving Facility Agreement repaid with the proceeds of such Indebtedness and (C) if such refinancing Indebtedness incurred under Section 6.01(m) is secured by assets referred to in clause (ii) above, the holders of such Indebtedness or a trustee or other agent acting on their behalf shall have executed and delivered to the Administrative Agent an agreement reasonably satisfactory to the Borrower and the Administrative Agent under which all such Liens on assets referred to in clause (ii) above are subordinated to the Liens on such assets securing the ABL Facilities Obligations and the European Facilities Obligations (as such terms are defined in the Guarantee and Collateral Agreement) on substantially the terms on which the Liens on such assets securing the US Revolving Facility Obligations (as defined in the Guarantee and Collateral Agreement) are so subordinated under the Guarantee and Collateral Agreement;" SECTION 4. Amendment to Section 6.07 of the Credit Agreement. Clause (v) of paragraph (a) of Section 6.07 is hereby amended to read as follows: "(v) Goodyear and its Subsidiaries may make Investments in Subsidiaries expressly permitted by Section 6.05(b), Section 6.05(e) or Section 6.05(s) and Investments expressly permitted under Section 6.05(j)." SECTION 5. Amendment to Section 7.01 of the Credit Agreement. Paragraph (d) of Section 7.01 of the Credit Agreement is hereby amended by inserting after the word "Section" the following: "5.01(a) (solely with respect to Goodyear's and the European J.V.'s fiscal year ended December 31, 2003),". SECTION 6. Representations and Warranties. Goodyear and Borrowers hereby represent and warrant to the Administrative Agent and the Lenders that: -2- (a) No Default has occurred and is continuing on the date hereof or will have occurred and be continuing at the time the amendments provided for herein become effective under Section 8. (b) All representations and warranties of Goodyear, the European J.V., and each other Borrower set forth in the Credit Agreement are true and correct in all respects material to the rights or interests of the Lenders on and as of the date hereof, and will be true and correct at the time the amendments provided for herein become effective under Section 8, except to the extent such representations and warranties relate to an earlier date. SECTION 7. Amendment Fee. In consideration of the agreements contained in this Amendment, Goodyear agrees to pay to the Administrative Agent on the Effective Date (as defined below), for the account of each Lender that delivers an executed counterpart of this Amendment prior to noon, New York City time, on April 16, 2004, an amendment fee equal to 0.03% of the sum of such Lender's outstanding Term Loans, Revolving Credit Exposure and unused Revolving Commitment on the Effective Date. SECTION 8. Conditions Precedent to Effectiveness. This Amendment shall become effective when the Administrative Agent shall have received counterparts hereof duly executed and delivered by Lenders representing the Majority Lenders (the date on which this Amendment becomes effective being called the "Effective Date"). SECTION 9. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect as set forth in the Credit Agreement. Nothing herein shall be deemed to entitle Goodyear or any Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Credit Agreement. SECTION 10. Expenses. Goodyear agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 11. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 12. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. -3- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, By /s/ R. W. Tieken ------------------------------------- Name: R. W. Tieken Title: Chief Financial Officer GOODYEAR DUNLOP TIRES EUROPE B.V., By /s/ Michael J. Roney ------------------------------------- Name: Michael J. Roney Title: President and Director By /s/ Phillips Regnault ------------------------------------ Name: Phillips Regnault Title: Director / Secretary GOODYEAR DUNLOP TIRES GERMANY GMBH, By /s/ Gerhard Grunenwald ------------------------------------- Name: Gerhard Grunenwald Title: Managing Director By /s/ Gottfried Hess ------------------------------------ Name: Gottfried Hess Title: Managing Director -4- GOODYEAR GMBH & CO. KG, REPRESENTED BY RVM REIFEN VERTRIEBSMANAGEMENT GMBH By /s/ Gerhard Grunenwald ------------------------------------- Name: Gerhard Grunenwald Title: Managing Director By /s/ Gottfried Hess ------------------------------------ Name: Gottfried Hess Title: Managing Director DUNLOP GMBH & CO. KG, REPRESENTED BY RVM REIFEN VERTRIEBSMANAGEMENT GMBH By /s/ Gerhard Grunenwald ------------------------------------ Name: Gerhard Grunenwald Title: Managing Director By /s/ Gottfried Hess ------------------------------------ Name: Gottfried Hess Title: Managing Director GOODYEAR LUXEMBOURG TIRES SA, By /s/ Hermann Lange ------------------------------------- Name: Hermann Lange Title: Finance Director By /s/ Loul Reiles ------------------------------------- Name: Loul Reiles Title: Authorized Signer -5- JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ Robert P. Kellas ------------------------------------- Name: Robert P. Kellas Title: Vice President -6- [Remaining Signature Pages Intentionally Omitted] EX-4.7 8 l07358aexv4w7.txt EX-4.7 1STAMEND-TERMLOANAGREE-JPMORGAN 2/19/04 EXHIBIT 4.7 FIRST AMENDMENT dated as of February 19, 2004 (this "Amendment"), to the Term Loan and Revolving Credit Agreement dated as of March 31, 2003 (the "Original Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "Borrower"); the lenders party thereto (together with their successors and permitted assigns thereunder, the "Lenders"); JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"); CITICORP USA, INC., as Syndication Agent; BANK OF AMERICA, N.A., as Documentation Agent; THE CIT GROUP/BUSINESS CREDIT, INC., as Documentation Agent; and GENERAL ELECTRIC CAPITAL CORPORATION; as Documentation Agent. WHEREAS, pursuant to the terms and conditions of the Original Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrower; and WHEREAS, the Borrower has requested, and the Majority Lenders and the Tranche B Term Lenders are willing, to agree that the Original Credit Agreement be amended and restated, and that certain provisions of the Guarantee and Collateral Agreement be amended, on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings given to them in the Original Credit Agreement as amended and restated hereby (as so amended and restated, the "Restated Credit Agreement") or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended hereby or pursuant hereto. SECTION 2. Amendment and Restatement of the Original Credit Agreement. The Original Credit Agreement is hereby amended and restated in the form of Exhibit A hereto. SECTION 3. Amendments to the Guarantee and Collateral Agreement; Security Documents; Lien Subordination and Intercreditor Agreement. (a) The undersigned Lenders authorize the Collateral Agent to execute and deliver an instrument amending the Guarantee and Collateral Agreement (and, in the case of clauses (i), (ii) and (vi) below, the other Security Documents) as follows: (i) to provide that all the Obligations will be secured by a second Lien, junior to the Lien securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations and the Collateral Agent Obligations, by all the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement, to the extent the securing of the ABL Facilities Obligations with such Collateral would require that Indebtedness under the Indentures be ratably secured), and by the Borrower's headquarters building in Akron, Ohio; (ii) to provide that, at such time as any Senior Subordinated-Lien Indebtedness shall be issued, the Guarantees by the Borrower and the Subsidiary Guarantors of the Revolving Obligations (and, if the Borrower and the Collateral Agent shall at any time hereafter so agree, the Term Obligations) under and as defined in the European Facilities Agreement will be secured, equally and ratably with the Senior Subordinated-Lien Indebtedness (and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement), by the ABL Facilities Collateral, the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement), and by the Borrower's headquarters building in Akron, Ohio; (iii) to provide that amounts received by the holders of Obligations secured by Junior Liens as a result of the subordination to such Junior Liens of the Liens securing any Senior Subordinated-Lien Indebtedness will be treated in the same manner under the subordination provisions of the Guarantee and Collateral Agreement as amounts received from the Borrower; (iv) to modify Section 11.03(b) to confirm that the Junior Lien on the ABL Facilities Collateral will be senior to the Lien on such Collateral securing any Senior Subordinated-Lien Indebtedness notwithstanding the use of any proceeds of any Senior Subordinated-Lien Indebtedness to repay amounts outstanding under the ABL Facilities; (v) to modify Section 11.04 to provide that the Junior Lien on the Intellectual Property consisting of Trademarks securing the ABL Facilities Obligations will be senior to the Lien on such Intellectual Property securing any Senior Subordinated-Lien Indebtedness; (vi) to effect such other changes as the Collateral Agent shall deem appropriate in connection with the issuance of any Senior Subordinated-Lien Indebtedness, the creation of the Liens securing such Indebtedness, the subordination of such Liens to the Liens created by the Guarantee and Collateral Agreement and the implementation of the matters set forth in this Section 3; and (vii) to modify Section 13.13 to provide for the release of the security interests in up to 14% of the stock of C A Goodyear de Venezuela held by -2- the Borrower in connection with the sale of such stock by the Borrower to Goodyear do Brasil Productos de Borraca Ltda (Brasil) in a transaction permitted by the Credit Agreements (as defined therein) for consideration consisting of up to $10,000,000 of cash. (b) The undersigned Lenders further authorize and direct the Collateral Agent to execute and deliver such amendments to the Security Documents as may in its judgment be appropriate for the following purposes: (i) to provide that the Liens securing the ABL Facilities Obligations will, insofar as they are applicable to cash deposited to collateralize letter of credit reimbursement obligations pursuant to Section 2.04(b) of the US Revolving Facility Agreement, be subordinate to the Liens securing such letter of credit reimbursement obligations; (ii) to provide that all the Obligations will be secured by a second Lien on all real property subject to Liens securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations or the Collateral Agent Obligations to the extent the securing of the Obligations with such Collateral would not require that Indebtedness under the Indentures be ratably secured; and (iii) to confirm that the US Term Facility Obligations, the US Revolving Facility Obligations, the ABL Facilities Obligations and the US Miscellaneous Obligations are and will be secured by not more than 65% of the issued and outstanding voting Equity Interests of Luxembourg Finance. (c) The undersigned Lenders further authorize and direct the Collateral Agent, on or after the Effective Date, to execute and deliver the Lien Subordination and Intercreditor Agreement. Each Lender party to the Credit Agreement from time to time will be deemed to have agreed to be bound by the provisions of the Lien Subordination and Intercreditor Agreement to the same extent as if it had executed such Agreement as a party thereto. SECTION 4. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that: (a) On the date hereof and at the time the amendments provided for herein become effective under Section 6, no Default shall have occurred and be continuing. (b) The execution, delivery and performance by the Borrower of this Amendment and the performance by the Borrower of the Restated Credit Agreement have been duly authorized by all necessary corporate and other action and, except to the extent that no Material Adverse Change would be materially likely to result, do not and will not require any registration with, consent or approval of, notice to or action by, any Person (including any Governmental Authority) in order to be effective and enforceable. -3- (c) This Amendment and the Restated Credit Agreement constitute the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (d) All representations and warranties of the Borrower set forth herein, and the representations and warranties of the Borrower set forth in the Restated Credit Agreement, are true and correct in all material respects on and as of the date hereof, and will be true and correct at the time the amendment and restatement of the Original Credit Agreement provided for herein become effective under Section 6, except to the extent such representations and warranties relate to an earlier date. SECTION 5. Amendment Fee. In consideration of the agreements contained in this Amendment, the Borrower agrees to pay to the Administrative Agent, for the account of each Lender under the Original Credit Agreement that delivers an executed counterpart of this Amendment prior to noon, New York City time, on February 17, 2004, an amendment fee (the "Amendment Fee") to be agreed between the Borrower and J.P. Morgan Securities Inc., payable on the Effective Date (as defined below). SECTION 6. Conditions Precedent to Effectiveness. This Amendment shall become effective upon the satisfaction of the condition set forth in paragraph (a) below; provided that the amendment and restatement of the Original Credit Agreement provided for in Section 2, the authorization set forth in Section 3 and the agreement in Section 5 shall become effective only upon the satisfaction, on a date (the "Effective Date") on or prior to February 28, 2004, of each of the conditions set forth below (and failing such satisfaction by such date, such amendment and restatement, authorization and agreement shall cease to be of any further force or effect): (a) The Administrative Agent shall have received counterparts hereof duly executed and delivered by each Tranche B Term Lender and by Tranche A Term Lenders and Revolving Lenders representing the Majority Banks under the Original Credit Agreement. (b) The Administrative Agent shall have received such evidence as it shall reasonably have requested as to the organization, existence and good standing of each Credit Party, the corporate power and authority of the Borrower to enter into this Amendment and to perform its obligations hereunder, the authorization by the Credit Parties of the Transactions and any other legal matters relating to the Borrower, the other Credit Parties, the Credit Documents or the Transactions, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel. (c) The Administrative Agent shall have received favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Covington & Burling, counsel for the Borrower, and (ii) the General Counsel, the Associate General Counsel or an Assistant General Counsel of the -4- Borrower, in each case in a form reasonably satisfactory to the Administrative Agent, and covering such matters relating to the Credit Parties, the Credit Documents or the Transactions as the Administrative Agent or the Majority Lenders shall reasonably request. (d) The Administrative Agent shall have received a certificate of an officer of the Borrower to the effect that the representations and warranties set forth in Section 4 and in the Restated Credit Agreement are true and correct in all respects material to the rights or interests of the Lenders on and as of the Effective Date. (e) At the time of and immediately after the Effective Date, the Borrower and the other Credit Parties shall be in compliance with all the terms and provisions set forth herein, in the Restated Credit Agreement and in the other Credit Documents in all respects material to the rights or interests of the Lenders, and at the time of and immediately after the Effective Date, no Default shall have occurred and be continuing, and the Administrative Agent shall have received a certificate of an officer of the Borrower to that effect. (f) The Administrative Agent shall have received the Amendment Fees payable by the Borrower pursuant to Section 5 and all other fees payable to the Arrangers and the Administrative Agent. (g) The Guarantee and Collateral Agreement shall have been amended to provide that all the Obligations will be secured by a second Lien, junior to the Lien securing the US Term Facility Obligations, the US Revolving Facility Obligations, the US Miscellaneous Obligations and the Collateral Agent Obligations, by all the US Facilities Pledged Collateral and the US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement, to the extent the securing of the ABL Facilities Obligations with such Collateral would require that Indebtedness under the Indentures be ratably secured), and by the Borrower's headquarters building in Akron, Ohio; (h) The US Term Facility Agreement and the US Revolving Facility Agreement shall have been amended to require that (i) if proceeds from borrowings under the Restated Credit Agreement pursuant to commitments becoming effective substantially concurrently with the Effective Date shall exceed $300,000,000, the Borrower shall prepay loans, cash collateralize reimbursement obligations in respect of letters of credit and reduce commitments under the US Term Facility Agreement and the US Revolving Facility Agreement in an aggregate amount equal to 100% of such proceeds in excess of $300,000,000, net of the aggregate fees and out-of-pocket expenses paid by the Borrower in connection with the borrowings under the Restated Credit Agreement and the related bank amendments and (ii) the Borrower shall apply 50% of the Net Cash Proceeds of incurrences or issuances of Senior Subordinated-Lien Indebtedness to prepay loans, cash collateralize reimbursement obligations in respect of letters of credit and reduce commitments under the US Term Facility Agreement and the US Revolving Facility Agreement. -5- (i) The US Term Facility Agreement, the US Revolving Facility Agreement and the European Facilities Agreement shall have been or shall simultaneously be amended in a manner reasonably satisfactory to the Administrative Agent to permit the incurrence, issuance and sale of Senior Subordinated-Lien Indebtedness and the other transactions contemplated hereby, in each case in a manner substantially corresponding to the amendments to the Original Credit Agreement effected hereby, to the extent applicable. The Administrative Agent shall notify the Lenders when it determines that the foregoing conditions have been satisfied and that this Amendment and the Restated Credit Agreement have become fully effective, and such notice shall be conclusive and binding upon the Lenders. SECTION 7. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Original Credit Agreement are and shall remain in full force and effect as set forth in the Restated Credit Agreement. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Restated Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Restated Credit Agreement. SECTION 8. Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment and the Restated Credit Agreement, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 9. Indemnity. It is agreed that for all purposes of Section 9.03(b) of the Restated Credit Agreement, any offering, incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness and any other securities issued and sold pursuant to Section 6.01(q) of the Credit Agreement, the execution, delivery and performance of this Amendment and of the Lien Subordination and Intercreditor Agreement, the amendment and restatement of the Original Credit Agreement as contemplated by Section 2, the amendment of the Guarantee and Collateral Agreement as contemplated by Section 3 and the other transactions contemplated hereby shall all be deemed to be transactions contemplated by the Credit Agreement. SECTION 10. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 11. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. -6- SECTION 12. Headings. The section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting this Amendment. -7- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, By /s/ D. R. Wells -------------------------------------- Name: D. R. Wells Title: Vice President JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ B. Joseph Lillis --------------------------------------- Name: B. Joseph Lillis Title: Managing Director -8- [Remaining Signature Pages Intentionally Omitted] ANNEX A Senior Subordinated-Lien Indebtedness - Capitalized terms used and not defined herein shall have the meanings given to them in the First Amendment, or, if not defined therein, in the Credit Agreement or, if not defined therein, in the Guarantee and Collateral Agreement, each as amended by the First Amendment or pursuant thereto. - All Senior Subordinated-Lien Indebtedness and the related Liens shall satisfy the requirements set forth in the definition of Senior Subordinated-Lien Indebtedness and in Sections 6.01(s) and 6.02(m). - Prior to the date (the "US Facilities Termination Date") on which all the loans under the US Term Facility Agreement and the US Revolving Facility Agreement have been repaid in full and the remaining commitments under the US Revolving Facility Agreement, if any, are available only for the issuance of cash collateralized letters of credit, the documentation establishing or evidencing any Senior Subordinated-Lien Indebtedness ("SSLI Documentation") shall contain no maintenance financial covenants (i.e., covenants requiring the maintenance of any balance sheet, income statement or other financial level or ratio). After the US Facilities Termination Date, the SSLI Documentation shall contain no maintenance financial covenants that are not contained in the Credit Agreement, and the financial levels or ratios required to be maintained by any such covenants shall be no more restrictive than those required to be maintained by the corresponding covenants of the Credit Agreement (it being understood that additional maintenance financial covenants may be included in any SSLI Documentation and, if they are, they shall automatically be included in this Agreement). - The SSLI Documentation shall permit (specifically, and not through a basket that could be exhausted by other financings) the refinancing of all Indebtedness under the New Facilities Credit Agreements (or any refinancing Indebtedness in respect thereof) with new Indebtedness having a maturity no sooner than, a weighted average life no shorter than, and an aggregate principal amount or accreted value no greater than the fully drawn amount (plus fees and expenses, including any premium and defeasance costs of refinancing) of the refinanced indebtedness or commitments thereunder and secured on the same basis as the Indebtedness refinanced. - The SSLI Documentation shall not restrict (except for restrictions that a Financial Officer of the Borrower shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with the Borrower's ability to effect) the securing of Indebtedness under the New Facilities Credit Agreements or any refinancing Indebtedness in respect thereof or the cash collateralization of any letter of credit exposure thereunder (but may require that if Indebtedness under any New Facilities Credit Agreement or related refinancing Indebtedness is secured by assets not securing the Indebtedness under any of the New Facilities Credit Agreements on the First Amendment Date, a junior lien on such assets, subordinated under the Lien Subordination and Intercreditor Agreement, (or in the case of any lien granted by any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to secure indebtedness under the European Facility Agreement, a ratable or junior lien on such assets) must be granted to secure the Senior Subordinated-Lien Indebtedness). - The SSLI Documentation shall not restrict (except for restrictions a Financial Officer of the Borrower shall have represented in a certificate to the Administrative Agent (which shall be deemed to be a Credit Document) will not materially interfere with the Borrower's ability to effect) the use of proceeds from any sale, transfer or other disposition of assets owned directly by (a) the Borrower or any US Facilities Grantor or ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) to repay or prepay Indebtedness under the New Facilities Credit Agreements (other than the European Facilities Agreement) or refinancing Indebtedness in respect thereof or, until the commitments under the US Revolving Facility Agreement and the ABL Facilities Agreement have been terminated and no letter of credit remains outstanding under either such agreement, to cash collateralize any letter of credit exposure thereunder, or (b) the European JV or any of its subsidiaries to repay or prepay Indebtedness under the European Facilities Agreement or refinancing Indebtedness in respect thereof. - Prior to the US Facilities Termination Date, no SSLI Documentation shall contain any provision under which a default or event of default (however denominated) or requirement to make or offer to make a prepayment or redemption under any other Indebtedness (the "Other Debt") would constitute a default or event of default or result in a requirement to make or offer to make a prepayment or redemption under such SSLI Documentation, unless such default or event of default under such Other Debt is a payment default or the Other Debt is as a result thereof accelerated. 2 EX-4.8 9 l07358aexv4w8.txt EX-4.8 AMENDED RESTD TERM LOAN AGRMT&REV CRED AGRE EXHIBIT 4.8 ================================================================================ AMENDED AND RESTATED TERM LOAN AND REVOLVING CREDIT AGREEMENT dated as of February 19, 2004 among THE GOODYEAR TIRE & RUBBER COMPANY, as Borrower, The Lenders Party Hereto, JPMORGAN CHASE BANK, as Administrative Agent, CITICORP USA, INC., as Syndication Agent, Bank of America, N.A., as Documentation Agent, THE CIT GROUP/BUSINESS CREDIT, INC., as Documentation Agent and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent J.P. MORGAN SECURITIES INC., CITIGROUP GLOBAL MARKETS INC., as Joint Lead Arranger as Joint Lead Arranger and Joint Bookrunner and Joint Bookrunner [CS&M #6701-315] TABLE OF CONTENTS

SECTION 3.09. Disclosure............................................................................... 60 SECTION 3.10. Security Interests....................................................................... 60 SECTION 3.11. Use of Proceeds. The proceeds of the Loans will be used only for the purposes referred to in the preamble to this Agreement.................................. 61 ARTICLE IV Conditions SECTION 4.01. Each Credit Event........................................................................ 61 ARTICLE V Affirmative Covenants SECTION 5.01. Financial Statements and Other Information............................................... 62 SECTION 5.02. Notices of Defaults...................................................................... 64 SECTION 5.03. Existence; Conduct of Business........................................................... 64 SECTION 5.04. Maintenance of Properties................................................................ 64 SECTION 5.05. Books and Records; Inspection and Audit Rights; Access Rights............................ 65 SECTION 5.06. Compliance with Laws..................................................................... 66 SECTION 5.07. Insurance................................................................................ 66 SECTION 5.08. Guarantees and Collateral................................................................ 66 SECTION 5.09. Borrowing Base Certificate............................................................... 68 ARTICLE VI Negative Covenants SECTION 6.01. Indebtedness and Preferred Equity Interests.............................................. 69 SECTION 6.02. Liens.................................................................................... 72 SECTION 6.03. Sale and Leaseback Transactions.......................................................... 75 SECTION 6.04. Fundamental Changes...................................................................... 75 SECTION 6.05. Investments, Loans, Advances and Guarantees.............................................. 76 SECTION 6.06. Asset Dispositions....................................................................... 78 SECTION 6.07. Restricted Payments...................................................................... 79 SECTION 6.08. Capital Expenditures..................................................................... 80 SECTION 6.09. Interest Expense Coverage Ratio.......................................................... 81 SECTION 6.10. Consolidated Net Worth................................................................... 81

ii ARTICLE VII Events of Default; Inter-Tranche Agreements With Respect to Collateral SECTION 7.01. Events of Default........................................................................ 81 SECTION 7.02. Inter-Tranche Agreements With Respect to Collateral...................................... 84 ARTICLE VIII The Agents ARTICLE IX Miscellaneous SECTION 9.01. Notices................................................................................. 89 SECTION 9.02. Waivers; Amendments..................................................................... 89 SECTION 9.03. Expenses; Indemnity; Damage Waiver...................................................... 91 SECTION 9.04. Successors and Assigns.................................................................. 93 SECTION 9.05. Survival................................................................................ 97 SECTION 9.06. Counterparts; Integration; Effectiveness................................................ 97 SECTION 9.07. Severability............................................................................ 97 SECTION 9.08. Right of Setoff......................................................................... 97 SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.............................. 98 SECTION 9.10. WAIVER OF JURY TRIAL.................................................................... 98 SECTION 9.11. Headings................................................................................ 99 SECTION 9.12. Confidentiality......................................................................... 99 SECTION 9.13. Interest Rate Limitation................................................................ 99 SECTION 9.14. Security Documents...................................................................... 100 SECTION 9.15. Additional Financial Covenants.......................................................... 100

SCHEDULES: Schedule 1.01 -- Consent Subsidiaries Schedule 2.01 -- Commitments Schedule 3.10(b) -- Material Trademarks Schedule 6.01 -- Existing Indebtedness Schedule 6.02 -- Existing Liens Schedule 6.06 -- Asset Dispositions EXHIBITS: Exhibit A -- Form of Borrowing Request iii Exhibit B -- Form of Interest Election Request Exhibit C -- Form of Promissory Note Exhibit D -- Form of Assignment and Assumption Exhibit E -- Form of Borrowing Base Certificate Exhibit F-1 -- Form of Opinion of Borrower's Outside Counsel Exhibit F-2 -- Form of Opinion of Borrower's General Counsel Exhibit G -- Form of Master Guarantee and Collateral Agreement Exhibit H -- Permitted Asset Sale Provision for Senior Subordinated-Lien Indebtedness iv AMENDED AND RESTATED TERM LOAN AND REVOLVING CREDIT AGREEMENT dated as of February 19, 2004 (this "Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY; the LENDERS party hereto; JPMORGAN CHASE BANK, as Administrative Agent; CITICORP USA, INC., as Syndication Agent; BANK OF AMERICA, N.A., as Documentation Agent; THE CIT GROUP/BUSINESS CREDIT, INC., as Documentation Agent; and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent. As part of a refinancing and restructuring of certain bank credit and receivables securitization facilities of the Borrower and the Subsidiaries (the "Refinancing") the Borrower, certain of the Lenders party hereto, the Administrative Agent, the Syndication Agent and the Documentation Agents entered into a Term Loan and Revolving Credit Agreement dated as of March 31, 2003 (the "Original Credit Agreement"). The Borrower has requested, and the other parties hereto have agreed, to amend and restate the Original Credit Agreement in the form of this Agreement, under which the Lenders are willing to maintain and extend credit to the Borrower on the terms and subject to the conditions herein set forth in the form of (a) Tranche A Term Loans that were made on the Original Effective Date in an aggregate principal amount of $800,000,000, (b) Tranche B Term Loans to be made on the Restatement Effective Date in an aggregate principal amount of $650,000,000 and (c) Revolving Loans available at any time and from time to time prior to the Maturity Date in an aggregate principal amount not in excess of $500,000,000 at any time outstanding. The proceeds of the Term Loans and the Revolving Loans have been used or will be used, as the case may be, for general corporate purposes of the Borrower and the Subsidiaries. Accordingly, the parties hereto agree as follows: ARTICLE I Definitions SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below: "ABL Facilities Collateral" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "ABL Facilities Grantor" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. "Access Agreement" means a written agreement granting access rights with respect to any Accounts or Inventory of the Borrower or any of the other Grantors located at any third party location, in form and substance reasonably satisfactory to the Administrative Agent. "Account" has the meaning specified in the UCC. "Account Debtor" means the Person who is primarily obligated under, with respect to or on account of an Account. "Accounts Receivable Reserves" means, on any date, an amount (calculated in accordance with the current and historical accounting practices of the Borrower) equal to the sum of reserves for volume rebates, cash discounts, Federal excise taxes and warranties maintained on the Borrower's general ledger with respect to Eligible Accounts Receivable, in each case without duplication of any amounts that are included in the Dilution Factors for such period or excluded from the value of Eligible Accounts Receivable pursuant to the definition thereof, and each such reserve to be subject to adjustment by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) based on the results of collateral and borrowing base evaluations (including with respect to Customer Capital Expenditures) and monitoring conducted by the Administrative Agent and its designated representatives. Any such adjustment by the Administrative Agent or the Majority Borrowing Base Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such adjustment, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. "Additional Inventory Reserves" means, on any date, an amount equal to the sum of the following reserves established by the Administrative Agent with respect to Eligible Inventory, without duplication of any deductions made pursuant to the definitions of "Eligible Inventory", "Inventory Reserves" and "Inventory Value": (a) a reserve for "slow moving" Eligible Inventory equal to 75% of the amount in excess of a 12 month supply on hand; (b) a reserve for (i) private label Eligible Inventory relating to the North America Tire Division and (ii) private label Eligible Inventory relating to the Engineered Products Division; (c) a reserve for freight, duties and insurance for Eligible Inventory representing in transit Inventory equal to $5,000,000; (d) a reserve for shrink or discrepancies that arise pertaining to Eligible Inventory quantities on hand between the Borrower's perpetual accounting system and physical counts of the Eligible Inventory which will be equal to the amount of any such discrepancy, if any, that is in excess of 2.0%; and 2 (e) any other reserve as deemed appropriate by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives. The reserves described in clauses (a), (b), (c), (d) and (e) above shall be subject to adjustment (and, in the case of clause (e), establishment) by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives. Any such adjustment or the establishment of a reserve pursuant to clause (e) by the Administrative Agent or the Majority Borrowing Base Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such adjustment or reserve, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. "Adjusted Eligible Accounts Receivable" means, on any date, an amount equal to (a) Eligible Accounts Receivable minus (b) the sum of, without duplication, (i) the Dilution Reserve and (ii) the Accounts Receivable Reserves. "Adjusted Eligible Finished Goods" means, on any date and with respect to any division of the Borrower, an amount equal to (a) Eligible Finished Goods relating to such division minus (b) the Inventory Reserves with respect to the Eligible Inventory included in such Eligible Finished Goods minus (c) the Additional Inventory Reserves with respect to the Eligible Inventory included in such Eligible Finished Goods. "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. "Administrative Agent" means JPMCB, in its capacity as administrative agent for the Lenders hereunder, and its successors in such capacity. "Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent. "Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. "Agents" means the Administrative Agent and the Collateral Agent. "Alternate Base Rate" means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a 3 change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. "Applicable Percentage" means, with respect to any Lender, the percentage of the total unused Revolving Commitments and outstanding Revolving Loans and LC Exposures represented by such Lender's unused Revolving Commitment and outstanding Revolving Loans and LC Exposure. If the Revolving Commitments have terminated or expired and there remain no outstanding Revolving Loans or LC Exposures, the Applicable Percentages shall be determined based upon the Revolving Commitments most recently in effect and/or the Revolving Loans and LC Exposures most recently outstanding, giving effect to any assignments. "Approved Fund" means (a) with respect to any Lender, a CLO managed by such Lender or by an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor. "Arrangers" means J.P. Morgan Securities Inc. and Citigroup Global Markets Inc., as Joint Lead Arrangers and Joint Bookrunners for the credit facilities established by this Agreement. "Assignment and Assumption" means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit D or any other form approved by the Administrative Agent. "Attributable Debt" means, with respect to any Sale and Leaseback Transaction, the present value (computed in accordance with GAAP and, in the case of a Sale and Leaseback Transaction that does not result in Capital Lease Obligations, as if the obligations incurred in connection with such Sale and Leaseback Transaction were Capital Lease Obligations) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease which is terminable by the lessee upon payment of a penalty, the Attributable Debt shall be the lesser of (i) the Attributable Debt determined assuming termination upon the first date such lease may be terminated (in which case the Attributable Debt shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) and (ii) the Attributable Debt determined assuming no such termination. "Availability Block" means an amount equal to $50,000,000. "Board" means the Board of Governors of the Federal Reserve System of the United States of America. 4 "Borrower" means The Goodyear Tire & Rubber Company, an Ohio corporation. "Borrowing" means Loans of the same Class and Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect. "Borrowing Base" means, at the time of any determination, an amount equal to the sum of, without duplication, (a) 85% of Adjusted Eligible Accounts Receivable and (b) (i) if the Effective Advance Rate is equal to or greater than the percentage equal to 85% of the Recovery Rate, 85% multiplied by the Recovery Rate multiplied by the Inventory Value of all Inventory of the Borrower and each other Grantor or (ii) if the Effective Advance Rate is less than the percentage equal to 85% of the Recovery Rate, (A) the sum of (x) 35% of Eligible Raw Materials plus (y) 65% of Adjusted Eligible Finished Goods relating to the North American Tire Division plus (z) 60% of Adjusted Eligible Finished Goods relating to the Retail Division, the Engineered Products Division, the Chemical Products Division and the Wingfoot Division, respectively, minus (B) the Rent Reserve, minus (C) the Priority Payables Reserve (the amount in clause (ii) collectively, the "Inventory Advance Amount"). The Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent pursuant to Section 5.09. Subject to the provisions of Section 9.02(b)(ix), standards of eligibility and reserves relating to the components of the Borrowing Base may be revised and adjusted from time to time by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives. Any such revision or adjustment by the Administrative Agent or the Majority Borrowing Base Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such revision or adjustment, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. "Borrowing Base Availability" means, at the time of any determination, an amount equal to (a) the lesser of (i) the Borrowing Base at such time minus the aggregate principal amount of the outstanding Tranche A Term Loans at such time and (ii) the aggregate amount of the Revolving Commitments at such time, minus (b) the Availability Block. "Borrowing Base Certificate" means a certificate substantially in the form of Exhibit E hereto (with such changes therein as may be reasonably requested by the Administrative Agent from time to time to reflect the components of and reserves against the Borrowing Base as provided for hereunder from time to time), executed and certified on behalf of the Borrower as accurate and complete in all material respects by a Financial Officer of the Borrower, which shall include appropriate exhibits, schedules, supporting documentation and additional reports as (a) outlined in Exhibit E hereto, (b) reasonably requested by the Administrative Agent and (c) provided for in Section 5.09. 5 "Borrowing Request" means a request by the Borrower for a Borrowing in accordance with Section 2.03 in substantially the form of Exhibit A hereto. "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. "Canadian Benefit Plans" means all material employee benefit plans of any nature or kind whatsoever that are not Canadian Pension Plans and are maintained or contributed to by any Credit Party having employees in Canada. "Canadian Dollars" refers to lawful money of Canada. "Canadian Pension Plans" means each plan which is a registered pension plan within the meaning of the Income Tax Act (Canada). "Canadian Security Agreements" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "Capital Expenditures" means, for any period, (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and the Subsidiaries that are (or would be) set forth in a statement of cash flows of the Borrower and its Consolidated Subsidiaries for such period prepared in accordance with GAAP, excluding capitalized software expenses, and (b) Capital Lease Obligations incurred by the Borrower and its Consolidated Subsidiaries during such period (other than any such Capital Lease Obligations that shall relate to assets acquired in transactions reflected in Capital Expenditures for any earlier period). For purposes of this definition, (i) the purchase price of equipment or other fixed assets that are purchased simultaneously with the trade-in of existing assets or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount by which such purchase price exceeds the credit granted by the seller of such assets for the assets being traded in at such time or the amount of such insurance proceeds, as the case may be, (ii) acquisitions permitted by Section 6.05(e) shall be excluded and (iii) "Capital Expenditures" in respect of any period shall be reduced by the amount of Customer Capital Expenditures that are directly paid by customers during such period and by the amount of reimbursements the Borrower or any Subsidiary shall have received during such period from customers in respect of Customer Capital Expenditures; provided that the aggregate amount of such reductions shall not exceed $50,000,000 in any fiscal year. "Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. 6 "Change in Control" means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended, and the rules of the United States Securities and Exchange Commission thereunder as in effect on the date hereof), of Equity Interests representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower; or (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) directors on the date hereof or nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated. "Change in Law" means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.13(b), by any lending office of such Lender or by such Lender's or such Issuing Bank's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. "Chemical Products Division" means those standard business units of the Borrower and the other Grantors classified as the "Chemical Products Division" on the Borrower's perpetual inventory records. "Class" when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Tranche A Term Loans or Tranche B Term Loans and, when used in reference to any Commitment, refers to whether such Commitment is a Revolving Commitment, a Tranche A Term Loan Commitment or a Tranche B Term Loan Commitment. "CLO" means any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral" means that portion of the "Collateral", as defined in the Guarantee and Collateral Agreement, that secures the Obligations. "Collateral Agent" means JPMCB, in its capacity as collateral agent for the Lenders under the Guarantee and Collateral Agreement and the other Security Documents. "Commitment" means a Revolving Commitment or a Term Loan Commitment, or any combination thereof (as the context requires). 7 "Consent Subsidiary" means (a) any Subsidiary listed on Part I or Part II of Schedule 1.01 and (b) any Subsidiary not on Schedule 1.01A or formed or acquired after the Original Effective Date in respect of which (A) the consent of any Person other than the Borrower or any Wholly Owned Subsidiary is required by applicable law or the terms of any organizational document of such Subsidiary or other agreement of such Subsidiary or an Affiliate of such Subsidiary in order for such Subsidiary to execute the Guarantee and Collateral Agreement as an ABL Facilities Grantor or a Subsidiary Guarantor and perform its obligations thereunder, and (B) the Borrower endeavored in good faith to obtain such consents and such consents shall not have been obtained. Notwithstanding the foregoing, no Subsidiary shall be a Consent Subsidiary at any time that it is a guarantor of, or has provided any collateral to secure, Indebtedness for borrowed money of the Borrower, and any Consent Subsidiary (including a Consent Subsidiary listed in Part I or Part II of Schedule 1.01) that at any time ceases to meet the test set forth in clause (A) shall cease to be a Consent Subsidiary. "Consolidated EBITDA" means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) all non-cash non-recurring charges for such period, (v) all Rationalization Charges for such period, (vi) other expense for such period, (vii) equity in losses of affiliates for such period, (viii) foreign exchange currency losses for such period and (ix) minority interest in net income of subsidiaries for such period, minus (b) without duplication, to the extent included in determining such Consolidated Net Income (except with respect to (ii) and (iii) below), (i) any non-cash extraordinary gains for such period, (ii) cash expenditures (other than Rationalization Charges) during such period in respect of items that resulted in non-cash non-recurring charges during any prior period after the date hereof, (iii) Excess Cash Rationalization Charges, (iv) other income for such period, (v) equity in earnings of affiliates for such period, (vi) foreign exchange currency gains for such period and (vii) minority interest in net losses of subsidiaries for such period, all determined on a consolidated basis in accordance with GAAP. Each item referred to in this definition and not defined elsewhere in this Agreement will be computed by a method consistent with that used in preparing the financial statements referred to in Section 3.04. "Consolidated Interest Expense" means, for any period, the sum, without duplication, of (a) the consolidated interest expense (including imputed interest expense in respect of Capital Lease Obligations and excluding fees and other origination costs included in interest expense and arising from Indebtedness incurred at any time) of the Borrower and its Consolidated Subsidiaries for such period, determined in accordance with GAAP but excluding capitalized interest, (b) all cash dividends paid during such period in respect of Permitted Preferred Stock and (c) all finance expense related to Securitization Transactions, excluding amortization of origination and other fees. "Consolidated Net Income" means, for any period, the net income or loss of the Borrower and its Consolidated Subsidiaries for such period determined in accordance with GAAP. 8 "Consolidated Net Worth" means, as of the last day of any fiscal quarter, the sum for the Borrower of (a) the stated value of outstanding common stock, (b) capital surplus and (c) retained earnings, excluding for purposes of such calculation the effect of (i) all non-cash non-recurring charges (including the $84,700,000 of charges incurred in connection with the Borrower's restatement of its financial statements from 1998 through the second quarter of 2003, reflected in SEC filings made in the fourth quarter of 2003), and all non-cash Rationalization Charges and (ii) all losses and gains on sales of assets other than in the ordinary course of business and all other non-cash non-recurring gains, in each case in (i) and (ii) above after December 31, 2002. "Consolidated Revenue" means, for any period, the revenues of the Borrower and its Consolidated Subsidiaries for such period, determined in accordance with GAAP. "Consolidated Senior Secured Indebtedness" means, for any period, the sum for the Borrower and its Consolidated Subsidiaries for such period, without duplication, of (a) all Indebtedness (other than up to $2,500,000,000 aggregate principal amount of Senior Subordinated-Lien Indebtedness) that is included on the Borrower's consolidated balance sheet and is secured by any assets of the Borrower or a Consolidated Subsidiary, (b) all Capital Lease Obligations and (c) all synthetic lease financings, (d) all Indebtedness of South Pacific Tyres that is secured by any of its assets or assets of the Borrower or a Consolidated Subsidiary and (e) all Securitization Transactions, all determined in accordance with GAAP. For purposes of computing Consolidated Senior Secured Indebtedness, the amount of any synthetic lease financing shall equal the amount that would be capitalized in respect of such lease if it were a Capital Lease Obligation. "Consolidated Subsidiary" means, at any date, each Subsidiary the accounts of which would be consolidated with those of the Borrower in the Borrower's consolidated financial statements in accordance with GAAP. "Consolidated Total Assets" means, at any date, the total assets of the Borrower and its Consolidated Subsidiaries, determined in accordance with GAAP. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and "Controlled" have meanings correlative thereto. "Credit Documents" means this Agreement, any promissory notes delivered pursuant to Section 2.08(e), the Security Documents, the Lien Subordination and Intercreditor Agreement and, for purposes of Articles III, IV and VII only, each Borrowing Base Certificate delivered pursuant to Section 5.09. "Credit Party" means the Borrower, each Subsidiary Guarantor and each Grantor. 9 "Customer Capital Expenditures" shall mean all or any portion of the purchase price of equipment or other fixed assets purchased for use in the business of the Borrower or any Subsidiary that is paid directly, or reimbursed to the Borrower or any Subsidiary, by customers of the Borrower or any of the Subsidiaries that are not Affiliates of the Borrower. "Default" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "Deposit Account" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "Deposit Account Institution" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "Designated Debt" means Indebtedness of the Borrower that matures during any of the calendar years 2005, 2006, 2007 and 2008. "Dilution Factors" means, with respect to any period, the aggregate amount recorded (in a manner consistent with current and historical accounting practices of the Borrower) to reduce Eligible Accounts Receivable on account of deductions, credit memos (net of related re-bills), returns, incorrect billings, adjustments, allowances, bad debt write-offs and other non-cash credits, in each case without duplication of any amounts relating to reserves for volume rebates or cash discounts or any other items that are included in the Accounts Receivable Reserves for such period or excluded from the value of Eligible Accounts Receivable pursuant to the definition thereof. "Dilution Ratio" means, on any date, the amount (expressed as a percentage) equal to (a) the aggregate amount of the applicable Dilution Factors for the 12 most recently ended fiscal months divided by (b) total gross sales for the 12 most recently ended fiscal months. "Dilution Reserve" means, on any date, (a) the applicable Dilution Ratio on such date multiplied by (b) (i) Eligible Accounts Receivable on such date minus (ii) the Accounts Receivable Reserves on such date. "Disclosure Documents" means (a) the Information Memorandum, (b) reports of the Borrower on Forms 10-K, 10-Q and 8-K, and any amendments thereto, that shall have been (i) filed with the Securities and Exchange Commission on or prior to March 21, 2003, or (ii) filed with the Securities and Exchange Commission after such date and prior to the Original Effective Date and delivered to the Administrative Agent, and (c) the draft Report of the Borrower on Form 10-K for the fiscal year ended December 31, 2002, delivered to the Lenders prior to the date hereof, as such Report shall have been modified by any subsequent draft of such Report delivered to the Administrative Agent prior to the Original Effective Date. 10 "Documentation Agent" means each of Bank of America, N.A., The CIT Group/Business Credit, Inc. and General Electric Capital Corporation, in its capacity as documentation agent hereunder. "dollars" or "$" refers to lawful money of the United States of America. "Domestic Subsidiary" means any Subsidiary that is not a Foreign Subsidiary. "Effective Advance Rate" means, on any date, the percentage equal to the Inventory Advance Amount on such date divided by the Inventory Value of all Inventory of the Borrower and each other Grantor on such date. "Eligible Accounts Receivable" means, at the time of any determination, each Account that satisfies the following criteria at the time of such determination: such Account (a) has been invoiced to, and represents the bona fide amounts due to the Borrower or another Grantor from, the purchaser of goods or services, in each case originated in the ordinary course of business of the Borrower or such Grantor and (b) is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (i) through (xxii) below or otherwise deemed by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) to be ineligible for inclusion in the calculation of the Borrowing Base based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives; any such decision by the Administrative Agent or the Majority Borrowing Base Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such decision, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. Without limiting the generality of foregoing, to qualify as Eligible Accounts Receivable an Account shall indicate no Person other than the Borrower or another Grantor as payee or remittance party. In determining the amount to be so included, the face amount of an Account shall be reduced by, without duplication, to the extent not reflected in such face amount, (a) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that the Borrower or another Grantor may be obligated to rebate to a customer pursuant to the terms of any agreement or understanding (written or oral)), in each case without duplication of any amounts that are included in the Accounts Receivable Reserves or the Dilution Factors for such period, (b) the aggregate amount of all limits and deductions provided for in this definition and (c) the aggregate amount of all cash received in respect of such Account but not yet applied by the Borrower or another Grantor to reduce the amount of such Account. Standards of eligibility may be fixed from time to time by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives. Any changes to such standards by the Administrative Agent or the Majority Borrowing Base Lenders shall be made by written notice to the Borrower 11 setting forth in reasonable detail the basis for such change, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. Unless otherwise approved from time to time in writing by the Administrative Agent, an Account shall not be an Eligible Account Receivable (or, in the case of clauses (vii) and (xv) below, the affected portion of such Account shall be deemed not to be an Eligible Account Receivable) if, without duplication: (i) the Borrower or another Grantor does not have good and valid title to such Account; or (ii) such Account (x) is unpaid more than 60 days from the original due date or (y) has been written off the books of the Borrower or another Grantor or has been otherwise designated on such books as uncollectible; or (iii) more than 35% in face amount of all Accounts of the same Account Debtor (x) are unpaid more than 60 days from the original due date or (y) have been written off the books of the Borrower or another Grantor or have been otherwise designated on such books as uncollectible; or (iv) the Account Debtor is insolvent or the subject of any bankruptcy case or insolvency proceeding of any kind; or (v) such Account is not payable in U.S. Dollars and/or Canadian Dollars, the Account Debtor is not located inside the United States or Canada, the Account Debtor does not have significant assets inside the United States or Canada or the enforceability of such Account is not governed by the laws of the United States or Canada or any of their respective states, provinces, territories or possessions or any political subdivision of any thereof; or (vi) the Account Debtor is the United States of America or Canada or any department, agency or instrumentality thereof, unless the Borrower or the other applicable Grantor duly assigns its rights to payment of such Account to the Administrative Agent pursuant to the Assignment of Claims Act of 1940, as amended, or the Financial Administration Act (Canada), as amended, as applicable, which assignment and related documents and filings shall be in form and substance satisfactory to the Administrative Agent; or (vii) to the extent of any security deposit, progress payment, retainage or other similar advance made by or for the benefit of the applicable Account Debtor to which such Account is subject; or (viii) such Account (x) is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent for the benefit of the Secured Parties to the extent that such a Lien may be perfected by filing UCC financing statements or making such other personal property security filings or registrations as may be required under the laws of the applicable jurisdiction in which such Account Debtor is located or has its principal place of business or domicile (for the 12 purposes of the Quebec Civil Code), subject to no other Liens other than Permitted Encumbrances (other than those described in clause (f) of the definition thereof) or (y) does not otherwise conform in all material respects to the applicable representations and warranties contained in the Credit Documents; or (ix) (x) such Account was invoiced or payment was received thereon (A) in advance of goods or services provided or (B) more than once or (y) the associated income has not been earned; or (x) such Account is a note receivable, non-trade Account or relates to payments for rent or interest; or (xi) the sale to the Account Debtor is on a bill-and-hold, sale on approval or consignment (it being understood and agreed that an Account that arises in connection with a sale of such goods by the consignee thereof shall not be deemed to be ineligible by reason of this clause (xi)) or other similar basis or made pursuant to any other agreement (other than an ordinary course customer warranty) providing for repurchases or return of any merchandise which has been claimed to be defective or otherwise unsatisfactory; or (xii) the goods giving rise to such Account have not been shipped and title has not been transferred to the Account Debtor or such Account represents a progress-billing; for purposes hereof, progress-billing means any invoice for goods sold or leased or services rendered under a contract or agreement pursuant to which the Account Debtor's obligation to pay such invoice is conditioned upon the Borrower's or the other applicable Grantor's completion of any further performance under such contract or agreement; or (xiii) such Account arises out of a sale made by the Borrower or another Grantor to an Affiliate (other than an Eligible Affiliate) of the Borrower or such Grantor; or (xiv) such Account was created by the Borrower or another Grantor as a new receivable for the unpaid portion of an outstanding Account; or (xv) the Account Debtor (x) is a creditor, (y) has or has asserted a right of set-off against the Borrower or another Grantor with respect to such Account (unless such Account Debtor has entered into a written agreement reasonably acceptable to the Administrative Agent to waive such set-off rights) or (z) has disputed its liability (whether by chargeback, dispute or otherwise) or made any asserted or unasserted claim with respect to such Account or any other Account of the Borrower or such other Grantor (as applicable) which has not been resolved, in each case, without duplication, to the extent of the amount owed by the Borrower or such other Grantor (as applicable) to the Account Debtor, the amount of such actual or asserted right of set-off or the amount of such dispute or claim, as the case may be; or 13 (xvi) such Account does not comply in all material respects with the requirements of all applicable laws and regulations, whether Federal, State, provincial or local, including the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board; or (xvii) such Account is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates that any Person other than the Borrower or another Grantor has or has had or has purported to have or have had an ownership interest in such goods and in the Account resulting from the sale of such goods; or (xviii) such Account is an extended terms account, which is not due and payable within 180 days from the original date of invoice; or (xix) such Account is created on cash on delivery terms or is payment for freight claims; or (xx) to the extent that such Account has been reclassified, as a result of a workout or other similar situation relating to the credit worthiness of the applicable Account Debtor, from an account receivable to a note receivable; or (xxi) the Account Debtor has not been instructed by the Borrower or any of the other Grantors to pay such Account directly into a Deposit Account in the Lockbox System; or (xxii) such Account relates to the Retail Division or Wingfoot, unless such Account meets certain criteria and is deemed eligible by the Administrative Agent in its sole discretion. Notwithstanding the foregoing, at the time of any determination of Eligible Accounts Receivable, an amount equal to all Eligible Accounts Receivable of any single Account Debtor and its Affiliates which in the aggregate exceed (a) 12% in respect of an Account Debtor whose unsecured short term debt is rated A3 or better by Moody's or A- or better by Standard & Poor's, (b) 6% in respect of an Account Debtor whose unsecured short term debt does not have the rating described in clause (a) but are rated Investment Grade by either Moody's or Standard & Poor's and (c) 3% in respect of any other Account Debtor, in each case of the total amount of all Eligible Accounts Receivable at such time of determination shall be deemed not to be Eligible Accounts Receivable to the extent of such excess. In determining the aggregate amount of Accounts from the same Account Debtor that are unpaid more than 60 days from the due date pursuant to clause (ii) above there shall be excluded the amount of any net credit balances relating to Accounts with invoice dates more than 60 days from the due date. "Eligible Affiliate" means any Affiliate of the Borrower, provided that (a) the Borrower or any of its other Affiliates does not Control such Affiliate, (b) the Borrower and the Subsidiaries do not own, control or hold, directly or indirectly, individually or in the aggregate, Equity Interests of such Affiliate representing 50% or more of the equity or 50% or more of the voting power or, in the case of a partnership, 14 50% or more of the general partnership interests of such Affiliate, (c) the accounts of such Affiliate are not consolidated with those of the Borrower in the Borrower's consolidated financial statements (and are not required to be so consolidated in accordance with GAAP), (d) each Account due to the Borrower or another Grantor from such Affiliate requires payment for the goods sold or leased or the services rendered to such Affiliate in cash and on terms that are no less favorable to the Borrower or such Grantor, as the case may be, than those that could be obtained at such time in arm's-length dealings with a Person who is not such an Affiliate and (e) such Affiliate meets any other eligibility standard or requirement that is imposed by the Administrative Agent or the Majority Lenders in their discretion (not to be exercised unreasonably) based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives; any changes to such standards or requirements or the imposition of any additional standard or requirement by the Administrative Agent or the Majority Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such change or addition, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. "Eligible Finished Goods" means, on any date, the Inventory Value of all Eligible Inventory of the Borrower and each other Grantor defined as Finished Goods by the Borrower on such date as shown on the Borrower's perpetual inventory records in accordance with its current and historical accounting practices. "Eligible Inventory" means, at the time of any determination thereof, without duplication, the Inventory Value of the Inventory of the Borrower and each other Grantor at the time of such determination that is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (n) below or otherwise deemed by the Administrative Agent or the Majority Borrowing Base Lenders in their discretion (not to be exercised unreasonably) to be ineligible for inclusion in the calculation of the Borrowing Base based on the results of collateral and borrowing base evaluations and monitoring conducted by the Administrative Agent and its designated representatives; any such decision by the Administrative Agent or the Majority Borrowing Base Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such decision, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. Without limiting the generality of the foregoing, to qualify as "Eligible Inventory" no Person other than the Borrower or another Grantor shall have any direct or indirect ownership, interest or title to such Inventory and no Person other than the Borrower or another Grantor shall be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein. Unless otherwise approved from time to time in writing by the Administrative Agent, no Inventory shall be deemed Eligible Inventory to the extent that such Inventory is accounted for in the Borrower's perpetual inventory balance and, without duplication: 15 (a) it is not owned solely by the Borrower or another Grantor or the Borrower or another Grantor does not have good and valid title thereto; or (b) it is not located in the United States or Canada; or (c) it (i) is not either (x) located on a Permitted Inventory Location or (y) in transit from a Permitted Inventory Location to another Permitted Inventory Location or (ii) is located at a dormant facility that is no longer operated by the Borrower or another Grantor; or (d) it is (i) goods returned or rejected by the Borrower's or another Grantor's customers and is not saleable in the ordinary course of business of the Borrower or another Grantor, (ii) Inventory in transit on the water via ship or other marine vessel to the Borrower or another Grantor or (iii) goods in transit from the Borrower or another Grantor to customers of the Borrower or another Grantor; or (e) it is Inventory (other than Raw Materials) not sold in the ordinary course of business of the Borrower or another Grantor, including engineering stores, miscellaneous supplies, packaging or shipping materials, cartons, repair parts, fuel, labels, miscellaneous spare parts, samples, prototypes, displays or display items; or (f) it is not subject to a valid and perfected first priority Lien in favor of the Administrative Agent for the benefit of the Secured Parties to the extent that such a Lien may be perfected by filing UCC financing statements or such other personal property security filings or registrations as may be required under the laws of the applicable jurisdiction in which such Inventory is located, subject to no other Liens other than Permitted Encumbrances (other than those described in clause (f) of the definition thereof); or (g) it is classified by the Borrower or another Grantor as work in process; or (h) it is consigned or at a customer location (other than Inventory consigned to original equipment manufacturers at no more than 20 locations in total, each of which have Inventory of the Borrower and the other Grantors with an Inventory Value in excess of $300,000 and with respect to which, on or after the fifteenth day following the Original Effective Date, an Access Agreement has been obtained); or (i) it is (i) being processed offsite at a third party processor at premises neither reflected in the Rent Reserve nor subject to a Lien Waiver or (ii) in transit to or from any such third party processor; or (j) it is classified by the Borrower or another Grantor as "obsolete", "unmerchantable" or "off spec without a ready market", or does not otherwise 16 conform in all material respects to the applicable representations and warranties contained in the Credit Documents; or (k) it is marked for return by the Borrower or another Grantor to the vendor of such Inventory; or (l) it does not meet in all material respects all materials standards imposed by any Governmental Authority having regulatory authority over it; or (m) it is classified by the Borrower or another Grantor as casings used for the retreading of commercial truck tires; or (n) it is classified by the Borrower or another Grantor as "shipped but not billed". "Eligible Raw Materials" means, on any date, the Inventory Value of all Eligible Inventory of the Borrower and each Grantor defined as Raw Materials on such date as shown on the Borrower's perpetual inventory records in accordance with its current and historical accounting practices. "Engineered Products Division" means those standard business units of the Borrower and the other Grantors classified as "Engineered Products Division" on the Borrower's perpetual inventory records. "Environmental Laws" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the presence, the management or release of, or exposure to, any Hazardous Materials or to health and safety matters. "Environmental Liability" means all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether contingent or otherwise, arising out of or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. "Equity Interests" means shares of capital stock, partnership interests, membership interests in limited liability companies, beneficial interests in trusts or other equity ownership interests in any Persons, and any warrants, options or other rights entitling the holders thereof to purchase or acquire any such equity interests. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. 17 "ERISA Affiliate" means any trade or business (whether or not incorporated) that, together with the Borrower or any Subsidiary, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code. "ERISA Event" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to any Plan (other than an event for which the 30-day notice period is waived or an event described in Section 4043.33 of Title 29 of the Code of Federal Regulations); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA) as to which a waiver has not been obtained; (c) the incurrence by the Borrower, a Subsidiary or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (d) the treatment of a Plan amendment as a termination under Section 4041 of ERISA; (e) any event or condition, other than the Transactions, that would be materially likely to result in the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan under Section 4042 of ERISA; (f) the receipt by the Borrower, a Subsidiary or any ERISA Affiliate from the PBGC or a plan administrator of any notice of an intention to terminate any Plan or to appoint a trustee to administer any Plan; (g) the incurrence by the Borrower, any Subsidiary or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by the Borrower, any Subsidiary or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower, any Subsidiary or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. "Eurodollar", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate. "European Facilities Agreement" means the $650,000,000 Term Loan and Revolving Credit Agreement dated as of the date hereof among the European JV, the other borrowers thereunder, certain lenders and JPMCB, as administrative agent. "European JV" means Goodyear Dunlop Tires Europe B.V. "Event of Default" has the meaning assigned to such term in Article VII. "Excess Cash Rationalization Charges" means, for any period, cash expenditures of the Borrower and its Consolidated Subsidiaries in such period with respect to Rationalization Charges recorded on the Borrower's consolidated income statement after the date hereof; provided, however that for such cash expenditures incurred after September 1, 2003, Excess Cash Rationalization Charges shall only include the aggregate amount of such cash expenditures which exceed the sum of $100,000,000 (or $50,000,000 if incurred prior to December 31, 2003) plus 25% of Net Cash Proceeds 18 from the issuance and sale of its Equity Interests or Indebtedness pursuant to Section 6.01(q). "Excluded Operating Account" means payroll and other operating accounts of the Borrower or any other Grantor that are not used to receive (a) payments from any Account Debtor in respect of Accounts or (b) payments in respect of Inventory, and containing only such amounts as required in the Borrower's or such other Grantor's good faith judgment for near-term operational purposes. "Excluded Subsidiary" means any Subsidiary with only nominal assets and no operations. "Excluded Taxes" means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) (i) any withholding tax that is imposed by the United States on amounts payable to a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.17(b)) at the time such Foreign Lender first becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.15(a) or (ii) any withholding tax that is imposed by the United States on amounts payable to a Foreign Lender that is attributable to such Foreign Lender's failure to comply with Section 2.15(e). "Existing Securitization Facilities" means (a) the securitization facility made available pursuant to the Series 2001-1 Indenture Supplement dated as of April 27, 2001 to the Base Indenture dated as of April 27, 2001 among Wingfoot A/R LLC, as issuer, The Goodyear Tire & Rubber Company, as collection agent, The Chase Manhattan Bank, as administrative agent, certain CP Conduit Purchasers, certain APA Banks, certain Funding Agents and The Chase Manhattan Bank, as indenture trustee and (b) the securitization facility made available pursuant to the Receivables Purchase Agreement dated July 27, 2001 between Goodyear Canada Inc., as seller and initial servicer, Montreal Trust Company, as trustee of Bay Street Funding Trust, as issuer, and Scotia Capital Inc., as administrator. "Federal Funds Effective Rate" means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of 19 the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Financial Officer" means the chief financial officer, principal accounting officer, treasurer or any assistant treasurer of the Borrower. "Finished Goods" means completed goods that require no additional processing or manufacturing to be sold by the Borrower or another Grantor in the ordinary course of business. "First Amendment" means the First Amendment dated as of February 19, 2004, to the Original Credit Agreement, amending and restating such the Original Credit Agreement in the form of this Agreement. "First Amendment Date" means February 19, 2004. "Foreign Lender" means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. "Foreign Subsidiary" means any Subsidiary organized under the laws of a jurisdiction other than the United States or any of its territories or possessions or any political subdivision thereof. "GAAP" means generally accepted accounting principles in the United States. "Governmental Authority" means the government of the United States, Canada, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Grantors" means the Borrower and each North American Subsidiary that has become, or is required to become, an ABL Facilities Grantor (as defined in the Guarantee and Collateral Agreement) and, if applicable, a party to any Canadian Security Agreement pursuant to Section 4.01(j) of the Original Credit Agreement or Section 5.08 hereof. "Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the 20 payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee shall be such guaranteeing person's maximum reasonably anticipated liability (assuming such person is required to perform) in respect thereof as determined in such person's good faith. "Guarantee and Collateral Agreement" means the Master Guarantee and Collateral Agreement among the Borrower, the Subsidiary Guarantors, the Grantors, certain other Subsidiaries and the Collateral Agent substantially in the form of Exhibit G. "Hazardous Materials" means (a) petroleum products and byproducts, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, radon gas, chlorofluorocarbons and all other ozone-depleting substances; and (b) any pollutant or contaminant or any hazardous, toxic, radioactive or otherwise regulated chemical, material, substance or waste that is prohibited, limited or regulated pursuant to any applicable Environmental Law. "Improved Ratings Day" means a day on which (a) Moody's has in effect a rating for the Tranche B Term Loans of B1 or better and (b) Standard & Poor's has in effect a rating for the Tranche B Term Loans of B+ or better. "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all Securitization Transactions of such Person. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in such entity. 21 "Indemnified Taxes" means Taxes other than Excluded Taxes. "Indemnitee" has the meaning set forth in Section 9.03. "Information" has the meaning set forth in Section 9.12. "Information Memorandum" means the Confidential Information Memorandum dated March 5, 2003 relating to the Borrower and the Transactions. "Interest Election Request" means a request by the Borrower to convert or continue a Revolving Borrowing or Term Borrowing in accordance with Section 2.06 in substantially the form of Exhibit B hereto. "Interest Payment Date" means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months' duration, each day prior to the last day of such Interest Period that occurs at intervals of three months' duration after the first day of such Interest Period. "Interest Period" means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. "Inventory" has the meaning specified in the UCC. "Inventory Reserves" means, on any date, an amount equal to the sum of the following reserves maintained on the Borrower's general ledger (calculated in each case in accordance with the current and historical accounting practices of the Borrower) with respect to Eligible Inventory, without duplication of any deductions made pursuant to the definitions of "Additional Inventory Reserves," "Eligible Inventory" and "Inventory Value": (a) a reserve for Inventory that is damaged; 22 (b) a revaluation reserve to reflect capitalized manufacturing variances whereby aggregate net variances (if favorable) shall be deducted from Eligible Inventory and aggregate net variances (if unfavorable) shall not be added to Eligible Inventory; (c) a reserve equal to the aggregate Inventory Value of Eligible Inventory attributable to intercompany or intracompany profit among the Borrower and its Affiliates (other than Eligible Affiliates); and (d) a lower of cost or market reserve for any differences between the Borrower's actual cost to produce versus the Borrower's sale price to third parties, determined on a product line basis. "Inventory Value" means, with respect to any Inventory of the Borrower or any other Grantor at the time of any determination thereof, an amount equal to such Inventory carried on the perpetual inventory records of the Borrower stated on a basis consistent with its current and historical accounting practices, in U.S. Dollars, determined in accordance with the standard cost method of accounting, which shall be, in the case of Inventory imported by the Borrower or another Grantor into the United States of America or Canada, the acquisition cost thereof plus transportation and freight charges plus import duties. "Investment Grade" means, in the case of Moody's, a credit rating of Baa3 or better and, in the case of Standard & Poor's, a credit rating of BBB- or better. "Investments" has the meaning assigned to such term in Section 6.05. "Issuing Bank" means JPMCB and each other Lender that has entered into an Issuing Bank Agreement, each in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.05(i). Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term "Issuing Bank" shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. Notwithstanding the foregoing provisions of this definition or any other provision of this Agreement, any financial institution that is an Issuing Bank under and as defined in the US Revolving Facility Agreement and is not a Lender hereunder may, in connection with the redesignation of any letter of credit issued by it under such agreement as a Letter of Credit hereunder as provided in Section 2.04, become a party to this Agreement and an Issuing Bank hereunder by executing an instrument satisfactory to the Borrower and the Administrative Agent for the limited purpose of obtaining the rights and assuming the responsibilities of an Issuing Bank with respect to such Letter of Credit, but shall not issue any other Letters of Credit hereunder. "Issuing Bank Agreement" means an agreement in form reasonably satisfactory to the Borrower and the Administrative Agent pursuant to which a Lender agrees to act as an Issuing Bank. "JPMCB" means JPMorgan Chase Bank, and its successors. 23 "Junior Securities" means, collectively, any Senior Subordinated-Lien Indebtedness and any Indebtedness or preferred Equity Interests issued under Section 6.01(q). "LC Disbursement" means a payment made by any Issuing Bank pursuant to a Letter of Credit. "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time. "Lenders" means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. "Letter of Credit" means any letter of credit issued pursuant to this Agreement or any letter of credit issued under the US Revolving Facility Agreement that has been redesignated as a Letter of Credit hereunder. "LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason with respect to any Eurodollar Borrowing, then the "LIBO Rate" with respect to such Eurodollar Borrowing for such Interest Period shall be the rate (rounded upwards, if necessary, to the next 1/100 of 1%) at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period. "Lien" means, with respect to any asset, (a) any mortgage, deed of trust, French delegation of claims, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. 24 "Lien Subordination and Intercreditor Agreement" means a Lien Subordination and Intercreditor Agreement, to be dated on or about the first date on which Senior Subordinated-Lien Indebtedness is incurred, issued or sold, among the Collateral Agent, the applicable Senior Subordinated-Lien Collateral Agent, the Borrower and the Subsidiary Guarantors, in substantially the form of the draft made available to the Lenders prior to the First Amendment Date with such changes as shall have been approved by the Administrative Agent. "Lien Waiver" means a written waiver of statutory or contractual Liens on Inventory for unpaid rent or charges of a warehouseman or bailee in form and substance reasonably satisfactory to the Administrative Agent. "Loans" means the loans made by the Lenders to the Borrower pursuant to this Agreement. "Lockbox Agreements" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "Lockbox System" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "Luxembourg Finance" means Goodyear Finance Holding S.A., a corporation organized in Luxembourg. "Majority Borrowing Base Lenders" means, at any time, Lenders having aggregate Revolving Credit Exposures, Tranche A Term Loans and unused Revolving Commitments representing at least a majority of the sum of the total Revolving Credit Exposures, Tranche A Term Loans and unused Revolving Commitments at such time. "Majority Lenders" means, at any time, Lenders having aggregate Revolving Credit Exposures, Term Loans and unused Commitments representing at least a majority of the sum of the total Revolving Credit Exposures, Term Loans and unused Commitments at such time. "Material Adverse Change" means a material adverse change in or effect on (a) the business, operations, properties, assets or financial condition (including as a result of the effects of any contingent liabilities thereon) of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of the Credit Parties, taken as a whole, to perform obligations under this Agreement and the other Credit Documents that are material to the rights or interests of the Lenders or (c) the rights of or benefits available to the Lenders under this Agreement and the other Credit Documents that are material to the interests of the Lenders. "Material Indebtedness" means Indebtedness (other than the Loans), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any 25 time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time, calculated in accordance with the terms of such Swap Agreement. "Material Subsidiary" means, at any time, each Subsidiary other than Subsidiaries that do not represent more than 1% for any such individual Subsidiary, or more than 5% in the aggregate for all such Subsidiaries, of either (a) Consolidated Total Assets or (b) Consolidated Revenue for the period of four fiscal quarters most recently ended. "Material Trademarks" has the meaning assigned to such term in the Guarantee and Collateral Agreement. "Maturity Date" means March 31, 2006. "Moody's" means Moody's Investors Service, Inc., or any successor thereto. "Mortgage" means a mortgage or deed of trust, assignment of leases and rents, or other security documents reasonably satisfactory in form and substance to the Collateral Agent granting a Lien on any Mortgaged Property to secure the Obligations. "Mortgaged Property" has the meaning assigned to such term in the US Revolving Facility Agreement. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "NAIC" means the National Association of Insurance Commissioners. "Net Cash Proceeds" shall have the meaning assigned to such term in the US Term Facility Agreement; provided, that the Net Cash Proceeds of any event that is not a Prepayment Event shall be determined as if such event were a Prepayment Event. "New Facilities Credit Agreements" means this Agreement, the US Revolving Facility Agreement, the US Term Facility Agreement and the European Facilities Agreement. "New Facilities Documents" means the New Facilities Credit Agreements, the Guarantee and Collateral Agreement and the other Security Documents (as such term is defined in any New Facilities Credit Agreement). "North American Subsidiary" means any Subsidiary organized under the laws of the United States or Canada or any of their respective states, provinces, territories or possessions or any political subdivision of any thereof. 26 "North American Tire Division" means those standard business units of the Borrower and the other Grantors classified as "North American Tire Division" on the Borrower's perpetual inventory records. "Obligations" means (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursements of LC Disbursements and interest thereon and (iii) all other monetary obligations of the Credit Parties to any of the Secured Parties under this Agreement and each of the other Credit Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), and (b) the due and punctual performance of all other obligations of the Credit Parties to any of the Secured Parties under this Agreement and the other Credit Documents. "Original Effective Date" means April 1, 2003. "Other Taxes" means any and all present or future stamp, documentary, excise, recording, transfer, sales, property or similar taxes, charges or levies arising from any payment made under any Credit Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Credit Document. "Participant" has the meaning assigned to such term in Section 9.04. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. "Perfection Certificate" means a certificate in the form of Exhibit II to the Guarantee and Collateral Agreement or any other form approved by the Collateral Agent. "Permitted Encumbrances" means: (a) (i) Liens imposed by law for taxes that are not yet due or are being contested and (ii) deemed trusts and Liens to which the Priority Payables Reserve relates for taxes, assessments or other charges or levies that are not yet due and payable; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days (or any longer grace period available under the terms of the applicable underlying obligation) or are being contested; 27 (c) Liens created and pledges and deposits made (including cash deposits to secure obligations in respect of letters of credit provided) in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations; (d) Liens created and deposits made to secure the performance of bids, trade contracts, leases, statutory obligations, appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business, and Liens created and deposits made prior to the date hereof in the ordinary course of business to secure the performance of surety bonds; (e) judgment liens in respect of judgments that do not constitute an Event of Default; (f) supplier's liens in inventory, other assets supplied or accounts receivable that result from retention of title or extended retention of title arrangements arising in connection with purchases of goods in the ordinary course of business; and (g) easements, zoning restrictions, rights-of-way and similar encumbrances on real property and other Liens incidental to the conduct of business or ownership of property that arise automatically by operation of law or arise in the ordinary course of business and that do not materially detract from the value of the property of the Borrower and the Subsidiaries or of the Collateral, in each case taken as a whole, or materially interfere with the ordinary conduct of business of the Borrower and the Subsidiaries, taken as a whole, or otherwise adversely affect in any material respect the rights or interests of the Lenders; provided that (except as provided in clause (d) above) the term "Permitted Encumbrances" shall not include any Lien securing Indebtedness for borrowed money. "Permitted Inventory Location" means (a) property owned or leased by the Borrower or a Grantor in the United States of America or Canada or (b) a third party warehouse or dock in the United States of America or Canada where Inventory of the Borrower or any Grantor is stored. "Permitted Investments" means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States), in each case maturing within one year from the date of acquisition thereof; (b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, ratings of A1 from Standard & Poor's and P1 from Moody's; 28 (c) investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof and issued or guaranteed by or placed with, and money market deposit accounts issued or offered by any commercial bank organized under the laws of the United States or any State thereof which has a short term deposit rating of A1 from Standard & Poor's and P1 from Moody's and has a combined capital and surplus and undivided profits of not less than $500,000,000; (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution described in clause (c) above; (e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by Standard & Poor's and Aaa by Moody's and (iii) have portfolio assets of at least $5,000,000,000; and (f) in the case of any Subsidiary that is not a Domestic Subsidiary, (i) marketable direct obligations issued or unconditionally guaranteed by the sovereign nation in which such Subsidiary is organized and is conducting business or issued by any agency of such sovereign nation and backed by the full faith and credit of such sovereign nation, in each case maturing within one year from the date of acquisition, so long as the indebtedness of such sovereign nation is rated at least A by Standard & Poor's or A2 by Moody's or carries an equivalent rating from a comparable foreign rating agency, (ii) investments of the type and maturity described in clauses (b) through (e) of foreign obligors, which investments or obligors have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies, (iii) investments of the type and maturity described in clause (c) in any obligor organized under the laws of a jurisdiction other than the United States that (A) is a branch or subsidiary of a Lender or the ultimate parent company of a Lender under one of the New Facilities Credit Agreements (but only if such Lender meets the ratings and capital, surplus and undivided profits requirements of such clause (c)) or (B) carries a rating at least equivalent to the rating of the sovereign nation in which it is located, and (iv) other investments of the type and maturity described in clause (c) in obligors organized under the laws of a jurisdiction other than the United States in any country in which such Subsidiary is located; provided, that the investments permitted under this subclause (iv) shall not exceed $10,000,000 for all such Subsidiaries in any such country or $50,000,000 in the aggregate for all such Subsidiaries and all countries. "Permitted Preferred Stock" has the meaning assigned to such term in Section 6.01(q). "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. 29 "Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV or Section 302 of ERISA or Section 412 of the Code, and in respect of which the Borrower, any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. "Prepayment Event" shall have the meaning assigned to such term in the US Term Facility Agreement. "Prime Rate" means the rate of interest per annum publicly announced from time to time by JPMCB (or any successor Administrative Agent appointed or chosen pursuant to Article VIII hereof) as its prime rate in effect at its principal office in New York City. Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. "Principal Issuing Bank" means JPMCB and any other Issuing Bank whom the Borrower and JPMCB agree will be a Principal Issuing Bank (or any of their Affiliates that shall act as Issuing Banks hereunder). "Priority Payables Reserve" means, at any time, the sum of, without duplication of any deductions made pursuant to the definitions of "Additional Inventory Reserves", "Inventory Reserves", "Eligible Inventory" and "Inventory Value", the full amount of the liabilities at such time which have a trust imposed to provide for payment thereof or a security interest, Lien or charge ranking or capable of ranking, in each case senior to or pari passu with the Liens created under the Security Documents under Canadian federal, provincial, county, municipal or local law with respect to claims for goods and services taxes, sales tax, income tax, workers' compensation obligations, vacation pay or pension fund obligations. "Rationalization Charges" means, for any period, cash and non-cash charges related to rationalization actions designed to reduce capacity, eliminate redundancies and reduce costs. Rationalization Charges will be computed by a method consistent with that used in preparing the financial statements referred to in Section 3.04. "Raw Material" means Inventory used or consumed in the manufacturing of goods to be sold by the Borrower or another Grantor in the ordinary course of business. "Recovery Rate" means (a) the estimated net recovery of all Inventory of the Borrower and the other Grantors stated in U.S. Dollars as determined on a net orderly liquidation basis by the most recent analysis conducted by outside inventory consultants/appraisers retained or approved by the Administrative Agent and disclosed to the Borrower divided by (b) the Inventory Value of all Inventory of the Borrower and each other Grantor as of the date of such most recent analysis. "Register" has the meaning set forth in Section 9.04. 30 "Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents, counsel and other advisors of such Person and such Person's Affiliates. "Rent Reserve" means, on any date, with respect to any retail store, distribution center, warehouse, manufacturing facility or other Permitted Inventory Location where any Eligible Inventory that is subject to Liens arising by operation of law is located and with respect to which no Lien Waiver is in effect, a reserve equal to three months' rent and charges at such retail store, distribution center, warehouse, manufacturing facility or other Permitted Inventory Location. "Restatement Effective Date" means the date on which the conditions specified in Section 6 of the First Amendment are satisfied. "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property) on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any such Equity Interests or any option, warrant or other right to acquire any such Equity Interests. "Retail Division" means those standard business units of the Borrower and the other Grantors classified as "Retail Division" on the Borrower's perpetual inventory records. "Revolving Availability Period" means the period from and including the Original Effective Date to but excluding the earlier of (a) the Maturity Date and (b) the date of termination of the Revolving Commitments. "Revolving Commitment" means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum permitted aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or increased from time to time pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lender's Revolving Commitment is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable. The initial aggregate amount of the Lenders' Revolving Commitments is $500,000,000. "Revolving Credit Exposure" means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Revolving Loans and such Lender's LC Exposure at such time. "Revolving Lender" means a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Credit Exposure. 31 "Revolving Loan" means a Loan made pursuant to clause (iii) of Section 2.01(a). "Revolving Obligations" means (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Revolving Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Credit Parties to any of the Revolving Lenders under this Agreement and each of the other Credit Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), and (b) the due and punctual performance of all other obligations of the Credit Parties to any of the Revolving Lenders under this Agreement and the other Credit Documents. "Sale and Leaseback Transaction" means any arrangement whereby the Borrower or a Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease from the buyer or transferee property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, other than any such transaction entered into with respect to any property or any improvements thereto at the time of, or within 180 days after, the acquisition or completion of construction of such property or such improvements (or, if later, the commencement of commercial operation of any such property), as the case may be, to finance the cost of such property or such improvements, as the case may be. "Secured Parties" means the Administrative Agent, each Issuing Bank, the Collateral Agent and each Lender. "Securitization Transaction" means, with respect to any Person, (i) any transfer by such Person of accounts receivable, rights to future lease payments or residuals or other financial assets, and related property, or interests therein (a) to a trust, partnership, corporation or other entity, which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or any successor transferee of Indebtedness or securities that are to receive payments from, or that represent interests in, the cash flow derived from such accounts receivable or interests, or (b) directly to one or more investors or other purchasers, (ii) any Indebtedness of such Person secured substantially entirely by accounts receivable, rights to future lease payments or residuals or other financial assets, and related property or (iii) any factoring transaction involving substantially entirely accounts receivable, rights to future lease payments or residuals or other financial assets, and related property; provided that "Securitization Transaction" shall not include (A) the sale by any Foreign Subsidiary, in the ordinary course of its business, of drafts with a bank or other financial institution as the maker (or otherwise primarily responsible for the payment thereof), bankers acceptances or similar instruments received by such Foreign Subsidiary from a customer 32 operating in a jurisdiction other than the United States or any of its territories or possessions or any political subdivision thereof in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer or (B) the sale, in the ordinary course of business, of drafts not payable on demand received by the Borrower or any Subsidiary from a customer in satisfaction of accounts receivable or otherwise as consideration for goods sold or services provided to such customer pursuant to an arrangement (1) initiated by and entered into a the request of such customer, and (2) under which a financial institution has agreed as part of a financing program established for and at the request of such customer to buy such drafts from such customer's vendors (which arrangements may be modified by the Borrower or any Subsidiary to contemplate the repurchase of such drafts by such customer, or other actions by such customer to reinstate or to pay receivables in respect of which such drafts were created, in the event of any failure by such financial institution to buy such drafts). The amount of any Securitization Transaction shall be deemed at any time to be the aggregate outstanding principal amount of the Indebtedness or securities referred to in the preceding sentence or, if there shall be no such principal amount, the equivalent outstanding amount of the funded investment. "Security Documents" means the Guarantee and Collateral Agreement, the Canadian Security Agreements, the Mortgages and each other instrument or document delivered in connection with the cash collateralization of Letters of Credit or pursuant to Section 5.08, in each case to secure any of the Obligations. "Senior Subordinated-Lien Collateral Agent" means, as to any Senior Subordinated-Lien Indebtedness, the collateral agent under the applicable Senior Subordinated-Lien Indebtedness Security Documents. "Senior Subordinated-Lien Governing Documents" means each Indenture or other agreement or instrument providing for the issuance or setting forth the terms of any Senior Subordinated-Lien Indebtedness. "Senior Subordinated-Lien Indebtedness" means Indebtedness of the Borrower issued after the First Amendment Date that (a) is secured by Liens permitted under Section 6.02(m), but that is not secured by Liens on any additional assets, (b) constitutes Initial Junior Indebtedness or Designated Junior Obligations under and as defined in the Lien Subordination and Intercreditor Agreement, and the Liens securing which are subordinated under the Lien Subordination and Intercreditor Agreement to the Liens securing the Obligations and (c) does not contain provisions inconsistent with the restrictions of Annex A to the First Amendment. "Senior Subordinated-Lien Obligations" means, as to any Senior Subordinated-Lien Indebtedness, (a) the principal of and all premium or make-whole amounts, if any, and interest payable in respect of such Senior Subordinated-Lien Indebtedness, (b) any amounts payable under Guarantees of such Senior Subordinated-Lien Indebtedness by Subsidiaries and (c) all other amounts payable by the Borrower or any Subsidiary under such Senior Subordinated-Lien Indebtedness, the applicable Senior Subordinated-Lien Security Documents (to the extent such amounts relate to such Senior 33 Subordinated-Lien Indebtedness) or the applicable Senior Subordinated-Lien Governing Documents. "Senior Subordinated-Lien Security Documents" means, as to any Senior Subordinated-Lien Indebtedness, the security agreements, pledge agreements, mortgages and other documents creating Liens on assets of the Borrower and the Subsidiary Guarantors to secure the applicable Senior Subordinated-Lien Obligations. "Standard & Poor's" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor thereto. "Statutory Reserve Rate" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject, with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which are consolidated with those of the parent in the parent's consolidated financial statements in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary" means any subsidiary of the Borrower. "Subsidiary Guarantor" means any Subsidiary that has become, or is required to become, a US Guarantor (as defined in the Guarantee and Collateral Agreement) pursuant to Section 4.01(j) of the Original Credit Agreement or Section 5.08 hereof. "Swap Agreement" means any agreement, including any master agreement, with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates or prices for one or more currencies, commodities, equity or debt instruments or securities, or 34 economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions. "Syndication Agent" means Citicorp USA, Inc., in its capacity as syndication agent hereunder. "Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. "Term Borrowing" means a Tranche A Term Borrowing or a Tranche B Term Borrowing. "Term Lender" means a Tranche A Term Lender or a Tranche B Term Lender. "Term Loans" means Tranche A Term Loans and Tranche B Term Loans. "Term Loan Commitment" means a Tranche A Term Loan Commitment or a Tranche B Term Loan Commitment. "Tranche A Term Lender" means a Lender with an outstanding Tranche A Term Loan. "Tranche A Term Loan" means a Loan made pursuant to clause (i) of Section 2.01(a). "Tranche A Term Loan Commitment" means, with respect to each Tranche A Term Lender, the commitment pursuant to which such Lender made its Tranche A Term Loan hereunder on the Original Effective Date. The aggregate amount of the Lenders' Tranche A Term Loan Commitments was $800,000,000. "Tranche A Term Obligations" means (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Tranche A Term Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Credit Parties to any of the Tranche A Term Lenders under this Agreement and each of the other Credit Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), and (b) the due and punctual performance of all other obligations of the Credit Parties to any of the Tranche A Term Lenders under this Agreement and the other Credit Documents. "Tranche B Term Lender" means a Lender with a Tranche B Term Loan Commitment or an outstanding Tranche B Term Loan. 35 "Tranche B Term Loan" means a Loan made pursuant to clause (ii) of Section 2.01(a). "Tranche B Term Loan Commitment" means, with respect to each Tranche B Term Lender, the commitment of such Lender to make a Tranche B Term Loan hereunder on the Restatement Effective Date, expressed as an amount representing the maximum principal amount of the Tranche B Term Loan to be made by such Lender hereunder, as such commitment may be (a) reduced or increased from time to time pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Tranche B Term Lender's Tranche B Term Loan Commitment is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Tranche B Term Loan Commitment, as applicable. The initial aggregate amount of the Tranche B Term Lenders' Tranche B Term Loan Commitments is $650,000,000. "Tranche B Term Obligations" means (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Tranche B Term Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations of the Credit Parties to any of the Tranche B Term Lenders under this Agreement and each of the other Credit Documents, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), and (b) the due and punctual performance of all other obligations of the Credit Parties to any of the Tranche B Term Lenders under this Agreement and the other Credit Documents. "Transactions" means the execution, delivery and performance by the Borrower of this Agreement and the First Amendment and by the Borrower, the Subsidiary Guarantors and the Grantors, as applicable, of the other Credit Documents, the borrowing of the Loans, the obtaining and use of the Letters of Credit, the creation of the Liens and Guarantees provided for in the Security Documents and the other transactions contemplated hereby. "Type", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate. "UCC" means Article 9 of the Uniform Commercial Code as from time to time in effect in the State of New York. "US Revolving Facility Agreement" means the $750,000,000 Revolving Loan Agreement dated as of the date hereof among the Borrower, certain lenders and JPMCB, as administrative agent. 36 "US Term Facility Agreement" means the $645,545,454 Term Loan Agreement dated as of the date hereof among the Borrower, certain lenders, JPMCB, as administrative agent, and BNP Paribas, as syndication agent. "Wholly Owned Subsidiary" of any person shall mean a subsidiary of such person of which securities (except for directors' qualifying shares) or other ownership interests representing 100% of the Equity Interests are, at the time any determination is being made, owned, controlled or held by such person or one or more wholly owned Subsidiaries of such person or by such person and one or more wholly owned Subsidiaries of such person. "Wingfoot" means Wingfoot Commercial Systems LLC. "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02. Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving Borrowing"). For purposes of determining compliance as of any date with Section 6.08, amounts incurred in euros during 2003 shall be translated into dollars at the exchange rate in effect on March 31, 2003, and amounts incurred in euros during any subsequent year shall be translated into dollars at the exchange rate determined by the Borrower and used in its Annual Operating Plan for such year (which exchange rate shall be determined reasonably and set forth in the first certificate delivered pursuant to Section 5.01(c) during such year). SECTION 1.03. Foreign Currency Translation. For purposes of determining compliance as of any date with Section 6.01, 6.02, 6.03, 6.05 or 6.06, amounts incurred or outstanding in currencies other than dollars shall be translated into dollars at the exchange rates in effect on the first Business Day of the fiscal quarter in which such determination occurs or in respect of which such determination is being made, as such exchange rates shall be determined in good faith by the Borrower. No Default or Event of Default shall arise as a result of any limitation set forth in dollars in Section 6.01, 6.02, 6.03, 6.05 or 6.06 being exceeded solely as a result of changes in currency exchange rates from those rates applicable on the first day of the fiscal quarter in which such determination occurs or in respect of which such determination is being made. SECTION 1.04. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to 37 have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (c) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (f) references herein to "the date hereof" or "the date of this Agreement" shall be deemed to be references to March 31, 2003, the date of the Original Credit Agreement. SECTION 1.05. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Majority Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. ARTICLE II The Credits SECTION 2.01. Commitments. (a) Subject to the terms and conditions set forth herein, (i) each Tranche A Term Lender made a Tranche A Term Loan to the Borrower on the Original Effective Date in a principal amount equal to its Tranche A Term Loan Commitment, (ii) each Tranche B Term Lender agrees to make a Tranche B Term Loan to the Borrower on the Restatement Effective Date in a principal amount equal to its Tranche B Term Loan Commitment and (iii) each Revolving Lender has made and agrees to make Revolving Loans to the Borrower from time to time during the Revolving Availability Period in an aggregate principal amount that will not result in (x) such Lender's Revolving Credit Exposure exceeding such Lender's Revolving Commitment or (y) the aggregate Revolving Credit Exposure exceeding the Borrowing Base Availability then in effect. 38 (a) Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts repaid in respect of Term Loans may not be reborrowed. SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. (b) Subject to Section 2.12, each Revolving Borrowing and Term Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement. (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $10,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000; provided, that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.04(e). Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 20 Eurodollar Borrowings outstanding. (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date. SECTION 2.03. Requests for Borrowing. To request a Revolving Borrowing or Term Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 3:00 p.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 10:30 a.m., New York City time, on the day of the proposed Borrowing; provided that any such notice of an ABR Borrowing to finance reimbursement of an LC Disbursement as contemplated by Section 2.04(e) may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02: 39 (i) the Class of the requested Borrowing; (ii) the aggregate amount of the requested Borrowing; (iii) the date of such Borrowing, which shall be a Business Day; (iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; (v) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period"; and (vi) the location and number of the Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.05. If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing. SECTION 2.04. Letters of Credit. (a) General. Subject to the terms and conditions set forth herein, the Borrower may request the issuance (or the amendment, renewal or extension) of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the applicable Issuing Bank, at any time and from time to time during the Revolving Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, any Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control. The Borrower may at any time redesignate letters of credit issued and outstanding under the US Revolving Facility Agreement as Letters of Credit hereunder; provided, that (i) the Borrower shall by notice to the Administrative Agent identify the letters of credit to be redesignated as Letters of Credit hereunder (each of which shall have been issued by a Lender that is an Issuing Bank under this Agreement) and certify that the conditions to such redesignation set forth in the following clause (ii) are satisfied; and (ii) no redesignation of a letter of credit shall become effective hereunder unless after giving effect to such redesignation no Default shall have occurred and be continuing and the conditions precedent to the issuance, amendment, renewal or extension of a Letter of Credit under clause (b) below shall be satisfied. The Revolving Lenders hereby agree that upon the effectiveness of any such redesignation, each Issuing Bank that has issued any such letter of credit under the US Revolving Facility Agreement shall be deemed, without further action by any party hereto, to have granted to each Revolving Lender, and each such Lender shall be deemed to have purchased from such Issuing Bank, a 40 participation in such Letter of Credit in accordance with paragraph (d) below. On and after the effectiveness of any such redesignation, such letter of credit shall constitute a Letter of Credit for all purposes hereof. (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to an Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by any Issuing Bank, the Borrower also shall submit a letter of credit application on such Issuing Bank's standard form in connection with any request for a Letter of Credit; provided that any provisions in any such letter of credit application that create Liens securing the obligations of the Borrower thereunder or that are inconsistent with the provisions of this Agreement shall be of no force or effect. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $450,000,000, (ii) the aggregate amount of the Lenders' Revolving Credit Exposures shall not exceed the aggregate Revolving Commitments, (iii) the Revolving Credit Exposure shall not exceed the Borrowing Base Availability and (iv) the LC Exposure and the LC Exposure under and as defined in the US Revolving Facility Agreement shall not, in the aggregate, exceed $600,000,000. (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date. (d) Participations. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the applicable Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the 41 date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason. Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. (e) Reimbursement. If any Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 1:30 p.m., New York City time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 1:30 p.m., New York City time, on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt or (iii) if such LC Disbursement is not less than the applicable minimum borrowing amount, on the second Business Day after the day otherwise applicable under clause (i) or (ii); provided that, if such LC Disbursement is not less than the applicable minimum borrowing amount, unless the Borrower shall have notified the Administrative Agent to the contrary, the Borrower will be deemed to have requested in accordance with Section 2.03 that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Revolving Lender's Applicable Percentage thereof. Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the applicable Issuing Bank the amounts so received by it from the Revolving Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to such Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Revolving Lender pursuant to this paragraph to reimburse any Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement. 42 (f) Obligations Absolute. The Borrower's obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by any Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower's obligations hereunder. None of the Administrative Agent, the Revolving Lenders or the Issuing Banks, or any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Banks; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Borrower to the extent of any damages suffered by the Borrower or any Revolving Lender that are caused by such Issuing Bank's gross negligence or willful misconduct. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the applicable Issuing Bank may, acting in good faith, either accept and make payment upon such documents without responsibility for further investigation or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit. (g) Disbursement Procedures. Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Each Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement. (h) Interim Interest. If any Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the Borrower fails to reimburse such LC 43 Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.11(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of such Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment. (i) Replacement of the Issuing Bank. Each Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Revolving Lenders of any such replacement of such Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.10(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of such Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of any Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit. (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on the earlier of (i) the third Business Day after the Borrower shall receive notice from the Administrative Agent or the Majority Lenders demanding the deposit of cash collateral pursuant to this paragraph and (ii) the date on which the maturity of the Loans shall be accelerated, unless prohibited by the terms of any other New Facilities Credit Agreement, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits, which investment shall be in Permitted Investments and shall be made in the discretion of the Administrative Agent and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposures representing greater than 50% of the total LC Exposure), be 44 applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral under this paragraph, then (i) if the maturity of the Loans has not been accelerated and the LC Exposure shall be reduced to an amount below the amount so deposited, the Administrative Agent will return to the Borrower any excess of the amount so deposited over the LC Exposure and (ii) such amount (to the extent not applied as provided above in this paragraph) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived. SECTION 2.05. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:30 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.04(e) shall be remitted by the Administrative Agent to the applicable Issuing Bank. (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing. It is agreed that no payment by the Borrower under this paragraph will be subject to any break-funding payment under Section 2.14. SECTION 2.06. Interest Elections. (a) Each Revolving Borrowing and Term Loan Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the 45 Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing or Term Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request signed by the Borrower. (c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02: (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period". If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of each resulting Borrowing. (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Majority Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and 46 (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. SECTION 2.07. Termination of Commitments; Reductions of Commitments. (a) The Tranche A Term Loan Commitments terminated on the Original Effective Date. Unless previously terminated, (i) the Tranche B Term Loan Commitments shall terminate at 5:00 p.m., New York City time, on the Restatement Effective Date and (ii) the Revolving Commitments shall terminate on the Maturity Date. (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments of any Class; provided that (i) each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.09, the total Revolving Credit Exposures would exceed the total Revolving Commitments. (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments of any Class shall be permanent. Each reduction of the Commitments of any Class shall be made ratably among the Lenders in accordance with their respective Commitments of such Class. SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan of such Lender on the Maturity Date and (ii) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Lender on the Maturity Date. (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and 47 (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof. (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein (including any failure to record the making or repayment of any Loan) shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement or prevent the Borrower's obligations in respect of Loans from being discharged to the extent of amounts actually paid in respect thereof. (e) Any Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) in substantially the form set forth in Exhibit C hereto. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns). SECTION 2.09. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to paragraph (c) of this Section and to prior notice in accordance with paragraph (d) of this Section. (b) The Borrower shall (i) in the event and on each occasion that the aggregate Revolving Credit Exposures exceed the total Revolving Commitments, not later than the next Business Day, and (ii) in the event and on each occasion that the aggregate Revolving Credit Exposures exceed the Borrowing Base Availability then in effect, not later than the next Business Day after any date on which a Borrowing Base Certificate or interim calculation of Eligible Accounts Receivable is due under Section 5.09(a) that shows or would show such excess, prepay Revolving Borrowings in an aggregate amount equal to such excess, and in the event that after such prepayment of Revolving Borrowings any such excess shall remain, the Borrower shall deposit cash in an amount equal to such excess as collateral for the reimbursement obligations of the Borrower in respect of Letters of Credit. Any cash so deposited (and any cash previously deposited pursuant to this paragraph) with the Administrative Agent shall be held in an account over which the Administrative Agent shall have dominion and control to the exclusion of the Borrower and its Subsidiaries, including the exclusive right of withdrawal. Other than any interest earned on the investment of such deposits, which investment shall be in Permitted Investments and shall be made in the discretion of the Administrative Agent (or, at any time when no Default or Event of Default has occurred and is continuing, shall be made at the direction of the Borrower) and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied 48 by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposures representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of the Borrower under this Agreement. If the Borrower has provided cash collateral to secure the reimbursement obligations of the Borrower in respect of Letters of Credit hereunder, then, so long as no Event of Default shall exist, such cash collateral shall be released to the Borrower if so requested by the Borrower at any time if and to the extent that, after giving effect to such release, the aggregate Revolving Credit Exposures will not exceed the Borrowing Base Availability. In the event that after such prepayment of Revolving Borrowings and the deposit of cash to collateralize reimbursement obligations in respect of Letters of Credit hereunder any such excess shall remain, the Borrower shall prepay Term Borrowings in an aggregate amount equal to such remaining excess (or, to the extent of not more than $80,000,000 of such remaining excess, deposit cash collateral in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders to secure the Obligations; provided that any amount in such account that shall not have been applied to the payment of the Obligations shall be returned to the Borrower at such time as no such remaining excess shall exist; provided further that if after 60 days following the deposit of such cash collateral any of such cash collateral shall not have been returned to the Borrower as provided above, the Borrower shall at such time repay Term Borrowings in such amount (it being understood that such cash collateral may be utilized to make such payment at such time)). (c) Each prepayment of Term Loans shall be applied to the Tranche A Term Loans and the Tranche B Term Loans ratably in accordance with the amounts of such Loans outstanding at the time of such prepayment. (d) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 3:00 p.m., New York City time, three Business Days before the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business Day before the date of prepayment; provided that if the Borrower shall be required to make any prepayment hereunder by reason of Section 2.09(b), such notice shall be delivered not later than the time at which such prepayment is made. Each such notice shall be irrevocable, shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.07, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.07. Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing (other than pursuant to Section 2.09(b)) shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid 49 Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.11. SECTION 2.10. Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, accruing at the rate of 0.75% per annum on the daily unused amount of the Revolving Commitment of such Lender during the period from and including the date hereof to but excluding the date on which such Revolving Commitment terminates. Accrued commitment fees shall be payable in arrears in the case of commitment fees in respect of the Revolving Commitments, on the last day of March, June, September and December of each year and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). (b) The Borrower agrees to pay (i) to the Administrative Agent, for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the rate of 4.00% per annum on the average daily amount of such Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Restatement Effective Date to but excluding the later of the date on which such Lender's Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum separately agreed upon between the Borrower and the applicable Issuing Bank (on the date hereof or any later date on which such Issuing Bank shall have become an Issuing Bank), on the average daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Restatement Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure attributable to Letters of Credit issued by such Issuing Bank, as well as such Issuing Bank's standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the Restatement Effective Date; provided that all such accrued fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand. Any other fees payable to the Issuing Banks pursuant to this paragraph shall be payable within 10 days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent. 50 (d) On each date on which (i) Revolving Commitments are terminated or reduced, (ii) Term Loans are repaid or prepaid (whether on a voluntary or mandatory basis), (iii) the Revolving Availability Period is extended or (iv) the Maturity Date is extended, the Borrower agrees to pay to the Administrative Agent for the account of each Lender holding a Revolving Commitment or Term Loan, as applicable, on such date a fee equal to 2.00% or, at any time on or after April 1, 2004, 1.00% of the amount of such Lender's Revolving Commitments or Term Loans subject to such termination, reduction, repayment, prepayment or extension. (e) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Banks, in case of fees payable to them) for distribution, in the case of commitment fees, to the Lenders. Fees paid shall not be refundable under any circumstances. SECTION 2.11. Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus (i) in the case of Tranche A Term Loans and Revolving Loans, 3.00% per annum and (ii) in the case of Tranche B Term Loans, (A) on any Improved Ratings Day, 3.25% per annum and (B) on any other day, 3.50% per annum. (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus (i) in the case of Tranche A Term Loans and Revolving Loans, 4.00% per annum and (ii) in the case of Tranche B Term Loans, (A) on any Improved Ratings Day, 4.25% per annum and (B) on any other day, 4.50% per annum. (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.00% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2.00% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section. (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Revolving Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion. 51 (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. SECTION 2.12. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing: (a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or (b) the Administrative Agent is advised by the Majority Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period; then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing. SECTION 2.13. Increased Costs. (a) If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or (ii) impose on any Lender or any Issuing Bank or the London interbank market any other condition (other than Taxes) affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or such Issuing Bank of participations in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder (whether of principal, interest or otherwise), in each case by an amount deemed by such Lender or Issuing Bank, as the case may be, to be material then the Borrower will pay to such Lender or such Issuing Bank such additional amount or amounts as will compensate such 52 Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered. (b) If any Lender or any Issuing Bank determines that any Change in Law regarding capital requirements has had or would have the effect of reducing the rate of return on such Lender's or such Issuing Bank's capital or on the capital of such Lender's or such Issuing Bank's holding company, if any, in each case by an amount deemed by such Lender or such Issuing Bank to be material, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender's or such Issuing Bank's holding company would have achieved but for such Change in Law (taking into consideration such Lender's or such Issuing Bank's policies and the policies of such Lender's or such Issuing Bank's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender's or such Issuing Bank's holding company for any such reduction suffered. (c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower. The Borrower shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof, unless such amount is being contested by the Borrower in good faith. (d) Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or such Issuing Bank's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or such Issuing Bank's intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. SECTION 2.14. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(c) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.17, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender 53 shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the Eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof, unless such amount is being contested by the Borrower in good faith. SECTION 2.15. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower or any other Credit Party hereunder or under any other Credit Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower or any other Credit Party shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions of such Taxes (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Issuing Bank or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made (and the Borrower shall pay or cause such Credit Party to pay such increased amount), (ii) the Borrower or such other Credit Party shall make such deductions and (iii) the Borrower or such other Credit Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. (c) The Borrower shall indemnify the Administrative Agent, each Issuing Bank and each Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Issuing Bank or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower or any other Credit Party hereunder or under any other Credit Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable out-of-pocket expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender, or the applicable Issuing Bank or by the Administrative Agent on its own behalf or on behalf of the applicable Issuing Bank or a Lender, shall be conclusive absent manifest error. 54 (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or any other Credit Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time such Foreign Lender first becomes a party to this Agreement and at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate; provided that such Foreign Lender has received written notice from the Borrower advising it of the availability of such exemption or reduction and supplying all applicable documentation. SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Setoffs. (a) Except as required or permitted under Section 2.03, 2.04, 2.13, 2.14, 2.15, 2.17 or 9.03, each Borrowing, each payment or prepayment of principal of any Borrowing or of any LC Disbursement, each payment of interest on the Loans or the LC Disbursements, each payment of fees (other than fees payable to the Issuing Banks), each reduction of the Commitments and each refinancing of any Borrowing with a Borrowing of any Type, shall be allocated pro rata among the Lenders in accordance with their respective Commitments (or, if such Commitments shall have expired or been terminated, in accordance with the respective principal amounts of their outstanding Loans). Each Lender agrees that in computing such Lender's portion of any Borrowing to be made hereunder, the Administrative Agent may, in its discretion, round each Lender's percentage of such Borrowing to the next higher or lower whole dollar amount. (b) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.13, 2.14 or 2.15 or otherwise) prior to 1:00 p.m., New York City time, on the date when due, in immediately available funds, without setoff, counterclaim or other deduction. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New York, New York, except payments to be made directly to an Issuing Bank as expressly provided herein and except that payments pursuant to Sections 2.13, 2.14, 2.15, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person in appropriate ratable shares to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a 55 Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars. (c) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties. Notwithstanding the foregoing provisions of this paragraph, the Administrative Agent shall not be required to distribute any Collateral or proceeds of Collateral in a manner inconsistent with the rights of the Tranche A Term Lenders and the Revolving Lenders on the one hand, and the Tranche B Term Lenders on the other hand, under Section 7.02. (d) If any Tranche A Term Lender or Revolving Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Tranche A Term Lender or Revolving Lender receiving payment of a greater proportion of the aggregate amount of its Loans, participations in LC Disbursements and accrued interest thereon than the proportion received by any other Tranche A Term Lender or Revolving Lender, then the Tranche A Term Lender or Revolving Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Tranche A Term Lenders or Revolving Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Tranche A Term Lender or Revolving Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements. If any Tranche B Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Tranche B Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Tranche B Lender, then the Tranche B Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Tranche B Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Tranche B Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans. If any participations are purchased pursuant to the preceding sentences and all or any portion of the payments giving rise thereto are recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest. The provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the 56 Borrower or any Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law and under this Agreement, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. (e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Banks, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Banks, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. (f) If any Lender shall fail to make any payment required to be made by it hereunder for the account of the Administrative Agent, any Issuing Bank or any Lender, then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender's obligations in respect of such payment until all such unsatisfied obligations are fully paid. SECTION 2.17. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.13 or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. (b) If any Lender requests compensation under Section 2.13, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require 57 such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee or the Borrower, as the case may be, and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.13 or payments required to be made pursuant to Section 2.15, such assignment will result in a reduction in such compensation or payments. ARTICLE III Representations and Warranties The Borrower represents and warrants to the Lenders that: SECTION 3.01. Organization; Powers. The Borrower and each of the other Credit Parties is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not be reasonably likely to result in a Material Adverse Change, is qualified to do business, and is in good standing, in every jurisdiction where such qualification is required. Each Subsidiary of the Borrower other than the Credit Parties is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and is qualified to do business, and is in good standing, in every jurisdiction where such qualification is required, except for failures that, individually or in the aggregate, would not be materially likely to result in a Material Adverse Change. SECTION 3.02. Authorization; Enforceability. The Transactions to be entered into by each Credit Party are within such Credit Party's powers and have been duly authorized. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Credit Document to which any Credit Party is to be a party, when executed and delivered by such Credit Party, will constitute, a legal, valid and binding obligation of the Borrower or such Credit Party, as the case may be, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. SECTION 3.03. Governmental Approvals; No Conflicts. Except to the extent that no Material Adverse Change would be materially likely to result, the Transactions (a) do not require any consent or approval of, registration or filing with, or 58 any other action by, any Governmental Authority, except such as are required to perfect Liens created under the Security Documents and such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of the Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of the Subsidiaries or any of their assets, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of the Subsidiaries, except Liens created under the Credit Documents. SECTION 3.04. Financial Statements; No Material Adverse Change. (a) The Borrower has heretofore furnished to the Lenders a draft in substantially final form of its consolidated balance sheet and statements of income, stockholders' equity and cash flows as of and for the fiscal year ended December 31, 2002. Such financial statements present fairly, in all material respects, the consolidated financial position and consolidated results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of such dates and for such fiscal year in accordance with GAAP. (b) Except as disclosed in the Disclosure Documents, since December 31, 2002, there has been no event or condition that constitutes or would be materially likely to result in a Material Adverse Change, it being agreed that a reduction in any rating relating to the Borrower issued by any rating agency shall not, in and of itself, be an event or condition that constitutes or would be materially likely to result in a Material Adverse Change (but that events or conditions underlying or resulting from any such reduction may constitute or be materially likely to result in a Material Adverse Change). SECTION 3.05. Litigation and Environmental Matters. (a) Except as set forth in the Disclosure Documents, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of the Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that if adversely determined would be materially likely, individually or in the aggregate, to result in a Material Adverse Change or (ii) that involve the Credit Documents or the Transactions. (b) Except as set forth in the Disclosure Documents, and except with respect to matters that, individually or in the aggregate, would not be materially likely to result in a Material Adverse Change, neither the Borrower nor any of the Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability. SECTION 3.06. Compliance with Laws and Agreements. Each of the Borrower and each of the Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure 59 to be in compliance, individually or in the aggregate, would not be materially likely to result in a Material Adverse Change. No Event of Default has occurred and is continuing. SECTION 3.07. Investment and Holding Company Status. Neither the Borrower nor any of the Subsidiaries is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended, or (b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended. SECTION 3.08. (a) ERISA and Canadian Pension Plans. Except as disclosed in the Disclosure Documents, no ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other ERISA Events that have occurred or are reasonably expected to occur, would be materially likely to result in a Material Adverse Change. (b) The Canadian Pension Plans are duly registered under the Income Tax Act (Canada) and all other applicable laws which require registration and no event has occurred which is reasonably likely to cause the loss of such registered status. All material obligations of each Credit Party (including fiduciary, funding, investment and administration obligations) required to be performed in connection with the Canadian Pension Plans and the funding agreements therefor have been performed in a timely fashion. To the knowledge of the Credit Parties there have been no improper withdrawals of the assets of the Canadian Pension Plans or the Canadian Benefit Plans. There are no outstanding material disputes concerning the assets of the Canadian Pension Plans or the Canadian Benefit Plans. Each of the Canadian Pension Plans is being funded in accordance with the actuarial valuation reports last filed with the applicable Governmental Authorities and which are consistent with generally accepted actuarial principles. SECTION 3.09. Disclosure. Neither the Information Memorandum nor the reports, financial statements, certificates or other written information referred to in Section 3.04 or delivered after the date hereof by or on behalf of any Credit Party to the Administrative Agent, the Collateral Agent or any Lender pursuant to Section 5.01 (taken together with all other information so furnished and as modified or supplemented by other information so furnished) contained or will contain, in each case as of the date delivered, any material misstatement of fact or omitted or will omit to state, in each case as of the date delivered, any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information or other forward looking information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. SECTION 3.10. Security Interests. (a) When executed and delivered, each of the Guarantee and Collateral Agreement and the Canadian Security Agreements will be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a valid and enforceable security interest in the ABL Facilities Collateral, to the 60 extent contemplated by the Guarantee and Collateral Agreement or the Canadian Security Agreements, as the case may be, and when financing statements in appropriate form are filed, and any other applicable registrations are made, in the offices specified in the Perfection Certificate, the Guarantee and Collateral Agreement and the Canadian Security Agreements will create a perfected security interest (or hypothec, as applicable) in all right, title and interest of the Grantors in the ABL Facilities Collateral to the extent perfection can be obtained by filing Uniform Commercial Code financing statements and making such other applicable filings and registrations in such jurisdictions, prior and superior to the rights of any other Person and subject to no other Lien other than Permitted Encumbrances. (b) Upon (i) the recordation of the Guarantee and Collateral Agreement or a memorandum of such Agreement with the United States Patent and Trademark Office and (ii) the recordation of the Canadian Security Agreements with the Canadian Intellectual Property Office, the Guarantee and Collateral Agreement and the Canadian Security Agreements, as the case may be, will create a perfected Lien on all right, title and interest of the Grantors in the Material Trademarks in which a security interest may be perfected by such recordation in the United States Patent and Trademark Office or the Canadian Intellectual Property Office, as the case may be, subject to Liens permitted under Section 6.02 (it being understood that subsequent recordings in the United States Patent and Trademark Office or the Canadian Intellectual Property Office, as the case may be, may be necessary to perfect a Lien on registered trademarks and trademark applications acquired by the Grantors after the Original Effective Date). As of the Original Effective Date, Schedule 3.10(b) sets forth all the Material Trademarks. (c) None of the Perfection Certificate or any other written information relating to the Collateral delivered after the date hereof by or on behalf of any Credit Party to the Administrative Agent, the Collateral Agent or any Lender pursuant to any provision of any Credit Document is or will be incorrect when delivered in any respect material to the rights or interests of the Lenders under the Credit Documents. SECTION 3.11. Use of Proceeds. The proceeds of the Loans will be used only for the purposes referred to in the preamble to this Agreement. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. ARTICLE IV Conditions SECTION 4.01. Each Credit Event. The obligation of each Lender to make a Loan on the occasion of any Borrowing (other than a conversion or continuation of an outstanding Borrowing) and of each Issuing Bank to issue, amend, renew or extend any Letter of Credit, shall be subject to the satisfaction of the following conditions: 61 (a) The representations and warranties of the Borrower set forth in this Agreement and in the other Credit Documents (insofar as they relate to the transactions provided for herein or to the Collateral securing the Obligations) shall be true and correct in all respects material to the rights or interests of the Lenders under the Credit Documents on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date. (b) After giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, the aggregate Revolving Credit Exposure shall not exceed the Borrowing Base Availability then in effect. (c) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing and no breach of the delivery requirements of Section 5.01(a) or (b) shall have occurred and be continuing. Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a), (b) and (c) of this Section. ARTICLE V Affirmative Covenants Until the Commitments shall have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that: SECTION 5.01. Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent and each Lender: (a) as soon as available and in any event within 110 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of income, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers or other independent public accountants of recognized national standing (without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries in accordance with GAAP consistently applied; and concurrently 62 with the filing of the Borrower's annual report on Form 10-K, an annual operating plan prepared by management of the Borrower in a manner consistent with past practice, which annual operating plan shall include, for the fiscal year in which it is delivered, (i) annual and quarterly projected income statements, annual and quarterly projected statements of cash flow, and a projected year-end balance sheet as of the last day of such fiscal year, in each case, for the Borrower and its Consolidated Subsidiaries, and (ii) quarterly projections of unit and dollar sales, EBIT and operating cash flow by business unit; (b) as soon as available and in any event within 60 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of income, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its Consolidated Subsidiaries in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; (c) not later than one Business Day after each delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) demonstrating compliance with Sections 6.08, 6.09, 6.10 and 6.11 at the end of the period to which such financial statements relate and for each applicable period then ended, (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the most recent audited financial statements delivered under clause (a) above (or, prior to the delivery of any such financial statements, since December 31, 2002) and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iv) specifying the exchange rate determined by the Borrower and used in its Annual Operating Plan for the then current fiscal year (which rate the Borrower agrees to determine reasonably); (d) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the United States Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; (e) at the time of each delivery of financial statements under clause (a) or (b) above, and at such other times as the Borrower may determine, a certificate of a Financial Officer identifying each Domestic Subsidiary formed or acquired after the Original Effective Date and not previously identified in a certificate delivered 63 pursuant to this paragraph, stating whether each such Domestic Subsidiary is a Consent Subsidiary and describing the factors that shall have led to the identification of any such Domestic Subsidiary as a Consent Subsidiary; (f) from time to time, all information and documentation required to be delivered under Section 4.04 of the Guarantee and Collateral Agreement; (g) at the time of each delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower certifying that the requirements of Section 5.08 have been satisfied in all material respects; and (h) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement or the other Credit Documents, or the perfection of the security interests created by the Security Documents, as the Administrative Agent or any Lender may reasonably request. Information required to be delivered pursuant to this Section 5.01 shall be deemed to have been delivered if such information, or one or more annual or quarterly reports containing such information, shall have been posted by the Administrative Agent on an IntraLinks or similar site to which the Lenders have been granted access or shall be available on the website of the Securities and Exchange Commission at http://www.sec.gov; provided that the Borrower shall deliver paper copies of such information to any Lender that requests such delivery. Information required to be delivered pursuant to this Section 5.01 may also be delivered by electronic communications pursuant to procedures approved by the Administrative Agent. SECTION 5.02. Notices of Defaults. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the occurrence of any Default, together with a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business, except to the extent that failures to keep in effect such rights, licenses, permits, privileges and franchises would not be materially likely, individually or in the aggregate for all such failures, to result in a Material Adverse Change; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.04. SECTION 5.04. Maintenance of Properties. The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all its property in good working order and condition, ordinary wear and tear excepted, except to the extent any failure to 64 do so would not, individually or in the aggregate, be materially likely to result in a Material Adverse Change (it being understood that the foregoing shall not prohibit any sale of any assets permitted by Section 6.06). SECTION 5.05. Books and Records; Inspection and Audit Rights; Access Rights. (a) The Borrower will, and will cause each of the Subsidiaries to, keep books of record and account sufficient to enable the Borrower to prepare the financial statements and other information required to be delivered under Section 5.01. The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent (or by any Lender acting through the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties (accompanied by a representative of the Borrower) and to discuss its affairs, finances and condition with its officers, all at such reasonable times and as often as reasonably requested. (b) The Borrower will, and will cause each of the other Grantors to, permit any representatives designated by the Administrative Agent (including any consultants, accountants, lawyers and appraisers retained by the Administrative Agent) (or by any Lender acting through the Administrative Agent) to conduct quarterly evaluations and semiannual appraisals of the Borrower's computation of the Borrowing Base and the assets included in the Borrowing Base (and information relating to Customer Capital Expenditures) and such other assets and properties of the Borrower or the Subsidiaries as the Administrative Agent or Majority Lenders may reasonably require, all at reasonable times and upon advance notice to the Borrower and, if reasonably requested at any time when Borrowing Base Availability shall be less than $100,000,000, more often than quarterly, in the case of evaluations, or semiannually, in the case of appraisals. The Borrower shall pay the reasonable fees (including reasonable and customary internally allocated fees and expenses of employees of the Administrative Agent as to which invoices have been furnished) and expenses of any third party representatives retained by the Administrative Agent as to which invoices have been furnished to conduct any such evaluation or appraisal, including the reasonable fees and expenses associated with collateral monitoring services performed by the Collateral Agent Services Group of the Administrative Agent to the extent not otherwise agreed in writing by the Borrower and the Administrative Agent. To the extent required by the Administrative Agent or the Majority Lenders in their discretion (not to be exercised unreasonably) as a result of any such evaluation, appraisal or monitoring, the Borrower also agrees to modify or adjust the computation of the Borrowing Base (which may include maintaining additional reserves or modifying the eligibility criteria for the components of the Borrowing Base, but not modifying the specifically enumerated advance rates specified in the definition of the "Borrowing Base"). Any such modification or adjustment required by the Administrative Agent or the Majority Lenders shall be made by written notice to the Borrower setting forth in reasonable detail the basis for such modification or adjustment, and shall become effective for purposes of the first Borrowing Base Certificate that is delivered pursuant to Section 5.09 at least five Business Days after the date of receipt by the Borrower of such written notice. (c) In the event that historical accounting practices, systems or reserves relating to the components of the Borrowing Base are modified in a manner that is 65 adverse to the Lenders in any material respect, the Borrower will agree to maintain such additional reserves (for purposes of computing the Borrowing Base) in respect of the components of the Borrowing Base and make such other adjustments to its parameters for including the components of the Borrowing Base as the Administrative Agent or the Majority Lenders in their discretion (not to be exercised unreasonably) shall reasonably require based upon such modifications. SECTION 5.06. Compliance with Laws. The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, including Environmental Laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not be materially likely to result in a Material Adverse Change. SECTION 5.07. Insurance. The Borrower will, and will cause each of the Subsidiaries to, maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customary among companies of established reputation engaged in the same or similar businesses and operating in the same or similar locations, except to the extent the failure to do so would not be materially likely to result in a Material Adverse Change. The Borrower will furnish to the Administrative Agent or any Lender, upon request, information in reasonable detail as to the insurance so maintained. SECTION 5.08. Guarantees and Collateral. (a) In the event that there shall at any time exist any North American Subsidiary (other than an Excluded Subsidiary or Consent Subsidiary) that shall not be a party to the Guarantee and Collateral Agreement or the Canadian Security Agreements, as the case may be, the Borrower will promptly notify the Collateral Agent (including in such notice the information that would have been required to be set forth with respect to such Subsidiary in the Perfection Certificate if such Subsidiary had been one of the Grantors listed therein) and will, within 30 days (or such longer period as may be reasonable under the circumstances) after such notification, deliver to the Collateral Agent a supplement to the Guarantee and Collateral Agreement or the Canadian Security Agreements, as the case may be, in substantially the form specified therein, duly executed and delivered on behalf of such North American Subsidiary, pursuant to which such North American Subsidiary will become a party to and a Subsidiary Guarantor and, if it elects to become an ABL Facilities Grantor or if its consolidated assets are greater than $10,000,000 as of December 31, 2002, or if later, as of the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b), an ABL Facilities Grantor, in each case as defined in the Guarantee and Collateral Agreement. (b) In the event that the Borrower or any other Grantor shall at any time own any Material Trademarks (other than Material Trademarks as to which the actions required by this paragraph have already been taken), the Borrower will promptly notify the Collateral Agent and will file all Uniform Commercial Code financing statements or other applicable personal property security law filings and recordations with the Patent and Trademark Office or the Canadian Intellectual Property Office as shall be required by law or reasonably requested by the Collateral Agent to be filed or recorded to perfect the 66 Liens intended to be created on the ABL Facilities Collateral (to the extent such Liens may be perfected by filings under the Uniform Commercial Code or other personal property security legislation as in effect in any applicable jurisdiction or by filings with the United States Patent and Trademark Office or the Canadian Intellectual Property Office); provided, that if the consents of Persons other than the Borrower and the Wholly Owned Subsidiaries would be required under applicable law or the terms of any agreement in order for a security interest to be created in any Material Trademark under the Guarantee and Collateral Agreement or the Canadian Security Agreements, as the case may be, a security interest shall not be required to be created in such Material Trademark prior to the obtaining of such consents. The Borrower will endeavor in good faith to obtain any consents required to permit any security interest in Material Trademarks to be created under the Guarantee and Collateral Agreement or the Canadian Security Agreements, as the case may be. (c) The Borrower will, and will cause each Subsidiary to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions, as may be reasonably requested by the Collateral Agent in order to cause the security interests purported to be created by the Security Documents or required to be created under the terms of this Agreement to constitute valid security interests, perfected in accordance with this Agreement. (d) During the period of 45 days after the Original Effective Date, the Borrower will endeavor in good faith to obtain any consents of third parties required in order for each North American Subsidiary listed on Part II of Schedule 1.01A to execute the Guarantee and Collateral Agreement as an ABL Guarantor and, if its consolidated assets are greater than $10,000,000 as of December 31, 2002, or if later, as of the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b), an ABL Facilities Grantor and perform its obligations thereunder and shall advise the Collateral Agent in writing whether such consents have been obtained, and if such consents have been obtained, will cause such North American Subsidiary to execute the Guarantee and Collateral Agreement as provided in paragraph (a) above. (e) The Borrower will, as soon as reasonably practicable after the Restatement Effective Date, cause the Obligations to be secured by (i) Mortgages (which shall be junior in priority to the Mortgages securing the US Term Facility Obligations, the US Revolving Facility Obligations and the US Miscellaneous Obligations, as such terms are defined in the Guarantee and Collateral Agreement) on all the Mortgaged Properties, with the aggregate amount of the Indebtedness under this Agreement, the US Term Facility Agreement and the US Revolving Facility Agreement that is secured by such Mortgaged Properties being limited to the extent required in order that the Indebtedness under the Indentures will not be required to be ratably secured, and (ii) perfected pledges (which shall be junior in priority to the pledges securing the US Term Facility Obligations, the US Revolving Facility Obligations and the US Miscellaneous Obligations) of all Equity Interests in Foreign Subsidiaries that are subject to the US Facilities Foreign Pledge Agreements (as defined in the Guarantee and Collateral Agreement) or that are pledged under the Luxembourg Finance Pledge Agreement (as 67 defined in the Guarantee and Collateral Agreement) to secure the US Term Facility Obligations, the US Revolving Facility Obligations and the US Miscellaneous Obligations. To the extent the Collateral Agent and the Borrower so determine, the requirements of this paragraph may be satisfied by the amendment of existing mortgages and pledge agreements to create the Liens required to be created hereunder. SECTION 5.09. Borrowing Base Certificate. (a) The Borrower will furnish to the Administrative Agent, no later than (a) 15 days following the end of each fiscal month (or, if such day is not a Business Day, the next succeeding Business Day), a completed Borrowing Base Certificate showing the Borrowing Base as of the close of business on the last day of such immediately preceding fiscal month as outlined in Exhibit E, (b) the third Business Day of each week (or less frequently if agreed to by the Administrative Agent in its sole discretion), an interim calculation of Eligible Accounts Receivable as of Saturday of the immediately preceding week and (c) if requested by the Administrative Agent, at any other time when the Administrative Agent reasonably believes that the then existing Borrowing Base Certificate is materially inaccurate, as soon as reasonably practicable but in no event later than five Business Days after such request, a completed Borrowing Base Certificate showing the Borrowing Base as of the date so requested, in each case with such supporting documentation and additional reports with respect to the Borrowing Base as the Administrative Agent may reasonably request. (b) The Borrower will furnish to the Administrative Agent at the time of each delivery of the Borrowing Base Certificate under clause (a) above (and in any event not later than 15 days following the end of each fiscal month (or, if such day is not a Business Day, the next succeeding Business day)), a certificate of a Financial Officer in the form attached as Annex [ ] to Exhibit E hereto specifying, to the best of such Financial Officer's knowledge, as of the date of the information reported in such Borrowing Base Certificate (i) the aggregate cash and cash equivalents of the Borrower and its Subsidiaries held in the United States, (ii) the aggregate cash and cash equivalents of the Borrower and its Subsidiaries held other than in the United States, (iii) for each of this Agreement, the US Revolving Facility Agreement and the European Facilities Agreement, the undrawn amount available to be drawn hereunder and thereunder, respectively, (iv) the aggregate accounts payable position of the Borrower and the Domestic Subsidiaries and (v) the unearned income on the Borrower's balance sheet that represents funded Customer Capital Expenditures relating to future production. ARTICLE VI Negative Covenants Until the Commitments shall have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that: 68 SECTION 6.01. Indebtedness and Preferred Equity Interests. The Borrower will not, and will not permit any Consolidated Subsidiary to, create, incur, assume or permit to exist any Indebtedness, or issue any preferred stock or other preferred Equity Interests, except: (a) Indebtedness under this Agreement (and related Indebtedness under the Security Documents); (b) Indebtedness under the other New Facilities Credit Agreements (and related Indebtedness under the Security Documents) in an amount for each New Facilities Credit Agreement not greater than the aggregate amount of the outstanding loans and unfunded commitments of the lenders thereunder on the Original Effective Date; provided, that the amount of Indebtedness permitted by this paragraph or any other paragraph of this Section to exist under the US Term Facility Agreement and the US Revolving Facility Agreement shall be reduced (i) in the case of the US Term Facility Agreement, by the aggregate amount of all prepayments of the loans outstanding thereunder and (ii) in the case of the US Revolving Facility Agreement, by the aggregate amount of all permanent reductions of the commitments thereunder (it being agreed, however, that up to $250,000,000 of Indebtedness under the US Revolving Facility Agreement in the form of cash-collateralized letters of credit will in any event be permitted); (c) other Indebtedness existing (or incurred pursuant to commitments to lend existing) on March 31, 2003, substantially all of which is set forth or described in Schedule 6.01 (as such Schedule 6.01 shall be modified in connection with the delivery of financial statements in respect of the fiscal period ended on March 31, 2003); (d) Indebtedness owed to the Borrower or any Subsidiary and permitted under Section 6.05(b); (e) Guarantees expressly permitted under Section 6.05; (f) Indebtedness of Foreign Subsidiaries (other than the European JV and its subsidiaries and Luxembourg Finance (it being understood that Indebtedness of Goodyear S.A., organized under the laws of Luxembourg, existing on the date hereof shall be counted against the limitation set forth in this Section 6.01(f) from and after the date on which it becomes secured)) in an aggregate principal amount (excluding Indebtedness existing or incurred under the other clauses of this Section 6.01 and under Section 6.05(b)) not greater than $200,000,000 outstanding at any time; (g) Securitization Transactions (other than those permitted by paragraphs (f), (j), (l), (r) and (u) of this Section) in an aggregate amount not greater than (euro)275,000,000 outstanding at any time; (h) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including 69 Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof; provided that such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement; (i) Attributable Debt of the Borrower or any Subsidiary incurred pursuant to Sale and Leaseback Transactions permitted by Section 6.03; (j) Indebtedness of any Person that becomes a Subsidiary after the date hereof as a result of a transaction expressly permitted under Section 6.05(e); provided that such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary; (k) obligations of the Borrower and the Subsidiaries existing on the date hereof (other than Guarantees, Securitization Transactions and Sale and Leaseback Transactions) that would not constitute Indebtedness that would appear as liabilities on a consolidated balance sheet of the Borrower under GAAP as in effect on the date hereof and that, as a result of changes in GAAP after the date hereof, shall be required to be reflected on such a balance sheet as liabilities; (l) Indebtedness of any Subsidiary that is not a Consolidated Subsidiary under GAAP as in effect on the date hereof (and in the event that any such Subsidiary shall become a Consolidated Subsidiary, Indebtedness of such Subsidiary existing at the time it becomes a Consolidated Subsidiary); (m) any extension, renewal, refinancing or replacement of any Indebtedness referred to in any of clauses (a) through (l) above that does not increase the outstanding principal amount thereof (except to the extent necessary to pay the fees, expenses, underwriting discounts and prepayment premiums in connection therewith) or change the parties directly or indirectly responsible for the payment of such Indebtedness; provided that (i) any such refinancing or replacement Indebtedness shall not shorten the maturity of the Indebtedness refinanced or replaced or add a requirement not previously applicable to the Indebtedness refinanced or replaced that such Indebtedness be prepaid, redeemed, repurchased or defeased on one or more scheduled dates or upon the happening of one or more events (other than events of default or change of control events) before the maturity of the Indebtedness refinanced or replaced and (ii) any such refinancing or replacement of Indebtedness under any revolving credit or similar facility shall be accompanied by the termination of the portion of the commitments under such facility under which such refinanced or replaced Indebtedness shall have been outstanding; (n) Indebtedness arising from the honoring of a check, draft or similar instrument presented by the Borrower or a Subsidiary against insufficient funds; 70 (o) Indebtedness pursuant to any Swap Agreement entered into to hedge against risks to which the businesses of the Borrower and the Subsidiaries are exposed, and not for speculative purposes; (p) unsecured surety and performance bonds entered into in the ordinary course of business and not securing Indebtedness; (q) other unsecured Indebtedness for borrowed money of the Borrower, or preferred Equity Interests of the Borrower ("Permitted Preferred Stock"), or any combination thereof, not maturing or required to be prepaid, redeemed, repurchased or defeased prior to the Maturity Date, whether on one or more scheduled dates or upon the happening of one or more events (other than events of default (or similar events relating to Equity Interests) or change of control events), and any Guarantee of such Indebtedness provided by any Subsidiary that is a US Guarantor under the Guarantee and Collateral Agreement that is subordinated to the Obligations on terms in no material respect less favorable to the Lenders than market terms prevailing at the time such Guarantee is issued; provided that the aggregate principal or stated amount of such Indebtedness (or of the Indebtedness it Guarantees) or preferred Equity Interests created or assumed pursuant to this clause (q) and outstanding at any time, without duplication, shall not exceed $1,000,000,000; provided further, that for purposes of this paragraph, any trust preferred stock or similar preferred Equity Interest issued by a special purpose entity substantially all the assets of which consist of Indebtedness or preferred Equity Interests of the Borrower will be deemed to be a preferred Equity Interest of the Borrower; (r) a Securitization Transaction in an aggregate amount not greater than $15,000,000 outstanding at any time involving accounts receivable, rights to future lease payments or residuals or other financial assets, and related property of Goodyear Australia Pty Limited; (s) Senior Subordinated-Lien Indebtedness for borrowed money of the Borrower not maturing or required to be prepaid, redeemed, repurchased or defeased prior to the Maturity Date, whether on one or more scheduled dates or upon the happening of one or more events (other than as a result of events of default or change of control events or pursuant to customary provisions requiring that the Borrower offer to purchase such Senior Subordinated-Lien Indebtedness with the proceeds of asset sales to the extent such proceeds have not been invested in assets used in the Borrower's business or used to prepay, redeem or purchase other Indebtedness (including Loans hereunder and Loans under and as defined in the US Term Facility Agreement) or to provide cash collateral for reimbursement obligations in respect of letters of credit (including the Letters of Credit under and as defined in the US Revolving Facility Agreement)) (it being agreed that provisions comparable to those set forth in Exhibit H hereto are customary), and related Guarantees by the Subsidiary Guarantors; provided that (i) the Borrower shall substantially concurrently make any prepayments, deposits of cash collateral to secure reimbursement obligations in respect of Letters of Credit (as defined in 71 the US Revolving Facility Agreement) and reductions of Regular Way Commitments and Commitments (as defined in the US Revolving Facility Agreement) required in connection with the issuance of such Senior Subordinated-Lien Indebtedness under the US Term Facility Agreement and the US Revolving Facility Agreement, (ii) the Senior Subordinated-Lien Collateral Agent for such Senior Subordinated-Lien Indebtedness shall have executed and delivered to the Administrative Agent, on its own behalf and on behalf of the obligees on such Senior Subordinated-Lien Indebtedness, the Lien Subordination and Intercreditor Agreement, and (iii) after no Loans or Regular Way Commitments are outstanding under the US Term Facility Agreement and or the US Revolving Facility Agreement, the portion of the Net Cash Proceeds of such Senior Subordinated-Lien Indebtedness in excess of required prepayments under the US Term Facility Agreement and Commitment reductions and Regular Way Commitment reductions under the US Revolving Facility Agreement shall, except to the extent a like amount of Net Cash Proceeds of Senior Subordinated-Lien Indebtedness shall have been so applied prior to the time at which all amounts outstanding under the US Term Facility Agreement and the US Revolving Facility Agreement shall have been prepaid and the Regular Way Commitments under the US Revolving Facility Agreement shall have been reduced to zero, be applied, within 180 days after the receipt by the Borrower of such Net Cash Proceeds, solely (A) to prepay Loans under and as defined in the New Facilities Credit Agreements (it being agreed that at the time of any such prepayment of revolving loans the related commitments will be reduced by the amount of such prepayment), (B) to repurchase, repay or prepay Designated Debt or (C) to make reasonably anticipated required contributions to Plans of the Borrower and the Subsidiaries; (t) Securitization Transactions of Foreign Subsidiaries (other than those permitted by paragraphs (f), (g), (j), (l) and (r) of this Section) in an aggregate amount not greater than $15,000,000 outstanding at any time; and (u) other Indebtedness in an aggregate amount at any time outstanding not to exceed $25,000,000. SECTION 6.02. Liens. The Borrower will not, and will not permit any Consolidated Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof (other than sales of delinquent or doubtful receivables and other than any transaction excluded from the definition of "Securitization Transaction" under the proviso thereto), except: (a) Liens created under the New Facilities Documents; (b) Permitted Encumbrances; (c) any Lien on any property or asset of the Borrower or any Subsidiary existing on the Original Effective Date and set forth in Schedule 6.02; provided 72 that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secured on the Original Effective Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; (d) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien secures Indebtedness permitted by clause (h) or (j) of Section 6.01, (ii) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (iii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary, and (iv) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; (e) Liens on assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (h) or (j) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such assets and (iv) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary; (f) Liens on assets of Foreign Subsidiaries (other than the European JV and its subsidiaries and Luxembourg Finance) securing Indebtedness incurred under Section 6.01(f), and (ii) in connection with Securitization Transactions permitted under Section 6.01(f) or (s); (g) Liens in connection with Securitization Transactions permitted under Section 6.01(g) and (r); (h) Liens in connection with Sale and Leaseback Transactions permitted by Section 6.03; (i) Liens on specific items of inventory or other goods (and proceeds thereof) securing obligations in respect of bankers' acceptances issued for the account of the Borrower or a Subsidiary to facilitate the purchase, shipment or storage of such items of inventory or other goods; (j) Liens on specific items of inventory or other goods and related documentation (and proceeds thereof) securing reimbursement obligations in respect of trade letters of credit issued to ensure payment of the purchase price for such items of inventory or other goods; 73 (k) any interest of a lessor in property subject to an operating lease; (l) Liens referred to in policies of title insurance with respect to Mortgaged Property delivered to the Administrative Agent prior to the Original Effective Date; (m) Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on the Borrower's headquarters building in Akron, Ohio, created under any Senior Subordinated-Lien Security Documents to secure any Senior Subordinated-Lien Indebtedness incurred under Section 6.01(s); provided, that such Liens shall be subordinate and junior to the Liens securing the Obligations on the terms set forth in the Lien Subordination and Intercreditor Agreement; (n) Liens on assets constituting US Facilities Pledged Collateral and US Facilities Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement), and on the Borrower's headquarters building in Akron, Ohio, securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the US Term Facility Agreement or the US Revolving Facility Agreement, but only if (i) all Indebtedness under both the US Term Facility Agreement and the US Revolving Facility Agreement shall have been repaid in full and the Commitments under and as defined in the US Revolving Facility Agreement shall have been terminated not later than the time at which such Liens are incurred and (ii) such Liens secure Indebtedness in an amount not greater than the amount of the Indebtedness under the US Term Facility Agreement and/or the US Revolving Facility Agreement repaid with the proceeds of such Indebtedness; (o) Liens on assets constituting European Facilities Collateral and Luxembourg Finance Pledged Collateral (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement) securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the European Facilities Agreement, but only if all Indebtedness under the European Facilities Agreement shall have been repaid in full and the Commitments under and as defined in the European Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred; (p) at the time of and after the initial incurrence, issuance or sale of Senior Subordinated-Lien Indebtedness, Liens on assets constituting ABL Facilities Collateral, US Facilities Pledged Collateral, Luxembourg Finance Pledged Collateral and US Facilities 74 Article 9 Collateral (other than any such US Facilities Article 9 Collateral constituting Indenture Properties or "manufacturing facilities", as defined in the Swiss Franc Note Agreement) (each such term not defined in this Agreement having the meaning assigned to it in the Guarantee and Collateral Agreement), and on the Borrower's headquarters building in Akron, Ohio, to secure the Guarantees by the Borrower and the Subsidiary Guarantors of the Obligations under and as defined in the European Facilities Agreement (or of Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the European Facilities Agreement, but only if all Indebtedness under the European Facilities Agreement shall have been repaid in full and the Commitments under and as defined in the European Facilities Agreement shall have been terminated not later than the time at which such Liens are incurred); provided that such Liens shall be pari passu with the Liens securing Senior Subordinated-Lien Indebtedness and subordinate to the other Liens on such Collateral created by the Guarantee and Collateral Agreement; and (q) other Liens on assets not constituting Collateral; provided that the aggregate amount of the Indebtedness and other obligations secured by such Liens shall at no time exceed $25,000,000. SECTION 6.03. Sale and Leaseback Transactions. The Borrower will not, and will not permit any of the Consolidated Subsidiaries to, enter into or be party to any Sale and Leaseback Transaction other than (a) Sale and Leaseback Transactions existing on the date hereof and any replacement Sale and Leaseback Transactions that do not involve assets other than those subject to the Sale and Leaseback Transactions they replace and do not increase the Attributable Debt related thereto and (b) other Sale and Leaseback Transactions the aggregate outstanding Attributable Debt in respect of which does not exceed $125,000,000. SECTION 6.04. Fundamental Changes. The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) assets (including capital stock of Subsidiaries) constituting all or substantially all the assets of the Borrower and its Consolidated Subsidiaries, taken as a whole, or, in the case of the Borrower, liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Subsidiary may merge into any other Subsidiary in a transaction in which the surviving entity is a Subsidiary; except that no Domestic Subsidiary may merge into a Foreign Subsidiary, (iii) any sale of a Subsidiary made in accordance with Section 6.06 may be effected by a merger of such Subsidiary and (iv) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Borrower or to another Subsidiary; provided that any Investment that takes the form of a merger or consolidation (other than any merger or consolidation involving the Borrower) that is expressly permitted by Section 6.05 shall be permitted under this Section 6.04. 75 SECTION 6.05. Investments, Loans, Advances and Guarantees. The Borrower will not, and will not permit any of the Consolidated Subsidiaries to, purchase or acquire (including pursuant to any merger with any Person that was not a Wholly Owned Subsidiary prior to such merger) any capital stock, evidences of Indebtedness or securities (including any option, warrant or other right to acquire any of the foregoing) of, make any loans or advances to, make any Guarantee of any obligations of, or make any investment in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (each of the foregoing, an "Investment" in such Person), except: (a) Permitted Investments; (b) Investments by the Borrower and the Subsidiaries in Subsidiaries or the Borrower; provided that no Investment shall made by any Credit Party in a Subsidiary that is not a Credit Party pursuant to this clause (b) except (i) Investments (A) to fund working capital needs of such Subsidiary, (B) to replace amounts available under credit facilities or other financings of such Subsidiary existing on the date hereof that shall have matured or shall have been terminated or reduced, (C) to cover losses from operations of such Subsidiary and (D) to provide funds for Capital Expenditures or acquisitions permitted to be made by such Subsidiary; provided further, that Equity Interests in the European JV or any subsidiary thereof may not be transferred to any Subsidiary that is not the European JV or any subsidiary thereof; (c) any Investment by a Credit Party in a Consolidated Subsidiary that is not a Credit Party in the form of a transfer of assets used in or directly relating to any manufacturing process (but excluding any cash or financial asset) from a jurisdiction having higher manufacturing costs to a jurisdiction having lower manufacturing costs; provided that the aggregate book value of all assets subject to all such transfers from and after the Original Effective Date shall not exceed $250,000,000; and any Investment by Goodyear Dunlop Tires NA in a Consolidated Subsidiary; (d) Guarantees expressly permitted under Section 6.01; (e) on or after June 30, 2003, the acquisition of any Equity Interest; provided that the aggregate consideration paid by the Borrower and the Subsidiaries in all such acquisitions (including Indebtedness assumed by the Borrower or any Subsidiary) shall not exceed $100,000,000 plus the aggregate Net Cash Proceeds from Prepayment Events or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness after the date hereof that (i) shall not have been required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under any of the New Facilities Credit Agreements, and (ii) shall not have been used (and shall not be required to be used) (A) to make Capital Expenditures that would otherwise have been prohibited by Section 6.08 or (B) to repurchase, repay or prepay Designated Debt; 76 (f) Guarantees not permitted by any other clause of this Section 6.05 incurred in the ordinary course of business and consistent with past practice in an aggregate amount for all such Guarantees at any time outstanding not exceeding $50,000,000; (g) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; (h) Investments for consideration consisting solely of common stock of the Borrower; (i) Equity Interests and debt obligations obtained by the Borrower or any Subsidiary as consideration for any asset sale permitted under Section 6.06; (j) Investments in Persons in which the Borrower or any Subsidiary has an Equity Interest on the date hereof, including Wingfoot Commercial Tire Systems LLC, SAVA Tires Joint Venture Holding d.o.o. and South Pacific Tyres that are (i) required to be made as a result of the exercise by other holders of Equity Interests in such joint ventures of put options or (ii) required to avoid dilution of the Borrower's or such Subsidiary's percentage ownership interest therein and in an aggregate amount not greater than $200,000,000 during the term of this Agreement; (k) Investments that are included in Capital Expenditures for the respective periods during which such Investments are made and that are permitted under Section 6.08; (l) the purchase of Equity Interests in Sava Joint Venture Holding d.o.o.; (m) loans and advances to officers and employees of the Borrower and its Subsidiaries in the ordinary course of business; (n) Investments in prepaid expenses in the ordinary course of business or in respect of required pension fund contributions; (o) negotiable instruments held for collection and lease, utility, workers' compensation, performance and other similar deposits in the ordinary course of business; (p) Investments in any Subsidiary that engages in no activities other than those related to a Securitization Transaction in order to capitalize such Subsidiary at a level customary for a securitization vehicle in such a transaction; (q) Investments constituting loans or advances by the European JV or any J.V. Subsidiary (as defined in the European Facilities Agreement) to the Borrower or any of its Subsidiaries (other than the European JV, its Subsidiaries and Luxembourg Finance) as part of cash management consistent with past practices 77 in an aggregate amount for all such Investments at any time outstanding not exceeding $75,000,000, other than Investments the proceeds of which are used (i) to repay loans under the US Term Facility Agreement or (ii) if there are no outstanding loans under the US Term Facility Agreement, to reduce commitments under the US Revolving Facility in an amount equal to such Investments; (r) Investments of the proceeds of any Securitization Transaction under Section 6.01(r) in South Pacific Tyres; and (s) Investments not permitted by any other clause of this Section in an aggregate amount at any time outstanding not greater than $25,000,000. SECTION 6.06. Asset Dispositions. The Borrower will not, and will not permit any of the Consolidated Subsidiaries to, sell, transfer, lease or otherwise dispose of (each a "Sale") any asset, including any Equity Interest, owned by it, nor will the Borrower permit any of the Subsidiaries to issue any additional Equity Interest in such Subsidiary, except: (a) Sales in the ordinary course of business of inventory and worn out or surplus equipment and Permitted Investments, and Sales in the ordinary course of business and consistent with past practices of assets other than property, plant, Investments in Subsidiaries and Intellectual Property; provided that licensing of Intellectual Property in the ordinary course of business and consistent with past practices shall be permitted; (b) Sales to the Borrower or a Subsidiary; provided that any such sale, transfer or disposition by a Credit Party to a Subsidiary that is not a Credit Party shall be made in compliance with Section 6.05; (c) the Sale of Equity Interests in Sava Joint Venture Holding d.o.o. to the European JV or any Subsidiary thereof (and any sale of such Equity Interests to the Borrower in connection therewith); (d) Sales of accounts receivable or interests therein in Securitization Transactions permitted under Sections 6.01(g) and (r); (e) Sales of assets in Sale and Leaseback Transactions permitted under Section 6.03; (f) Sales of any Equity Interests in any Person that is not a Subsidiary; (g) Sales to Persons other than the Borrower or any Subsidiary of assets listed on Schedule 6.06; provided that (i) at least 50% of the consideration received in each such Sale of the assets listed on Part I of Schedule 6.06 shall consist of cash and (ii) at least 75% of the consideration received in each other such Sale listed on Part II of Schedule 6.06 shall consist of cash; 78 (h) Sales to the extent the aggregate value of the consideration received in any such Sale or series of related Sales does not exceed $10,000,000; (i) Investments expressly permitted by Section 6.05; and (j) Sales (other than Sales of accounts receivable or inventory) that are not permitted by any other clause of this Section 6.06; provided that (i) the aggregate consideration received in respect of all such Sales in reliance upon this clause (j) shall not exceed $300,000,000 in the aggregate, (ii) all Sales permitted pursuant to this clause (j) shall be made for fair value, as reasonably determined by the Borrower, and (iii) at least 75% of the consideration received in each such Sale shall consist of cash. SECTION 6.07. Restricted Payments. (a) The Borrower will not, and will not permit any of the Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that (i) the Borrower may declare and pay dividends payable solely in additional shares of its common stock, (ii) so long as no Event of Default shall exist, the Borrower may declare and pay cash dividends and other regularly scheduled distributions on shares of its Permitted Preferred Stock, (iii) Subsidiaries may make Restricted Payments ratably with respect to any class of their respective Equity Interests, (iv) the Borrower may make Restricted Payments pursuant to and in accordance with stock option or rights plans or other benefit plans for management, employees, directors or consultants of the Borrower or any Subsidiary and (v) the Borrower and its Subsidiaries may make Investments expressly permitted under Section 6.05(j). (b) The Borrower will not, nor will it permit any of the Subsidiaries to, make or agree to make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property), except payments or distributions made in common stock of the Borrower, to any Person other than the Borrower or a Subsidiary in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancelation or termination of any Indebtedness of the Borrower or any Subsidiary, except: (i) payments and prepayments under this Agreement (ratably in accordance with the Commitments of the Lenders) and the other New Facilities Credit Agreements; (ii) regularly scheduled and other mandatory interest and principal payments (including pursuant to sinking fund requirements) as and when due in respect of any Indebtedness; (iii) refinancings of Indebtedness to the extent permitted by Section 6.01(m), including the payment of customary fees, costs and expenses in connection therewith, and including additional cash payments in an aggregate 79 amount for all such refinancings not to exceed, in the case of any refinancing, 5% of the principal amount being refinanced; (iv) the payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; (v) if the Loans under and as defined in the US Term Facility Agreement shall have been repaid in full and no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds from the issuance and sale of Senior Subordinated-Lien Indebtedness not required to be applied to reduce commitments, prepay loans and/or cash collateralize reimbursement obligations in respect of letters of credit under the US Revolving Facility Agreement or the US Term Facility Agreement, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.08 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e); and (vi) if no Event of Default shall exist, repurchases, repayments or prepayments of Designated Debt in an aggregate amount not greater than the portion of the aggregate Net Cash Proceeds of securities issued and sold pursuant to Section 6.01(q) not required to be applied to prepay loans under the US Term Facility Agreement, but only to the extent that such portion of such Net Cash Proceeds shall not have been used (A) to make Capital Expenditures that would have been prohibited by Section 6.08 but for the receipt of such Net Cash Proceeds or (B) to acquire Equity Interests pursuant to Section 6.05(e). SECTION 6.08. Capital Expenditures. The Borrower and the Subsidiaries will not make Capital Expenditures in any period set forth below in an amount greater than (a) the sum of (i) the amount set forth below for such period and each prior period plus (ii) that portion of the aggregate Net Cash Proceeds from Prepayment Events or incurrences, issuances or sales of Senior Subordinated-Lien Indebtedness after the date hereof that shall not have been required to be applied to prepay loans or cash collateralize letters of credit under any of the New Facilities Credit Agreements (and shall not have been used (A) to make Investments under Section 6.05(e) in excess of the $100,000,000 limitation set forth therein or (B) to repurchase, repay or prepay Designated Debt) minus (b) the aggregate amount of Capital Expenditures made during any prior period set forth below:
Period Capital Expenditure Amount ------ -------------------------- 1/1/03 through 12/31/03 $360,000,000 1/1/04 through 12/31/04 $500,000,000 1/1/05 through 12/31/05 $500,000,000 1/1/06 through 3/31/06 $150,000,000
80 SECTION 6.09. Interest Expense Coverage Ratio. The Borrower will not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Expense for any period of four consecutive fiscal quarters to be less than 2.25 to 1.00 or, at any time after the Borrower shall have received gross cash proceeds of at least $500,000,000 from issuances and sales after the First Amendment Date of Senior Subordinated-Lien Indebtedness, 2.00 to 1.00. SECTION 6.10. Consolidated Net Worth. The Borrower will not permit Consolidated Net Worth at the end of any fiscal quarter to be less than the amount set forth below for such date.
Fiscal Quarter Ending Minimum Amount - --------------------- -------------- March 31, 2003 2,800,000,000 June 30, 2003 2,800,000,000 September 30, 2003 2,800,000,000 December 31, 2003 2,800,000,000 March 31, 2004 2,500,000,000 June 30, 2004 2,500,000,000 September 30, 2004 2,500,000,000 December 31, 2004 2,500,000,000 March 31, 2005 2,000,000,000 June 30, 2005 2,000,000,000 September 30, 2005 2,000,000,000 December 31, 2005 2,000,000,000 March 31, 2006 2,000,000,000
SECTION 6.11. Senior Secured Indebtedness Ratio. The Borrower will not at any date permit the ratio of (a) Consolidated Senior Secured Indebtedness at such date to (b) Consolidated EBITDA for the most recent period of four consecutive fiscal quarters for which financial statements have been delivered pursuant to Section 5.01(a) or (b), to be greater than 4.00 to 1.00. ARTICLE VII Events of Default; Inter-Tranche Agreements With Respect to Collateral SECTION 7.01. Events of Default. If any of the following events ("Events of Default") shall occur: (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the 81 same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Credit Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of (i) in the case of fees and interest payable under Sections 2.10 and 2.11, respectively, five Business Days, and (ii) in the case of any other fees, interest or other amounts (other than those referred to in paragraph (a) above), five Business Days after the earlier of (A) the day on which a Financial Officer first obtains knowledge of such failure and (B) the day on which written notice of such failure shall have been given to the Borrower by the Administrative Agent or any Lender; (c) any representation or warranty made or deemed made by or on behalf of any Credit Party in any Credit Document or any amendment or modification thereof or waiver thereunder shall prove to have been incorrect when made or deemed made in any respect material to the rights or interests of the Lenders under the Credit Documents; (d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower's existence) or 5.08 or in Article VI; (e) any Credit Party shall fail to observe or perform any covenant, condition or agreement contained in any Credit Document (other than those specified in clauses (a), (b) and (d) of this Article), and such failure shall continue unremedied for a period of 30 days after written notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender); provided, that the failure of any Credit Party to perform any covenant, condition or agreement made in any Credit Document (other than this Agreement) shall not constitute an Event of Default unless such failure shall be (i) wilful or (ii) material to the rights or interests of the Lenders under the Credit Documents; (f) the Borrower or any Consolidated Subsidiary shall fail to make any payment of principal in respect of any Material Indebtedness at the scheduled due date thereof and such failure shall continue beyond any applicable grace period, or any event or condition occurs that results in any Material Indebtedness (other than any Securitization Transaction existing on the date hereof) becoming due or being required to be prepaid, repurchased, redeemed, defeased or terminated prior to its scheduled maturity; provided that this clause (f) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness in accordance with the terms and conditions of this Agreement or (ii) Material Indebtedness of any Foreign Subsidiary if the Borrower is unable, due to applicable law restricting Investments 82 in such Foreign Subsidiary, to make an Investment in such Foreign Subsidiary to fund the payment of such Material Indebtedness; (g) any event or condition occurs that continues beyond any applicable grace period and enables or permits the holder or holders of any Material Indebtedness (other than (i) any Securitization Transaction existing on the date hereof and (ii) any Material Indebtedness of any Foreign Subsidiary in an aggregate principal amount that is less than $50,000,000) or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption, defeasance or termination thereof, prior to its scheduled maturity; provided, that this clause (g) shall not apply to (i) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness in accordance with the terms and conditions of this Agreement or (ii) Material Indebtedness of any Foreign Subsidiary if the Borrower is unable, due to applicable law restricting Investments in such Foreign Subsidiary, to make an Investment in such Foreign Subsidiary to fund the payment of such Material Indebtedness; (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 90 days or an order or decree approving or ordering any of the foregoing shall be entered; (i) the Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) make a general assignment for the benefit of creditors or (v) take any action for the purpose of effecting any of the foregoing; (j) the Borrower or any Material Subsidiary shall admit in writing its inability or fail generally to pay its debts as they become due; (k) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, would be materially likely to result in a Material Adverse Change; 83 (l) Liens created under the Security Documents shall not be valid and perfected Liens on a material portion of the Collateral; (m) any Guarantee of the Obligations under the Guarantee and Collateral Agreement shall fail to be a valid, binding and enforceable Guarantee of one or more Subsidiary Guarantors where such failure would constitute or be materially likely to result in a Material Adverse Change; or (n) a Change in Control shall occur; then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Majority Lenders or the Majority Borrowing Base Lenders shall, by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate, the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. SECTION 7.02. Inter-Tranche Agreements With Respect to Collateral. (a) Under the Guarantee and Collateral Agreement and the other Security Documents, the Tranche A Term Obligations and Revolving Obligations on the one hand, and the Tranche B Term Obligations on the other hand, are secured by first priority Liens and second priority Liens, respectively, on the ABL Collateral (such term and each other capitalized term used in this Section and not defined in Section 1.01 having the meaning specified in the Guarantee and Collateral Agreement) and are or will be secured by second priority Liens and third priority Liens, respectively, on the US Facilities Pledged Collateral, the US Facilities Article 9 Collateral, the Mortgaged Properties and certain Equity Interests in Luxembourg Finance. The Tranche B Term Lenders hereby agree, for the benefit of the Tranche A Term Lenders and the Revolving Lenders, that notwithstanding any other provision of this Agreement, or any other Security Document, the rights of the Tranche B Term Lenders in the Collateral and any Proceeds thereof shall be subordinate and junior to the rights of the Tranche A Term Lenders and the Revolving Lenders in such Collateral and Proceeds. In furtherance of the foregoing, (i) any amounts distributed in respect of the Obligations (other than Obligations owed to the Administrative Agent or the Collateral Agent) pursuant to Section 6.03 of the Guarantee and Collateral Agreement or pursuant to any other Security Document shall be applied 84 first to pay the Tranche A Term Obligations and the Revolving Obligations, ratably in accordance with the respective amounts thereof, until all such Tranche A Term Obligations and Revolving Obligations shall have been paid in full, and thereafter shall be applied to pay the Tranche B Obligations, and (ii) with respect to the Collateral, any Proceeds thereof, the Liens thereon securing the Obligations and all related matters, the relative rights and obligations of the Tranche A Term Lenders and the Revolving Lenders on the one hand, and the Tranche B Term Lenders on the other hand, shall be as set forth in Sections 11.01 and 11.02 of the Guarantee and Collateral Agreement, which for purposes of this Section shall be deemed to be incorporated by reference in this paragraph, mutatis mutandis, it being agreed that for purposes of such Sections as so incorporated (A) the Liens securing the Tranche A Term Obligations and the Revolving Obligations on the one hand, and the Tranche B Term Obligations on the other hand, are separate Liens, (B) the Liens securing the Tranche A Term Obligations and the Revolving Obligations are Senior Liens in respect of the Collateral and Applicable Senior Liens in respect of the Liens securing the Tranche B Term Obligations, (C) the Tranche A Term Obligations and the Revolving Obligations are Applicable Senior Obligations in respect of the Tranche B Term Obligations, (D) the Liens securing the Tranche B Term Obligations are Junior Liens in respect of the Collateral and (E) the references in Sections 11.01 and 11.02 to the Collateral Agent shall be deemed to include the Administrative Agent. Notwithstanding the foregoing, each Tranche B Term Lender shall be free to vote as it chooses on any matter put to a vote of the Lenders or the Tranche B Term Lenders in accordance with Section 9.02, and no exercise by a Tranche B Term Lender of its voting rights under Section 9.02 shall be deemed a breach of any of the restrictions or obligations imposed on such Tranche B Term Lender by the provisions contained or incorporated by reference in this paragraph; provided, that each Tranche B Term Lender acknowledges and agrees that Section 9.02(b)(iv) will not require the vote of any Tranche B Term Lender to approve any release of Collateral upon the sale thereof pursuant to an exercise of remedies under any of the Security Documents. (b) The agreements contained in this Section are intended to survive and be fully applicable following the commencement of any bankruptcy or other insolvency proceeding by or with respect to the Borrower or any Subsidiary, and to be taken into account and given effect in any such proceeding in a manner consistent with the intent and agreement of the parties hereto that the Liens securing the Tranche A Term Obligations and the Revolving Obligations on the one hand, and the Tranche B Term Obligations on the other hand, are separate Liens with the Liens securing the Tranche B Term Obligations being subordinate and junior as set forth in paragraph (a) above to the Liens securing the Tranche A Term Obligations and the Revolving Obligations. (c) The agreements contained in this Section are solely for the benefit of the Tranche A Term Lenders and the Revolving Lenders and shall not affect the priority of the Liens securing the Tranche B Obligations relative to the Liens securing any other obligations (other than the Obligations owed to the Tranche A Term Lenders and the Revolving Lenders) or create any rights in favor of any other Person (other than the Tranche A Term Lenders, the Revolving Lenders, the Administrative Agent and the Collateral Agent). 85 ARTICLE VIII The Agents Each of the Lenders hereby irrevocably appoints the Agents as its agents and authorizes the Agents to take such actions on its behalf and to exercise such powers as are delegated to the Agents by the terms hereof and of the other Credit Documents, together with such actions and powers as are reasonably incidental thereto. The bank or banks serving as the Agents hereunder shall have the same rights and powers in their capacity as Lenders as any other Lender and may exercise the same as though they were not Agents, and such bank or banks and their Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if they were not Agents hereunder. The Agents shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing (a) the Agents shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Agents shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Agents are required to exercise in writing by the Majority Lenders, and (c) except as expressly set forth herein, the Agents shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information communicated to the Agents by or relating to the Borrower or any Subsidiary. The Agents shall not be liable for any action taken or not taken by them with the consent or at the request of the Majority Lenders or the Lenders, as the case may be, or in the absence of their own gross negligence or wilful misconduct. In addition, the Agents shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Agents by the Borrower or a Lender, and the Agents shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Agents. Each Tranche B Term Lender acknowledges that by virtue of the provisions of Section 7.02 or other provisions of this Agreement the interests of the Tranche B Term Lenders may conflict with those of the Tranche A Term Lenders and/or the Revolving Lenders, and agrees that the Agents may perform their duties under and exercise the authority conferred on them by the Credit Documents without liability to the Tranche B Term Lenders notwithstanding that as a result of such performance or exercise the Tranche B Term Lenders might be disadvantaged relative to the Tranche A Term Lenders and/or the Revolving Lenders. 86 The Agents shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by them to be genuine and to have been signed or sent by the proper Person. The Agents also may rely upon any statement made to them orally or by telephone and believed by them to be made by the proper Person, and shall not incur any liability for relying thereon. The Agents may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by them with reasonable care, and shall not be liable for any action taken or not taken by them in accordance with the advice of any such counsel, accountants or experts. The Agents may perform any and all their duties and exercise their rights and powers by or through any one or more sub-agents appointed by the Agents. The Agents and any such sub-agent may perform any and all their duties and exercise their rights and powers through their respective Affiliates. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Affiliates of the Agents and any such sub-agent. Subject to the appointment and acceptance of a successor Agent as provided below, either Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Majority Lenders shall have the right to appoint a successor with the Borrower's written consent (which shall not be unreasonably withheld or delayed and shall not be required from the Borrower if an Event of Default has occurred and is continuing). If no successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders, with the Borrower's written consent (which shall not be unreasonably withheld or delayed and shall not be required if an Event of Default has occurred and is continuing), appoint a successor Agent which shall be a bank or an Affiliate thereof, in each case with a net worth of at least $1,000,000,000 and an office in New York, New York. Upon the acceptance of its appointment as Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After an Agent's resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent. Each Lender acknowledges that it has, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agents or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder. Notwithstanding any other provision contained herein, (a) each Lender acknowledges that the Administrative Agent is not acting as an agent of the Borrower and 87 that the Borrower will not be responsible for acts or failures to act on the part of the Administrative Agent and (b) neither the Syndication Agent nor any of the Documentation Agents shall, in its capacity as such, have any responsibilities under this Agreement or the other Credit Documents. Without prejudice to the provisions of this Article VIII, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) to act as the person holding the power of attorney (in such capacity, the "fonde de pouvoir") of the Lenders as contemplated under Article 2692 of the Civil Code of Quebec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are conferred upon the fonde de pouvoir under any hypothec. Moreover, without prejudice to such appointment and authorization to act as the person holding the power of attorney as aforesaid, each Lender hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) (in such capacity, the "Custodian") to act as agent and custodian for and on behalf of the Lenders to hold and to be the sole registered holder of any debenture which may be issued under any hypothec, the whole notwithstanding Section 32 of the Act Respecting the Special Powers of Legal Persons (Quebec) or any other applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of any such debenture and owing to each Lender, and (ii) each Lender will be entitled to the benefits of any charged property covered by any hypothec and will participate in the proceeds of realization of any such charged property, the whole in accordance with the terms hereof. Each of the fonde de pouvoir and the Custodian shall (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to fonde de pouvoir and the Custodian (as applicable) with respect to the charged property under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise, (b) benefit from and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders, and (c) be entitled to delegate from time to time any of its powers or duties under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise and on such terms and conditions as it may determine from time to time. Any person who becomes a Lender shall be deemed to have consented to and confirmed: (y) the fonde de pouvoir as the person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the agent and custodian as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the Custodian in such capacity. 88 ARTICLE IX Miscellaneous SECTION 9.01. Notices. (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or e-mail, as follows: (i) if to the Borrower, to it at 1144 East Market Street, Akron, Ohio, 44316-0001, Attention of the Treasurer (Telecopy No. (330) 796-6502 or (330) 796-8836); (ii) if to the Administrative Agent, to JPMorgan Chase Bank, Loan & Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of Debbie Meche and Cliff Trapani (Telecopy No. (713) 750-2938), with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017, Attention of Robert Kellas (Telecopy No. (212) 270-3089); (iii) if to a Lender, to it at its address (or telecopy number or e-mail address) set forth in Schedule 2.01 or its Administrative Questionnaire; and (iv) if to any Issuing Bank, to it at the address most recently specified by it in a notice delivered to the Administrative Agent and the Borrower. (b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. (c) Any party hereto may change its address, telecopy number or e-mail address for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. SECTION 9.02. Waivers; Amendments. (a) No failure or delay by any of the Agents, any Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents, the Issuing Banks and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would 89 otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether any Agent, any Issuing Bank or any Lender may have had notice or knowledge of such Default at the time. (b) No Credit Document or any provision thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Credit Parties party thereto and the Administrative Agent or Collateral Agent, as the case may be, with the consent of the Majority Lenders; provided, that no such agreement shall (i) increase or extend the expiration date of the Commitment of any Lender without the written consent of such Lender, (ii) reduce or forgive all or part of the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any commitment fee payable hereunder, without the prior written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement or date for the payment of any interest on any Loan or any commitment fee, or reduce the amount of, waive or excuse any such payment, without the prior written consent of each Lender adversely affected thereby, (iv) release all or substantially all the Subsidiary Guarantors from their Guarantees under the Guarantee and Collateral Agreement, or release all or substantially all the Collateral from the Liens of the Security Documents, without the written consent of each Lender, (v) change any provision of the Guarantee and Collateral Agreement or any other Security Document to alter the amount or allocation of any payment to be made to the Secured Parties, or effect any change to Article XI of the Guarantee and Collateral Agreement, without the consent of each adversely affected Lender, (vi) change Section 2.16 in a manner that would alter the pro rata sharing of any payment without the written consent of each Lender adversely affected thereby, (vii) change any of the provisions of this Section or Section 9.02A or the definition of "Majority Lenders" or "Majority Borrowing Base Lenders" or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender, (viii) change any provision of any Credit Document in a manner that by its terms adversely affects the rights in respect of payments due to Lenders holding Loans of any Class differently from those holding Loans of the other Class, without the written consent of Lenders holding a majority in interest of the outstanding Loans and unused Commitments of the affected Class or (ix) amend, modify or otherwise alter the definition of "Availability Block" or the eligibility standards or advance rates used in determining the Borrowing Base in a manner which would increase the amount of the Borrowing Base Availability, without the prior written consent of each Lender (provided that if any amendment, modification or alteration is made after the date hereof to any eligibility standard by the Administrative Agent or the Majority Lenders as provided for herein in a manner which would decrease the amount of the Borrowing Base Availability, such eligibility standard may be subsequently amended, modified or altered in a manner which would increase the amount of the Borrowing Base Availability with the prior written consent of Lenders holding more than 85% in interest of the aggregate amount of 90 the outstanding Loans and unused Commitments so long as such eligibility standard, as so amended, modified or altered, would not have increased the Borrowing Base Availability if it had been applied on the date hereof); provided, further that no such agreement shall amend, modify or otherwise affect the rights or duties of any of the Agents or Issuing Banks under any Credit Document without the prior written consent of such Agent or Issuing Bank, as the case may be; provided further that any amendment, modification or waiver of this Agreement that by its terms affects the rights or duties under this Agreement of the Revolving Lenders (but not the Term Lenders) or the Term Lenders (but not the Revolving Lenders) may be effected by an agreement or agreements in writing entered into by the Borrower and the requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at such time. SECTION 9.02A. Layering of Rights in Collateral; Additional Commitments; Covenants and Defaults. (a) Notwithstanding any other provision contained herein, no amendment or modification of this Agreement shall (i) provide for the making of additional Tranche B Term Loans after the Restatement Effective Date or (ii) provide for the making of additional Loans or other extensions of credit under this Agreement with rights in the Collateral subordinate to those of the Tranche A Term Lenders or the Revolving Lenders but senior to the rights of the Tranche B Term Lenders, in each case without the written consent of Lenders holding a majority in interest of the outstanding Tranche B Term Loans. (b) Notwithstanding any other provision contained herein, no amendment or modification of this Agreement shall provide for the making of additional loans (other than pursuant to the Revolving Commitments) or the provision of additional commitments after the Restatement Effective Date without the written consent of Lenders having aggregate Revolving Credit Exposures, Tranche A Term Loans and unused Revolving Commitments representing at least 66-2/3% of the sum of the total Revolving Credit Exposures, Tranche A Term Loans and unused Revolving Commitments at such time. (c) Notwithstanding any other provision contained herein, no waiver, amendment or other modification of the provisions of Article V, Article VI or Article VII of this Agreement shall be effective without the written consent of the Majority Borrowing Base Lenders. SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents, the Arrangers and their Affiliates (including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Agents and the Arrangers, and other local and foreign counsel for the Agents and Arrangers, limited to one per jurisdiction, in connection with the Security Documents and the creation and perfection of the Liens created thereby and other local and foreign law matters) in connection with the arrangement and syndication of the credit facilities provided for herein, the preparation, execution, delivery and administration of this Agreement and the other Credit Documents or any amendments, modifications or waivers of the provisions hereof or thereof 91 (whether or not the transactions contemplated hereby or thereby shall be consummated) , (ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Agents, any Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Agents, any Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or similar negotiations in respect of such Loans or Letters of Credit. The Borrower also shall pay all out-of-pocket expenses incurred by the Collateral Agent in connection with the creation and perfection of the security interests contemplated by this Agreement, including all filing, recording and similar fees and, as more specifically set forth above, the reasonable fees and disbursements of counsel. (b) The Borrower shall indemnify each Agent, each Arranger, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of any counsel for any Indemnitee), incurred by or asserted against any Indemnitee and arising out of (i) the execution or delivery of this Agreement or any other Credit Document or other agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations or the exercise by the parties hereto of their rights hereunder or thereunder or the consummation of the Transactions or any other transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use of the proceeds thereof (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of the Subsidiaries, or (iv) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses shall have resulted from the gross negligence or wilful misconduct of such Indemnitee or the breach by such Indemnitee of obligations set forth herein or in any other Credit Document. (c) To the extent that the Borrower fails to pay any amount required to be paid by it to any Agent, any Arranger or any Issuing Bank under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to such Agent, Arranger or Issuing Bank, as the case may be, such Lender's percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on the outstanding Loans and LC Exposures and unused Commitments of such Lender and the other Lenders (or, if the Commitments shall have terminated and there shall be no 92 outstanding Loans or LC Exposures, based on the Loans and LC Exposures and unused Commitments most recently in effect)) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent, Arranger or Issuing Bank in its capacity as such. SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto, the Indemnitees and their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, Indemnitees, their respective successors and assigns permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents, the Arrangers, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); with the prior written consent (such consent not to be unreasonably withheld or delayed) of: (A) the Borrower; provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund (as defined below), a Federal Reserve Bank or, if an Event of Default has occurred and is continuing, any other assignee; provided further that the consent of the Borrower and the consent of the Administrative Agent shall be required for an assignment by any Revolving Lender to any Person (other than a Revolving Lender); (B) the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment to an assignee that is a Lender, an Affiliate of a Lender, a Federal Reserve Bank or an Approved Fund; and (C) in the case of any assignment of a Revolving Commitment or any interests in a Letter of Credit or LC Disbursement, each Principal Issuing Bank; provided that no consent of any Principal Issuing Bank shall be required for an assignment to an assignee that is a Federal Reserve Bank. (ii) Assignments shall be subject to the following additional conditions: 93 (A) except in the case of an assignment to a Lender or an Affiliate of a Lender, the amount of the Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 or, if smaller, the entire remaining amount of the assigning Lender's Commitment unless each of the Borrower and the Administrative Agent shall otherwise consent, provided (i) that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing and (ii) in the event of concurrent assignments to two or more assignees that are Affiliates of one another, or to two or more Approved Funds managed by the same investment advisor or by affiliated investment advisors, all such concurrent assignments shall be aggregated in determining compliance with this subsection; (B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement; provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender's rights and obligations in respect of one Class of Commitments or Loans; (C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; provided that in the event of concurrent assignments to two or more assignees that are Affiliates of one another, or to two or more Approved Funds managed by the same investment advisor or by affiliated investment advisors, only one such fee shall be payable; and (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section. Each assignment hereunder shall be deemed to be an assignment of the related rights under the Guarantee and Collateral Agreement. 94 (iv) The Administrative Agent shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Issuing Bank or Lender, at any reasonable time and from time to time upon reasonable prior notice. (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. (vi) By executing and delivering an Assignment and Assumption, the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim and that its Commitment and the outstanding balances of its Loans, in each case without giving effect to assignments thereof that have not become effective, are as set forth in such Assignment and Assumption; (ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Credit Document or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any of the foregoing, or the financial condition of the Credit Parties or the performance or observance by the Credit Parties of any of their obligations under this Agreement or under any other Credit Document or any other instrument or document furnished pursuant hereto or thereto; (iii) each of the assignee and the assignor represents and warrants that it is legally authorized to enter into such Assignment and Assumption; (iv) such assignee confirms that it has received a copy of this Agreement, together with copies of any amendments or consents entered into prior to the date of such Assignment and Assumption and copies of the most recent financial statements delivered pursuant to Section 5.01 and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Assumption; (v) such assignee will independently and without reliance upon the 95 Agents, such assigning Lender or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement; (vi) such assignee appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers under this Agreement and the other Credit Documents as are delegated to them by the terms hereof and thereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations that by the terms of this Agreement are required to be performed by it as a Lender. (c) (i) Any Lender may, without the consent of the Borrower or the Administrative Agent or any Issuing Bank, sell participations to one or more banks or other entities (each a "Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender's obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver that affects such Participant and that, under Section 9.02, would require the consent of each affected Lender. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.16(d) as though it were a Lender. (ii) A Participant shall not be entitled to receive any greater payment under Section 2.13 or 2.15 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent, which consent shall specifically refer to this exception. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.15 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.15(e) as though it were a Lender. (d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; 96 provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. SECTION 9.05. Survival. All covenants, agreements, representations and warranties made by the Borrower herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the Letters of Credit or the termination of this Agreement or any provision hereof. SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be executed by the execution of counterparts of the First Amendment (and by different parties hereto on different counterparts of the First Amendment), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent or the Arrangers constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. This Agreement shall become effective as provided in the First Amendment. Delivery of an executed counterpart of a signature page of the First Amendment by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. SECTION 9.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. No failure to obtain any approval required for the effectiveness of any provision of this Agreement shall affect the validity or enforceability of any other provision of this Agreement. SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be continuing and the Loans shall have become due and payable pursuant to Article VII, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and 97 other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have. SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. (b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction. (c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR 98 OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 9.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. SECTION 9.12. Confidentiality. Each of the Agents, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors who have been informed of the confidential nature of such Information and instructed to keep such Information confidential, (b) to the extent requested by any regulatory authority (including the NAIC), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) to the extent necessary or advisable in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the written consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, "Information" means all information received from the Borrower or Persons acting on its behalf relating to the Borrower or its business, other than any such information that is available to any Agent or any Lender prior to disclosure by the Borrower on a nonconfidential basis from a source other than the Borrower that is not known by the recipient to be bound by a confidentiality agreement or other obligation of confidentiality with respect to such information. Notwithstanding anything herein to the contrary, any party to this Agreement (and any employee, representative or other agent of such party) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure, but no party shall disclose any information relating to such tax treatment or tax structure to the extent nondisclosure is necessary in order to comply with applicable securities laws. SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under 99 applicable law (collectively, the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Alternate Base Rate to the date of repayment, shall have been received by such Lender. SECTION 9.14. Security Documents. Each Lender hereby authorizes and directs the Collateral Agent to execute and deliver the Guarantee and Collateral Agreement and each other Security Document. Each Lender, by executing and delivering this Agreement, acknowledges receipt of a copy of the Guarantee and Collateral Agreement and approves and agrees to be bound by and to act in accordance with the terms and conditions of the Guarantee and Collateral Agreement and each other Security Document, specifically including (i) the provisions of Article VI of the Guarantee and Collateral Agreement (governing the exercise of remedies under the Security Documents and the distribution of the proceeds realized from such exercise), (ii) the provisions of Article VIII of the Guarantee and Collateral Agreement (governing the manner in which acts of the Secured Parties are to be evidenced and the manner in which the amounts of the Obligations and the other Obligations (as defined in the Guarantee and Collateral Agreement) are to be determined at any time), (iii) the provisions of Articles IX and X of the Guarantee and Collateral Agreement (relating to the duties and responsibilities of the Collateral Agent and providing for the indemnification and the reimbursement of expenses of the Collateral Agent by the Lenders), (iv) the provisions of Article XI of the Guarantee and Collateral Agreement (providing for the subordination of certain Junior Liens (as defined therein) in favor of the Secured Parties to the Applicable Senior Liens (as defined therein)) and (v) the provisions of Section 13.13 of the Guarantee and Collateral Agreement (providing for releases of Guarantees of and Collateral securing the Obligations). Each party hereto further agrees that the foregoing provisions of the Guarantee and Collateral Agreement shall apply to each other Security Document. SECTION 9.15. Additional Financial Covenants. Notwithstanding anything else contained herein to the contrary, in the event that any maintenance financial covenant other than the financial covenants set forth in Sections 6.09, 6.10 and 6.11 is included in any Senior Subordinated-Lien Document (as defined in Annex A to the First Amendment), such covenant will be deemed to be added to this Agreement automatically, without the need for any further action whatsoever. 100 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY by /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, by /s/ B. Joseph Lillis ------------------------------------ Name: B. Joseph Lillis Title: Managing Director 101 [Remaining Signature Pages Intentionally Omitted] 102 EX-4.9 10 l07358aexv4w9.txt EX-4.9 1STAMENDRESTATETERMAGR&REVCREAGR 4/16/04 EXHIBIT 4.9 FIRST AMENDMENT dated as of April 16, 2004 (this "Amendment"), to the Amended and Restated Term Loan and Revolving Credit Agreement dated as of February 19, 2004 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among THE GOODYEAR TIRE & RUBBER COMPANY (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), JPMORGAN CHASE BANK, as administrative agent for the Lenders (in such capacity, the "Administrative Agent"), CITICORP USA, INC., as Syndication Agent, BANK OF AMERICA, N.A., as Documentation Agent, THE CIT GROUP/BUSINESS CREDIT, INC., as Documentation Agent, and GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent. WHEREAS, pursuant to the terms and conditions of the Credit Agreement, the Lenders have extended and agreed to extend credit to the Borrower; and WHEREAS, the Borrower has requested, and the Majority Lenders are willing to agree, that the Credit Agreement be amended on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. Defined Terms. Capitalized terms used and not defined herein shall have the meanings assigned to them in the Credit Agreement. SECTION 2. Amendment to Section 5.01 of the Credit Agreement. Section 5.01(a) of the Credit Agreement is hereby amended by (a) inserting after the phrase "within 110 days after the end of each fiscal year of the Borrower" the following: "(or, in the case of the fiscal year ended December 31, 2003, within 140 days after the end of such fiscal year)" and (b) inserting after the phrase "concurrently with the filing of the Borrower's annual report on Form 10-K" the following: "(or, in the case of the annual operating plan to be delivered in 2004, no later than May 19, 2004)". SECTION 3. Amendment to Section 6.02 of the Credit Agreement. Paragraph (n) of Section 6.02 of the Credit Agreement is hereby amended to read as follows: "(n) Liens on (i) assets constituting US Facilities Pledged Collateral and US Facilities Article 9 Collateral, and real property and interests in real property covered by US Facilities Mortgages, and (ii) assets constituting ABL Facilities Collateral and Luxembourg Finance Pledged Collateral and any other assets securing obligations under the US Revolving Facility Agreement at the time such obligations are refinanced with Indebtedness incurred under Section 6.01(m), in each case securing Indebtedness incurred under Section 6.01(m) to refinance the Indebtedness under the US Revolving Facility Agreement, but only if (A) all Indebtedness under the US Revolving Facility Agreement shall have been repaid in full and the Commitments under and as defined in the US Revolving Facility Agreement shall have been terminated not later than the time at which such Liens are incurred, (B) such Liens secure Indebtedness in an amount not greater than the amount of the Indebtedness under the US Revolving Facility Agreement repaid with the proceeds of such Indebtedness and (C) if such refinancing Indebtedness incurred under Section 6.01(m) is secured by assets referred to in clause (ii) above, the holders of such Indebtedness or a trustee or other agent acting on their behalf shall have executed and delivered to the Administrative Agent an agreement reasonably satisfactory to the Borrower and the Administrative Agent under which all such Liens on assets referred to in clause (ii) above are subordinated to the Liens on such assets securing the ABL Facilities Obligations and the European Facilities Obligations (as such terms are defined in the Guarantee and Collateral Agreement) on substantially the terms on which the Liens on such assets securing the US Revolving Facility Obligations (as defined in the Guarantee and Collateral Agreement) are so subordinated under the Guarantee and Collateral Agreement;" SECTION 4. Amendment to Section 6.07 of the Credit Agreement. Clause (v) of paragraph (a) of Section 6.07 is hereby amended to read as follows: "(v) the Borrower and its Subsidiaries may make Investments in Subsidiaries expressly permitted by Section 6.05(b), Section 6.05(e) or Section 6.05(s) and Investments expressly permitted under Section 6.05(j)." SECTION 5. Amendment to Section 7.01 of the Credit Agreement. Paragraph (d) of Section 7.01 of the Credit Agreement is hereby amended by inserting after the word "Section" the following: "5.01(a) (solely with respect to the Borrower's fiscal year ended December 31, 2003 and the Borrower's annual operating plan to be delivered in 2004), ". SECTION 6. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that: (a) No Default has occurred and is continuing on the date hereof or will have occurred and be continuing at the time the amendments provided for herein become effective under Section 8. -2- (b) All representations and warranties of the Borrower set forth in the Credit Agreement are true and correct in all respects material to the rights or interests of the Lenders on and as of the date hereof, and will be true and correct at the time the amendments provided for herein become effective under Section 8, except to the extent such representations and warranties relate to an earlier date. SECTION 7. Amendment Fee. In consideration of the agreements contained in this Amendment, the Borrower agrees to pay to the Administrative Agent on the Effective Date (as defined below), for the account of each Lender that delivers an executed counterpart of this Amendment prior to noon, New York City time, on April 16, 2004, an amendment fee equal to 0.03% of the sum of such Lender's outstanding Term Loans, Revolving Credit Exposure and unused Revolving Commitment on the Effective Date. SECTION 8. Conditions Precedent to Effectiveness. This Amendment shall become effective when the Administrative Agent shall have received counterparts hereof duly executed and delivered by Lenders representing the Majority Lenders (the date on which this Amendment becomes effective being called the "Effective Date"). SECTION 9. No Other Amendments or Waivers; Confirmation. Except as expressly amended hereby, the provisions of the Credit Agreement are and shall remain in full force and effect as set forth in the Credit Agreement. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement in similar or different circumstances. This Amendment shall be a Credit Document for all purposes of the Credit Agreement. SECTION 10. Expenses. The Borrower agrees to pay or reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the reasonable fees, charges and disbursements of Cravath, Swaine & Moore LLP, counsel for the Administrative Agent. SECTION 11. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 12. Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be delivered by facsimile transmission of the signature pages hereof. -3- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their duly authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, By /s/ R. W. Tieken ---------------------------------- Name: R. W. Tieken Title: Chief Financial Officer JPMORGAN CHASE BANK, individually and as Administrative Agent and Collateral Agent, By /s/ B. Joseph Lillis ---------------------------------- Name: B. Joseph Lillis Title: Managing Director -4- [Remaining Signature Pages Intentionally Omitted] EX-4.10 11 l07358aexv4w10.txt EX-4.10 MASTERGUARANTEEDANDCOLLATERALAGREE 3/31/03 EXHIBIT 4.10 ================================================================================ MASTER GUARANTEE AND COLLATERAL AGREEMENT dated as of March 31, 2003, as Amended and Restated as of February 20, 2004, among THE GOODYEAR TIRE & RUBBER COMPANY, THE SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY identified as Grantors and Guarantors herein, THE LENDERS PARTY HERETO and JPMORGAN CHASE BANK, as Collateral Agent ================================================================================ [CS&M #6701-315] TABLE OF CONTENTS
Page ---- ARTICLE I Definitions SECTION 1.01. Certain Defined Terms................................................................................ 1 ARTICLE II Guarantees SECTION 2.01. Guarantees........................................................................................... 14 SECTION 2.02. Guarantee of Payment................................................................................. 14 SECTION 2.03. No Limitations....................................................................................... 14 SECTION 2.04. Reinstatement........................................................................................ 16 SECTION 2.05. Agreement To Pay; Subrogation........................................................................ 16 SECTION 2.06. Information.......................................................................................... 17 ARTICLE III Pledge of Securities SECTION 3.01. Pledge............................................................................................... 17 SECTION 3.02. Voting Rights; Dividends and Interest................................................................ 18 ARTICLE IV Security Interests in Personal Property SECTION 4.01. Creation of Security Interests....................................................................... 19 SECTION 4.02. Certain Filings...................................................................................... 23 SECTION 4.03. Representations and Warranties....................................................................... 23 SECTION 4.04. Covenants............................................................................................ 24 SECTION 4.05. Other Actions........................................................................................ 25
i SECTION 4.06. Covenants Regarding Patent, Trademark and Copyright Collateral....................................... 25 SECTION 4.07. Lockbox System....................................................................................... 26 SECTION 4.08. Insurance............................................................................................ 28 ARTICLE V Other Pledges, Mortgages and Security Interests SECTION 5.01. Summary of Certain Other Security Documents.......................................................... 28 SECTION 5.02. Other Security Documents Subject to This Agreement................................................... 29 ARTICLE VI Remedies SECTION 6.01. Remedies Upon Default................................................................................ 30 SECTION 6.02. Exercise of Remedies under Other Security Documents.................................................. 31 SECTION 6.03. Application of Proceeds.............................................................................. 32 SECTION 6.04. Grant of License to Use Intellectual Property........................................................ 33 SECTION 6.05. Securities Act....................................................................................... 33 ARTICLE VII Indemnity, Subrogation and Subordination SECTION 7.01. Indemnity and Subrogation............................................................................ 34 SECTION 7.02. Contribution and Subrogation......................................................................... 35 SECTION 7.03. Subordination........................................................................................ 35 ARTICLE VIII Acts of Secured Parties and Administrative Agent; Amounts of Secured Obligations SECTION 8.01. Acts of Secured Parties and Administrative Agent..................................................... 35 SECTION 8.02. Determination of Amounts of Secured Obligations and Existence of Events of Default under Credit Agreements; Acceleration........................................................................... 36

ii ARTICLE IX Duties of Collateral Agent SECTION 9.01. Notices to Administrative Agents under Credit Agreements............................................. 36 SECTION 9.02. Actions Under This Agreement......................................................................... 36 ARTICLE X Concerning the Collateral Agent SECTION 10.01. Limitations on Responsibility of Collateral Agent................................................... 38 SECTION 10.02. Reliance by Collateral Agent; Indemnity Against Liabilities, etc.................................... 39 SECTION 10.03. Resignation and Removal of the Collateral Agent..................................................... 40 SECTION 10.04. Expenses and Indemnification........................................................................ 40 ARTICLE XI Subordination of Certain Liens SECTION 11.01. Perfection and Priority of Security Interests....................................................... 40 SECTION 11.02. No Interference; No Right to Instruct Collateral Agent; Payment Over; Reinstatement; Permitted Actions........................................................................................... 42 SECTION 11.03. Consent to Priming of Junior Lien on ABL Facilities Collateral...................................... 43 SECTION 11.04. Consent to Subordination of Junior Liens to Certain Refinancing Indebtedness........................ 43 ARTICLE XII Subordination of Intercompany Indebtedness SECTION 12.01. Subordination....................................................................................... 43 SECTION 12.02. Dissolution or Insolvency........................................................................... 44 SECTION 12.03. Subrogation......................................................................................... 44 SECTION 12.04. Other Creditors..................................................................................... 44 SECTION 12.05. No Waiver........................................................................................... 44

iii SECTION 12.06. Obligations Hereunder Not Affected.................................................................. 45 ARTICLE XIII Miscellaneous SECTION 13.01. Notices............................................................................................. 45 SECTION 13.02. Waivers; Amendment.................................................................................. 46 SECTION 13.03. Collateral Agent's Fees and Expenses; Indemnification............................................... 46 SECTION 13.04. Successors and Assigns.............................................................................. 46 SECTION 13.05. Survival of Agreement............................................................................... 47 SECTION 13.06. Counterparts; Effectiveness; Several Agreement...................................................... 47 SECTION 13.07. Severability........................................................................................ 47 SECTION 13.08. Right of Set-Off.................................................................................... 47 SECTION 13.09. Governing Law; Jurisdiction; Consent to Service of Process.......................................... 48 SECTION 13.10. WAIVER OF JURY TRIAL................................................................................ 48 SECTION 13.11. Headings............................................................................................ 49 SECTION 13.12. Security Interest Absolute.......................................................................... 49 SECTION 13.13. Termination or Release.............................................................................. 49 SECTION 13.14. Additional Grantors and Guarantors.................................................................. 50 SECTION 13.15. Collateral Agent Appointed Attorney-in-Fact......................................................... 51 SECTION 13.16. Collateral Agent as Joint and Several Creditor...................................................... 52 SECTION 13.17. Post-Closing Letter Agreements...................................................................... 52 SECTION 13.18. Credit Party Obligations............................................................................ 52

iv Schedules Schedule I Aircraft Schedule II US Facilities Foreign Pledge Agreements Schedule III US Facilities Mortgages Schedule IV European Facilities Security Documents Exhibits Exhibit I Form of Perfection Certificate v MASTER GUARANTEE AND COLLATERAL AGREEMENT dated as of March 31, 2003, as Amended and Restated as of February 20, 2004, among THE GOODYEAR TIRE & RUBBER COMPANY (the "Company"), the Subsidiaries of THE GOODYEAR TIRE & RUBBER COMPANY identified herein, the LENDERS party hereto and JPMORGAN CHASE BANK, as collateral agent (the "Collateral Agent"). This agreement amends and restates the Master Guarantee and Collateral Agreement dated as of March 31, 2003, among the parties hereto. Reference is made to the Credit Agreements (such term, and each other capitalized term used and not otherwise defined herein, having the meaning assigned to it in Article I). The Lenders have agreed to extend credit to the Company and the other Borrowers on the terms and subject to the conditions set forth in the Credit Agreements. The obligations of the Lenders to extend such credit are conditioned upon, among other things, the execution and delivery of this Agreement by the Company and the other Grantors and Guarantors. The Subsidiary Grantors and Subsidiary Guarantors are subsidiaries of the Company and subsidiaries or affiliates of the other Borrowers, will derive substantial benefits from the extension of credit to the Borrowers pursuant to the Credit Agreements and are willing to execute and deliver this Agreement in order to induce the Lenders to extend such credit. Accordingly, the parties hereto agree as follows: ARTICLE I Definitions SECTION 1.01. Certain Defined Terms. (a) All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term "instrument" shall have the meaning specified in Article 9 of the New York UCC. (b) All terms defined in the Credit Agreements and not defined in this Agreement have the meanings specified therein. The rules of construction specified in Section 1.03 or 1.04, as applicable, of each of the Credit Agreements shall also apply to this Agreement. As used in this Agreement, the following terms have the meanings specified below: "ABL Collateral Proceeds Account" means a deposit account maintained at JPMorgan Chase Bank, as Collateral Agent, for the benefit of the Secured Parties, and any successor account maintained with the Collateral Agent. "ABL Facilities Agreement" means the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMCB, as administrative agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as documentation agents, as amended by the First Amendment thereto dated as of February 19, 2004, and as further amended from time to time. 2 "ABL Facilities Collateral" means any and all of the following assets and properties now owned or at any time hereafter acquired by any ABL Facilities Grantor or in which such ABL Facilities Grantor now has or at any time in the future may acquire any right, title or interest: (a) all Accounts; (b) all Chattel Paper; (c) all Deposit Accounts (and all cash, checks and other negotiable instruments, funds and other evidences of payment held therein); (d) all Inventory; (e) to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (a), (b), (c) and (d), all Documents, General Intangibles (other than Intellectual Property and, in the case of any ABL Facilities Grantor that is organized under the laws of Canada or one or more provinces thereof, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), goodwill, registrations and franchises), Instruments, Investment Property (other than (i) US Facilities Pledged Equity Interests, (ii) Equity Interests in Luxembourg Finance, (iii) the Equity Interests described in clauses (b), (c) and (d) of the definition of Excluded Equity Interests and (iv) Proceeds in respect of Equity Interests described in clauses (i), (ii) and (iii)) and Letter of Credit Rights; (f) all books and records related to the foregoing; and (g) all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. Notwithstanding the foregoing, any cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to the US Revolving Facility Agreement will constitute US Facilities Article 9 Collateral and not ABL Facilities Collateral. "ABL Facilities Grantors" means the Company and each Subsidiary that is listed under the heading "ABL Facilities Grantors" on the signature pages hereto or that becomes an ABL Facilities Grantor pursuant to Section 13.14. "ABL Facilities Junior Liens" means all Liens on the ABL Facilities Collateral securing the US Facilities Obligations, the US Miscellaneous Obligations or any European Facilities Obligations. "ABL Facilities Mortgages" means the "Mortgages" under and as defined in the ABL Facilities Agreement. In the event that the requirements of Section 5.08(e) of the ABL Facilities Agreement shall be satisfied by the amendment of the US Facilities Mortgages, such mortgages shall, for all purposes hereof, (a) insofar as they secure the US Facilities Obligations, constitute the US Facilities Mortgages, and (b) insofar as they secure the ABL Facilities Obligations, constitute the ABL Facilities Mortgages. "ABL Facilities Obligations" means the "Obligations" under and as defined in the ABL Facilities Agreement (other than any Collateral Agent Obligations). "ABL Facilities Revolving Obligations" means the "Revolving Obligations" under and as defined in the ABL Facilities Agreement (other than any Collateral Agent Obligations). "ABL Facilities Secured Parties" means the "Secured Parties" under and as defined in the ABL Facilities Agreement. "ABL Facilities Tranche A Term Obligations" means the "Tranche A Term Obligations" under and as defined in the ABL Facilities Agreement (other than any Collateral Agent Obligations). 3 "ABL Tranche B Junior Liens" means all Liens securing the ABL Facilities Tranche B Term Obligations. "ABL Facilities Tranche B Term Obligations" means the "Tranche B Term Obligations" under and as defined in the ABL Facilities Agreement (other than any Collateral Agent Obligations). "Acceptable Financing" means a credit facility extended to the Company as a debtor-in-possession in a proceeding commenced by or against the Company under the Bankruptcy Code that (a) replaces and results in the payment of all amounts outstanding or owed to the Lenders under the ABL Facilities Agreement at the time of the first extension of credit under such credit facility made following the entry of a final order approving such credit facility, (b) is arranged by J.P. Morgan Securities Inc. (or, if J.P. Morgan Securities Inc. shall elect not to arrange such credit facility, another recognized provider of debtor-in-possession financings for substantial corporate debtors that shall be a Lender under one or both of the US Facilities Agreements) and (c) provides for extensions of credit in an aggregate amount not in excess of the greater of (i) $1,950,000,000 and (ii) the amount available to be borrowed from time to time under the Borrowing Base under and as defined in the ABL Facilities Agreement as in effect at the commencement of such proceeding. "Account Debtor" means any Person who is or who may become obligated to any ABL Facilities Grantor under, with respect to or on account of an Account. "Act" has the meaning assigned to such term in Section 8.01. "Additional Subsidiary Agreement" has the meaning assigned to such term in Section 13.14. "Administrative Agent" means, as to any Credit Agreement, the "Administrative Agent" under and as defined in such Credit Agreement. "Agreement" means this amended and restated Master Guarantee and Collateral Agreement. "Aircraft" means all airships, airplanes, helicopters and other aircraft owned on the date hereof or hereafter acquired by any US Facilities Grantor, including those listed on Schedule I hereto, as updated from time to time pursuant to Section 4.04(c). "Aircraft Collateral" means the Aircraft, Aircraft Parts and Aircraft Log Books. "Aircraft Log Books" means any and all log books, maintenance records, airworthiness certificates, registration documents and other records and documents relating to the Aircraft or Aircraft Parts. "Aircraft Parts" means all engines and propellers (whether or not affixed to any Aircraft) owned by any US Facilities Grantor and used or intended for use in connection with the Aircraft, and all avionics equipment, radio equipment, navigation equipment, radar equipment and other equipment, appliances, accessories and accessions used or intended for use in connection with the Aircraft. 4 "Applicable Collateral" means (a) as to the ABL Facilities Agreement, the ABL Facilities Collateral, (b) as to the European Facilities Agreement, the European Facilities Collateral and the Luxembourg Finance Pledged Collateral, (c) as to the US Revolving Facility Agreement or the US Term Facility Agreement, the US Facilities Collateral and (d) as to each Credit Agreement referred to above, but subject to Article XI, all Collateral subject to any Junior Lien securing the Obligations under and as defined in such Credit Agreement. "Applicable Collateral Agent Obligations" means, as to any Class of Obligations, any Collateral Agent Obligations under the Credit Agreement or any other agreement or instrument governing the Obligations of such Class and any Collateral Agent Obligations under this Agreement or any Other Security Document to the extent related to the Obligations of such Class. "Applicable Credit Agreement" means (a) as to the ABL Facilities Collateral, the ABL Facilities Agreement, (b) as to the European Facilities Collateral, the European Facilities Agreement, (c) as to the Luxembourg Finance Pledged Collateral, the European Facilities Agreement, (d) as to the US Facilities Collateral, the US Revolving Facility Agreement and the US Term Facility Agreement and (e) as to each class of Collateral referred to above, when all loans under the applicable Credit Agreement or Credit Agreements referred to above have been repaid, no letters of credit issued under such Credit Agreement or Credit Agreements shall be outstanding and the commitments of the Lenders under such Credit Agreement or Credit Agreements shall have terminated, any Credit Agreement under which Obligations secured by a Junior Lien on such Collateral shall be outstanding (or, if there shall be more than one such Credit Agreement, the Credit Agreement under which the Obligations secured by the most senior Lien on such Collateral shall be outstanding). "Applicable Guarantors" means, as to any Class of Obligations, each Guarantor for which the Obligations of such Class constitute Guaranteed Obligations. "Applicable Senior Liens" means (a) as to the ABL Facilities Junior Liens, the Liens on the ABL Facilities Collateral securing the ABL Facilities Obligations and the Applicable Collateral Agent Obligations, (b) as to the Luxembourg Finance Junior Liens, the Liens on the Luxembourg Finance Pledged Collateral securing the European Facilities Obligations referred to therein and the Applicable Collateral Agent Obligations, (c) as to the US Facilities Junior Liens, the Liens on the US Facilities Collateral securing the US Facilities Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations, (d) as to the European Facilities Junior Liens, the Liens on the ABL Facilities Collateral and the US Facilities Collateral securing the ABL Facilities Obligations, the US Facilities Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations and (e) as to the ABL Tranche B Junior Liens, all Liens securing the ABL Facilities Revolving Obligations and the ABL Facilities Tranche A Term Obligations. "Applicable Senior Obligations" means, as to any Obligations secured by Junior Liens, the Obligations secured by the Applicable Senior Liens. "Article 9 Collateral" means the ABL Facilities Collateral and the US Facilities Article 9 Collateral. "Bankruptcy Code" means Title 11 of the U.S. Code. 5 "Borrowers" means, collectively, the "Borrower" or "Borrowers" under and as defined in each of the Credit Agreements. "Canadian Intellectual Property Collateral" means all Intellectual Property in which security interests are created under the Canadian Security Agreements. "Canadian Security Agreements" means the Canadian Guarantee and Collateral Agreement between Goodyear Canada Inc. and the Collateral Agent, and the Quebec Hypothec (as defined in the Canadian Guarantee and Collateral Agreement. "Claiming Party" has the meaning assigned to such term in Section 7.02. "Class" refers to the Obligations described in any one of clauses (a) through (g) of the definition of "Obligations" (the Obligations described in each clause of the definition of "Obligations" constituting a separate Class of Obligations). "Collateral" means the Pledged Collateral, the Article 9 Collateral, the US Facilities Mortgaged Collateral and the European Facilities Collateral. "Collateral Agent Obligations" means all obligations, monetary and otherwise, of any Credit Party to the Collateral Agent, or to its Related Parties in connection with acts or omissions related to its role as Collateral Agent, under this Agreement or any other Credit Document, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding). "Consent Asset" means any asset or right of a Grantor the creation of a security interest in which would be prohibited by or not be effective under applicable law or would violate or result in a default under any agreement or instrument in effect on the date hereof (or in the case of any future Grantor on the date it becomes a Grantor) between such Grantor and any Person other than (a) the Company, (b) any Wholly Owned Subsidiary or (c) any Subsidiary that is not a Wholly Owned Subsidiary unless the waiver of such default or violation would require the consent of any Person other than the Company or another Subsidiary; provided that no asset or right shall be a Consent Asset to the extent that Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the applicable jurisdiction, or any other law of the applicable jurisdiction, shall permit (and excuse any default or violation resulting from) the creation of a security interest in such asset or right notwithstanding the provision of such agreement or instrument prohibiting the creation of a security interest therein or shall render such provision unenforceable. "Consent Subsidiary" has the meaning assigned to such term in the US Facilities Agreements or, if the US Facilities Agreements are no longer in effect, the ABL Facilities Agreement. "Control Notice" has the meaning assigned to such term in each Lockbox Agreement. "Contributing Party" has the meaning assigned to such term in Section 7.02. 6 "Copyright License" means any written agreement, now or hereafter in effect, granting any right to any third party under any copyright now or hereafter owned by any US Facilities Grantor or that such Grantor otherwise has the right to license, or granting any right to any US Facilities Grantor under any copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement. "Copyrights" means all of the following now owned or hereafter acquired by any US Facilities Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office. "Credit Agreements" means the US Revolving Facility Agreement, the US Term Facility Agreement, the European Facilities Agreement and the ABL Facilities Agreement. "Credit Document" means each agreement, instrument or document that is a "Credit Document" under and as defined in any one or more of the Credit Agreements. "Credit Parties" means the Company and each other Borrower, Grantor and Guarantor. "Deposit Account Institution" means each financial institution at which a Deposit Account in the Lockbox System is maintained. "Equity Interests" means shares of capital stock, partnership interests, membership interests in limited liability companies, beneficial interests in trusts or other equity ownership interests in any Persons, and any warrants, options or other rights entitling the holders thereof to purchase or acquire any such equity interests. "European Facilities Agreement" means the $650,000,000 Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the JV, the other borrowers thereunder, certain lenders, JPMCB, as administrative agent, and Deutsche Bank AG, as syndication agent, as amended by the First Amendment thereto dated as of February 19, 2004, and as further amended from time to time. "European Facilities Collateral" means all the assets and rights (other than the Luxembourg Finance Pledged Collateral) subject to Liens created under the European Facilities Security Documents to secure the European Facilities Obligations or any of them; provided, however, that, notwithstanding anything to the contrary in any of the European Facilities Security Documents, the European Facilities Collateral shall not include any Consent Assets. "European Facilities Grantors" means the Company, the JV, each Subsidiary that is listed under the heading "European Facilities Grantor" on the signature pages hereto or that becomes a European Facilities Grantor pursuant to Section 13.14. "European Facilities Guarantors" means the Company, the JV and the European Subsidiary Guarantors. "European Facilities Junior Liens" means all Liens on the ABL Facilities Collateral and the US Facilities Collateral securing any European Facilities Obligations. 7 "European Facilities Obligations" means the "Obligations" under and as defined in the European Facilities Agreement (other than any Collateral Agent Obligations). "European Facilities Revolving Lenders" means the "Revolving Lenders" under and as defined in the European Facilities Agreement. "European Facilities Revolving Obligations" means all obligations of the US Guarantors under Guarantees of the "Revolving Obligations" under and as defined in the European Facilities Agreement, including the Guarantees granted under Article II. "European Facilities Secured Parties" means the "Secured Parties" under and as defined in the European Facilities Agreement. "European Facilities Security Documents" means the "Security Documents" (other than the Luxembourg Finance Pledge Agreement), as defined in the European Facilities Agreement (other than the Luxembourg Finance Pledge Agreement). "European Facilities Term Lenders" means the "Term Lenders" under and as defined in the European Facilities Agreement. "European Revolving Facilities Secured Parties" means the European Facilities Secured Parties, other than any European Facilities Term Lender that is not also a European Facilities Revolving Lender. "European Subsidiary Guarantors" means each Subsidiary that is listed under the heading "European Facilities Guarantor" on the signature pages hereto or that becomes a European Facilities Guarantor pursuant to Section 13.14. "Excluded Equity Interests" means (a) Equity Interests in any Subsidiary with consolidated assets not greater than $10,000,000 as of December 31, 2002, or if such Equity Interests are acquired by the Company or a Subsidiary after the Original Signing Date, as of the end of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 5.01(a) or (b) of either of the US Facilities Agreements, (b) Equity Interests in any Consent Subsidiary, (c) Equity Interests in Goodyear Canada Inc. and Goodyear S.A. and (d) Equity Interests in any Foreign Subsidiary with respect to which a Financial Officer has delivered a certificate in accordance with clause (B) of the proviso in Section 5.08(b) of either of the US Facilities Agreements. "Excluded Operating Account" means payroll and other operating accounts of the Company or any other ABL Facilities Grantor that are not used to receive (a) payments from any Account Debtor in respect of Accounts or (b) payments in respect of Inventory, and containing only such amounts as are required in the Company's or such other ABL Facilities Grantor's good faith judgment for near-term operational purposes. "FAA" means the Federal Aviation Administration or the United States Department of Transportation or both, as the context may require, or any successors thereto. "Federal Securities Laws" has the meaning assigned to such term in Section 6.05. 8 "Foreign Subsidiary" means any Subsidiary organized under the laws of a jurisdiction other than the United States or any of its territories or possessions or any political subdivision thereof. "General Intangibles" means, as to any ABL Facilities Grantor or US Facilities Grantor, all choses in action and causes of action and all other intangible personal property of every kind and nature (other than Accounts) now owned or hereafter acquired by such Grantor, including to the extent relevant corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and, in the case of any ABL Facilities Grantor only, any letter of credit, guarantee, claim, security interest or other security held by or granted to such Grantor to secure payment by an Account Debtor of any Accounts. "Goodyear Venezuela Transaction" means the sale of up to 14% of the Equity Interests of C.A. Goodyear de Venezuela held by the Company to Goodyear do Brasil Productos de Borraca Ltda. in a transaction permitted by the Credit Agreements. "Grantors" means the ABL Facilities Grantors, the European Facilities Grantors and the US Facilities Grantors. "Guaranteed Obligations" means (a) with respect to the Company, the European Facilities Obligations and the US Miscellaneous Obligations and, with respect to each of the foregoing, the Applicable Collateral Agent Obligations, (b) with respect to each US Subsidiary Guarantor, the US Revolving Facility Obligations, the US Term Facility Obligations, the ABL Facilities Obligations, the European Facilities Obligations, the US Miscellaneous Obligations and, with respect to each of the foregoing, the Applicable Collateral Agent Obligations, (c) with respect to the JV, the European Facilities Obligations and the Applicable Collateral Agent Obligations and (d) with respect to each European Subsidiary Guarantor, the European Facilities Obligations and the Applicable Collateral Agent Obligations. "Guarantors" means the US Guarantors and the European Facilities Guarantors. "Indemnified Party" has the meaning assigned to such term in Section 10.04. "Indenture Basket" means 15% of the Shareholders' Equity of the Company (as defined in the Indentures), as at the last day of the most recently ended fiscal quarter of the Company as of the date hereof, as reported on the applicable consolidated balance sheet of the Company. "Indenture Properties" means the "Restricted Property" (as defined in the Indentures) of the Company and each "Restricted Subsidiary" (as defined in the Indentures). "Indentures" means (a) the Indenture dated as of March 15, 1996, between the Company and Chemical Bank, as trustee, (b) the Indenture dated as of March 1, 1999, between the Company and The Chase Manhattan Bank, as trustee, and (c) the Indenture dated as of June 1, 2002, between the Company and JPMCB, as trustee. "Intellectual Property" means, as to any US Grantor, all intellectual and similar property of every kind and nature now owned or hereafter acquired by such Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or 9 proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing. "Intercompany Indebtedness" means any Indebtedness of the Company or any Subsidiary to the Company or any other Subsidiary. "Intercompany Obligor" means, with respect to any Intercompany Indebtedness, the obligor in respect of such Intercompany Indebtedness. "Junior Liens" means the ABL Facilities Junior Liens, the Luxembourg Finance Junior Liens, the US Facilities Junior Liens, the European Facilities Junior Liens and the ABL Tranche B Junior Liens. "JV" means Goodyear Dunlop Tires Europe B.V., a Subsidiary organized in the Netherlands and a joint venture of the Company and Sumitomo Rubber Industries. "Lenders" means, collectively, the "Lenders" under and as defined in each of the Credit Agreements. "License" means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any US Facilities Grantor is a party. "Lien Subordination and Intercreditor Agreement" means the Lien Subordination and Intercreditor Agreement to be entered into among JPMorgan Chase Bank, as Collateral Agent under the Security Documents, the collateral agent or collateral agents for holders of Senior Subordinated-Lien Indebtedness and the subsidiaries of the Company named therein, as amended from time to time. "Local Collection Account" means a deposit account of a Grantor not subject to the control of the Collateral Agent pursuant to the Lockbox System; provided that (a) such account shall not receive any payments in respect of Accounts or Inventory other than that generated or sold by Goodyear's retail or Wingfoot divisions and (b) the applicable Grantor shall have irrevocably instructed the Deposit Account Institution at which such deposit account is maintained to remit all funds on deposit in such deposit account to a Deposit Account in the Lockbox System periodically, and in no event less frequently than weekly, such instructions to be given (i) in the case of a Local Collection Account in existence on the Effective Date, no later than 45 days after the Effective Date and (ii) in the case of a Local Collection Account opened after the Effective Date, as promptly as practicable (and in no event later than 10 Business Days) after the opening of such Local Collection Account. "Lockbox Agreement" means a Lockbox Agreement in a form approved by the Collateral Agent, among a Grantor, the Collateral Agent and a Deposit Account Institution. "Lockbox System" has the meaning assigned to such term in Section 4.07. "Luxembourg Finance" means Goodyear Finance Holding S.A. 10 "Luxembourg Finance Junior Liens" means all Liens on the Luxembourg Finance Pledged Collateral securing the US Facilities Obligations or the ABL Facilities Obligations. "Luxembourg Finance Pledge Agreement" means the pledge over shares of Goodyear Finance Holdings S.A. between the Company, Goodyear International Corporation and the Collateral Agent dated April 1, 2003, as amended from time to time. "Luxembourg Finance Pledged Collateral" means all the Company's right, title and interest in, to and under (a) the Equity Interests in Luxembourg Finance owned by it on the date hereof or obtained by it in the future, (b) subject to the provisions of the Luxembourg Finance Pledge Agreement, all payments of dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, such Equity Interests; (c) subject to the provisions of the Luxembourg Finance Pledge Agreement, all rights and privileges of the Company with respect to the securities and other property referred to in clauses (a) and (b) above; and (d) all Proceeds of any of the foregoing. "Majority Lenders" means, as to any Credit Agreement, the "Majority Lenders" under and as defined in such Credit Agreement. "Material Intellectual Property" means "Material Intellectual Property" under and as defined in each of the US Facilities Agreements. "Mortgaged Properties" means the properties subject to the US Facilities Mortgages. "New York UCC" means the Uniform Commercial Code as from time to time in effect in the State of New York. "Obligations" means (a) the US Revolving Facility Obligations, (b) the US Term Facility Obligations, (c) the ABL Facilities Obligations, (d) the European Facilities Obligations, (e) the US Miscellaneous Obligations, (f) the Swiss Franc Obligations and (g) the Collateral Agent Obligations. "Original Signing Date" means March 31, 2003. "Other Security Documents" means the European Facilities Security Documents, the Luxembourg Finance Pledge Agreement, the Canadian Security Agreements, the US Facilities Foreign Pledge Agreements and the US Facilities Mortgages. "Patent License" means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a patent, now or hereafter owned by any US Facilities Grantor or that any US Facilities Grantor otherwise has the right to license, is in existence, or granting to any US Facilities Grantor any right to make, use or sell any invention on which a patent, now or hereafter owned by any third party, is in existence, and all rights of any such Grantor under any such agreement. "Patents" means all of the following now owned or hereafter acquired by any US Facilities Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the 11 United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule II to the Perfection Certificate, as updated from time to time pursuant to Section 4.04(c), and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein. "Perfection Certificate" means a certificate substantially in the form of Exhibit I. "Pledged Collateral" means the US Facilities Pledged Collateral, the Luxembourg Finance Pledged Collateral and any Equity Interests or Indebtedness pledged under the European Facilities Security Documents (and all stock certificates, promissory notes or other securities evidencing any of such Equity Interests or Indebtedness). "RBC Deposit Account" means the Deposit Account maintained with The Royal Bank of Canada, with respect to which a Lockbox Agreement shall have been executed by the applicable ABL Facilities Grantor and The Royal Bank of Canada. "Secured Parties" means, collectively, (a) the US Revolving Facility Secured Parties, (b) the US Term Facility Secured Parties, (c) the ABL Facilities Secured Parties, (d) the European Facilities Secured Parties, (e) the US Miscellaneous Secured Parties, (f) the Swiss Franc Secured Parties, (g) the Collateral Agent and (h) the successors and assigns of each of the foregoing. "Security Documents" means this Agreement and the Other Security Documents. "Swap Agreement" means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates or prices for one or more currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions. "Swiss Franc Bond Agreement" means the Bond Agreement dated as of March 17, 1986, between the Company and Union Bank of Switzerland, Credit Suisse, Morgan Stanley S.A. and Swiss Bank Corporation, as in effect on the date hereof. "Swiss Franc Secured Parties" means the holders from time to time of the Swiss Franc Obligations. "Swiss Franc Obligations" means the "Bonds", as defined in the Swiss Franc Bond Agreement. "Trademark License" means any written agreement, now or hereafter in effect, granting to any third party any right to use any trademark now or hereafter owned by any US Facilities Grantor or that any such Grantor otherwise has the right to license, or granting to any US Facilities Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any such Grantor under any such agreement. 12 "Trademarks" means all of the following now owned or hereafter acquired by any US Facilities Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule II to the Perfection Certificate, as updated from time to time pursuant to Section 4.04(c), (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill. "US Facilities Agreements" means the US Revolving Facility Agreement and the US Term Facility Agreement. "US Facilities Article 9 Collateral" means any and all of the following assets and properties now owned or at any time hereafter acquired by any US Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest: (a) all Documents; (b) all Equipment (other than fixtures to real property not constituting Mortgaged Properties); (c) all General Intangibles; (d) all Instruments; (e) all Investment Property (other than (i) US Facilities Pledged Equity Interests, (ii) Equity Interests in Luxembourg Finance, (iii) the Equity Interests described in clauses (b), (c) and (d) of the definition of Excluded Equity Interests and (iv) Proceeds in respect of Equity Interests described in clauses (i), (ii) and (iii)); (f) all Letter-of-Credit rights; (g) all books and records pertaining to any of the foregoing; (h) all Aircraft Collateral; (i) all cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to the US Revolving Facility Agreement and (j) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing; provided, however, that, notwithstanding any of the foregoing provisions of this definition, the US Facilities Article 9 Collateral shall not include (i) any ABL Facilities Collateral or (ii) Consent Assets. "US Facilities Collateral" means the US Facilities Pledged Collateral, the US Facilities Article 9 Collateral, the US Facilities Mortgaged Collateral and the Canadian Intellectual Property Collateral. "US Facilities Foreign Pledge Agreements" means the "Foreign Pledge Agreements", as defined in the US Facilities Agreements. "US Facilities Grantors" means the Company and each Subsidiary that is listed under the heading "US Facilities Grantor" on the signature pages hereto or that becomes a US Facilities Grantor pursuant to Section 13.14. "US Facilities Junior Liens" means all Liens on US Facilities Collateral securing the ABL Facilities Obligations or any European Facilities Obligations. "US Facilities Mortgaged Collateral" means all the assets and rights subject to Liens created under the US Facilities Mortgages. "US Facilities Mortgages" means the "Mortgages" under and as defined in the US Facilities Agreements. 13 "US Facilities Obligations" means the US Revolving Facility Obligations and the US Term Facility Obligations. "US Facilities Pledged Collateral" means (a) the US Facilities Pledged Equity Interests, (b) the US Facilities Pledged Debt Securities, (c) subject to Section 3.02, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in the preceding clauses (a) and (b); (d) subject to Section 3.02, all rights and privileges of such US Facilities Grantor with respect to the securities and other property referred to in clauses (a), (b) and (c) above; and (e) all Proceeds of any of the foregoing. "US Facilities Pledged Debt Securities" means all debt securities (as defined in Article 8 of the New York UCC) owned by any US Facilities Grantor on the date hereof or obtained by it in the future, and any promissory notes or other instruments evidencing any such debt securities. "US Facilities Pledged Equity Interests" means all Equity Interests in Subsidiaries (other than Luxembourg Finance and Excluded Equity Interests) owned by any US Facilities Grantor on the date hereof or obtained or owned by it in the future, and the certificates representing all the foregoing Equity Interests, including the Equity Interests listed on Schedule 3A to the Perfection Certificate, as updated from time to time pursuant to Section 4.04(c); provided that the US Facilities Pledged Equity Interests shall not include more than 65% of the issued and outstanding Equity Interests of any Foreign Subsidiary. "US Facilities Secured Parties" means the US Revolving Facility Secured Parties and the US Term Facility Secured Parties. "US Facilities Security Documents" means the "Security Documents", as defined in the US Facilities Agreements. "US Grantors" means the ABL Facilities Grantors and the US Facilities Grantors. "US Guarantors" means the Company and the US Subsidiary Guarantors. "US Miscellaneous Obligations" means (a) the due and punctual payment and performance of all obligations of the Company or any Domestic Subsidiary under each Swap Agreement that (i) shall have been in effect on the Effective Date under and as defined in any of the US Facilities Agreements with a counterparty that shall have been a Lender or an Affiliate of a Lender under such US Facilities Agreement as of such Effective Date or (ii) shall have been entered into after such Effective Date with any counterparty that shall have been a Lender or an Affiliate of a Lender under such US Facilities Agreement at the time such Swap Agreement was entered into and (b) the due and punctual payment and performance of all obligations of the Company or any Domestic Subsidiary arising out of or in connection with cash management or similar services provided by any Lender. "US Miscellaneous Secured Parties" means the Lenders and other Persons to whom US Miscellaneous Obligations are owed. 14 "US Revolving Facility Agreement" means the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMCB, as administrative agent, as amended by the First Amendment thereto dated as of February 19, 2004, and as further amended from time to time. "US Revolving Facility Obligations" means the "Obligations" under and as defined in the US Revolving Facility Agreement (other than any Collateral Agent Obligations). "US Revolving Facility Secured Parties" means the "Secured Parties" under and as defined in the US Revolving Facility Agreement. "US Subsidiary Guarantors" means each Subsidiary that is listed under the heading "US Guarantor" on the signature pages hereto or that becomes a US Guarantor pursuant to Section 13.14. "US Term Facility Agreement" means the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMCB, as administrative agent, and BNP Paribas, as syndication agent, as amended by the First Amendment thereto dated as of February 19, 2004, and as further amended from time to time. "US Term Facility Obligations" means the "Obligations" under and as defined in the US Term Facility Agreement (other than any Collateral Agent Obligations). "US Term Facility Secured Parties" means the "Secured Parties" under and as defined in the US Term Facility Agreement. ARTICLE II Guarantees SECTION 2.01. Guarantees. Each Guarantor irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the due and punctual payment and performance of the Guaranteed Obligations of such Guarantor, jointly with the other Applicable Guarantors and severally. Each of the Guarantors further agrees that its Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any such Guaranteed Obligation. Each of the Guarantors waives presentment to, demand of payment from and protest to any Borrower or other Credit Party of any of its Guaranteed Obligations, and also waives notice of acceptance of its guarantee, notice of protest for nonpayment and all similar formalities. SECTION 2.02. Guarantee of Payment. Each of the Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any security held for the payment of its Guaranteed Obligations or to any balance of any deposit account or credit on the books of the Collateral Agent or any other Secured Party in favor of any Borrower or any other Person. SECTION 2.03. No Limitations. (a) Except for termination of a Guarantor's obligations hereunder as expressly provided in Section 13.13, the obligations of each Guarantor 15 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 or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations of such Guarantor or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any right or remedy under the provisions of any Credit Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Credit Document or any other agreement, including with respect to any other Guarantor under this Agreement; (iii) the release of any security held by the Collateral Agent or any other Secured Party for the Guaranteed Obligations of such Guarantor or any of them; (iv) any default, failure or delay, wilful or otherwise, in the performance of the Guaranteed Obligations of such Guarantor; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of such Guarantor or otherwise operate as a discharge of such Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Guaranteed Obligations of such Guarantor). Each Guarantor expressly authorizes the Secured Parties to take and hold security for the payment and performance of the Guaranteed Obligations of such Guarantor, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Guaranteed Obligations of such Guarantor, all without affecting the obligations of such Guarantor hereunder. (b) To the fullest extent permitted by applicable law, each Guarantor waives any defense based on or arising out of any defense of any Borrower or any other Credit Party or the unenforceability of the Guaranteed Obligations of such Guarantor or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower or any other Credit Party, other than the indefeasible payment in full in cash of all the Guaranteed Obligations of such Guarantor. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with any Borrower or any other Credit Party or exercise any other right or remedy available to them against any Borrower or any other Credit Party, in each case without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations of such Guarantor have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against any Borrower or any other Credit Party, as the case may be, or any security. (c) Notwithstanding any provisions to the contrary contained in this Agreement, in respect of the obligations and liabilities of the Guarantors incorporated under the laws of France (the "French Guarantors") under this Article II, it is understood that: (i) the obligations and liabilities of French Guarantors in respect of the Guaranteed Obligations shall be limited in accordance with their respective financial resources in the following manner: (A) the obligations and liabilities of Dunlop France in respect of the Guaranteed Obligations shall be limited to an aggregate amount not exceeding $150,000,000, (B) the obligations and liabilities of Goodyear France S.A. in respect of the Guaranteed Obligations shall be limited to an aggregate amount not exceeding $50,000,000 and (C) the obligations and liabilities of any other Person becoming a French Guarantor in respect of the Guaranteed Obligations shall be limited to an aggregate 16 amount not exceeding the amount indicated as such maximum amount in the agreement pursuant to which such Person shall become a French Guarantor. (d) In the case of a Guarantor established in Germany as a limited liability company (Gesellschaft mit beschrankter Haftung) (a "German GmbH Guarantor"), or as a limited partnership (Kommanditgesellschaft) with a limited liability company (Gesellschaft mit beschrankter Haftung) as sole general partner (the "German GmbH & Co. KG Guarantor", together with any "German GmbH Guarantor" hereinafter referred to as "German Guarantor"), the enforcement against such German Guarantor of any and all claims arising under this Article II shall, if and to the extent that under this Article II the relevant German Guarantor guarantees obligations of any of the German Guarantor's affiliated companies (verbundenes Unternehmen) within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (other than any of the German Guarantor's Subsidiaries), at all times be limited to an amount equal to the German GmbH Guarantor's, or in the case of a GmbH & Co. KG Guarantor its general partner's, assets (the calculation of which shall include all items set forth in Section 266(2) A, B and C of the German Commercial Code (Handelsgesetzbuch)) less the sum of (A) the German GmbH Guarantor's, or in the case of a GmbH & Co. KG Guarantor its general partner's, liabilities (the calculation of which shall include all items set forth in Section 266(3) B, C and D of the German Commercial Code), and (B) the registered share capital (Stammkapital) of the German GmbH Guarantor, or in the case of a German GmbH & Co. KG Guarantor of its general partner (the "Net Assets"). For the purposes of the calculation of the Net Assets loans and other contractual liabilities incurred in negligent or wilful violation of the provisions of the Credit Documents shall be disregarded. In addition, in case of an enforcement of the guarantee granted under this Article II, the German GmbH Guarantor, or in the case of a German GmbH & Co. KG Guarantor its general partner and the German GmbH & Co. KG Guarantor, shall realize, to the extent legally permitted and, in respect of the German GmbH Guarantor's, or in the case of a German GmbH & Co. KG Guarantor its general partner's and the German GmbH & Co. KG Guarantor's, business, commercially justifiable, in a situation where the German GmbH Guarantor, or in the case of a German GmbH & Co. KG Guarantor its general partner and the German GmbH & Co. KG Guarantor, does not have sufficient Net Assets to maintain its registered share capital, any and all of its assets that are shown in the balance sheet with a book value (Buchwert) that is significantly lower than the market value of the assets if such asset is not necessary for the German GmbH Guarantor's, or in the case of a German GmbH & Co. KG Guarantor its general partner's and the German GmbH & Co. KG Guarantor's, business (betriebsnotwendig). SECTION 2.04. Reinstatement. Each of the Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Guaranteed Obligation of such Guarantor is rescinded or must otherwise be restored by the Collateral Agent or any other Secured Party upon the bankruptcy or reorganization of any Borrower, any other Credit Party or otherwise. SECTION 2.05. Agreement To Pay; Subrogation. In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of any Borrower or any other Credit Party to pay any Guaranteed Obligation of any Guarantor when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, such Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent for distribution to the applicable Secured Parties in cash the amount of such unpaid Guaranteed Obligation. Upon payment by any Guarantor of any sums to the Collateral Agent as provided above, all rights of such Guarantor against any Borrower or any other Credit Party arising as a result thereof by way of right of subrogation, contribution, reimbursement, 17 indemnity or otherwise shall in all respects be subordinate to the Obligations of such Borrower or Credit Party on the terms set forth in Article XII. SECTION 2.06. Information. Each Guarantor assumes all responsibility for being and keeping itself informed of each relevant Borrower's and each other relevant Credit Party's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations of such Guarantor and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Collateral Agent or the other Secured Parties will have any duty to advise such Guarantor of information known to it or any of them regarding such circumstances or risks. ARTICLE III Pledge of Securities SECTION 3.01.Pledge. (a) As security for the payment or performance, as the case may be, in full of the US Revolving Facility Obligations, the US Term Facility Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns a security interest in all such US Facilities Grantor's right, title and interest in, to and under the US Facilities Pledged Collateral, to have and to hold all such US Facilities Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, for the benefit of the US Facilities Secured Parties, the US Miscellaneous Secured Parties and the Collateral Agent; subject, however, to the terms, covenants and conditions hereinafter set forth. (b) As security for the payment or performance, as the case may be, in full of the ABL Facilities Revolving Obligations the ABL Facilities Tranche A Term Obligations and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns a security interest in all such US Facilities Grantor's right, title and interest in, to and under the US Facilities Pledged Collateral, to have and to hold all such US Facilities Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, for the benefit of the ABL Facilities Secured Parties and the Collateral Agent; subject, however, to the terms, covenants and conditions hereinafter set forth. The ABL Facilities Secured Parties agree that the foregoing assignment, pledge and grant shall be on a junior, second priority basis and shall be subordinated as described in, and subject to, Article XI. (c) As security for the payment or performance, as the case may be, in full of the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns a security interest in all such US Facilities Grantor's right, title and interest in, to and under the US Facilities Pledged Collateral, to have and to hold all such US Facilities Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, for the benefit of the ABL Facilities Secured Parties; subject, however, to the terms, covenants and conditions hereinafter set forth. The ABL Facilities Secured Parties agree that the foregoing assignment, pledge and grant shall be on a junior, third priority basis and shall be subordinated as described in, and subject to, Article XI. 18 (d) As security for the payment or performance, as the case may be, in full of the European Facilities Revolving Obligations and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, effective upon the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, a security interest in all such US Facilities Grantor's right, title and interest in, to and under the US Facilities Pledged Collateral, to have and to hold all such US Facilities Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, for the benefit of the European Revolving Facility Secured Parties; subject, however, to the terms, covenants and conditions hereinafter set forth. The European Revolving Facility Secured Parties agree that the foregoing assignment, pledge and grant shall be on a junior, fourth priority basis and shall be subordinated as described in, and subject to, Article XI. SECTION 3.02. Voting Rights; Dividends and Interest. (a) Unless and until an Event of Default (as defined in any Credit Agreement (other than the European Facilities Agreement prior to the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness)) shall have occurred and be continuing and the Collateral Agent shall have notified the US Facilities Grantors that their rights under this Section 3.02 are being suspended: (i) Each US Facilities Grantor shall be entitled to exercise any and all voting and/or other rights and powers inuring to an owner of US Facilities Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement and the Credit Agreements, including the right to sell or otherwise transfer such US Facilities Pledged Collateral in accordance with the terms of the Credit Agreements. (ii) The Collateral Agent shall execute and deliver to each US Facilities Grantor, or cause to be executed and delivered to such US Facilities Grantor, all such proxies, powers of attorney, certificates and other instruments as such US Facilities Grantor may reasonably request for the purpose of enabling such US Facilities Grantor to exercise the voting and/or rights and powers it is entitled to exercise pursuant to subparagraph (i) above. (iii) Each US Facilities Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the US Facilities Pledged Collateral to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Credit Agreements, the other Credit Documents and applicable laws; provided that any noncash dividends, interest, principal or other distributions that would constitute US Facilities Pledged Equity Interests or US Facilities Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the outstanding Equity Interests of the issuer of any US Facilities Pledged Collateral or received in exchange for US Facilities Pledged Collateral or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the US Facilities Pledged Collateral. (b) Upon the occurrence and during the continuance of an Event of Default (as defined in any Credit Agreement (other than the European Facilities Agreement prior to the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness)), after the Collateral Agent shall have notified the US Facilities Grantors of the suspension of their rights under paragraph (a)(iii) of this Section, then all rights of any US Facilities Grantor to 19 dividends, interest, principal or other distributions that such US Facilities Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any US Facilities Grantor contrary to the provisions of this Section shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such US Facilities Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the form in which so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 6.03. After all Events of Default have been cured or waived and the Company has delivered to the Collateral Agent a certificate to that effect, the Collateral Agent shall promptly repay to each US Facilities Grantor (without interest) all dividends, interest, principal or other distributions that such US Facilities Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section and that remain in such account. (c) Upon the occurrence and during the continuance of an Event of Default (as defined in any Credit Agreement (other than the European Facilities Agreement prior to the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness)), after the Collateral Agent shall have notified the US Facilities Grantors of the suspension of their rights under paragraph (a)(i) of this Section, then all rights of any US Facilities Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by the Majority Lenders under any Credit Agreement, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the US Facilities Grantors to exercise such rights. (d) Any notice given by the Collateral Agent to the US Facilities Grantors suspending their rights under paragraph (a) of this Section (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the US Facilities Grantors at the same or different times and (iii) may suspend the rights of the US Facilities Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent's rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing. ARTICLE IV Security Interests in Personal Property SECTION 4.01. Creation of Security Interests. (a) As security for the payment or performance, as the case may be, in full of the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations, on an equal and ratable basis, and the Applicable Collateral Agent Obligations, each ABL Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the ABL Facilities Secured Parties 20 holding such Obligations and the Collateral Agent, a security interest in all right, title or interest in or to any and all the ABL Facilities Collateral now owned or at any time hereafter acquired by such ABL Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest. (b) As security for the payment or performance, as the case may be, in full of the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations, each ABL Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the ABL Facilities Secured Parties holding such Obligations and the Collateral Agent, a security interest in all right, title or interest in or to any and all the ABL Facilities Collateral now owned or at any time hereafter acquired by such ABL Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest; the ABL Facilities Secured Parties holding the ABL Facilities Tranche B Obligations and the Collateral Agent agree that the foregoing assignment, pledge and grant shall be on a junior, second priority basis and shall be subordinated as described in, and subject to, Article XI. (c) As security for the payment or performance, as the case may be, in full of the US Facilities Obligations and the US Miscellaneous Obligations, on an equal and ratable basis, and, as to each such Class of Obligations, the Applicable Collateral Agent Obligations, each ABL Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the US Facilities Secured Parties, the US Miscellaneous Secured Parties and the Collateral Agent, a security interest in, all right, title or interest in or to any and all the ABL Facilities Collateral now owned or at any time hereafter acquired by such ABL Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest; the US Facilities Secured Parties, the US Miscellaneous Secured Parties and the Collateral Agent agree that the foregoing assignment, pledge and grant shall be on a junior, third priority basis and shall be subordinated as described in, and subject to, Article XI. (d) As security for the payment or performance, as the case may be, in full of the European Facilities Revolving Obligations and the Applicable Collateral Agent Obligations, each ABL Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, effective upon the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, for the benefit of the European Revolving Facility Secured Parties and the Collateral Agent, a security interest in all right, title or interest in or to any and all the ABL Facilities Collateral now owned or at any time hereafter acquired by such ABL Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest; the European Revolving Facility Secured Parties agree that the foregoing assignment, pledge and grant shall be on a junior, fourth priority basis and shall be subordinated as described in, and subject to, Article XI. (e) As security for the payment or performance, as the case may be, in full of the US Facilities Obligations and the US Miscellaneous Obligations, on an equal and ratable basis, and, as to each such Class of Obligations, the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the US Facilities Secured Parties, the US Miscellaneous Secured Parties and the Collateral Agent, a security interest in all right, title or interest in or to any and all the US Facilities Article 9 Collateral (other than, in the case of the Company only, any such US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement) now owned or at any time hereafter acquired by such US Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest. 21 (f) As security for the payment or performance, as the case may be, in full of the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations, on an equal and ratable basis, and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the ABL Facilities Secured Parties holding such Obligations and the Collateral Agent, a security interest in, all right, title or interest in or to any and all the US Facilities Article 9 Collateral (other than, in the case of the Company only, any such US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement) now owned or at any time hereafter acquired by such US Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest; the ABL Facilities Secured Parties agree that the foregoing assignment, pledge and grant shall be on a junior, second priority basis and shall be subordinated as described in, and subject to, Article XI. (g) As security for the payment or performance, as the case may be, in full of the ABL Facilities Tranche B Term Obligations, on an equal and ratable basis, and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the ABL Facilities Secured Parties holding such Obligations and the Collateral Agent, a security interest in, all right, title or interest in or to any and all the US Facilities Article 9 Collateral (other than, in the case of the Company only, any such US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement) now owned or at any time hereafter acquired by such US Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest; the ABL Facilities Secured Parties holding the ABL Facilities Tranche B Obligations agree that the foregoing assignment, pledge and grant shall be on a junior, third priority basis and shall be subordinated as described in, and subject to, Article XI. (h) As security for the payment or performance, as the case may be, in full of the European Facilities Revolving Obligations and the Applicable Collateral Agent Obligations, each US Facilities Grantor hereby grants to the Collateral Agent, its successors and assigns, effective upon the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, for the benefit of the European Revolving Facility Secured Parties and the Collateral Agent, a security interest in all right, title or interest in or to any and all the US Facilities Article 9 Collateral (other than, in the case of the Company only, any such US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement) now owned or at any time hereafter acquired by such US Facilities Grantor or in which such US Facilities Grantor now has or at any time in the future may acquire any right, title or interest; the European Revolving Facility Secured Parties agree that the foregoing assignment, pledge and grant shall be on a junior, fourth priority basis and shall be subordinated as described in, and subject to, Article XI. (i) As security for the payment or performance, as the case may be, in full of the US Facilities Obligations and the US Miscellaneous Obligations, on an equal and ratable basis, and the Applicable Collateral Agent Obligations, the Company hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the US Facilities Secured Parties, the US Miscellaneous Secured Parties and the Collateral Agent, a security interest in all right, title or interest in or to any and all the US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement, now owned or at any time hereafter acquired by it or in which it now has or at any time in the future may acquire any right, title or interest; provided, that the aggregate amount of the US Facilities Obligations, Collateral Agent Obligations and US Miscellaneous Obligations that are secured by (i) the security interest granted under this paragraph, and (ii) any Liens on US Facilities Collateral owned by the Company 22 constituting "manufacturing facilities", as defined in the Swiss Franc Bond Agreement, that are created under the US Facilities Mortgages and are not for the equal and ratable benefit of the Swiss Franc Obligations, shall not exceed the amount, if any, that can be so secured without violation of the Swiss Franc Bond Agreement. (j) As security for the payment or performance, as the case may be, in full of the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations, on an equal and ratable basis, and the Applicable Collateral Agent Obligations, the Company hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the ABL Facilities Secured Parties holding such Obligations and the Collateral Agent, a security interest in all right, title or interest in or to any and all the US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement, now owned or at any time hereafter acquired by it or in which it now has or at any time in the future may acquire any right, title or interest; provided, that the aggregate amount of the US Facilities Obligations, US Miscellaneous Obligations, ABL Facilities Revolving Obligations, ABL Facilities Tranche A Term Obligations and Collateral Agent Obligations and that are secured by (i) the security interest granted under this paragraph, (ii) the security interest granted under paragraph (i) above and (iii) any Liens on US Facilities Collateral owned by the Company constituting "manufacturing facilities", as defined in the Swiss Franc Bond Agreement, that are created under the US Facilities Mortgages and the ABL Facilities Mortgages and are not for the equal and ratable benefit of the Swiss Franc Obligations, shall not exceed the amount, if any, that can be so secured without violation of the Swiss Franc Bond Agreement. The ABL Facilities Secured Parties holding the ABL Facilities Revolving Obligations and the ABL Facilities Tranche A Term Obligations agree that the foregoing assignment, pledge and grant shall be on a junior, second priority basis and shall be subordinated as described in, and subject to, Article XI. (k) As security for the payment or performance, as the case may be, in full of the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations, the Company hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the ABL Facilities Secured Parties holding such Obligations and the Collateral Agent, a security interest in all right, title or interest in or to any and all the US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement, now owned or at any time hereafter acquired by it or in which it now has or at any time in the future may acquire any right, title or interest; provided, that the aggregate amount of the US Facilities Obligations, US Miscellaneous Obligations, ABL Facilities Revolving Obligations, ABL Facilities Tranche A Term Obligations and Collateral Agent Obligations and that are secured by (i) the security interest granted under this paragraph, (ii) the security interest granted under paragraphs (i) and (j) above and (iii) any Liens on US Facilities Collateral owned by the Company constituting "manufacturing facilities", as defined in the Swiss Franc Bond Agreement, that are created under the US Facilities Mortgages and the ABL Facilities Mortgages and are not for the equal and ratable benefit of the Swiss Franc Obligations, shall not exceed the amount, if any, that can be so secured without violation of the Swiss Franc Bond Agreement. The ABL Facilities Secured Parties holding the ABL Facilities Tranche B Term Obligations agree that the foregoing assignment, pledge and grant shall be on a junior, third priority basis and shall be subordinated as described in, and subject to, Article XI. (l) As security for the payment or performance, as the case may be, in full of the US Facilities Obligations, the US Miscellaneous Obligations, the ABL Facilities Obligations and the Swiss Franc Obligations, on an equal and ratable basis (but subject, as among the US Facilities Obligations and US Miscellaneous Obligations, the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations and the ABL Facilities Tranche B 23 Term Obligations, to the provisions of Article XI) and, as to each such Class of Obligations, the Applicable Collateral Agent Obligations, the Company hereby grants to the Collateral Agent, its successors and assigns, for the benefit of the US Facilities Secured Parties, the US Miscellaneous Secured Parties, the ABL Facilities Secured Parties, the Swiss Franc Secured Parties and the Collateral Agent, a security interest in all right, title or interest in or to any and all the US Facilities Article 9 Collateral constituting a "manufacturing facility", as defined in the Swiss Franc Bond Agreement, now owned or at any time hereafter acquired by the Company or in which the Company now has or at any time in the future may acquire any right, title or interest; the foregoing assignment, pledge and grant shall be on a junior, fourth priority basis and shall be subordinated to the assignments, pledges and grants pursuant to paragraphs (i), (j) and (k) above. (m) Notwithstanding anything in this Section or in any Other Security Document to the contrary, the aggregate amount of the US Facilities Obligations, ABL Facilities Obligations and Swiss Franc Obligations secured by (i) the security interests granted under this Section, and (ii) any Liens created under the US Facilities Mortgages and ABL Facilities Mortgages, in each case in or on the Indenture Properties shall not exceed the Indenture Basket (it being agreed that Obligations excluded by this paragraph from the benefits of such security interests in and Liens on the Indenture Properties will be determined based on the priority of the security interests and Liens securing the applicable Obligations, with the Obligations secured by the most junior security interests and Liens being the first excluded). (n) The security interests granted under this Section are granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral. SECTION 4.02. Certain Filings. (a) Each US Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral of such US Grantor or any part thereof and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (i) whether such US Grantor is an organization, the jurisdiction in which it is organized, the type of organization and any organizational identification number issued to such Grantor and (ii) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates. Each US Grantor agrees to provide such information to the Collateral Agent promptly upon request. Each US Grantor also ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. (b) The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting any security interest granted by any US Grantor in any Material Intellectual Property, without the signature of such US Grantor, and naming such US Grantor or the US Grantors as debtors and the Collateral Agent as secured party. SECTION 4.03. Representations and Warranties. The US Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that each US 24 Grantor has good and valid rights (including ownership rights) in the material Article 9 Collateral with respect to which it has purported to grant a security interest hereunder. SECTION 4.04. Covenants. (a) Each US Grantor agrees promptly (and in any event within 30 days) to notify the Collateral Agent in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, (iii) in its identity or type of organization or corporate structure, (iv) in its Federal Taxpayer Identification Number or organizational identification number or (v) in its jurisdiction of organization. Each US Grantor agrees promptly to provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the first sentence of this paragraph. (b) Each US Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Article 9 Collateral owned by it as shall be consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such US Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Article 9 Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent schedules in form and detail reasonably satisfactory to the Collateral Agent showing the identity, amount and location of any specified Article 9 Collateral. (c) Each year, at the time of delivery of annual financial statements of the Company with respect to the preceding fiscal year pursuant to each Credit Agreement, the Company shall deliver to the Collateral Agent a certificate executed on behalf of the Company by a Financial Officer and a legal officer of the Company setting forth the information required pursuant to the Perfection Certificate (including the Schedules thereto) or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant to this paragraph, and setting forth for any Aircraft owned by any US Facilities Grantor and not already listed on Schedule I hereto information sufficient to permit the Collateral Agent to file notices of its security interests on such Aircraft with the Federal Aviation Administration, including the model number, the tail number, the name, the serial number and the location of such Aircraft (and Schedule I shall be automatically updated to list any Aircraft identified in any such certificate). (d) The Collateral Agent and such Persons as the Collateral Agent may reasonably designate shall have the right, at the US Grantors' own cost and expense, to inspect the Article 9 Collateral and the premises upon which any of the Article 9 Collateral is located and to verify under reasonable procedures, in accordance with the provisions of each applicable Credit Agreement, the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, only after the occurrence and during the continuance of an Event of Default, in the case of Accounts or Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification. The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party. (e) At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to the US Facilities Credit Agreements or the ABL Facilities Credit Agreement, and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any US Grantor fails to do so as required by any Credit 25 Agreement or this Agreement, and each US Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided that nothing in this paragraph shall be interpreted as excusing any US Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any US Grantor with respect to taxes, assessments, charges, fees, Liens, security interests or other encumbrances and maintenance as set forth herein or in the other Credit Documents. (f) The US Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment included in the Article 9 Collateral in accordance with the requirements set forth in the US Facilities Credit Agreements and the ABL Facilities Credit Agreement. Each US Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such US Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Article 9 Collateral under policies of insurance, endorsing the name of such US Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any US Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the US Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premiums and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this paragraph, including reasonable attorneys' fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the US Grantors to the Collateral Agent and shall be additional Obligations secured hereby. (g) Each US Grantor shall maintain, in form and manner reasonably satisfactory to the Collateral Agent, records of its Chattel Paper and its books, records and documents evidencing or pertaining thereto. SECTION 4.05. Other Actions. In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the security interests created hereby, each US Grantor agrees, in each case at such Grantor's own expense, to take the following actions with respect to the following Article 9 Collateral: if any US Grantor shall at any time hold or acquire any Instrument representing Indebtedness in excess of $3,000,000, such US Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request. SECTION 4.06. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each US Facilities Grantor agrees that it will not do or omit to do any act (and will exercise commercially reasonable efforts to prevent its licensees from doing or omitting to do any act) whereby any Patent constituting Material Intellectual Property may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by such Patent with the relevant patent number consistent with good business judgment to establish and preserve its rights under applicable patent laws. (b) Each US Facilities Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark constituting Material Intellectual Property, (i) maintain 26 such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration consistent with good business judgment to establish and preserve its rights under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights. (c) Each US Facilities Grantor (either itself or through its licensees or sublicensees) will, for each work covered by a Copyright constituting Material Intellectual Property, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice consistent with good business judgment to establish and preserve its rights under applicable copyright laws. (d) Each US Facilities Grantor shall notify the Collateral Agent promptly if it knows or has reason to know that any Patent, Trademark or Copyright constituting Material Intellectual Property may become abandoned, lost or dedicated to the public, or of any materially adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such US Grantor's ownership of any Patent, Trademark or Copyright, its right to register the same, or its right to keep and maintain the same; provided that such notification need not be given if such impairment of such Intellectual Property is not material viewed against the Material Intellectual Property as a whole. (e) Each US Facilities Grantor will take all steps consistent with good business judgment that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each application relating to the Patents, Trademarks and/or Copyrights constituting Material Intellectual Property (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights constituting Material Intellectual Property, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancelation proceedings against third parties. (f) Upon and during the continuance of an Event of Default, each US Grantor shall endeavor in good faith to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License or Trademark License to effect the assignment of all such US Grantor's right, title and interest thereunder to the Collateral Agent or its designee. SECTION 4.07. Lockbox System. The ABL Facilities Grantors shall establish, subject to the control of the Collateral Agent pursuant to the Lockbox Agreements, a system of lockboxes and related Deposit Accounts (the "Lockbox System"). Each ABL Facilities Grantor agrees that it shall have no Deposit Accounts other than (a) Deposit Accounts in the Lockbox System, (b) Excluded Operating Accounts and (c) Local Collection Accounts, except during the period of 45 days following the Effective Date as contemplated by the next sentence. Each ABL Facilities Grantor further agrees (i) to execute and deliver, and to cause the Deposit Account Institution at which any Deposit Account (other than an Excluded Operating Account or a Local Collection Account) is maintained to execute and deliver, a Lockbox Agreement with respect to each such Deposit Account as promptly as practicable following (and in any event no later than 45 days following) the Effective Date, (ii) to notify and direct promptly each Account Debtor and 27 every other Person obligated to make payments on Accounts or in respect of any Inventory to make all such payments directly to one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes, (iii) to use all reasonable efforts to cause each such Account Debtor and other Person to make all payments with respect to Accounts and Inventory directly to one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes, (iv) promptly to deposit all payments received by it on account of Accounts and Inventory, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes in the form in which received (but with any endorsements of such ABL Facilities Grantor necessary for deposit or collection), (v) to establish promptly after the Effective Date an ABL Collateral Proceeds Account in the United States, a U.S. dollar and a Canadian dollar ABL Collateral Proceeds Account in Canada and the RBC Deposit Account, in each case on terms reasonably satisfactory to the Collateral Agent and (vi) as promptly as practicable following (and in any event no later than 45 days following) the Effective Date, to implement agreements with the applicable Deposit Account Institutions under which all amounts on deposit in each Deposit Account (other than Excluded Operating Accounts and Local Collection Accounts) located in the United States and in Canada will be paid to the Collateral Agent for deposit in the ABL Collateral Proceeds Account located in the United States or in the RBC Account, respectively, at the end of each Business Day, and under which all amounts in the RBC Account will be paid not less often than weekly into the ABL Collateral Proceeds Accounts in Canada in same day funds. So long as no Event of Default under and as defined in the ABL Facilities Agreement (or, if the ABL Facilities Agreement shall no longer be in effect, under and as defined in either of the US Facilities Agreements) has occurred and is continuing, the Collateral Agent shall promptly (and no less frequently than each Business Day) remit any funds on deposit in each ABL Collateral Proceeds Account to one or more accounts of the Company that have been designated by the Company. Effective upon notice to the Company after the occurrence and during the continuance of an Event of Default under and as defined in the ABL Facilities Agreement (or, if the ABL Facilities Agreement shall no longer be in effect, under and as defined in either of the US Facilities Agreements), each ABL Collateral Proceeds Account, the RBC Deposit Account and each Deposit Account (other than Excluded Operating Accounts and Local Collection Accounts) will, without further action on the part of any ABL Facilities Grantor or the Collateral Agent, convert into a closed lockbox account under the sole dominion and control of the Collateral Agent in which all funds are held subject to the rights of the Collateral Agent hereunder. Without the prior written consent of the Collateral Agent, no ABL Facilities Grantor shall, in a manner adverse to the Secured Parties, change the general instructions given to Account Debtors in respect of payments to be deposited in the Lockbox System. Each ABL Facilities Grantor irrevocably authorizes the Collateral Agent, upon the occurrence of an Event of Default under and as defined in the ABL Facilities Agreement (or, if the ABL Facilities Agreement shall no longer be in effect, under and as defined in either of the US Facilities Agreements), to deliver a Control Notice under each Lockbox Agreement. The Collateral Agent agrees with each ABL Facilities Grantor that the Collateral Agent shall not give any instructions pursuant to any Lockbox Agreement terminating such Lockbox Agreement or the right of such ABL Facilities Grantor to make withdrawals from any Deposit Account in the Lockbox System unless an Event of Default under and as defined in the ABL Facilities Agreement (or, if the ABL Facilities Agreement shall no longer be in effect, under and as defined in either of the US Facilities Agreements) shall have occurred and be continuing or, after giving effect to any withdrawal, would occur. The Collateral Agent, in its capacity as Administrative Agent under the ABL Facilities Agreement, acknowledges and agrees that an instruction by a Grantor to pay an 28 Account into the RBC Collection Account or a Deposit Account in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, a Local Collection Account) or a related lockbox, or, for a period of 45 days after the Effective Date, into any Deposit Account of such Grantor or related lockbox, shall constitute an instruction by such Grantor to pay such Account directly into a Deposit Account in the Lockbox System for purposes of clause (xxi) of the definition of "Eligible Accounts Receivable" contained in the ABL Facilities Agreement. The Company shall ensure that the aggregate amount contained in all Local Collection Accounts taken together shall not at any time exceed a maximum amount determined by the Administrative Agent in its sole discretion (not to be exercised unreasonably). SECTION 4.08. Insurance. Each applicable US Grantor shall cause the Collateral Agent to be named as loss payee on all property insurance maintained in respect of property subject to US Facilities Mortgages and the ABL Facilities Mortgages. ARTICLE V Other Pledges, Mortgages and Security Interests SECTION 5.01. Summary of Certain Other Security Documents. In addition to the security interests created under Articles III and IV the parties acknowledge that: (a) The Company and the Collateral Agent are entering into the Luxembourg Finance Pledge Agreement under which the Company is pledging the Luxembourg Finance Pledged Collateral (i) on a senior basis to secure the European Facilities Obligations referred to therein and the Applicable Collateral Agent Obligations, (ii) on a junior, second lien basis to secure the US Facilities Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations, (iii) on a junior, third lien basis to secure the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations and the Applicable Collateral Agent Obligations and (iv) on a junior, fourth lien basis to secure the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations. (b) The US Facilities Grantors are entering into the US Facilities Foreign Pledge Agreements listed in Schedule II, and may in the future enter into additional US Facilities Foreign Pledge Agreements, under which they are pledging Equity Interests in Foreign Subsidiaries owned by them (i) on a senior basis to secure the the US Facilities Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations, (ii) on a junior, second lien basis to secure the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations and the Applicable Collateral Agent Obligations, (iii) on a junior, third lien basis to secure the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations and (iv) after the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, on a junior, fourth lien basis to secure the European Facilities Revolving Obligations and the Applicable Collateral Agent Obligations. (c) The US Facilities Grantors are entering into the US Facilities Mortgages listed in Schedule III under which they are mortgaging real properties and interests in real properties owned by them (i) on a senior basis to secure the US Facilities Obligations, the US Miscellaneous Obligations, the Applicable Collateral Agent Obligations, (ii) on a junior, second lien basis to secure the ABL Facilities Obligations and the Applicable Collateral Agent Obligations and, to the extent provided therein, to secure the Swiss Franc Obligations (but subject, as among the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term 29 Obligations and the ABL Facilities Tranche B Term Obligations, to the provisions of Article XI) and (iii) in the case of the Company's headquarters building in Akron, Ohio, after the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, on a junior, third lien basis to secure the European Facilities Revolving Obligations and the Applicable Collateral Agent Obligations. (d) The European Facilities Grantors are entering into the European Facilities Security Documents listed in Schedule IV, and may in the future enter into additional European Facilities Security Documents, under which they are pledging and creating security interests in Equity Interests and other assets owned by them to secure the European Facilities Obligations referred to therein and the Applicable Collateral Agent Obligations. (e) Certain ABL Facilities Grantors that are organized under the laws of Canada or one or more provinces thereof are entering into the Canadian Security Agreements, under which they are creating security interests (i) in the ABL Facilities Collateral owned by them to secure (A) on a senior basis the ABL Facilities Revolving Obligations, the ABL Facilities Tranche A Term Obligations and the Applicable Collateral Agent Obligations, (B) on a junior, second lien basis the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations and (C) on a junior, third lien basis the US Facilities Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations and (D) after the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, on a junior, fourth lien basis the European Facilities Revolving Obligations, and (ii) in the Canadian Intellectual Property Collateral owned by them to secure (A) on a senior basis the US Facilities Obligations, the US Miscellaneous Obligations and the Applicable Collateral Agent Obligations, (B) on a junior, second lien basis the ABL Facilities Tranche A Term Obligations and the Applicable Collateral Agent Obligations, (C) on a junior, third lien basis the ABL Facilities Tranche B Term Obligations and the Applicable Collateral Agent Obligations and (D) after the initial incurrence, issuance or sale by the Company of Senior Subordinated-Lien Indebtedness, on a junior, fourth lien basis the European Facilities Revolving Obligations. SECTION 5.02. Other Security Documents Subject to This Agreement. (a) The parties to the Other Security Documents shall observe the following provisions: (i) to the extent applicable, the provisions of Section 4.01 (i), (j), (l) and (m) (limiting the amount of certain Obligations secured by Collateral of the Company; (ii) the provisions of Section 6.03 (governing the distribution of the proceeds realized from the exercise of remedies under the Security Documents); (iii) the provisions of Article VIII (governing the manner in which Acts of the Secured Parties are to be evidenced and the manner in which the amounts of the Obligations at any time are to be determined); (iv) the provisions of Articles IX and X (relating to the duties and responsibilities of the Collateral Agent); (v) the provisions of Article XI (providing for the subordination of the Junior Liens created hereby and by certain of the Other Security Documents to the Applicable Senior Liens and the priming of certain Junior Liens); and (vi) the provisions of Section 13.13 (providing for releases of Guarantees of and Collateral securing the Obligations). (b) Each of the US Facilities Mortgages (other than any US Facilities Mortgage that sets forth in full the provisions referred to in clauses (i) through (vi) of paragraph (a) above) shall contain a provision substantially to the effect set forth below (in the language of such Other Security Document) and satisfactory to the Collateral Agent and its counsel: "THIS AGREEMENT AND THE PLEDGES, SECURITY INTERESTS AND OTHER LIENS AND CHARGES CREATED HEREBY ARE SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THE MASTER GUARANTEE AND COLLATERAL AGREEMENT 30 DATED AS OF MARCH 31, 2003, AS AMENDED, AMONG THE GOODYEAR TIRE & RUBBER COMPANY, CERTAIN OF ITS SUBSIDIARIES AND JPMORGAN CHASE BANK, AS COLLATERAL AGENT, AND ANY PROVISION OF THIS AGREEMENT THAT IS INCONSISTENT WITH THE PROVISIONS OF SUCH MASTER GUARANTEE AND COLLATERAL AGREEMENT SHALL BE DEEMED FOR ALL PURPOSES TO HAVE BEEN AMENDED TO CONFORM IN ALL RESPECTS TO SUCH PROVISIONS." ARTICLE VI Remedies SECTION 6.01. Remedies Upon Default. Upon the occurrence and during the continuance of an Event of Default under and as defined in any Credit Agreement and the receipt by the Collateral Agent of an Act of the Majority Lenders (or, in the case of the ABL Facilities Agreement, the Majority Borrowing Base Lenders) under such Credit Agreement instructing it to exercise remedies, to the extent permitted by law (a) the Collateral Agent may demand that each Grantor deliver each item of Applicable Collateral owned or held by it to the Collateral Agent, and each Grantor agrees so to deliver all such Applicable Collateral, and (b) the Collateral Agent shall have the right to take any of or all the following actions at the same or different times with respect to any Applicable Collateral: (i) with respect to any Collateral consisting of Intellectual Property, on demand, to cause its security interest in such Collateral to become an assignment, transfer and conveyance of any of or all such Collateral by the applicable Grantors to the Collateral Agent, or to grant any license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, with respect to any such Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (ii) with or without legal process and with or without prior notice or demand for performance, to take possession of the Applicable Collateral and without liability for trespass to enter any premises where the Applicable Collateral may be located for the purpose of taking possession of or removing the Applicable Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Applicable Collateral at a public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Applicable Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Applicable Collateral so sold. Each such purchaser at any sale of Applicable Collateral shall (to the extent permitted by law) 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 law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. In the case of any Applicable Collateral that constitutes Article 9 Collateral, the Collateral Agent shall give the applicable Grantors 10 days' written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its 31 equivalent in other jurisdictions) of the Collateral Agent's intention to make any sale of Applicable Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Applicable Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Applicable Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Applicable Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Applicable Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Applicable Collateral is made on credit or for future delivery, the Applicable Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Applicable Collateral so sold and, in case of any such failure, such Applicable Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Agreement, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Applicable Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor (to the extent permitted by law). For purposes hereof, a written agreement to purchase any Applicable Collateral or portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Applicable Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default under the applicable Credit Agreement shall have been remedied and the Obligations secured by the Applicable Collateral paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Applicable Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 6.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions. SECTION 6.02. Exercise of Remedies under Other Security Documents. The Collateral Agent shall also have the right to exercise remedies provided for in each Other Security Document upon the occurrence and during the continuance of an Event of Default under and as defined in any Credit Agreement as to which the Collateral subject to such Other Security Document constitutes Applicable Collateral and the receipt by the Collateral Agent of an Act of the Majority Lenders under such Credit Agreement instructing it to exercise remedies. 32 SECTION 6.03. Application of Proceeds. (a) Unless otherwise required by applicable law, the Collateral Agent shall apply the proceeds of the collection or sale of any Collateral securing any Obligations, including any Collateral consisting of cash, as follows: FIRST, to the payment of all costs and expenses incurred by the Collateral Agent in connection with such collection or sale or otherwise in connection with this Agreement or any other Credit Document (in each case, insofar as they evidence, govern, secure or otherwise relate to such Obligations), or otherwise in connection with any of such Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Credit Document (in each case, insofar as they relate to such Obligations) on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Credit Document (in each case, insofar as they relate to such Obligations) at the direction or for the benefit of holders of such Obligations; SECOND, to the payment of all such Obligations as shall be owed to the Administrative Agent or any Issuing Bank under and as defined in the Applicable Credit Agreement; THIRD, to the payment in full of the other Obligations secured by such Collateral in accordance with the relative priorities of the Liens on such Collateral securing such Obligations as set forth herein and in the Other Security Documents, with Obligations secured by Liens of a higher priority being paid in full before any distribution is made in respect of Obligations secured by Liens of a lower priority (and, as between Obligations secured by Liens of the same priority, ratably in accordance with the amounts of such Obligations on the date of such application); provided that proceeds of US Facilities Collateral and ABL Facilities Collateral subject to European Facilities Junior Liens shall, after the payment of all Obligations secured by Applicable Senior Liens, be applied to the payment in full of the European Facilities Revolving Obligations and, to the extent required by the Lien Subordination and Intercreditor Agreement, to the payment of all other obligations secured by such Collateral on a pari passu basis with the European Facilities Revolving Obligations; and FOURTH, to the applicable Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. If any US Facilities Mortgage shall be permitted under applicable law to secure only those US Facilities Obligations that constitute term Indebtedness, the proceeds of other US Facilities Collateral shall be distributed pursuant to Clause THIRD above in such a manner as shall be appropriate in the judgment of the Collateral Agent to offset any resulting distributions to holders of such term Indebtedness in excess of their ratable share of all distribution in respect of the US Facilities Collateral. For purposes of clause THIRD above, the Lien of any US Facilities Mortgage, insofar as it secures the Swiss Franc Obligations, will, to the maximum extent 33 permitted under the Swiss Franc Bond Agreement, be deemed to be of a lower priority than the Lien of such US Facilities Mortgage insofar as it secures the US Facilities Obligations, the US Miscellaneous Obligations and the ABL Facilities Obligations. Notwithstanding the provisions of clause THIRD above, any US Facilities Article 9 Collateral consisting of cash deposited to collateralize Letter of Credit reimbursement obligations pursuant to the US Revolving Facility Agreement will be applied first against such reimbursement obligations. SECTION 6.04. Grant of License to Use Intellectual Property. (a) Each Grantor hereby grants to the Collateral Agent, to the extent necessary to enable the Collateral Agent to exercise rights and remedies under this Agreement and the Other Security Documents at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or sublicense any Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, to the extent and only to the extent such license would not violate or result in a default under any license or other agreement, whether express or implied, between the Grantor and any Person other than a Wholly Owned Subsidiary. The rights of the Collateral Agent under such license may be exercised, at the option of the Collateral Agent, solely upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of any Event of Default. (b) Notwithstanding any other provision contained in this Agreement, any security interest granted hereunder in any Collateral consisting of Intellectual Property to secure the Obligations of any Class shall be subject to the license granted under the preceding paragraph (a), as such license may be exercised for the benefit of the Secured Parties holding Obligations of any other Class, and any sale or transfer of Collateral consisting of Intellectual Property upon any exercise of remedies under this Agreement shall be made expressly subject to such license. SECTION 6.05. Securities Act. In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the "Federal Securities Laws") with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single 34 potential purchaser to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells. SECTION 6.06. Registration. Each Grantor agrees that, upon the occurrence and during the continuance of an Event of Default, if for any reason the Collateral Agent desires to sell any of the Pledged Collateral at a public sale, it will, at any time and from time to time, upon the written request of the Collateral Agent, use its best efforts to take or to cause the issuer of such Pledged Collateral to take such action and prepare, distribute and/or file such documents, as are required or advisable in the reasonable opinion of counsel for the Collateral Agent to permit the public sale of such Pledged Collateral under applicable law. Each Grantor further agrees to indemnify, defend and hold harmless the Collateral Agent, each other Secured Party, any underwriter and their respective officers, directors, affiliates and controlling persons from and against all loss, liability, expenses, costs of counsel (including, without limitation, reasonable fees and expenses of the Collateral Agent's legal counsel), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or in any notification or offering circular relating to the offering for sale of any Pledged Collateral, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to such Grantor or the issuer of such Pledged Collateral by the Collateral Agent or any other Secured Party expressly for use therein. Each Grantor further agrees, upon such written request referred to above, to use its best efforts to qualify, file or register, or cause the issuer of such Pledged Collateral to qualify, file or register, any of the Pledged Collateral under the Blue Sky or other securities laws of such jurisdictions as may be requested by the Collateral Agent and keep effective, or cause to be kept effective, all such qualifications, filings or registrations. Each Grantor will bear all costs and expenses of carrying out its obligations under this Section. Each Grantor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section may be specifically enforced. ARTICLE VII Indemnity, Subrogation and Subordination SECTION 7.01. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Grantors and Guarantors may have under applicable law (but subject to Section 7.03), the Company and each other Borrower agrees that (a) in the event a payment shall be made by any Guarantor under this Agreement in respect of an Obligation of any Borrower, the Company and such Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the Person to whom such 35 payment shall have been made to the extent of such payment and (b) in the event any assets of any Grantor shall be sold pursuant to this Agreement or any Other Security Document to satisfy in whole or in part an Obligation of any Borrower, the Company and such Borrower shall indemnify such Grantor in an amount equal to the greater of the book value or the fair market value of the assets so sold. SECTION 7.02. Contribution and Subrogation. Each US Guarantor and US Facilities Grantor, other than the Company, that has guaranteed, or granted Liens to secure, the Obligations of any Class under this Agreement or any Other Security Document (a "Contributing Party") agrees (subject to Section 7.03) that, in the event a payment shall be made by any other US Guarantor (other than the Company) hereunder in respect of Obligations of such Class or assets of any other US Facilities Grantor (other than the Company) shall be sold pursuant to any Security Document to satisfy Obligations of such Class and such other US Guarantor or US Facilities Grantor (the "Claiming Party") shall not have been fully indemnified by the applicable Borrower as provided in Section 7.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party and the denominator shall be the aggregate net worth of all the US Guarantors and US Facilities Grantors, other than the Company, that have guaranteed or granted Liens to secure the Obligations of such Class. For the purposes of the previous sentence, the net worth of each Guarantor and Grantor shall be determined on the Effective Date (or, in the case of any US Guarantor or US Facilities Grantor becoming a US Guarantor or US Facilities Grantor after the Original Signing Date, the date on which such US Guarantor or US Facilities Grantor shall have become a US Guarantor or US Facilities Grantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section shall be subrogated to the rights of such Claiming Party under Section 7.01 to the extent of such payment. SECTION 7.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Guarantors and Grantors under Sections 7.01 and 7.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of the Obligations, and no Guarantor or Grantor shall seek to enforce any of such rights until the Obligations have been paid in full. No failure on the part of any Borrower or any Guarantor or Grantor to make the payments required by Sections 7.01 and 7.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor or Grantor with respect to its obligations hereunder, and each Guarantor and Grantor shall remain liable for the full amount of the obligations of such Guarantor or Grantor hereunder. (b) To the fullest extent permitted under law, each Guarantor and Grantor hereby agrees that all Indebtedness and other monetary obligations owed by it to any other Guarantor, Grantor or any other Subsidiary shall be fully subordinated to the indefeasible payment in full in cash of the Obligations. ARTICLE VIII Acts of Secured Parties and Administrative Agent; Amounts of Secured Obligations SECTION 8.01. Acts of Secured Parties and Administrative Agent. Any request, demand, authorization, direction, notice, consent, waiver or other action permitted or 36 required by this Agreement to be given or taken by any Secured Party may be, and at the request of the Collateral Agent shall be, embodied in and evidenced by one or more instruments reasonably satisfactory in form to the Collateral Agent and signed by such Secured Party or Administrative Agent, acting individually or on behalf of the applicable Secured Parties, as the case may be, and, except as otherwise expressly provided in any such instrument, any such action shall become effective when such instrument or instruments shall have been delivered to the Collateral Agent as provided herein. The instrument or instruments evidencing any action (and the action embodied therein and evidenced thereby) are sometimes referred to herein as an "Act" of the persons signing such instrument or instruments. All Acts hereunder on the part of any Secured Parties shall be taken on their behalf by the Administrative Agent under the applicable Credit Agreement. The Collateral Agent shall be entitled to rely absolutely upon an Act of an Administrative Agent if such Act purports to be taken by or on behalf of the Secured Parties, and nothing in this Section or elsewhere in this Agreement shall be construed to require such Administrative Agent to demonstrate that it has been authorized by the Secured Parties thereunder to take any action that it purports to be taking, the Collateral Agent being entitled to rely conclusively without any independent investigation whatsoever, and being fully protected in so relying, on any Act of such Administrative Agent. SECTION 8.02. Determination of Amounts of Secured Obligations and Existence of Events of Default under Credit Agreements; Acceleration. Whenever the Collateral Agent is required to determine the existence or amount of any of the Obligations or the existence of any Event of Default under any Credit Agreement for any purposes of this Agreement, it shall request written certification of such existence or amount from the Administrative Agent under such Credit Agreement, and shall be entitled to make such determination on the basis of such certification; provided, however, that if, notwithstanding the request of the Collateral Agent, the Administrative Agent under any Credit Agreement shall fail or refuse reasonably promptly to certify as to the existence or amount of any Obligation or the existence of any Event of Default under such Credit Agreement, the Collateral Agent shall be entitled to determine such existence or amount by such method as the Collateral Agent may, in the exercise of its good faith judgment, determine, including by reliance upon a certificate of the Company. The Collateral Agent may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to the Company, any other Borrower, Guarantor or Grantor, any holder of any Secured Obligation or any other person as a result of such determination. ARTICLE IX Duties of Collateral Agent SECTION 9.01. Notices to Administrative Agents under Credit Agreements. The Collateral Agent shall promptly notify each Administrative Agent in the event it shall receive (a) any notice of an Event of Default under any other Credit Agreement or (b) any instructions given by the Administrative Agent, on behalf of the Majority Lenders, under any other Credit Agreement to commence the exercise of remedies under Article VI. SECTION 9.02. Actions Under This Agreement. (a) The Collateral Agent shall not be obligated to take any action under this Agreement or any Other Security Document except for the performance of such duties as are specifically set forth herein and therein. Subject to the provisions of Article X of this Agreement and to the succeeding provisions of this Section, 37 the Collateral Agent shall take such actions, and only such actions, under this Agreement and the Other Security Documents with respect to any Collateral of any Class as are requested by the Administrative Agent, on behalf of the Majority Lenders, under the Applicable Credit Agreement (or, in the case of the US Facilities Collateral, one of the Applicable Credit Agreements) and as are not inconsistent with or contrary to the provisions of this Agreement, any Other Security Document or any Credit Agreement, as well as ministerial and/or administrative actions required or permitted by this Agreement and the Other Security Documents. It is the intent of the parties hereto that (i) the Administrative Agent under either of the US Facilities Credit Agreements shall have the right to initiate the exercise of remedies with respect to the US Facilities Collateral and (ii) the Administrative Agents under the US Facilities Credit Agreements shall jointly control the manner of the exercise of such remedies. Therefore, in the event the Administrative Agent under either US Facilities Credit Agreement notifies the Collateral Agent and the Administrative Agent under the other US Facilities Credit Agreement of its desire to commence the exercise of remedies and/or to foreclose on specified US Facilities Collateral, the Administrative Agents under both US Facilities Credit Agreements shall promptly confer to determine the manner in which the Collateral Agent should proceed. The Administrative Agent under each US Facilities Credit Agreement, acting in good faith, shall use its best efforts to reach agreement on such matters so that one or more remedies (which shall include foreclosure on such US Facilities Collateral if requested in such notification) will be exercised reasonably promptly after such notification. In connection with the foregoing, neither of such Administrative Agents will give instructions to the Collateral Agent with the intent of preventing, hindering or delaying the exercise of any remedies requested by the Administrative Agent under the other US Facilities Credit Agreement. Notwithstanding the foregoing, the Collateral Agent shall, if it has received inconsistent instructions from the Administrative Agents under the Credit Agreements with respect to any matter hereunder, act with respect to such matter in such manner as it shall deem to be in the best interests of all the Secured Parties and consistent with the provisions and intent of this Agreement. (b) The holders of the Swiss Franc Obligations and the US Miscellaneous Obligations shall not be entitled to, and shall not, (i) direct the actions of the Collateral Agent hereunder, (ii) take any action, or commence any legal proceeding seeking, to require, compel or cause the Collateral Agent to enforce any provisions of this Agreement against any Grantor or to exercise any remedy hereunder, (iii) take any action, or commence any legal proceeding seeking, to prevent or enjoin the Collateral Agent from taking any action (including, without limitation, the enforcement of any provisions of this Agreement against any Grantor, the exercise of any remedy hereunder, the release of any Collateral hereunder or the consent to any amendment or modification of this Agreement or the grant of any waiver hereunder), or refraining from taking any such action, in accordance with this Agreement or (iv) take any action, or commence any legal proceeding seeking, to delay, hinder or otherwise impair the Collateral Agent in taking any such action in accordance with this Agreement. By their acceptance of the benefits of this Agreement and the Other Security Documents, the holders of the Swiss Franc Obligations and the US Miscellaneous Obligations will be deemed to have acknowledged and agreed to the provisions of the preceding sentence, and to have acknowledged that such provisions are being relied upon by the other Secured Parties. (c) THE COLLATERAL AGENT HAS CONSENTED TO SERVE AS COLLATERAL AGENT HEREUNDER ON THE EXPRESS UNDERSTANDING, AND THE HOLDERS OF THE SWISS FRANC OBLIGATIONS AND US MISCELLANEOUS OBLIGATIONS, BY ACCEPTING THE BENEFITS OF THIS AGREEMENT, SHALL BE DEEMED TO HAVE AGREED, THAT THE COLLATERAL AGENT SHALL HAVE NO DUTY AND SHALL OWE NO OBLIGATION OR RESPONSIBILITY (FIDUCIARY OR 38 OTHERWISE) TO THE HOLDERS OF THE SWISS FRANC OBLIGATIONS OR THE US MISCELLANEOUS OBLIGATIONS, OTHER THAN THE DUTY TO PERFORM ITS EXPRESS OBLIGATIONS UNDER THIS AGREEMENT IN ACCORDANCE WITH THEIR TERMS, SUBJECT IN ALL EVENTS TO THE PROVISIONS OF ARTICLE X AND THE OTHER PROVISIONS OF THIS AGREEMENT LIMITING THE RESPONSIBILITY OR LIABILITY OF THE COLLATERAL AGENT HEREUNDER. WITHOUT LIMITING THE FOREGOING, THE HOLDERS OF THE SWISS FRANC OBLIGATIONS AND US MISCELLANEOUS OBLIGATIONS, BY ACCEPTING THE BENEFITS OF THIS AGREEMENT AND THE OTHER SECURITY DOCUMENTS, SHALL BE DEEMED TO HAVE WAIVED ANY RIGHT THEY MIGHT HAVE, UNDER APPLICABLE LAW OR OTHERWISE, TO COMPEL THE SALE OR OTHER DISPOSITION OF ANY COLLATERAL, AND ANY OBLIGATION THE COLLATERAL AGENT MIGHT HAVE, UNDER APPLICABLE LAW OR OTHERWISE, TO OBTAIN ANY MINIMUM PRICE FOR ANY COLLATERAL UPON THE SALE THEREOF, IT BEING EXPRESSLY UNDERSTOOD, AND THE AVAILABILITY OF THE BENEFITS OF THIS AGREEMENT TO THE HOLDERS OF THE SWISS FRANC OBLIGATIONS AND US MISCELLANEOUS OBLIGATIONS BEING CONDITIONED UPON THE UNDERSTANDING, THAT THE SOLE RIGHT OF THE HOLDERS OF THE SWISS FRANC OBLIGATIONS AND US MISCELLANEOUS OBLIGATIONS SHALL BE TO RECEIVE THEIR RATABLE SHARE OF ANY PROCEEDS OF COLLATERAL IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS AGREEMENT. ARTICLE X Concerning the Collateral Agent SECTION 10.01. Limitations on Responsibility of Collateral Agent. The Collateral Agent shall not be responsible in any manner whatsoever for the correctness of any recitals, statements, representations or warranties contained herein or in any Other Security Document. The Collateral Agent makes no representation as to the value or condition of the Collateral or any part thereof, as to the title of any Grantor to the Collateral, as to the security afforded by this Agreement or any Other Security Document or as to the validity, execution, enforceability, legality or sufficiency of this Agreement or any Other Security Document, and the Collateral Agent shall incur no liability or responsibility in respect of any such matters. The Collateral Agent shall not be responsible for insuring the Collateral, for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise for the maintenance of the Collateral, except as provided in the immediately following sentence when the Collateral Agent has possession or control of the Collateral. Except as otherwise provided herein, the Collateral Agent shall have no duty to the Grantors or to the holders of the Secured Obligations as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except the duty to accord such Collateral the same care that it normally accords to its own assets and the duty to account for moneys received by it. The Collateral Agent shall not be required to ascertain or inquire as to the performance by any Borrower, Guarantor or Grantor of any of the covenants or agreements contained herein or in any other agreement. Neither the Collateral Agent nor any officer, agent or representative thereof shall be personally liable for any action taken or omitted to be taken by any such person in connection with this Agreement or any Other Security Document except for such person's own gross negligence or wilful misconduct (it being understood that any action taken in accordance with the terms of this Agreement or any Other Security Document by the Collateral Agent or any 39 such officer, agent or representative at the direction or instruction of the Administrative Agent or the Majority Lenders under any Credit Agreement (or not taken, in the absence of any such directions or instructions) shall not constitute gross negligence or wilful misconduct). Neither the Collateral Agent nor any officer, agent or representative thereof shall be personally liable for any action taken by any such person in accordance with any notice given by the Administrative Agent or the Majority Lenders under any Credit Agreement hereunder or under any Other Security Document even if, at the time such action is taken by any such Person, the Administrative Agent or the Lenders which gave the notice to take such action shall no longer be the Administrative Agent or the Majority Lenders under such Credit Agreement or the Secured Parties on behalf of which such notice was given are no longer the Secured Parties. The Collateral Agent may execute any of the powers granted under this Agreement and perform any duty hereunder either directly or by or through agents or attorneys-in-fact. SECTION 10.02. Reliance by Collateral Agent; Indemnity Against Liabilities, etc. (a) Whenever in the performance of its duties under this Agreement or any Other Security Document the Collateral Agent shall deem it necessary or desirable that a matter be proved or established with respect to any Grantor or any other person in connection with the taking, suffering or omitting of any action hereunder by the Collateral Agent, such matter may be conclusively deemed to be proved or established by a certificate executed by an officer of such Person which is believed by the Collateral Agent to be genuine and to have been signed or sent by the proper Person, and the Collateral Agent shall have no liability with respect to any action taken, suffered or omitted in reliance thereon. (b) The Collateral Agent may consult with counsel and shall not incur any liability in taking any action hereunder or under any Other Security Document in good faith in accordance with any advice of such counsel. The Collateral Agent shall have the right but not the obligation at any time to seek instructions concerning the administration of this Agreement or any Other Security Document, the duties created hereunder or the Collateral from any court of competent jurisdiction. (c) The Collateral Agent shall not incur any liability in relying upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order or other paper or document which it in good faith believes to be genuine and to have been signed or presented by the proper party. The Collateral Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificate or opinions that are believed by the Collateral Agent to be genuine and signed or furnished by the proper Person furnished to the Collateral Agent in connection with this Agreement or any Other Security Document. (d) The Collateral Agent shall not be deemed to have actual, constructive, direct or indirect notice or knowledge of the occurrence of any Event of Default under any Credit Agreement unless and until the Collateral Agent shall have received written notice thereof from the Administrative Agent under such Credit Agreement. The Collateral Agent shall have no obligation whatsoever either prior to or after receiving such a notice which is believed by the Collateral Agent to be genuine and to have been signed or sent by the proper Person to inquire whether an Event of Default under any Credit Agreement has, in fact, occurred and shall be entitled to rely conclusively, and shall be fully protected in so relying, on any such notice so furnished to it. (e) If the Collateral Agent has been requested to take any specific action by any Administrative Agent pursuant to any provision of this Agreement or any Other Security 40 Document, the Collateral Agent shall not be under any obligation to exercise any of the rights or powers vested in it by this Agreement or such Other Security Document in the manner so requested unless it shall have been provided indemnity by the Secured Parties on whose behalf such request shall have been made reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred by it in compliance with such request or direction. SECTION 10.03. Resignation and Removal of the Collateral Agent. The Collateral Agent may at any time, by giving 30 days' prior written notice to the Company and the Administrative Agent under each Credit Agreement, resign and be discharged from the responsibilities hereby created, such resignation to become effective upon the appointment of a successor by the Administrative Agents with, so long as no Event of Default has occurred and is continuing, the consent of the Company (such consent not to be unreasonably withheld) and the acceptance of such appointment by such successor. If no successor shall be appointed and approved within 30 days after the date of any such resignation, the Collateral Agent may apply to any court of competent jurisdiction to appoint a successor to act until a successor shall have been appointed as above provided or may, on behalf of the Secured Parties, appoint a successor Collateral Agent which shall be a bank with an office in New York, New York having a combined capital and surplus of at least $500,000,000. SECTION 10.04. Expenses and Indemnification. By accepting the benefits of this Agreement, each of the Lenders severally agrees (i) to reimburse the Collateral Agent, on demand, in the amount of its pro rata share from time to time (based on the amount of the Loans, LC Exposures and unused Commitments (as such terms are defined in the respective Credit Agreements) of such Lender and the other applicable Lenders), of any expenses referred to in this Agreement or in any Other Security Document securing Obligations owed to such Lender and/or any other expenses incurred by the Collateral Agent in connection with the enforcement and protection of the rights of the Collateral Agent and the Secured Parties which shall not have been paid or reimbursed by the Company or any other Borrower, Grantor or Guarantor or paid from the proceeds of Collateral as provided herein and (ii) to indemnify and hold harmless the Collateral Agent and its Affiliates and its and their respective directors, officers, employees, agents and attorneys (each, an "Indemnified Party"), on demand, in the amount of such pro rata share, from and against any and all liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements referred to in this Agreement and/or incurred by the Collateral Agent in connection with this Agreement or the Other Security Documents or the enforcement and protection of the rights of the Secured Parties, to the extent the same shall not have been reimbursed by the Company or any other Borrower, Grantor or Guarantor or paid from the proceeds of Collateral as provided herein; provided, in each case, that no Secured Party shall be liable to any Indemnified Party for any portion of such expenses, liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or wilful misconduct of such Person. ARTICLE XI Subordination of Certain Liens SECTION 11.01. Perfection and Priority of Security Interests. (a) All Junior Liens in respect of any Collateral are expressly subordinated and made junior in priority, operation and effect to the Applicable Senior Liens in respect of such Collateral, notwithstanding anything to the contrary contained in this Agreement, any Other Security Document or any other agreement or filing to the contrary, and irrespective of the time, order or method of attachment or 41 perfection of such Junior Liens and the Applicable Senior Liens or any defect or deficiency or alleged defect or deficiency in any of the foregoing. (b) Each Secured Party holding Obligations secured by a Junior Lien acknowledges that a portion of the Applicable Senior Obligations consists of Indebtedness that is revolving in nature and that the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the Applicable Senior Obligations may be modified, extended or amended from time to time, and the aggregate amount of the Applicable Senior Obligations may be increased, replaced or refinanced, all without notice to or consent by such Secured Party and without affecting the provisions hereof. The lien priorities provided for herein and in the Other Security Documents shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, restatement or refinancing of either the Obligations secured by any Junior Lien or the Applicable Senior Obligations, or by any action that the Collateral Agent or the Secured Parties holding any of such Obligations may take or fail to take in respect of any Collateral. (c) Each Secured Party holding Obligations secured by a Junior Lien acknowledges and agrees that the Collateral Agent and the holders of the Applicable Senior Obligations shall have no duties or other obligations to such Secured Party with respect to the Collateral subject to such Junior Lien other than to transfer to the holders of the Obligations secured by such Junior Lien the proceeds, if any, that remain following any sale, transfer or other disposition of such Collateral and the payment and satisfaction in full of all the Applicable Senior Obligations. In furtherance of the foregoing, each Secured Party holding Obligations secured by a Junior Lien acknowledges and agrees that until the Applicable Senior Obligations shall have been paid and satisfied in full, the Collateral Agent shall be entitled, for the benefit of the holders of the Applicable Senior Obligations, to sell, transfer or otherwise dispose of or deal with the Collateral subject to such Junior Lien as provided herein and in the Other Security Documents without regard to such Junior Lien or any rights to which the holders of the Obligations secured thereby would otherwise be entitled as a result of such Junior Lien, the only obligation of the Collateral Agent and the holders of the Applicable Senior Obligations to the holders of the Obligations secured by such Junior Lien being to deliver any proceeds remaining from such sale, transfer or other disposition of the applicable Collateral after the payment and satisfaction in full of all the Applicable Senior Obligations. Each Secured Party holding Obligations secured by a Junior Lien agrees that it will not, and will not attempt to, exercise or instruct the Collateral Agent to exercise any rights that it may have as a result of such Junior Lien until the payment and satisfaction in full of all the Applicable Senior Obligations. Notwithstanding anything in this paragraph to the contrary, any holder of Applicable Senior Obligations with respect to any Junior Lien shall be entitled to transfer proceeds of Collateral subject to such Junior Lien to any other holder of Applicable Senior Obligations to the extent it is required to do so under the terms of this Agreement, and shall, to the extent of such transfer, be deemed to have satisfied its obligations to the holders of the Obligations secured by such Junior Lien under this paragraph. (d) In the event a proceeding under the Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law shall be commenced by or against any Grantor that shall have granted a Junior Lien, until the Applicable Senior Obligations shall have been paid and satisfied in full, each Secured Party holding Obligations secured by such Junior Lien hereby authorizes and empowers (without imposing an obligation on) the holders of the Applicable Senior Obligations or the Collateral Agent or any Administrative Agent acting on their behalf to vote such Secured Party's share of the Obligations secured by such Junior Lien, insofar as any such voting right arises from or relates to such Junior Lien or to the Collateral 42 subject thereto, in connection with any resolution, arrangement, plan of reorganization, compromise or settlement relating to such Collateral. SECTION 11.02. No Interference; No Right to Instruct Collateral Agent; Payment Over; Reinstatement; Permitted Actions. (a) Each Secured Party holding Obligations secured by a Junior Lien agrees that (i) it will not take or cause to be taken any action the purpose or effect of which is, or could be, to make such Junior Lien pari passu with, or to give such Secured Party any preference or priority relative to, any Applicable Senior Lien with respect to the Collateral subject to such Junior Lien or any part thereof, (ii) it will not interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Collateral subject to such Junior Lien by the Collateral Agent or any holder of Applicable Senior Obligations, (iii) it shall have no right to (A) direct the Collateral Agent or any holder of Applicable Senior Obligations to exercise any right, remedy or power with respect to the Collateral subject to such Junior Lien or (B) consent to the exercise by the Collateral Agent or any holder of Applicable Senior Obligations of any right, remedy or power with respect to the Collateral subject to such Junior Lien, (iv) it will not institute any suit or assert in any suit or in any bankruptcy, insolvency or other proceeding any claim against the Collateral Agent or any holder of Applicable Senior Obligations seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, and neither the Collateral Agent nor any holder of Applicable Senior Obligations shall be liable for, any action taken or omitted to be taken by the Collateral Agent or any holder of Applicable Senior Obligations with respect to the Collateral subject to such Junior Lien, (v) it will not commence or instruct the Collateral Agent to commence judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, the Collateral subject to such Junior Lien (other than filing a proof of claim) until all the Applicable Senior Obligations shall have been paid and satisfied in full, (vi) it will not seek, and hereby waives any right, to have the Collateral subject to such Junior Lien or any part thereof marshaled upon any foreclosure or other disposition of such Collateral and (vii) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement. (b) The Collateral Agent and each Secured Party holding Obligations secured by a Junior Lien agree that, in the event of a sale, transfer or other disposition of Collateral subject to such Junior Lien, such Junior Lien on such Collateral shall terminate and be released automatically and without further action if the Applicable Senior Lien on such Collateral is released. (c) Each Secured Party holding Obligations secured by a Junior Lien hereby agrees that if it shall obtain possession of any of the Collateral subject to such Junior Lien, or shall realize any payment in respect of such Collateral (including as a result of any transfer of any Collateral or payment to such Secured Party, pursuant to this paragraph or otherwise, by the holder of any obligation secured by a Lien that is junior or subordinate to such Junior Lien), in either case prior to the time when the Applicable Senior Obligations have been paid in full, then it shall hold such Collateral or payment in trust for the holders of the Applicable Senior Obligations and transfer such Collateral or payment, as the case may be, to the Collateral Agent. Each Secured Party holding Obligations secured by a Junior Lien agrees that if, at any time, all or part of any payment with respect to the Applicable Senior Obligations previously made is rescinded for any reason whatsoever, such Secured Party shall promptly pay over to the Collateral Agent any payment received by it in respect of the Collateral subject to such Junior Lien and shall promptly turn any Collateral subject to such Junior Lien then held by it over to the Collateral 43 Agent, and the provisions set forth in this Agreement shall be reinstated as if such payment had not been made, until the payment and satisfaction in full of the Applicable Senior Obligations. SECTION 11.03. Consent to Priming of Junior Lien on ABL Facilities Collateral. In consideration of and as a condition to the creation under Section 4.01(c) and (d) and under the Canadian Security Documents of the Junior Liens on the ABL Facilities Collateral to secure the US Facilities Obligations, the US Miscellaneous Obligations, the European Facilities Revolving Obligations and, as to each such Class of Obligations, the Applicable Collateral Agent Obligations, each Secured Party from time to time secured by such Junior Liens will be deemed to have agreed, and the Collateral Agent hereby agrees, on behalf of such Secured Party, that in the event a proceeding under the Bankruptcy Code shall be commenced by or against the Company and the Company shall enter into an Acceptable Financing in such proceeding, such Junior Lien may, without any further action or consent by such Secured Party, be made junior and subordinated to Liens granted to secure such Acceptable Financing, subject to the granting and approval by the applicable bankruptcy court of adequate protection for the holders of the Obligations secured by such Junior Lien consisting of (a) the current monthly payment of an amount equal to post-petition interest, fees in respect of Letters of Credit (whether owed to any Lender under the US Facilities Agreements or to any Issuing Bank) and facility fees, in each case at non-default rates, (b) the current payment of out-of-pocket expenses, including fees and disbursements of counsel and other professional fees and disbursements, of the Administrative Agent under and as defined in each US Facility Agreement and (c) a replacement lien on substantially all assets of the Company and the Domestic Subsidiaries (other than the assets of and Equity Interests in Goodyear Dunlop Tires North America, Ltd., its Subsidiaries and any other Consent Subsidiaries), subject only to the Liens securing such Acceptable Financing, Liens existing prior to the commencement of such proceeding, Applicable Senior Liens and Liens, if any, that are senior to the Liens securing such Acceptable Financing. SECTION 11.04. Consent to Subordination of Junior Liens to Certain Refinancing Indebtedness. In consideration of and as a condition to the creation of each Junior Lien, each Secured Party from time to time secured by such Junior Lien will be deemed to have agreed, and the Collateral Agent hereby agrees, on behalf of such Secured Party, that in the event the Obligations of any Class secured by the Applicable Senior Liens are refinanced, replaced, renewed or extended, in whole or in part, in compliance with the covenants set forth in the Credit Agreement governing the Obligations secured by such Junior Lien, such Junior Lien shall, without any further action or consent by such Secured Party, be junior and subordinated on the terms set forth herein to the Liens on the Collateral subject to such Junior Lien that are granted to secure such refinanced, replaced, renewed or extended Obligations; provided, that nothing in this Section or elsewhere in this Agreement shall have the effect of subordinating any Junior Lien to any Lien securing Senior Subordinated-Lien Indebtedness, it being agreed that the Liens securing Senior Subordinated-Lien Indebtedness shall be junior and subordinate to the Liens securing the Obligations as and to the extent provided in the Lien Subordination and Intercreditor Agreement. ARTICLE XII Subordination of Intercompany Indebtedness SECTION 12.01. Subordination. To the fullest extent permitted under law, the Company and each other Grantor and Guarantor hereby agrees that all Intercompany Indebtedness owed to it by any Intercompany Obligor is hereby expressly subordinated, to the 44 extent and in the manner set forth in this Article XII, to the payment in full in cash of all Obligations of such Intercompany Obligor. SECTION 12.02. Dissolution or Insolvency. Upon any dissolution, winding up, liquidation or reorganization of any Intercompany Obligor, whether in bankruptcy, insolvency, reorganization, arrangement or receivership proceedings or otherwise, or upon any assignment for the benefit of creditors or any other marshalling of the assets and liabilities of any Intercompany Obligor, or otherwise: (a) the applicable Secured Parties shall, as between such Secured Parties and the Company or any other Grantor or Guarantor, first be entitled to receive payment in full in cash of the Obligations of such Intercompany Obligor in accordance with the terms of such Obligations before the Company or such Grantor or Guarantor shall be entitled to receive any payment on account of the Intercompany Indebtedness of such Intercompany Obligor, whether as principal, interest or otherwise; and (b) any payment by, or distribution of the assets of, such Intercompany Obligor of any kind or character, whether in cash, property or securities, to which the Company or any other Grantor or Guarantor would be entitled except for the provisions of clause (a) above shall, upon receipt by the Company or such Grantor or Guarantor, be held in trust (or in a compte de sequestre, if applicable) for the applicable Secured Parties and promptly paid or delivered directly to the Collateral Agent for the benefit of such Secured Parties to the extent necessary to make payment in full in cash of all such Obligations remaining unpaid, after giving effect to any concurrent payment or distribution to such Secured Parties in respect of such Obligations. SECTION 12.03. Subrogation. Subject to (and only upon) the prior indefeasible payment in full in cash of all the Obligations of any Intercompany Obligor, the Company or any other Grantor or Guarantor holding Intercompany Indebtedness of such Intercompany Obligor shall be subrogated to the rights of the applicable Secured Parties to receive payments or distributions in cash, property or securities applicable to such Obligations until all amounts owing on the Intercompany Indebtedness of such Intercompany Obligor shall be paid in full, and as between and among such Intercompany Obligor, its creditors (other than its Secured Parties) and the Company or any other Grantor or Guarantor holding Intercompany Indebtedness of such Intercompany Obligor, no such payment or distribution made to the Secured Parties by virtue of this Agreement that otherwise would have been made to the Company or any other Grantor or Guarantor in respect of such Intercompany Indebtedness shall be deemed to be a payment by such Intercompany Obligor on account of such Intercompany Indebtedness. SECTION 12.04. Other Creditors. Nothing contained in this Article is intended to or shall impair, as between and among any Intercompany Obligor, its creditors (other than the Secured Parties) and the Company or any other Grantor or Guarantor holding Intercompany Indebtedness of such Intercompany Obligor, the obligations of such Intercompany Obligor to pay its Intercompany Indebtedness as and when the same shall become due and payable in accordance with the terms thereof, or affect the relative rights of the Company or any other Grantor or Guarantor holding Intercompany Indebtedness of such Intercompany Obligor and the creditors of such Intercompany Guarantor (other than the Secured Parties). SECTION 12.05. No Waiver. No right of any Secured Party to enforce this Article shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of any of the Collateral Agent, the other Secured Parties, or any Intercompany Obligor, or by any noncompliance by any Intercompany Obligor with the terms, provisions and covenants 45 contained in this Agreement, any Other Security Document or any Credit Agreement, and the Secured Parties are hereby expressly authorized to extend, renew, increase, decrease, modify or amend the terms of the Obligations or any security therefor, and to release, sell or exchange any such security and otherwise deal freely with any Intercompany Obligor, all without notice to or consent of the Company or any other Grantor or Guarantor and without affecting the liabilities and obligations of the parties hereto. SECTION 12.06. Obligations Hereunder Not Affected. (a) All rights and interests of the Secured Parties under this Article, and all agreements and obligations of the Company and each other Grantor or Guarantor under this Article, shall remain in full force and effect irrespective of: (i) any lack of validity or enforceability of any Credit Agreement; (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or consent to departure from any Credit Agreement; (iii) any exchange, release or nonperfection of any security interest in any Collateral, or any release or amendment or waiver of or consent to departure from any Guarantee, in respect of all or any of the Obligations; or (iv) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Intercompany Obligor in respect of Obligations or of the Company or any Grantor or Guarantor in respect of the agreements contained in this Article. (b) The agreements contained in this Article shall continue to be effective or be reinstated, as the case may be, if at any time any payment of the Obligations or any part thereof is rescinded or must otherwise be returned by any Secured Party upon the insolvency, bankruptcy or reorganization of any Intercompany Obligor or otherwise, all as though such payment had not been made. (c) The Company and each Grantor and Guarantor hereby agree that the Secured Parties may, without affecting or impairing any of the obligations of the Company or such Grantor or Guarantor hereunder, from time to time to (i) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of, the Obligations or any part thereof and (ii) exercise or refrain from exercising any rights against any Intercompany Obligor or any other Person. ARTICLE XIII Miscellaneous SECTION 13.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be given as provided in the Credit Agreements. All communications and notices hereunder to any Grantor or Guarantor other than the Company shall be given to it in care of the Company as provided in the Credit Agreements. 46 SECTION 13.02. Waivers; Amendment. (a) No failure or delay by the Collateral Agent or any Secured Party in exercising any right or power hereunder or under any other Credit Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent and the Secured Parties hereunder and under the other Credit Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Credit Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, no extension of credit under any Credit Agreement shall be construed as a waiver of any default hereunder, regardless of whether the Collateral Agent or any Secured Party may have had notice or knowledge of such default at the time. No notice or demand on any Credit Party in any case shall entitle such Credit Party to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Credit Party or Credit Parties with respect to which such waiver, amendment or modification is to apply, subject to any consent required under any of the Credit Agreements. SECTION 13.03. Collateral Agent's Fees and Expenses; Indemnification. (a) The parties hereto agree that the Collateral Agent shall be entitled to reimbursement of its expenses incurred hereunder as provided in the Credit Agreements. (b) Without limitation of its indemnification obligations under the other Credit Documents, each Grantor and each Guarantor, to the fullest extent permitted under law, jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees (as defined in each Credit Agreement) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of the execution, delivery or performance of this Agreement or any agreement or instrument contemplated hereby or any claim, litigation, investigation or proceeding relating to any of the foregoing or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses shall have resulted from the gross negligence or wilful misconduct of such Indemnitee or from the breach of any of its obligations set forth in any Credit Document. (c) The provisions of this Section shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Credit Document, the consummation of the transactions contemplated hereby, the repayment of any of the Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Credit Document, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section shall be payable promptly after written demand therefor. SECTION 13.04. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf 47 of any Guarantor or Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. SECTION 13.05. Survival of Agreement. All covenants, agreements, representations and warranties made by the Credit Parties in the Credit Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Credit Document shall be considered to have been relied upon by the Lenders and shall survive the execution and delivery of the Credit Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any Lender or on its behalf and notwithstanding that the Collateral Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended under any Credit Agreement, and shall, subject to Section 13.13, continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under any Credit Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments under any Credit Agreement have not expired or terminated. SECTION 13.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in this Section. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. This Agreement shall become effective as to any Credit Party when a counterpart hereof executed on behalf of such Credit Party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Credit Party and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Credit Party, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Credit Party shall have the right to assign or transfer its rights or obligations hereunder (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement. This Agreement shall be construed as a separate agreement with respect to each Credit Party and may be amended, modified, supplemented, waived or released with respect to any Credit Party without the approval of any other Credit Party and without affecting the obligations of any other Credit Party hereunder. SECTION 13.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 13.08. Right of Set-Off. Without limitation to the provisions of Section 4.07, if an Event of Default shall have occurred and be continuing and the Loans shall have become due and payable pursuant to Article VII of the Applicable Credit Agreement, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Credit Party against any of and all the 48 obligations of such Credit Party now or hereafter existing under this Agreement with respect to such Applicable Credit Agreement owed to such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of set-off) which such Lender may have. SECTION 13.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. (b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Credit Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Credit Document shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement or any other Credit Document in the courts of any jurisdiction. (c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Credit Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 13.01. Nothing in this Agreement or any other Credit Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 13.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 49 SECTION 13.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 13.12. Security Interest Absolute. The pledges and security interests created hereby and by the Other Security Documents shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of any Credit Agreement, any other Credit Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any Credit Agreement, any other Credit Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor or Guarantor in respect of the Obligations or this Agreement. SECTION 13.13. Termination or Release. (a) This Agreement and the Other Security Documents shall terminate and all pledges and security interests created hereunder and thereunder shall be automatically released when (i) all the Obligations under the Credit Agreements at any time due and owing have been paid in full, (ii) the Lenders have no further commitment to lend under any Credit Agreement, (iii) the LC Exposures under the US Revolving Facility Agreement and the ABL Facilities Agreement have been reduced to zero and (iv) the Issuing Banks under the US Revolving Facility Agreement and the ABL Facilities Agreement have no further obligation to issue Letters of Credit thereunder. It is understood that such termination and release shall be effective notwithstanding that any US Miscellaneous Obligation or any obligation under clause (c) or (d) of the definitions of Revolving Obligations or Term Obligations under the European Facilities Agreement shall be outstanding at the time thereof. (b) When (i) all the Obligations under any Credit Agreement have been paid in full, (ii) the Lenders have no further commitment to lend under such Credit Agreement, (iii) if such Credit Agreement is the US Revolving Facility Agreement or the ABL Facilities Agreement, the LC Exposure (as defined therein) has been reduced to zero and the Issuing Banks (as defined therein) have no further obligation to issue Letters of Credit thereunder and (iv) if such Credit Agreement is the US Revolving Facility Agreement or the US Term Facility Agreement, no US Miscellaneous Obligations remain outstanding and all related Swap Agreements have terminated, all Collateral that (A) shall have secured the Obligations under and as defined in such Credit Agreement and (B) shall not secure the Obligations under and as defined in any other Credit Agreement, whether on a senior or a junior basis, shall be automatically released from the pledges and security interests created hereunder and under the Other Security Documents. Each Other Security Document shall terminate when all the Collateral subject thereto shall have been released as provided in this paragraph. It is understood that such termination and release shall be effective notwithstanding that any US Miscellaneous Obligation or any obligation under clause (c) or (d) of the definitions of Revolving Obligations or Term Obligations under the European Facilities Agreement shall be outstanding at the time thereof. (c) A Subsidiary shall automatically be released from its obligations as a Grantor or Guarantor hereunder and under each Other Security Document, and all pledges hereunder or under any Other Security Document of and security interests created hereunder or under any Other Security Document in the Collateral of such Subsidiary shall be automatically released, 50 upon the consummation of any transaction permitted by this Agreement and each Credit Agreement as a result of which such Subsidiary ceases to be a Subsidiary; provided that any consent to such transaction required by any Credit Agreement shall have been obtained and the terms of such consent shall not provide otherwise. (d) Upon any sale or other transfer of any Collateral permitted under this Agreement and each Applicable Credit Agreement by any Grantor to any Person other than the Company or a Subsidiary, or upon the effectiveness of any written consent to the release of any pledge or security interest created hereby or by any Other Security Document in respect of any Collateral pursuant to and in accordance with the requirements of each Credit Agreement the Obligations under which are secured by such Collateral, all pledges hereunder or under any Other Security Document of and security interests created hereunder or under any Other Security Document in such Collateral shall be automatically released. (e) At the time the Goodyear Venezuela Transaction is completed, all pledges hereunder or under any Other Security Document of and security interests created hereunder or under any Other Security Document in the Equity Interests of C.A. Goodyear de Venezuela sold by the Company to Goodyear do Brasil Productos de Borraca Ltda. in such transaction shall be automatically released. (f) In connection with any termination or release pursuant to paragraph (a), (b), (c), (d) or (e), the Collateral Agent shall execute and deliver to each applicable Grantor, at such Grantor's expense, all documents that such Grantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or representation or warranty by the Collateral Agent. Notwithstanding paragraph (c) or (d) above, in the case of any Lien on any Equity Interests in an entity organized under the laws of a jurisdiction outside the United States of America or the grant of any Lien on real property in any jurisdiction outside the United States of America, such Lien shall not be released until the Collateral Agent executes and delivers to the applicable Grantor a written consent to such release. The Collateral Agent agrees to execute and deliver any such written consent required by the immediately preceding sentence that is requested by the applicable Grantor in connection with the consummation of any transaction permitted by this Agreement and the Credit Agreements. SECTION 13.14. Additional Grantors and Guarantors. (a) Upon execution and delivery by the Collateral Agent and a Subsidiary of an instrument in a form agreed to by the Collateral Agent and Goodyear (an "Additional Subsidiary Agreement"), such Subsidiary shall become a party hereto and a Grantor and a Guarantor under the Credit Agreement referenced therein to the extent set forth in such Additional Subsidiary Agreement and shall, to the extent applicable, guarantee and create pledges of and security interests in its assets to secure the Obligations set forth in such Additional Subsidiary Agreement with the same force and effect as if originally named as a Grantor or Guarantor herein. At the time any Subsidiary shall become a party to this Agreement as provided in the preceding sentence, the Schedules hereto shall be supplemented as appropriate to reflect the guarantees, pledges and security interests, as applicable, given or created by such Subsidiary, and such supplemented Schedules shall replace the Schedules that shall therefore have been attached to this Agreement. The execution and delivery of any Additional Subsidiary Agreement and the amendment of the Schedules hereto as above provided shall not require the consent of any other Credit Party. The rights and obligations of each Credit Party shall remain in full force and effect notwithstanding the addition of any new Credit Party as a party to this Agreement. 51 (b) Any Subsidiary that is a US Guarantor may elect to become a US Facilities Grantor or an ABL Facilities Grantor at any time by delivering a certificate in substantially the form agreed to by the Collateral Agent and the Company or in such other form as may be reasonably required by the Collateral Agent. Any such election shall be effective immediately upon the delivery of such certificate. At the time any such election is made, the Schedules hereto shall be supplemented as appropriate to reflect the pledges and security interests given or created by such Subsidiary, and such supplemented Schedules shall replace the Schedules that shall therefore have been attached to this Agreement. The execution and delivery of any certificate hereunder and the amendment of the Schedules hereto as above provided shall not require the consent of the Collateral Agent or any Credit Party. The rights and obligations of each Credit Party shall remain in full force and effect notwithstanding the addition of any new US Facilities Grantor or ABL Facilities Grantor as a party to this Agreement. SECTION 13.15. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest in each case upon the occurrence and during the continuance of an Event of Default. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default under any applicable Credit Agreement, with full power of substitution either in the Collateral Agent's name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Applicable Collateral of such Grantor or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Applicable Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Applicable Collateral; (d) to send verifications of Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Applicable Collateral or to enforce any rights in respect of any Applicable Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Applicable Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent relating to the Applicable Collateral; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Applicable Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Applicable Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or wilful misconduct or the breach of such Person of its obligations set forth herein. For the purposes of Italian law, each Grantor expressly authorizes the Collateral Agent (and any agents or attorneys appointed under this Agreement) to act under a conflict of interest and self-dealing (including, but not limited to a situation in which the Collateral Agent acts simultaneously in the name and/or on behalf (a) of any Secured Party, on the one hand, and (b) of 52 any Credit Party, on the other hand) solely in relation to this Agreement, the other Security Documents and the Credit Agreement. SECTION 13.16. Collateral Agent as Joint and Several Creditor. Section 9.15 of the European Facilities Agreement is hereby incorporated by reference and shall be effective as if set forth in full herein. SECTION 13.17. Post-Closing Letter Agreements. Each party hereto agrees to complete the actions and perform the obligations applicable to it under each of (a) the post-closing letter agreement dated the Effective Date between the Collateral Agent and Goodyear relating to the European Facilities Agreement and (b) the post-closing letter agreement dated the Effective Date between the Collateral Agent and Goodyear relating to the US Facilities Agreements and the ABL Facilities Agreement. SECTION 13.18. Credit Party Obligations. Each Credit Party will perform its obligations and pay all amounts owed by it under each Credit Document in accordance with the terms thereof. 53 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President JPMORGAN CHASE BANK, individually and as administrative agent and collateral agent, By /s/ B. Joseph Lillis -------------------------------- Name: B. Joseph Lillis Title: Managing Director ALLIED TIRE SALES, INC., as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President BELT CONCEPTS OF AMERICA, INC., as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President CELERON CORPORATION, as a US GUARANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President COSMOFLEX, INC., as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President DAPPER TIRE CO, INC., as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR, By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President DIVESTED COMPANIES HOLDING COMPANY as a US FACILITIES GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ Brent Copeland -------------------------------- Name: Brent Copeland Title: President By /s/ Ronald J. Carr -------------------------------- Name: Ronald J. Carr Title: Vice President DIVESTED LITCHFIELD PARK PROPERTIES, INC., as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR, By /s/ Brent Copeland -------------------------------- Name: Brent Copeland Title: President By /s/ Ronald J. Carr -------------------------------- Name: Ronald J. Carr Title: Vice President GOODYEAR FARMS, INC., as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President GOODYEAR INTERNATIONAL CORPORATION, as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President GOODYEAR WESTERN HEMISPHERE CORPORATION, as a US Guarantor By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President THE KELLY-SPRINGFIELD TIRE CORPORATION, as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President WHEEL ASSEMBLIES INC., as a US GUARANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC, as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT VENTURES EIGHT, INC. as a US GUARANTOR, a US FACILITIES GRANTOR and an ABL FACILITIES GRANTOR By /s/ Brent Copeland -------------------------------- Name: Brent Copeland Title: President GOODYEAR CANADA INC., as a US GUARANTOR and an ABL FACILITIES GRANTOR. By /s/ L. M. Alexander -------------------------------- Name: L. M. Alexander Title: Vice President By /s/ D. S. Hamilton -------------------------------- Name: D. S. Hamilton Title: Secretary [Remaining Signature Pages Intentionally Omitted] EX-4.11 12 l07358aexv4w11.txt EX-4.11 INDENTURE - DATED MARCH 12, 2004 EXHIBIT 4.11 ================================================================================ The Goodyear Tire & Rubber Company 11% Senior Secured Notes due 2011 Senior Secured Floating Rate Notes due 2011 --------------------------- INDENTURE Dated as of March 12, 2004 --------------------------- Wells Fargo Bank, N.A. Trustee ================================================================================ CROSS-REFERENCE TABLE
TIA Indenture Section Section - ------------------------------------------------------------------- ---------- 310(a)(1) ........................................... 7.10 (a)(2) ........................................... 7.10 (a)(3) ........................................... N.A. (a)(4) ........................................... N.A. (b) ........................................... 7.08; 7.10 (c) ........................................... N.A. 311(a) ........................................... 7.11 (b) ........................................... 7.11 (c) ........................................... N.A. 312(a) ........................................... 2.05 (b) ........................................... 13.03 (c) ........................................... 13.03 313(a) ........................................... 7.06 (b)(1) ........................................... 7.06 (b)(2) ........................................... 7.06 (c) ........................................... 13.02 (d) ........................................... 7.06 314(a) ........................................... 4.02; ........................................... 4.14; 13.02 (b) ........................................... 11.02 (c)(1) ........................................... 13.04 (c)(2) ........................................... 13.04 (c)(3) ........................................... N.A. (d) ........................................... 11.04 (e) ........................................... 13.05 (f) ........................................... 4.15 315(a) ........................................... 7.01 (b) ........................................... 7.05; 13.02 (c) ........................................... 7.01 (d) ........................................... 7.01 (e) ........................................... 6.11 316(a)(last sentence) ................................. 13.06 (a)(1)(A) ........................................... 6.05 (a)(1)(B) ........................................... 6.04 (a)(2) ........................................... N.A. (b) ........................................... 6.07 317(a)(1) ........................................... 6.08 (a)(2) ........................................... 6.09 (b) ........................................... 2.04 318(a) ........................................... 13.01 N.A. means Not Applicable.
- ------------------ Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of this Indenture. TABLE OF CONTENTS
Page ---- ARTICLE 1 Definitions and Incorporation by Reference................................................. 1 SECTION 1.01. Definitions.................................................................... 1 SECTION 1.02. Other Definitions.............................................................. 39 SECTION 1.03. Incorporation by Reference of Trust Indenture Act.............................. 40 SECTION 1.04. Rules of Construction.......................................................... 40 ARTICLE 2 The Securities............................................................................. 41 SECTION 2.01. Form and Dating................................................................ 41 SECTION 2.02. Execution and Authentication................................................... 41 SECTION 2.03. Registrar and Paying Agent..................................................... 42 SECTION 2.04. Paying Agent To Hold Money in Trust............................................ 43 SECTION 2.05. Lists of Holders of Securities................................................. 43 SECTION 2.06. Transfer and Exchange.......................................................... 43 SECTION 2.07. Replacement Securities......................................................... 44 SECTION 2.08. Outstanding Securities......................................................... 44 SECTION 2.09. Temporary Securities........................................................... 45 SECTION 2.10. Cancellation................................................................... 45 SECTION 2.11. Defaulted Interest............................................................. 45 SECTION 2.12. CUSIP Numbers and ISINs........................................................ 45 SECTION 2.13. Issuance of Additional Securities.............................................. 46 ARTICLE 3 Redemption................................................................................. 46 SECTION 3.01. Notices to Trustee............................................................. 46 SECTION 3.02. Selection of Securities to Be Redeemed......................................... 47 SECTION 3.03. Notice of Redemption........................................................... 47 SECTION 3.04. Effect of Notice of Redemption................................................. 48 SECTION 3.05. Deposit of Redemption Price.................................................... 48 SECTION 3.06. Securities Redeemed in Part.................................................... 48 ARTICLE 4 Covenants.................................................................................. 48 SECTION 4.01. Payment of Securities.......................................................... 48 SECTION 4.02. SEC Reports.................................................................... 49 SECTION 4.03. Limitation on Indebtedness..................................................... 49 SECTION 4.04. Limitation on Restricted Payments.............................................. 53 SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries....... 56 SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock............................. 58 SECTION 4.07. Limitation on Transactions with Affiliates..................................... 62 SECTION 4.08. Change of Control.............................................................. 64 SECTION 4.09. Limitation on Liens............................................................ 65
i SECTION 4.10. Limitation on Sale/Leaseback Transactions...................................... 65 SECTION 4.11. Future Subsidiary Guarantors................................................... 66 SECTION 4.12. Perfected Security Interests................................................... 66 SECTION 4.13. Suspension of Certain Covenants................................................ 67 SECTION 4.14. Compliance Certificate......................................................... 68 SECTION 4.15. Further Instruments and Acts................................................... 68 ARTICLE 5 Successor Company.......................................................................... 69 SECTION 5.01. When Company May Merge or Transfer Assets...................................... 69 ARTICLE 6 Defaults and Remedies...................................................................... 70 SECTION 6.01. Events of Default.............................................................. 70 SECTION 6.02. Acceleration................................................................... 73 SECTION 6.03. Other Remedies................................................................. 73 SECTION 6.04. Waiver of Past Defaults........................................................ 73 SECTION 6.05. Control by Majority............................................................ 73 SECTION 6.06. Limitation on Suits............................................................ 74 SECTION 6.07. Rights of Holders to Receive Payment........................................... 74 SECTION 6.08. Collection Suit by Trustee..................................................... 74 SECTION 6.09. Trustee May File Proofs of Claim............................................... 74 SECTION 6.10. Priorities..................................................................... 75 SECTION 6.11. Undertaking for Costs.......................................................... 75 SECTION 6.12. Waiver of Stay or Extension Laws............................................... 75 ARTICLE 7 Trustee.................................................................................... 76 SECTION 7.01. Duties of Trustee.............................................................. 76 SECTION 7.02. Rights of Trustee.............................................................. 77 SECTION 7.03. Individual Rights of Trustee................................................... 78 SECTION 7.04. Trustee's Disclaimer........................................................... 78 SECTION 7.05. Notice of Defaults............................................................. 78 SECTION 7.06. Reports by Trustee to Holders.................................................. 78 SECTION 7.07. Compensation and Indemnity..................................................... 78 SECTION 7.08. Replacement of Trustee......................................................... 79 SECTION 7.09. Successor Trustee by Merger.................................................... 80 SECTION 7.10. Eligibility; Disqualification.................................................. 80 SECTION 7.11. Preferential Collection of Claims Against Company.............................. 81 ARTICLE 8 Discharge of Indenture; Defeasance......................................................... 81 SECTION 8.01. Discharge of Liability on Securities; Defeasance............................... 81 SECTION 8.02. Conditions to Defeasance....................................................... 82 SECTION 8.03. Application of Trust Money..................................................... 83 SECTION 8.04. Repayment to Company........................................................... 83 SECTION 8.05. Indemnity for Government Obligations........................................... 83 SECTION 8.06. Reinstatement.................................................................. 83

ii ARTICLE 9 Amendments................................................................................. 84 SECTION 9.01. Without Consent of Holders..................................................... 84 SECTION 9.02. With Consent of Holders........................................................ 85 SECTION 9.03. Compliance with Trust Indenture Act............................................ 86 SECTION 9.04. Revocation and Effect of Consents and Waivers.................................. 86 SECTION 9.05. Notation on or Exchange of Securities.......................................... 87 SECTION 9.06. Trustee To Sign Amendments..................................................... 87 SECTION 9.07. Payment for Consent............................................................ 87 ARTICLE 10 Subsidiary Guarantees..................................................................... 87 SECTION 10.01. Guarantees..................................................................... 87 SECTION 10.02. Limitation on Liability........................................................ 89 SECTION 10.03. Successors and Assigns......................................................... 89 SECTION 10.04. No Waiver...................................................................... 89 SECTION 10.05. Modification................................................................... 89 SECTION 10.06. Release of Subsidiary Guarantor................................................ 90 SECTION 10.07. Contribution................................................................... 91 ARTICLE 11 Security Documents........................................................................ 91 SECTION 11.01. Collateral and Security Documents.............................................. 91 SECTION 11.02. Recording Fees; Opinion........................................................ 91 SECTION 11.03. Release of Collateral.......................................................... 92 SECTION 11.04. Permitted Releases Not to Impair Lien; Trust Indenture Act Requirements........ 94 SECTION 11.05. Certificates of the Trustee.................................................... 94 SECTION 11.06. Suits to Protect the Collateral................................................ 94 SECTION 11.07. Authorization of Receipt of Funds by the Trustee Under the Security Documents.. 95 SECTION 11.08. Purchaser Protected............................................................ 95 SECTION 11.09. Powers Exercisable by Receiver or Trustee...................................... 95 SECTION 11.10. Determinations Relating to Collateral.......................................... 95 SECTION 11.11. Collateral Agent............................................................... 96 SECTION 11.12. Designations................................................................... 97 SECTION 11.13. Further Assurances............................................................. 97 SECTION 11.14. Intercreditor Agreement........................................................ 98 SECTION 11.15. Release upon Termination of Company's Obligations.............................. 99 SECTION 11.16. Fonde de Pouvoir............................................................... 99 ARTICLE 12 Application of Trust Moneys............................................................... 100 SECTION 12.01 "Trust Moneys" Defined......................................................... 100 SECTION 12.02. Investment and Use of Trust Moneys............................................. 100

iii ARTICLE 13 Miscellaneous............................................................................. 101 SECTION 13.01. Trust Indenture Act Controls................................................... 101 SECTION 13.02. Notices........................................................................ 101 SECTION 13.03. Communication by Holders with Other Holders.................................... 102 SECTION 13.04. Certificate and Opinion as to Conditions Precedent............................. 102 SECTION 13.05. Statements Required in Certificate or Opinion.................................. 102 SECTION 13.06. When Securities Disregarded.................................................... 102 SECTION 13.07. Rules by Trustee, Paying Agent and Registrar................................... 103 SECTION 13.08. Legal Holidays................................................................. 103 SECTION 13.09. Governing Law.................................................................. 103 SECTION 13.10. No Recourse Against Others..................................................... 103 SECTION 13.11. Successors..................................................................... 103 SECTION 13.12. Multiple Originals............................................................. 103 SECTION 13.13. Table of Contents; Headings.................................................... 103

Appendix A Exhibit 1a - Form of Initial Fixed Rate Security Exhibit 1b - Form of Exchange Fixed Rate Security Exhibit 2a - Form of Initial Floating Rate Security Exhibit 2b - Form of Exchange Floating Rate Security Exhibit 3 - Form of Supplemental Indenture Exhibit 4 - Form of Transferee Letter of Representation iv INDENTURE dated as of March 12, 2004, among The Goodyear Tire & Rubber Company, an Ohio corporation (the "Company"), the Subsidiary Guarantors listed on the signature pages hereto and Wells Fargo Bank, N.A., a national banking association (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Initial Securities and, if and when issued pursuant to a registered exchange for Initial Securities, the Exchange Securities: ARTICLE 1 Definitions and Incorporation by Reference SECTION 1.01 Definitions. "ABL Bank Indebtedness" means any and all amounts payable under or in respect of the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as documentation agents and any Refinancing Indebtedness with respect thereto, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations and all other amounts payable thereunder or in respect thereof. "Additional Assets" means: (1) any property or assets (other than Indebtedness and Capital Stock) to be used by the Company or a Restricted Subsidiary; (2) the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or (3) Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary; provided, however, that any such Restricted Subsidiary described in clauses (2) or (3) above is primarily engaged in a Permitted Business. "Additional Excluded Collateral" means (i) the portion of the Company's and the Grantor Subsidiary Guarantors' manufacturing facilities that are pledged to secure Bank Indebtedness on the Closing Date, (ii) any Excluded Securities and (iii) any 2 Consent Assets that are pledged from time to time to secure Priority Lien Obligations permitted under this Indenture. "Additional Foreign Bank Collateral" means all the assets of and rights in Foreign Subsidiaries (other than that portion of the Company's equity interest in Luxembourg Finance pledged to secure the Securities) subject to Liens securing the European Bank Indebtedness from time to time. "Additional Securities" means Securities issued under this Indenture after the Closing Date and in compliance with Sections 2.13, 4.03 and 4.09, it being understood that any Securities issued in exchange for or replacement of any Initial Security issued on the Closing Date shall not be an Additional Security, including any such Securities issued pursuant to a Registration Rights Agreement (as defined in Appendix A attached hereto). "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. For purposes of Section 4.06 and Section 4.07 only, "Affiliate" shall also mean any beneficial owner of shares representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis) of the Company or of rights or warrants to purchase such Voting Stock (whether or not currently exercisable) and any Person who would be an Affiliate of any such beneficial owner pursuant to the first sentence hereof. "Applicable Indebtedness" means: (1) in respect of any asset that is the subject of an Asset Disposition at a time when such asset is included in the Collateral or is an Excluded Security, any Priority Lien Obligation that, in each case, is secured at such time by such asset on a Priority Lien basis; or (2) in respect of any asset that is the subject of an Asset Disposition at a time when such asset is not included in the Collateral but is owned, directly or indirectly, by a Foreign Subsidiary the stock of which is included in the Collateral, (A) any Priority Lien Obligation that, in each case, is secured by such stock on a Priority Lien basis, (B) any Indebtedness of such Foreign Subsidiary or (C) any Indebtedness of any other Foreign Subsidiary that is a Wholly Owned Subsidiary; or (3) in respect of any other asset, Senior Indebtedness of the Company or a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor. "Applicable Senior Indebtedness" means: 3 (1) in respect of any asset that is the subject of an Asset Disposition at a time when such asset is included in the Collateral, Senior Indebtedness that is secured at such time by such asset; or (2) in respect of any asset that is the subject of an Asset Disposition at a time when such asset is not included in the Collateral but is owned, directly or indirectly, by a Foreign Subsidiary the stock of which is included in the Collateral, (A) any Priority Lien Obligation that, in each case, is secured by such stock on a Priority Lien basis, (B) any Indebtedness of such Foreign Subsidiary or (C) any Indebtedness of any other Foreign Subsidiary that is a Wholly Owned Subsidiary; or (3) in respect of any other asset, Senior Indebtedness of the Company or a Subsidiary Guarantor or Indebtedness of a Restricted Subsidiary that is not a Subsidiary Guarantor. "Asset Disposition" means any sale, lease, transfer or other disposition (or series of sales, leases, transfers or dispositions that are part of a common plan) by the Company or any Restricted Subsidiary, including any disposition by means of a merger, consolidation, or similar transaction (each referred to for the purposes of this definition as a "disposition"), of: (1) any shares of Capital Stock of a Restricted Subsidiary (other than directors' qualifying shares or shares required by applicable law to be held by a Person other than the Company or a Restricted Subsidiary), (2) all or substantially all the assets of any division or line of business of the Company or any Restricted Subsidiary, (3) any other assets of the Company or any Restricted Subsidiary outside of the ordinary course of business of the Company or such Restricted Subsidiary, or (4) any other assets of the Company or any Restricted Subsidiary that are the subject of a transaction the Company elects to be an Asset Disposition pursuant to Section 11.03(a)(3) other than, in the case of clauses (1), (2) and (3) above, (A) a disposition by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary, (B) for purposes of Section 4.06 only, a disposition subject to Section 4.04, (C) a disposition of assets with a Fair Market Value of less than $5,000,000, 4 (D) a sale of accounts receivable and related assets of the type specified in the definition of "Qualified Receivables Transaction" to a Receivables Entity, (E) a transfer of accounts receivable and related assets of the type specified in the definition of "Qualified Receivables Transaction" (or a fractional undivided interest therein) by a Receivables Entity in a Qualified Receivables Transaction, and (F) a disposition of all or substantially all the Company's assets (as determined on a Consolidated basis) in accordance with Section 5.01. "Attributable Debt" means, with respect to any Sale/Leaseback Transaction that does not result in a Capitalized Lease Obligation, the present value (computed in accordance with GAAP) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended). In the case of any lease which is terminable by the lessee upon payment of a penalty, the Attributable Debt shall be the lesser of (i) the Attributable Debt determined assuming termination upon the first date such lease may be terminated (in which case the Attributable Debt shall also include the amount of the penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated) and (ii) the Attributable Debt determined assuming no such termination. "Average Life" means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing: (1) the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or scheduled redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by (2) the sum of all such payments. "Bank Indebtedness" means any and all amounts payable under or in respect of the Credit Agreements and any Refinancing Indebtedness with respect thereto or with respect to such Refinancing Indebtedness, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations and all other amounts payable thereunder or in respect thereof. "Board of Directors" means the board of directors of the Company or any committee thereof duly authorized to act on behalf of the board of directors of the Company. 5 "Business Day" means each day which is not a Legal Holiday. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity. "Capitalized Lease Obligations" means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation determined in accordance with GAAP. "Change of Control" means the occurrence of any of the following events: (1) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1) such person shall be deemed to have "beneficial ownership" of all shares that any such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Company; (2) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors of the Company (together with any new directors whose election by such board of directors of the Company or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Company then in office; (3) the adoption of a plan relating to the liquidation or dissolution of the Company; or (4) the merger or consolidation of the Company with or into another Person or the merger of another Person with or into the Company, or the sale of all or substantially all the assets of the Company (as determined on a Consolidated basis) to another Person, and, in the case of any such merger or consolidation, the securities of the Company that are outstanding immediately prior to such transaction and which represent 100% of the aggregate voting power of the Voting Stock of the Company are changed into or exchanged for cash, securities or property, unless pursuant to such transaction such securities are changed into or exchanged for, in addition to any other consideration, securities of the surviving Person or transferee that represent immediately after such transaction, at least a majority of the 6 aggregate voting power of the Voting Stock of the surviving Person or transferee. "Closing Date" means March 12, 2004. "Code" means the Internal Revenue Code of 1986, as amended. "Collateral" means all assets and rights constituting Collateral, from time to time, pursuant to the Security Documents. "Collateral Agent" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Collateral Agreement" means the Collateral Agreement, dated as of the Closing Date, among the Company, the Grantor Subsidiary Guarantors and the Collateral Agent, as the same may be amended from time to time in accordance with its terms and under this Indenture. "Company" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the indenture securities. "Consent Asset" means any asset or right of the Company or a Grantor Subsidiary Guarantor the creation of a security interest in which would be prohibited by or not be effective under applicable law or would violate or result in a default under any agreement or instrument in effect on the Closing Date (or in the case of any future Grantor Subsidiary Guarantor on the date it becomes a Grantor Subsidiary Guarantor) between the Company or such Grantor Subsidiary Guarantor, as the case may be, and any Person other than (a) the Company, (b) any Wholly Owned Subsidiary or (c) any Subsidiary that is not a Wholly Owned Subsidiary unless the waiver of such default or violation would require the consent of any Person other than the Company or another Subsidiary; provided, however, that no asset or right shall be a Consent Asset to the extent that Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the applicable jurisdiction, or any other law of the applicable jurisdiction, shall permit (and excuse any default or violation resulting from) the creating of a security interest in such asset or right notwithstanding the provision of such agreement or instrument prohibiting the creation of a security interest therein or shall render such provision unenforceable. "Consent Subsidiary" means any Subsidiary in respect of which (A) the consent of any Person other than the Company or any Wholly Owned Subsidiary is required by applicable law or the terms of any organizational document of such Subsidiary or other agreement of such Subsidiary or any Affiliate of such Subsidiary in order for such Subsidiary to Guarantee the Securities, pledge its assets to secure its Guarantee of the Securities and perform its obligations under any supplemental indenture and the Security Documents, or in order for Capital Stock of such Subsidiary to be pledged under the Security Documents, as the case may be, and (B) the Company 7 endeavored in good faith to obtain such consents and such consents shall not have been obtained; provided, however, that any Subsidiary constituting a "Consent Subsidiary" under the U.S. Revolving Credit Facility on the Closing Date shall be a Consent Subsidiary for so long as the assets or Capital Stock of such Subsidiary are not pledged to secure any U.S. Bank Indebtedness or ABL Bank Indebtedness. Notwithstanding the foregoing, no Subsidiary shall be a Consent Subsidiary at any time that it is a guarantor of, or has provided any collateral to secure, Indebtedness for borrowed money of the Company, and any Consent Subsidiary that at any time ceases to meet the test set forth in clause (A) shall cease to be a Consent Subsidiary. "Consolidated Coverage Ratio" as of any date of determination means the ratio of: (1) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which financial statements have been filed with the SEC to (2) Consolidated Interest Expense for such four fiscal quarters; provided, however, that: (A) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since the beginning of such period that remains outstanding on such date of determination or if the transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving effect on a pro forma basis to such Indebtedness as if such Indebtedness had been Incurred on the first day of such period and the discharge of any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the proceeds of such new Indebtedness as if such discharge had occurred on the first day of such period, (B) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case other than Indebtedness Incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) on the date of the transaction giving rise to the need to calculate the Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro forma basis as if such discharge had occurred on the first day of such period and as if the Company or such Restricted Subsidiary had not earned the interest income actually earned during such period in respect of cash or Temporary Cash 8 Investments used to repay, repurchase, defease or otherwise discharge such Indebtedness, (C) if since the beginning of such period the Company or any Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for such period shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the assets that are the subject of such Asset Disposition for such period or increased by an amount equal to the EBITDA (if negative) directly attributable thereto for such period and Consolidated Interest Expense for such period shall be reduced by an amount equal to the Consolidated Interest Expense directly attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise discharged with respect to the Company and its Restricted Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no longer liable for such Indebtedness after such sale), (D) if since the beginning of such period the Company or any Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any Person that becomes a Restricted Subsidiary) or an acquisition of assets, including any acquisition of assets occurring in connection with a transaction causing a calculation to be made hereunder, which constitutes all or substantially all of an operating unit, division or line of a business, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the first day of such period, and (E) if since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period shall have made any Asset Disposition or any Investment or acquisition of assets that would have required an adjustment pursuant to clause (C) or (D) above if made by the Company or a Restricted Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period shall be calculated after giving pro forma effect thereto as if such Asset Disposition, Investment or acquisition of assets occurred on the first day of such period. 9 For purposes of this definition, whenever pro forma effect is to be given to an acquisition of assets, Asset Disposition or other Investment, the amount of income, EBITDA or earnings relating thereto and the amount of Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith, the pro forma calculations shall be determined in good faith by a responsible Financial Officer of the Company and shall comply with the requirements of Rule 11-02 of Regulation S-X, as it may be amended or replaced from time to time, promulgated by the SEC. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a remaining term as at the date of determination in excess of 12 months). If any Indebtedness is Incurred or repaid under a revolving credit facility and is being given pro forma effect, the interest on such Indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation. "Consolidated Interest Expense" means, for any period, the total interest expense of the Company and its Consolidated Restricted Subsidiaries, plus, to the extent Incurred by the Company and its Consolidated Restricted Subsidiaries in such period but not included in such interest expense, without duplication: (1) interest expense attributable to Capitalized Lease Obligations and the interest expense attributable to leases constituting part of a Sale/Leaseback Transaction that does not result in a Capitalized Lease Obligation, (2) amortization of debt discount and debt issuance costs, (3) capitalized interest, (4) noncash interest expense, (5) commissions, discounts and other fees and charges attributable to letters of credit and bankers' acceptance financing, (6) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) the Company or any Restricted Subsidiary and such Indebtedness is in default under its terms or any payment is actually made in respect of such Guarantee, (7) net payments made pursuant to Hedging Obligations (including amortization of fees), (8) dividends paid in cash or Disqualified Stock in respect of (A) all Preferred Stock of Restricted Subsidiaries and (B) all Disqualified Stock of the 10 Company, in each case held by Persons other than the Company or a Restricted Subsidiary, (9) interest Incurred in connection with investments in discontinued operations, and (10) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are used by such plan or trust to pay interest or fees to any Person (other than the Company) in connection with Indebtedness Incurred by such plan or trust, and less, to the extent included in such total interest expense, (A) any breakage costs of Hedging Obligations terminated in connection with the offering of the Securities on the Closing Date and the application of the net proceeds therefrom and (B) the amortization during such period of capitalized financing costs; provided, however, that for any financing consummated after the Closing Date, the aggregate amount of amortization relating to any such capitalized financing costs deducted in calculating Consolidated Interest Expense shall not exceed 5% of the aggregate amount of the financing giving rise to such capitalized financing costs. Notwithstanding the foregoing, for the purposes of the definition of "Consolidated Secured Debt Ratio," "Consolidated Interest Expense" means, for any period, the total Consolidated interest expense of the Company for such period determined in accordance with GAAP. "Consolidated Net Income" means, for any period, the net income of the Company and its Consolidated Subsidiaries for such period; provided, however, that there shall not be included in such Consolidated Net Income: (1) any net income of any Person (other than the Company) if such Person is not a Restricted Subsidiary, except that: (A) subject to the limitations contained in clause (4) below, the Company's equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution made to a Restricted Subsidiary, to the limitations contained in clause (3) below) and (B) the Company's equity in a net loss of any such Person for such period shall be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary; 11 (2) any net income (or loss) of any Person acquired by the Company or a Subsidiary of the Company in a pooling of interests transaction for any period prior to the date of such acquisition; (3) any net income of any Restricted Subsidiary if such Restricted Subsidiary is subject to restrictions on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company (but, in the case of any Foreign Subsidiary, only to the extent cash equal to such net income (or a portion thereof) for such period is not readily procurable by the Company from such Foreign Subsidiary (with the amount of cash readily procurable from such Foreign Subsidiary being determined in good faith by a Financial Officer of the Company) pursuant to intercompany loans, repurchases of Capital Stock or otherwise), except that: (A) subject to the limitations contained in clause (4) below, the Company's equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution made to another Restricted Subsidiary, to the limitation contained in this clause) and (B) the net loss of any such Restricted Subsidiary for such period shall not be excluded in determining such Consolidated Net Income; (4) any gain (or loss) realized upon the sale or other disposition of any asset of the Company or its Consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise disposed of in the ordinary course of business and any gain (or loss) realized upon the sale or other disposition of any Capital Stock of any Person; (5) any extraordinary gain or loss; and (6) the cumulative effect of a change in accounting principles. Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall be excluded from Consolidated Net Income any dividends, repayments of loans or advances or other transfers of assets from Unrestricted Subsidiaries to the Company or a Restricted Subsidiary to the extent such dividends, repayments or transfers increase the amount of Restricted Payments permitted under Section 4.04(a)(3)(D). "Consolidated Secured Debt Ratio" as of any date of determination means, the ratio of (a) the sum of, without duplication (i) total Consolidated Indebtedness of the Company that is secured by Priority Liens and Pari Passu Liens and (ii) total Indebtedness for borrowed money of the Foreign Subsidiaries (including the European 12 Bank Indebtedness), in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC, to (b) the aggregate amount of EBITDA for the then most recent four fiscal quarters for which financial statements have been filed with the SEC, in each case with such pro forma adjustments to Consolidated Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Consolidated Coverage Ratio. "Consolidation" means the consolidation of (1) in the case of the Company, the accounts of each of the Restricted Subsidiaries with those of the Company and (2) in the case of a Restricted Subsidiary, the accounts of each Subsidiary of such Restricted Subsidiary that is a Restricted Subsidiary with those of such Restricted Subsidiary, in each case in accordance with GAAP consistently applied; provided, however, that "Consolidation" will not include consolidation of the accounts of any Unrestricted Subsidiary, but the interest of the Company or any Restricted Subsidiary in an Unrestricted Subsidiary will be accounted for as an investment. The term "Consolidated" has a correlative meaning. "Credit Agent" means JPMorgan Chase Bank, in its capacity as administrative agent and collateral agent for the lenders party to each of the Credit Agreements or any successor thereto, or any Person otherwise designated the "Credit Agent" pursuant to the Intercreditor Agreement. "Credit Agreements" means (i) the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMorgan Chase Bank, as administrative agent, (ii) the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent and BNP Paribas, as syndication agent, (iii) the $650,000,000 Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, the other borrowers thereunder, certain lenders, JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as syndication agent and (iv) the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as documentation agents, each as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), refinanced, restructured or otherwise modified from time to time (except to the extent that any such amendment, restatement, supplement, waiver, replacement, refinancing, restructuring or other modification thereto would be prohibited by the terms of this Indenture, unless otherwise agreed to by the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding). "Currency Agreement" means with respect to any Person any foreign exchange contract, currency swap agreements or other similar agreement or arrangement to which such Person is a party or of which it is a beneficiary. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. 13 "Designated Noncash Consideration" means noncash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is designated by the Company as Designated Noncash Consideration, less the amount of cash or cash equivalents received in connection with a subsequent sale of such Designated Noncash Consideration, which cash and cash equivalents shall be considered Net Available Cash received as of such date and shall be applied pursuant to Section 4.06. "Designated LC Cash Collateralizations" means cash collateral provided in respect of letters of credit issued under the U.S. Revolving Credit Facility; provided, however, that a corresponding commitment amount of such facility is permanently reduced, except that no such permanent reduction shall be required to the extent such reduction would reduce the aggregate amount of commitment available under the facility below $250,000,000. "Disqualified Stock" means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event: (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (2) is convertible or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary; provided, however, that any such conversion or exchange shall be deemed an Incurrence of Indebtedness or Disqualified Stock, as applicable) or (3) is redeemable at the option of the holder thereof, in whole or in part, in the case of each of clauses (1), (2) and (3), on or prior to 180 days after the Stated Maturity of any series of the Securities; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the first anniversary of the Stated Maturity of any series of the Securities shall not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are not more favorable in any material respect to the holders of such Capital Stock than the provisions of Section 4.06 and Section 4.08; provided further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability. 14 The amount of any Disqualified Stock that does not have a fixed redemption, repayment or repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of such Disqualified Stock is to be determined pursuant to this Indenture; provided, however, that if such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of such determination, the redemption, repayment or repurchase price will be the book value of such Disqualified Stock as reflected in the most recent financial statements of such Person. "Domestic Subsidiary" means any Restricted Subsidiary of the Company other than a Foreign Subsidiary. "EBITDA" for any period means the Consolidated Net Income for such period, plus, without duplication, the following to the extent deducted in calculating such Consolidated Net Income: (1) income tax expense of the Company and its Consolidated Restricted Subsidiaries, (2) Consolidated Interest Expense, (3) depreciation expense of the Company and its Consolidated Restricted Subsidiaries, (4) amortization expense of the Company and its Consolidated Restricted Subsidiaries (excluding amortization expense attributable to a prepaid cash item that was paid in a prior period), (5) all other noncash charges of the Company and its Consolidated Restricted Subsidiaries (excluding any such noncash charge to the extent it represents an accrual of or reserve for cash expenditures in any future period) less all noncash items of income of the Company and its Restricted Subsidiary in each case for such period (other than normal accruals in the ordinary course of business), and (6) cash and non-cash charges reflected on the Consolidated financial statements of the Company and its Consolidated Restricted Subsidiaries for any period ending prior to January 1, 2004, related to (i) anticipated liabilities relating to the pending Entran II claims described in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2003, filed with the SEC on November 19, 2003, and (ii) rationalization actions designed to reduce capacity, eliminate redundancies and reduce costs. Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and noncash charges of, a Restricted Subsidiary of the Company shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was 15 included in calculating Consolidated Net Income and only if (A) a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its shareholders or (B) in the case of any Foreign Subsidiary, a corresponding amount of cash is readily procurable by the Company from such Foreign Subsidiary (as determined in good faith by a Financial Officer of the Company) pursuant to intercompany loans, repurchases of Capital Stock or otherwise, provided that to the extent cash of such Foreign Subsidiary provided the basis for including the net income of such Foreign Subsidiary in Consolidated Net Income pursuant to clause (3) of the definition of "Consolidated Net Income," such cash shall not be taken into account for the purposes of determining readily procurable cash under this clause (B). "Euro Equivalent" means with respect to any monetary amount in a currency other than euros, at any time of determination thereof, the amount of euros obtained by converting such foreign currency involved in such computation into euros at the spot rate for the purchase of euros with the applicable foreign currency as published in The Wall Street Journal in the "Exchange Rates" column under the heading "Currency Trading" on the date two Business Days prior to such determination. Except as described in Section 4.03, whenever it is necessary to determine whether the Company has complied with any covenant in this Indenture or a Default has occurred and an amount is expressed in a currency other than euros, such amount will be treated as the Euro Equivalent determined as of the date such amount is initially determined in such currency. "European Bank Indebtedness" means any and all amounts payable under or in respect of the $650,000,000 Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, the other borrowers thereunder, certain lenders, JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as syndication agent and any Refinancing Indebtedness with respect thereto, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations and all other amounts payable thereunder or in respect thereof. "European Revolving Loan Bank Indebtedness" means that portion of the European Bank Indebtedness Incurred from time to time under the revolving loan commitments in an initial maximum aggregate principal amount of $250,000,000. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Excluded Equity Interests" means equity interests in any Subsidiary with Consolidated assets not greater than $10,000,000 as of September 30, 2003 or, in the case of a Lien granted after the Closing Date, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC at the time of such grant, (ii) 16 equity interests in any Consent Subsidiary and (iii) equity interests in any Foreign Subsidiary if the Company shall have delivered to the Trustee an Officers' Certificate certifying that the Company has determined, on the basis of reasonable inquiries in the jurisdiction of such Foreign Subsidiary, that such pledge would affect materially and adversely the ability of such Foreign Subsidiary to conduct its business in such jurisdiction. "Excluded Securities" means that portion of Capital Stock or other securities of a Subsidiary of the Company pledged as Collateral which value (defined as the principal amount, par value, book value as carried by the Company or market value, whichever is greatest), when considered in the aggregate with all other Capital Stock or other securities of such Subsidiary subject to a security interest as provided for in this Indenture and the Security Documents, exceeds 19.99% of the principal amount of the then outstanding Securities issued by the Company; provided, however, in the event that Rule 3-16 of Regulation S-X promulgated by the SEC is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary of the Company due to the fact that such Subsidiary's Capital Stock or other securities secure the Securities, then the Capital Stock or other securities of such Subsidiary shall automatically be deemed to be Excluded Securities but only for so long as and to the extent necessary to not be subject to such requirement; provided, further, however, that in such event, the Security Documents may be amended or modified, without the consent of any Holder of Securities, to the extent necessary to release the security interest in the Excluded Securities that are so deemed to no longer constitute part of the Collateral. Any portion of a Subsidiary's Capital Stock or other securities that does not secure the Securities or the Subsidiary Guarantees pursuant to this paragraph (including Excluded Securities) may continue to secure any Priority Lien Obligations and Other Pari Passu Lien Obligations; provided, further however, that if any Priority Lien Obligation or Other Pari Passu Lien Obligation is secured by a security interest in any securities that are Excluded Securities, such obligation is registered under the Securities Act, and in connection with such registration, the Company is required to file with the SEC (or any other governmental agency) separate financial statements of the Subsidiary of the Company that is the issuer of such securities, then such securities will not be considered Excluded Securities. "Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction as such price is, unless specified otherwise in this Indenture, determined in good faith by a Financial Officer of the Company or by the Board of Directors. Fair Market Value (other than of any asset with a public trading market) of any asset or property (or group of assets or property subject to an event giving rise to a requirement under this Indenture that "Fair Market Value" be determined) in excess of $25,000,000 shall be determined by the Board of Directors or a duly authorized committee thereof. 17 "Financial Officer" means the Chief Financial Officer, the Treasurer or the Chief Accounting Officer of the Company. "Foreign Pledge Agreement" means a pledge or collateral agreement securing the Securities or the Subsidiary Guarantees or any of them that is governed by the law of a jurisdiction other than the United States of America and reasonably satisfactory in form and substance to the Trustee. "Foreign Subsidiary" means any Restricted Subsidiary of the Company that is not organized under the laws of the United States of America or any State thereof or the District of Columbia, other than Goodyear Canada. "GAAP" means generally accepted accounting principles in the United States of America as in effect as of the Closing Date set forth in: (1) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (2) statements and pronouncements of the Financial Accounting Standards Board, (3) such other statements by such other entities as approved by a significant segment of the accounting profession, and (4) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP. "Goodyear Brazil" means Goodyear do Brasil Produtos de Borracha Ltda., a Brazilian company incorporated with quotas and limited liability, and its successors and permitted assigns. "Goodyear Canada" means Goodyear Canada Inc., an Ontario corporation, and its successors and permitted assigns. "Goodyear Thailand" means Goodyear (Thailand) Public Company Limited, a public company limited organized under the laws of the Kingdom of Thailand, and its successors and permitted assigns. "Grantor Subsidiary Guarantor" means each Subsidiary Guarantor on the Closing Date (other than Goodyear Western Hemisphere Corporation and Celeron Corporation) and each other Subsidiary of the Company that becomes a Grantor Subsidiary Guarantor pursuant to Section 4.11. 18 "Guarantee" means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. The term "Guarantor" shall mean any Person Guaranteeing any obligation. "Guaranteed Obligations" means the principal and interest on the Securities when due, whether at Stated Maturity, by acceleration or otherwise, and all other obligations, monetary or otherwise, of the Company under this Indenture and the Securities (including expenses and indemnification). "Hedging Obligations" of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Raw Materials Hedge Agreement. "Holder" means the Person in whose name a Security is registered on the Registrar's books. "Incur" means issue, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary. The term "Incurrence" when used as a noun shall have a correlative meaning. The accretion of principal of a non-interest bearing or other discount security shall not be deemed the Incurrence of Indebtedness. "Indebtedness" means, with respect to any Person on any date of determination, without duplication: (1) the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money; (2) the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; 19 (3) all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers' acceptance or similar credit transaction (other than obligations with respect to letters of credit securing obligations (other than obligations described in clauses (1), (2) and (5)) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the tenth Business Day following payment on the letter of credit); provided, however, that all obligations of such Person for the reimbursement of any obligor on any letter of credit, bankers' acceptance or similar credit transaction shall constitute indebtedness for all purposes of the covenant described under Section 4.09 and for determining the Company's ability to incur Liens and for no other purpose under this Indenture, if such obligations are secured by or are purported to be secured by Liens on Collateral; (4) all obligations of such Person to pay the deferred and unpaid purchase price of property or services (except Trade Payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto or the completion of such services; (5) all Capitalized Lease Obligations and all Attributable Debt of such Person; (6) the amount of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person, any Preferred Stock (but excluding, in each case, any accrued and unpaid dividends); (7) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of Indebtedness of such Person shall be the lesser of: (A) the Fair Market Value of such asset at such date of determination and (B) the amount of such Indebtedness of such other Persons; (8) Hedging Obligations of such Person; and (9) all obligations of the type referred to in clauses (1) through (8) of other Persons for the payment of which such Person is responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by means of any Guarantee. Notwithstanding the foregoing, in connection with the purchase by the Company or any Restricted Subsidiary of any business, the term "Indebtedness" shall exclude post-closing payment adjustments to which the seller may become entitled to the extent such payment 20 is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid within 30 days thereafter. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above; provided, however, that in the case of Indebtedness sold at a discount, the amount of such Indebtedness at any time will be the accreted value thereof at such time. "Indenture" means this Indenture as amended or supplemented from time to time. "Intercreditor Agreement" means the Lien Subordination and Intercreditor Agreement, dated the Closing Date, by and among the Company, the Grantor Subsidiary Guarantors, the Credit Agent and the Trustee, as amended, supplemented or otherwise modified from time to time. "Interest Rate Agreement" means, with respect to any Person, any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement to which such Person is party or of which it is a beneficiary. "Investment" in any Person means any direct or indirect advance, loan or other extension of credit (including by way of Guarantee or similar arrangement) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person. For purposes of the definition of "Unrestricted Subsidiary" and Section 4.04: (1) "Investment" shall include the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to: (A) the Company's "Investment" in such Subsidiary at the time of such redesignation less (B) the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such redesignation; and 21 (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer. In the event that the Company sells Capital Stock of a Restricted Subsidiary such that after giving effect to such sale, such Restricted Subsidiary would no longer constitute a Restricted Subsidiary, any Investment in such Person remaining after giving effect to such sale shall be deemed to constitute an Investment made on the date of such sale of Capital Stock. "Investment Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by Standard and Poor's, or an equivalent rating by any other Rating Agency. "Legal Holiday" means a Saturday, Sunday or other day on which banking institutions are not required by law or regulation to be open in the State of New York. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge in the nature of an encumbrance of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Luxembourg Finance" means Goodyear Finance Holdings, S.A., a Luxembourg corporation and its successors and permitted assigns. "Material Foreign Subsidiary" means, at any time, each Foreign Subsidiary that had assets with an aggregate book value in excess of $50,000,000 as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC. "Material Intellectual Property" means all intellectual property of the Company and the Grantor Subsidiary Guarantors, other than intellectual property that in the aggregate is not material to the business of the Company and its Subsidiaries, taken as a whole. "Moody's" means Moody's Investors Service, Inc. and any successor to its rating business. "Net Available Cash" from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and proceeds from the sale or other disposition of any securities received as consideration, in each case only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other noncash form) therefrom, in each case net of: (1) all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, 22 provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP, as a consequence of such Asset Disposition, (2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of any kind with respect to such assets, or which must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition, (3) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition and (4) appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition (but only for so long as such reserve is maintained). "Net Cash Proceeds", with respect to any issuance or sale of Capital Stock, means the cash proceeds of such issuance or sale net of attorneys' fees, accountants' fees, underwriters' or placement agents' fees, listing fees, discounts or commissions and brokerage, consultant and other fees actually incurred in connection with such issuance or sale and net of taxes paid or payable as a result thereof. "Obligations" means with respect to any Indebtedness, all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, and other amounts payable pursuant to the documentation governing such Indebtedness. "Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company. "Officer" of a Subsidiary Guarantor has a correlative meaning. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Subsidiary Guarantor or the Trustee. "Other Pari Passu Lien Obligation" means any Indebtedness of the Company and its Restricted Subsidiaries (including any Additional Securities) that is designated by the Company as permitted by this Indenture to be secured by Pari Passu Liens (other than the Securities issued on the Closing Date and the Subsidiary Guarantees). Any portion of the European Bank Indebtedness secured by Pari Passu Liens will be considered an Other Pari Passu Lien Obligation for so long as the only 23 Collateral securing the European Bank Indebtedness on a Priority Lien basis is the Company's equity interest in Luxembourg Finance. "Pari Passu Lien" means any Lien on Collateral securing the Securities, a Subsidiary Guarantee or any Other Pari Passu Lien Obligation that ranks immediately junior in priority (subject to Permitted Collateral Liens) to the Liens on such Collateral securing any Priority Lien Obligations. "Permitted Business" means any business engaged in by the Company or any Restricted Subsidiary on the Closing Date and any Related Business. "Permitted Collateral Liens" means (1) Liens on the Collateral securing Priority Lien Obligations in an amount which, when taken together with all other Priority Lien Obligations then outstanding pursuant to this clause (1), does not exceed the greater of (a) $2,700,000,000 and (b) the sum of (i) 80% of the book value of the inventory of the Company and the Subsidiary Guarantors and (ii) 85% of the book value of the accounts receivable of the Company and the Subsidiary Guarantors, in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; provided, however, that at the election of the Company, all or a portion of the amount of Indebtedness permitted to be secured by Priority Liens pursuant to this clause (1) may instead be allocated to be secured by Pari Passu Liens; provided, further, that (x) the first $500,000,000 of Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso shall reduce the amount set forth in clause (a) above by the amount of such Indebtedness and (y) all Indebtedness allocated to be secured by Pari Passu Liens pursuant to the preceding proviso in excess of $500,000,000 shall reduce both the amount set forth in clause (a) above and the amount set forth in clause (b) above, in each case, by the amount of such Indebtedness; (2) (A) Liens on the Collateral securing the Securities outstanding on the Closing Date, the Exchange Securities issued in exchange therefor and the Subsidiary Guarantees relating thereto; and (B) Liens on the Collateral securing Other Pari Passu Lien Obligations (including, without limitation, Additional Securities) in an amount which, when taken together with all other Other Pari Passu Lien Obligations (including the European Bank Indebtedness to the extent it constitutes another Pari Passu Lien Obligation at the time) then outstanding does not exceed any amount of Indebtedness secured by Pari Passu Liens pursuant to clause (1) above plus the greater of (i) $650,000,000 and (ii) an amount that as of the date of Incurrence, after giving effect thereto and the application of 24 proceeds therefrom, would not result in a Consolidated Secured Debt Ratio of more than 3.75:1; (3) the Priority Lien on the Company's equity interest in Luxembourg Finance securing the European Bank Indebtedness; (4) Liens on the Collateral existing on the Closing Date (other than Liens specified in clauses (1) through (3) above); (5) Liens on the Collateral described in clauses (3) through (5), (7), (10), (11), (13), (15) (only in respect of clauses (10) and (11)) and (17) through (22) of the definition of "Permitted Liens;" provided that all obligations secured by such Liens described in clauses (21) and (22) of the definition of "Permitted Liens" shall be deemed to constitute Indebtedness Incurred pursuant to clause (b)(6) of the covenant described under Section 4.03 for all purposes of the covenant described under Section 4.09 and for determining the Company's ability to Incur Liens and for no other purpose under the Indenture; (6) Liens on the Collateral in favor of any collateral agent relating to such collateral agent's administrative expenses with respect to the Collateral; and (7) Liens on the Collateral securing Indebtedness Incurred pursuant to Section 4.03(b)(6). For the avoidance of doubt, any Lien on the Collateral securing U.S. Bank Indebtedness or ABL Bank Indebtedness outstanding on the Closing Date shall be deemed to be Incurred and outstanding pursuant to clause (1) of this definition, and any Lien on the Collateral (other than any Lien on the Company's equity interest in Luxembourg Finance) securing European Bank Indebtedness outstanding on the Closing Date shall be deemed to be Incurred and outstanding pursuant to clause (2) of this definition. "Permitted Investment" means an Investment by the Company or any Restricted Subsidiary in: (1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such Investment, become a Restricted Subsidiary; (2) another Person if as a result of such Investment such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all its assets to, the Company or a Restricted Subsidiary; (3) Temporary Cash Investments; (4) receivables owing to the Company or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, 25 however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances; (5) payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (6) loans or advances to employees made in the ordinary course of business of the Company or such Restricted Subsidiary; (7) stock, obligations or securities received in settlement of disputes with customers or suppliers or debts (including pursuant to any plan of reorganization or similar arrangement upon insolvency of a debtor) created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments; (8) any Person to the extent such Investment represents the noncash portion of the consideration received for an Asset Disposition that was made pursuant to and in compliance with Section 4.06; (9) a Receivables Entity or any Investment by a Receivables Entity in any other Person in connection with a Qualified Receivables Transaction, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Transaction or any related Indebtedness; provided, however, that any Investment in a Receivables Entity is in the form of a Purchase Money Note, contribution of additional receivables or an equity interest; (10) any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility and workers' compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary; (11) any Person to the extent such Investments consist of Hedging Obligations otherwise permitted under Section 4.03; (12) any Person to the extent such Investment in such Person existed on the Closing Date and any Investment that replaces, refinances or refunds such an Investment, provided that the new Investment is in an amount that does not exceed that amount replaced, refinanced or refunded and is made in the same Person as the Investment replaced, refinanced or refunded; (13) advances to, and Guarantees for the benefit of, customers, dealers or suppliers made in the ordinary course of business and consistent with past practice; and 26 (14) any Person to the extent such Investment, when taken together with all other Investments made pursuant to this clause (14) and then outstanding on the date such Investment is made, does not exceed the greater of (A) the sum of (i) $250,000,000 and (ii) any amounts under Section 4.04(a)(3)(D)(x) that were excluded by operation of the proviso in Section 4.04(a)(3)(D) and which excluded amounts are not otherwise included in Consolidated Net Income or intended to be permitted under any of clauses (1) through (13) of this definition and (B) 2.0% of Consolidated assets of the Company as of the end of the most recent fiscal quarter for which financial statements of the Company have been filed with the SEC. "Permitted Liens" means, with respect to any Person: (1) Liens on Additional Excluded Collateral to secure Priority Lien Obligations permitted pursuant to this Indenture; (2) Liens on Additional Foreign Bank Collateral to secure European Bank Indebtedness permitted pursuant to Section 4.03(b)(1); (3) pledges or deposits by such Person under workers' compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business; (4) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review; (5) Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings; (6) Liens in favor of issuers of surety or performance bonds or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business; provided, however, that such letters of credit do not constitute Indebtedness; (7) survey exceptions, encumbrances, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions 27 as to the use of real property or Liens incidental to the conduct of the business of such Person or to the ownership of its properties which were not Incurred in connection with Indebtedness for borrowed money and which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person; (8) Liens securing Indebtedness Incurred to finance the construction, purchase or lease of, or repairs, improvements or additions to, property of such Person (including Indebtedness Incurred under Section 4.03(b)(6); provided, however, that the Lien may not extend to any other property (other than property related to the property being financed) owned by such Person or any of its Subsidiaries at the time the Lien is Incurred, and the Indebtedness (other than any interest thereon) secured by the Lien may not be Incurred more than 180 days after the later of the acquisition, completion of construction, repair, improvement, addition or commencement of full operation of the property subject to the Lien; (9) Liens existing on the Closing Date (other than (i) Liens referred to in the foregoing clauses (1) and (2) and (ii) Permitted Collateral Liens); (10) Liens on property or shares of stock of another Person at the time such other Person becomes a Subsidiary of such Person; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided further, however, that such Liens do not extend to any other property owned by such Person or any of its Subsidiaries, except pursuant to after-acquired property clauses existing in the applicable agreements at the time such Person becomes a Subsidiary which do not extend to property transferred to such Person by the Company or a Restricted Subsidiary; (11) Liens on property at the time such Person or any of its Subsidiaries acquires the property, including any acquisition by means of a merger or consolidation with or into such Person or any Subsidiary of such Person; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that the Liens do not extend to any other property owned by such Person or any of its Subsidiaries; (12) Liens securing Indebtedness or other obligations of a Subsidiary of such Person owing to such Person or a Restricted Subsidiary of such Person; (13) Liens securing Hedging Obligations so long as such obligations relate to Indebtedness that is, and is permitted under this Indenture to be, secured by a Lien on the same property securing such Hedging Obligations; 28 (14) Liens on assets of Foreign Subsidiaries securing Indebtedness Incurred under Section 4.03(b)(10); (15) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (1), (2), (8), (9), (10) and (11); provided, however, that: (A) such new Lien shall be limited to all or part of the same property that secured the original Lien (plus improvements, accessions, proceeds, dividends or distributions in respect thereof) and (B) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of: (i) the outstanding principal amount or, if greater, committed amount of the Indebtedness secured by Liens described under clauses (1), (2), (8), (9), (10) or (11) at the time the original Lien became a Permitted Lien under this Indenture and (ii) an amount necessary to pay any fees and expenses, including premiums, related to such Refinancings; (16) Liens on accounts receivables and related assets of the type specified in the definition of "Qualified Receivables Transaction" Incurred in connection with a Qualified Receivables Transaction; (17) judgment Liens not giving rise to an Event of Default so long as any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired; (18) Liens arising from Uniform Commercial Code financing statement filings regarding leases that do not otherwise constitute Indebtedness entered into in the ordinary course of business; (19) leases and subleases of real property which do not materially interfere with the ordinary conduct of the business of the Company and its Subsidiaries; (20) Liens which constitute bankers' Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with any bank or other financial institution, whether arising by operation of law or pursuant to contract; (21) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' 29 acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; (22) Liens on specific items of inventory or other goods and related documentation (and proceeds thereof) securing reimbursement obligations in respect of trade letters of credit issued to ensure payment of the purchase price for such items of inventory or other goods; and (23) other Liens to secure Indebtedness in an aggregate amount not to exceed $25,000,000 at any time outstanding. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person. "principal" of a Security means the principal of the Security plus the premium, if any, payable on the Security which is due or overdue or is to become due at the relevant time. "Priority Lien" means any Lien on any Collateral for the benefit of the lenders of any Indebtedness of the Company or any of its Restricted Subsidiaries that is designated by the Company as permitted by this Indenture to rank prior to the Liens on such Collateral for the benefit of the Holders. "Priority Lien Obligation" means any Indebtedness that is secured by a Priority Lien; provided, however, that for purposes of this definition, the European Bank Indebtedness will not be considered a Priority Lien Obligation as long as the only Collateral securing the European Bank Indebtedness on a Priority Lien basis is the Company's equity interest in Luxembourg Finance. The relative priorities of the Priority Lien Obligations are determined by agreement among the holders of the Priority Lien Obligations. "Private Placement Memorandum" means the Offering Memorandum, dated March 9, 2004, with respect to the Securities, as supplemented or amended and including all documents incorporated by reference therein. "Public Equity Offering" means an underwritten primary public offering of common stock of the Company pursuant to an effective registration statement under the Securities Act. "Purchase Money Indebtedness" means Indebtedness: 30 (1) consisting of the deferred purchase price of property, plant and equipment, conditional sale obligations, obligations under any title retention agreement and other obligations Incurred in connection with the acquisition, construction or improvement of such asset, in each case where the amount of such Indebtedness does not exceed the greater of (A) the cost of the asset being financed and (B) the Fair Market Value of such asset, and (2) Incurred to finance such acquisition, construction or improvement by the Company or a Restricted Subsidiary of such asset; provided, however, that such Indebtedness is Incurred within 180 days after such acquisition or the completion of such construction or improvement. "Purchase Money Note" means a promissory note of a Receivables Entity evidencing a line of credit, which may be irrevocable, from the Company or any Subsidiary of the Company to a Receivables Entity in connection with a Qualified Receivables Transaction, which note (1) shall be repaid from cash available to the Receivables Entity, other than (A) amounts required to be established as reserves, (B) amounts paid to investors in respect of interest, (C) principal and other amounts owing to such investors and (D) amounts paid in connection with the purchase of newly generated receivables and (2) may be subordinated to the payments described in clause (a). "Qualified Receivables Transaction" means any transaction or series of transactions that may be entered into by the Company or any of its Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer to: (1) a Receivables Entity (in the case of a transfer by the Company or any of its Subsidiaries) or (2) any other Person (in the case of a transfer by a Receivables Entity), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Company or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all Guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset 31 securitization transactions involving accounts receivable; provided, however, that the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by a Financial Officer of the Company). The grant of a security interest in any accounts receivable of the Company or any of its Restricted Subsidiaries to secure Bank Indebtedness shall not be deemed a Qualified Receivables Transaction. "Rating Agency" means Standard & Poor's and Moody's or if Standard & Poor's or Moody's or both shall not make a rating on the Securities publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a resolution of the Board of Directors) which shall be substituted for Standard & Poor's or Moody's or both, as the case may be. "Raw Material Hedge Agreements" means agreements designed to hedge against fluctuations in the cost of raw materials in connection with the operation of the Company and its Restricted Subsidiaries' business. "Receivables Entity" means a (a) Wholly Owned Subsidiary of the Company which is designated by the Board of Directors (as provided below) as a Receivables Entity or (b) another Person engaging in a Qualified Receivables Transaction with the Company which Person engages in the business of the financing of accounts receivable, and in either of clause (a) or (b): (1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which (A) is Guaranteed by the Company or any Subsidiary of the Company (excluding Guarantees of obligations (other than the principal of, and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (B) is recourse to or obligates the Company or any Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings or (C) subjects any property or asset of the Company or any Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (2) which is not an Affiliate of the Company or with which neither the Company nor any Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms which the Company reasonably believes to be no less favorable to the Company or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company; and 32 (3) to which neither the Company nor any Subsidiary of the Company has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions. "Refinance" means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness exchange or replacement for, such Indebtedness, including, in any such case from time to time, after the discharge of the Indebtedness being Refinanced. "Refinanced" and "Refinancing" shall have correlative meanings. "Refinancing Indebtedness" means Indebtedness that is Incurred to Refinance (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Company or any Restricted Subsidiary existing on the Closing Date or Incurred in compliance with this Indenture (including Indebtedness of the Company that Refinances Refinancing Indebtedness); provided, however, that: (1) the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced, (2) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced, (3) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount of the Indebtedness being refinanced (or if issued with original issue discount, the aggregate accreted value) then outstanding (or that would be outstanding if the entire committed amount of any credit facility being Refinanced were fully drawn (other than any such amount that would have been prohibited from being drawn pursuant to Section 4.03) (plus fees and expenses, including any premium and defeasance costs), and (4) if the Indebtedness being Refinanced is subordinated in right of payment to the Securities, such Refinancing Indebtedness is subordinated in right of payment to the Securities at least to the same extent as the Indebtedness being Refinanced; provided further, however, that Refinancing Indebtedness shall not include: (A) Indebtedness of a Restricted Subsidiary that is not a Grantor Subsidiary Guarantor that Refinances Indebtedness of the Company or 33 (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary. "Related Business" means any business reasonably related, ancillary or complementary to the businesses of the Company and its Restricted Subsidiaries on the Closing Date. "Restricted Payment" in respect of any Person means: (1) the declaration or payment of any dividend, any distribution on or in respect of its Capital Stock or any similar payment (including any payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary) to the direct or indirect holders of its Capital Stock in their capacity as such, except (A) dividends or distributions payable solely in its Capital Stock (other than Disqualified Stock or, in the case of a Restricted Subsidiary, Preferred Stock) and (B) dividends or distributions payable to the Company or a Restricted Subsidiary (and, if such Restricted Subsidiary has Capital Stock held by Persons other than the Company or other Restricted Subsidiaries, to such other Persons on no more than a pro rata basis), (2) the purchase, repurchase, redemption, retirement or other acquisition ("Purchase") for value of any Capital Stock of the Company or any Restricted Subsidiary held by Persons other than the Company or a Restricted Subsidiary (other than in exchange for Capital Stock of the Company that is not Disqualified Stock), (3) the Purchase for value, prior to scheduled maturity, any scheduled repayment or any scheduled sinking fund payment, of any Subordinated Obligations (other than the Purchase for value of Subordinated Obligations acquired in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such Purchase), or (4) any Investment (other than a Permitted Investment) in any Person. "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "Sale/Leaseback Transaction" means an arrangement relating to property, plant and equipment now owned or hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases it from such Person, other than (i) leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries or (ii) any such transaction entered into with respect to any property, plant and equipment or any improvements thereto at the time of, or within 180 days after, the acquisition or completion of construction of such property, plant and equipment or such improvements (or, if later, the commencement of commercial operation of any such 34 property, plant and equipment), as the case may be, to finance the cost of such property, plant and equipment or such improvements, as the case may be. "SEC" means the Securities and Exchange Commission. "Secured Indebtedness" means any Indebtedness of the Company secured by a Lien. "Secured Indebtedness" of a Subsidiary Guarantor has a correlative meaning. "Securities" means the securities issued under this Indenture. "Securities Act" means the U.S. Securities Act of 1933, as amended. "Security Documents" means the Collateral Agreement, any Foreign Pledge Agreements, any agreements or mortgages to which assets are added to the Collateral and any other agreements, mortgages, instruments or documents referenced in, contemplated by, or entered into or delivered in connection with, any of the foregoing, as such agreements, mortgages, instruments or documents may be amended, modified or supplemented from time to time. "Senior Indebtedness" of the Company or any Subsidiary Guarantor, as the case may be, means the principal of, premium (if any) and accrued and unpaid interest on (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization of the Company or any Subsidiary Guarantor, as applicable, regardless of whether or not a claim for post-filing interest is allowed in such proceedings), and fees and other amounts owing in respect of, Bank Indebtedness, the Securities (in the case of the Company), the Subsidiary Guarantees (in the case of the Subsidiary Guarantors) and all other Indebtedness of the Company or any Subsidiary Guarantor, as applicable, whether outstanding on the Closing Date or thereafter Incurred, unless in the instrument creating or evidencing the same or pursuant to which the same is outstanding it is provided that such obligations are subordinated in right of payment to the Securities or such Subsidiary Guarantor's Subsidiary Guarantee, as applicable; provided, however, that Senior Indebtedness of the Company or any Subsidiary Guarantor shall not include: (1) any obligation of the Company to any Subsidiary of the Company or of such Subsidiary Guarantor to the Company or any other Subsidiary of the Company; (2) any liability for Federal, state, local or other taxes owed or owing by the Company or such Subsidiary Guarantor, as applicable; (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including Guarantees thereof or instruments evidencing such liabilities); (4) any Indebtedness or obligation of the Company (and any accrued and unpaid interest in respect thereof) that by its terms is subordinate or junior in any respect to any other Indebtedness or obligation of the Company or 35 such Subsidiary Guarantor, as applicable, including any Subordinated Obligations of the Company or such Subsidiary Guarantor, as applicable; (5) any obligations with respect to any Capital Stock; or (6) any Indebtedness Incurred in violation of this Indenture. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC. "Specified Asset Sale" means the sale of all the assets and liabilities of the Company's Chemical Products strategic business segment other than its natural rubber plantation and processing facility in Indonesia. "Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc., and any successor to its rating business. "Standard Securitization Undertakings" means representations, warranties, covenants and indemnities entered into by the Company or any Subsidiary of the Company which, taken as a whole, are customary in an accounts receivable transaction. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). "Subordinated Obligation" means any Indebtedness of the Company (whether outstanding on the Closing Date or thereafter Incurred) that by its terms is subordinate or junior in right of payment to the Securities. "Subordinated Obligation" of a Subsidiary Guarantor has a correlative meaning. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) 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: (1) such Person, (2) such Person and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of such Person. 36 "Subsidiary Guarantee" means each Guarantee of the obligations with respect to the Securities issued by a Subsidiary of the Company pursuant to the terms of this Indenture. "Subsidiary Guarantor" means any Subsidiary that has issued a Subsidiary Guarantee. "Temporary Cash Investments" means any of the following: (1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (2) investments in commercial paper maturing within 270 days from the date of acquisition thereof, and having, at such date of acquisition, ratings of A1 from S&P and P1 from Moody's; (3) investments in certificates of deposit, banker's acceptances and time deposits maturing within 180 days from the date of acquisition thereof and issued or guaranteed by or placed with, and money market deposit accounts issued or offered by any commercial bank organized under the laws of the United States of America or any state thereof which has a short-term deposit rating of A1 from S&P and P1 from Moody's and has a combined capital and surplus and undivided profits of not less than $500,000,000; (4) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (1) above and entered into with a financial institution described in clause (3) above; (5) money market funds that (A) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, (B) are rated AAA by S&P and Aaa by Moody's and (C) have portfolio assets of at least $5,000,000,000; and (6) in the case of any Foreign Subsidiary, (A) marketable direct obligations issued or unconditionally guaranteed by the sovereign nation in which such Foreign Subsidiary is organized and is conducting business or issued by any agency of such sovereign nation and backed by the full faith and credit of such sovereign nation, in each case maturing within one year from the date of acquisition, so long as the indebtedness of such sovereign nation is rated at least A by S&P or A2 by Moody's or carries an equivalent rating from a comparable foreign rating agency, (B) investments of the type and maturity described in clauses (2) through (5) of foreign obligors, which investments or obligors have ratings described in such clauses or equivalent ratings from comparable foreign rating 37 agencies, (C) investments of the type and maturity described in clause (3) in any obligor organized under the laws of a jurisdiction other than the United States that (i) is a branch or subsidiary of a lender or the ultimate parent company of a lender under any of the Credit Agreements (but only if such lender meets the ratings and capital, surplus and undivided profits requirements of such clause (3)) or (ii) carries a rating at least equivalent to the rating of the sovereign nation in which it is located, and (D) other investments of the type and maturity described in clause (3) in obligors organized under the laws of a jurisdiction other than the United States in any country in which such Subsidiary is located; provided, however, that the investments permitted under this subclause (D) shall not exceed $10,000,000 for all such Subsidiaries in any such country or $50,000,000 in the aggregate for all such Subsidiaries and all countries. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the Closing Date. "Trade Payables" means, with respect to any Person, any accounts payable or any indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "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. "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "Unrestricted Subsidiary" means: (1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors in the manner provided below and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that either: 38 (A) the Subsidiary to be so designated has total Consolidated assets of $1,000 or less or (B) if such Subsidiary has Consolidated assets greater than $1,000, then such designation would be permitted under the covenant entitled "Limitation on Restricted Payments." The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation: (x) (1) the Company could Incur $1.00 of additional Indebtedness under Section 4.03(a) or (2) the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries would be greater after giving effect to such designation than before such designation and (y) no Default shall have occurred and be continuing. Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions. "U.S. Bank Indebtedness" means any and all amounts payable under or in respect of (i) the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMorgan Chase Bank, as administrative agent and (ii) the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent and BNP Paribas, as syndication agent, and any Refinancing Indebtedness with respect thereto, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations and all other amounts payable thereunder or in respect thereof. "U.S. Dollar Equivalent" means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the "Exchange Rates" column under the heading "Currency Trading" on the date two Business Days prior to such determination. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option. 39 "U.S. Revolving Credit Facility" means that portion of the U.S. Bank Indebtedness described in clause (i) of such definition. "Voting Stock" of a Person means all classes of Capital Stock or other interests (including partnership interests) of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof. "Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company all the Capital Stock of which (other than directors' qualifying shares) is owned by the Company or another Wholly Owned Subsidiary. SECTION 1.02. Other Definitions.
Defined in Term Section - -------------------------------------------------------------------------------- ---------- "Affiliate Transaction"......................................................... 4.07(a) "Bankruptcy Law"................................................................ 6.01 "Change of Control Offer"....................................................... 4.09(b) "covenant defeasance option".................................................... 8.01(b) "Custodian"..................................................................... 6.01 "Definitive Security" .......................................................... Appendix A "Event of Default".............................................................. 6.01 "Exchange Fixed Rate Securities" ............................................... Appendix A "Exchange Floating Rate Securities" ............................................ Appendix A "Exchange Securities"........................................................... Appendix A "Floating Rate Securities" ..................................................... 2.02 "Fixed Rate Securities" ........................................................ 2.02 "Global Security" .............................................................. Appendix A "Guaranteed Obligations"........................................................ 10.01 "Initial Fixed Rate Securities" ................................................ Appendix A "Initial Floating Rate Securities" ............................................. Appendix A "Initial Securities"............................................................ Appendix A "legal defeasance option"....................................................... 8.01(b) "Offer"......................................................................... 4.06(b) "Offer Amount".................................................................. 4.06(d)(3) "Offer Period".................................................................. 4.06(d)(3) "Paying Agent".................................................................. 2.03 "Purchase Date"................................................................. 4.06(d)(2) "Registrar"..................................................................... 2.03 "Reversion Date"................................................................ 4.13(b) "Successor Company"............................................................. 5.01(a)(1) "Suspended Covenants"........................................................... 4.13(a) "Suspension Date"............................................................... 4.13(a) "Suspension Period"............................................................. 4.13(b)
40 SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the TIA which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: "Commission" means the SEC; "indenture securities" means the Securities and the Subsidiary Guarantees; "indenture security holder" means a Holder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the indenture securities means the Company, each Subsidiary Guarantor and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; (6) unsecured Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature as unsecured Indebtedness; (7) secured Indebtedness shall not be deemed to be subordinate or junior to any other secured Indebtedness merely because it has a junior priority with respect to the same collateral; (8) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; 41 (9) the principal amount of any Preferred Stock shall be (A) the maximum liquidation value of such Preferred Stock or (B) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater; and (10) all references to the date the Securities were originally issued shall refer to Closing Date. ARTICLE 2 The Securities SECTION 2.01. Form and Dating. Provisions relating to the Initial Securities and the Exchange Securities are set forth in Appendix A attached hereto (the "Appendix") which is hereby incorporated in, and expressly made part of, this Indenture. The Initial Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit 1a (in respect of the Initial Fixed Rate Securities) and Exhibit 2a (in respect of the Initial Floating Rate Securities) to this Indenture, which are hereby incorporated in and expressly made a part of this Indenture; provided, that Definitive Securities issued on the Closing Date or prior to the Rule 144A Availability Date (as defined in Appendix A) shall not bear the Global Securities Legend (as defined in Appendix A). The Exchange Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit 1b (in respect of the Exchange Fixed Rate Securities) and Exhibit 2b (in respect of the Exchange Floating Rate Securities) to this Indenture which are hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of its authentication. The terms of the Securities set forth in the Appendix and Exhibits 1a and 1b are part of the terms of this Indenture. SECTION 2.02. Execution and Authentication. Two Officers shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. On the Closing Date, the Trustee shall authenticate and make available for delivery $450,000,000 of 11% Senior Secured Notes due 2011 (the "Fixed Rate Securities") and $200,000,000 of Senior Secured Floating Rate Notes due 2011 (the "Floating Rate Securities"), and upon receipt of a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant 42 Secretary of the Company, the Trustee shall authenticate and deliver Securities of any series for original issue in an aggregate principal amount specified in such order. Such order shall specify the amount and series of the Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and, in the case of an issuance of Additional Securities pursuant to Section 2.13 after the Closing Date, shall certify that such issuance is in compliance with Sections 4.03 and 4.09. The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Unless limited by the terms of such appointment, 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 any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.03. Registrar and Paying Agent. (a) The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency located in the Borough of Manhattan, the City of New York, where Securities may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents provided, however, that so long as Wells Fargo Bank, National Association shall be the Trustee, without the consent of the Trustee, there shall be no more than one Registrar or Paying Agent. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any Wholly Owned Subsidiary incorporated or organized within The United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent. The Registrar 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 Registrar need not register transfer or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed, or any Securities for a period of 15 days before a selection of an interest payment date. The Holder of a Security may be treated as the owner of such Security for all purposes. (b) The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities. 43 (c) The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of an appointment by a successor as evidence by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due date of the principal and interest on any Security, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of Holders entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 2.05. Lists of Holders of Securities. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders. SECTION 2.06. Transfer and Exchange. (a) The Securities shall be issued in registered form and shall be transferable only in compliance with Appendix A and upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. (b) To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities at the Registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section. The Company shall not be required to make and the Registrar need not register transfer or exchanges of Securities selected for redemption in accordance with the terms 44 of this Indenture (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or any Securities for a period of 15 days before an interest payment date. Prior to the due presentation for registration of transfer of any Security, the Company, the Subsidiary Guarantors, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and (subject to paragraph 2 of the Securities) interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, any Subsidiary Guarantor, the Trustee, the Paying Agent, or the Registrar shall be affected by notice to the contrary. Any Holder of a beneficial interest in a Global Security shall, by acceptance of such beneficial interest, agree that transfers of beneficial interest in such Global Security may be effected only through a book-entry system maintained by (a) the Holder of such Global Security (or its agent) or (b) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry. All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same Indebtedness and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange. SECTION 2.07. Replacement Securities. If a mutilated Security is surrendered to the Registrar 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 if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Security is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Security. Every replacement Security is an additional Obligation of the Company. The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Securities. SECTION 2.08. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to Section 13.06, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. 45 If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a bona fide purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue. SECTION 2.09. Temporary Securities. Until Definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. 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 and deliver them in exchange for temporary Securities upon surrender of such temporary Securities at the office or agency of the Company, without charge to the Holder. SECTION 2.10. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver canceled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Securities in place of cancelled Securities other than pursuant to the terms of this Indenture. SECTION 2.11. Defaulted Interest. If the Company defaults in a payment of interest on the Securities, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Holders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.12. CUSIP Numbers and ISINs. The Company in issuing the Securities may use "CUSIP" numbers and ISINs (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers and ISINs in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed 46 only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. SECTION 2.13. Issuance of Additional Securities. After the Closing Date, the Company shall be entitled, subject to its compliance, at the time of and after giving effect to such issuance, with Section 4.03 and Section 4.09, to issue Additional Securities of any series under this Indenture, which Securities shall have identical terms as the applicable series of Initial Securities issued on the Closing Date, other than with respect to the date of issuance and issue price. All the Securities issued under this Indenture shall be treated as a single class for all purposes of this Indenture; provided, however, that in respect of any amendment, waiver, other modification or optional redemption by the Company that affects only one series of the Securities, such affected series of Securities shall be treated as a single class under this Indenture. With respect to any Additional Securities, the Company shall set forth in a an Officers' Certificate, a copy of which shall be delivered to the Trustee (along with a copy of the Resolutions of the Board of Directors authorizing the Additional Securities), the following information: (1) the aggregate principal amount of such Additional Securities to be authenticated and delivered pursuant to this Indenture and the provision of Section 4.03 that the Company is relying on to issue such Additional Securities; (2) that such Additional Securities may be designated Other Pari Passu Lien Obligations in accordance with Section 4.09; (3) the issue price, the issue date, the CUSIP number and ISIN of such Additional Securities; provided, however, that no Additional Securities may be issued at a price that would cause such Additional Securities to have "original issue discount" within the meaning of Section 1273 of the Code; and (4) whether such Additional Securities shall be Initial Securities or shall be issued in the form of Exchange Securities as set forth in Exhibit A. ARTICLE 3 Redemption SECTION 3.01. Notices to Trustee. If the Company elects to redeem Securities of any series pursuant to paragraph 5 of such series of Securities, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed and the paragraph of such series of Securities pursuant to which the redemption will occur. The Company shall give each notice to the Trustee provided for in this Section at least 45 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate to the effect 47 that such redemption will comply with the conditions herein. Any such notice may be cancelled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. SECTION 3.02. Selection of Securities to Be Redeemed. If fewer than all the Securities of a series are to be redeemed, the Trustee shall select the Securities of such series to be redeemed pro rata or by lot or by a method that complies with applicable legal and securities exchange requirements, if any, and that the Trustee in its sole discretion shall deem to be fair and appropriate. The Trustee shall make the selection from outstanding Securities of such series not previously called for redemption. The Trustee may select for redemption portions of the principal amount of Securities of such series that have denominations larger than $1,000. Securities and portions of them the Trustee selects shall be in principal amounts of $1,000 or a whole multiple of $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 of the Securities or portions of Securities to be redeemed. SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days before a date for redemption of Securities of a series, the Company shall mail a notice of redemption by first-class mail to each Holder of Securities of such series to be redeemed at such Holder's registered address. The notice shall identify the Securities of such series to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) the name and address of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) if fewer than all the outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed; (6) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date; and (7) that no representation is made as to the correctness or accuracy of the CUSIP number or ISIN, if any, listed in such notice or printed on the Securities. 48 At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. In such event, the Company shall provide the Trustee with the information required by this Section. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed to Holders, Securities of a series called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date if the redemption date is after a regular record date and on or prior to the interest payment date). Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. Prior to 11:00 a.m., New York City time, on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities of a series or portions thereof to be redeemed on that date other than Securities of such series or portions of Securities of such series called for redemption which have been delivered by the Company to the Trustee for cancellation. Interest shall cease to accrue on Securities or portions thereof called for redemption on and after the date the Company has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest, on the Securities to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company's expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4 Covenants SECTION 4.01. Payment of Securities. The Company shall promptly pay the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due. The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 49 SECTION 4.02. SEC Reports. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC and provide the Trustee and Holders and prospective Holders (upon request) within 15 days after it files them with the SEC, copies of its annual report and the information, documents and other reports that are specified in Sections 13 and 15(d) of the Exchange Act. In addition, the Company shall furnish to the Trustee and the Holders, promptly upon their becoming available, copies of the annual report to shareholders and any other information provided by the Company to its public shareholders generally. The Company also shall comply with the other provisions of Section 314(a) of the TIA. In addition, the Company shall furnish to the Holders of the Securities and to prospective investors, upon the requests of such Holders, any information with respect to the Company required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Securities are not freely transferable under the Securities Act. SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that the Company or any Subsidiary Guarantor may Incur Indebtedness if on the date of such Incurrence and after giving effect thereto and the application of the proceeds therefrom the Consolidated Coverage Ratio would be greater than 2.0:1. (b) Notwithstanding the foregoing paragraph (a), the Company and its Restricted Subsidiaries may Incur the following Indebtedness: (1) Bank Indebtedness in an aggregate principal amount not to exceed the greater of (A) $2,700,000,000, less the aggregate amount of all prepayments of principal applied to permanently reduce any such Indebtedness in satisfaction of the Company's obligations under Section 4.06 and (B) the sum of (i) 60% of the book value of the inventory of the Company and its Restricted Subsidiaries plus (ii) 80% of the book value of the accounts receivable of the Company and its Restricted Subsidiaries (other than any accounts receivable pledged, sold or otherwise transferred or encumbered by the Company or any Restricted Subsidiary in connection with a Qualified Receivables Transaction), in each case, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; provided, however, that the amount of -------- ------- Indebtedness that may be Incurred pursuant to this clause (1) shall be reduced by any amount of Indebtedness Incurred and then outstanding pursuant to the election provision of clause (10)(A)(ii) below; (2) Indebtedness of the Company owed to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owed to and held by the Company or any Restricted Subsidiary; provided, however, that any 50 subsequent event that results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such Indebtedness by the issuer thereof; (3) Indebtedness (A) represented by the Securities issued on the Closing Date (not including any Additional Securities) and the Subsidiary Guarantees, (B) outstanding on the Closing Date (other than the Indebtedness described in clauses (1) and (2) and (3)(A) above), and (C) consisting of Refinancing Indebtedness Incurred in respect of any Indebtedness described in this clause (3) (including Indebtedness that is Refinancing Indebtedness) or the foregoing paragraph (a); (4) (A) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the date on which such Restricted Subsidiary was acquired by the Company or a Restricted Subsidiary (other than Indebtedness Incurred in contemplation of, in connection with, as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Subsidiary of or was otherwise acquired by the Company); provided, however, that on the date that such Restricted Subsidiary is acquired by the Company, (i) the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to the foregoing paragraph (a) after giving effect to the Incurrence of such Indebtedness pursuant to this clause (4) or (ii) the Consolidated Coverage Ratio immediately after giving effect to such Incurrence and acquisition would be greater than such ratio immediately prior to such transaction and (B) Refinancing Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness Incurred by such Restricted Subsidiary pursuant to this clause (4); (5) Indebtedness (A) in respect of performance bonds, bankers' acceptances, letters of credit and surety or appeal bonds entered into by the Company or any Restricted Subsidiary in the ordinary course of business, and (B) Hedging Obligations entered into in the ordinary course of business to hedge risks with respect to the Company's or a Restricted Subsidiary's interest rate, currency or raw materials pricing exposure and not entered into for speculative purposes; (6) Purchase Money Indebtedness, Capitalized Lease Obligations and Attributable Debt and Refinancing Indebtedness in respect thereof in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (6) and then outstanding, will not exceed the greater of (A) $600,000,000 and (B) 5.0% of Consolidated assets of the Company as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC; 51 provided, however, that the aggregate principal amount of Capitalized Lease Obligations and Attributable Debt (and Refinancing Indebtedness in respect thereof) Incurred pursuant to this clause (6) and then outstanding in respect of Sale/Leaseback Transactions relating to Collateral may not exceed $100,000,000. (7) Indebtedness Incurred by a Receivables Entity in a Qualified Receivables Transaction; (8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of a Financial Officer's becoming aware of its Incurrence; (9) any Guarantee (other than the Subsidiary Guarantees) by the Company or a Restricted Subsidiary of Indebtedness or other obligations of the Company or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness or other obligations by the Company or such Restricted Subsidiary is permitted under the terms of this Indenture (other than Indebtedness Incurred pursuant to clause (4) above); (10) (A) Indebtedness of Foreign Subsidiaries in an aggregate principal amount that, when added to all other Indebtedness Incurred pursuant to this clause (10)(A) and then outstanding, will not exceed (i) $600,000,000 plus (ii) any amount then permitted to be Incurred pursuant to clause (1) above that the Company instead elects to Incur pursuant to this clause (10)(A); and (B) Indebtedness of Foreign Subsidiaries Incurred in connection with a Qualified Receivables Transaction in an amount not to exceed (euro)275,000,000 at any one time outstanding; (11) Indebtedness constituting Other Pari Passu Lien Obligations or unsecured Indebtedness in an amount not to exceed $850,000,000 and Refinancing Indebtedness in respect thereof; provided that such Refinancing Indebtedness constitutes Other Pari Passu Lien Obligations or unsecured Indebtedness; and (12) Indebtedness of the Company and the Restricted Subsidiaries in an aggregate principal amount on the date of Incurrence that, when added to all other Indebtedness Incurred pursuant to this clause (12) and then outstanding, will not exceed $150,000,000. (c) For purposes of determining the outstanding principal amount of any particular Indebtedness Incurred pursuant to this Section 4.03: 52 (1) Outstanding Indebtedness Incurred pursuant to any of the Credit Agreements prior to or on the Closing Date shall be classified as Incurred as follows: (A) such Indebtedness shall be deemed to have been Incurred pursuant to clause (1) of paragraph (b) above, in an amount such that after giving effect to such Incurrence there will remain available to be Incurred under clause (1) of paragraph (b) an amount of Indebtedness equal to the aggregate amount committed and undrawn under the Credit Agreements on the Closing Date (including amounts committed that are not available to be drawn because such amounts have been allocated to undrawn outstanding letters of credit); and (B) to the extent not classified pursuant to clause (A) above, such Indebtedness shall be deemed to have been Incurred pursuant to paragraph (a) above. (2) Indebtedness permitted by this Section 4.03 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness, and (3) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this Section 4.03, the Company, in its sole discretion, shall classify such Indebtedness (or any portion thereof) as of the time of Incurrence and will only be required to include the amount of such Indebtedness in one of such clauses (provided that any Indebtedness originally classified as Incurred pursuant to Sections 4.03(b)(2) through (b)(12) may later be reclassified as having been Incurred pursuant to Section 4.03(a) or any other of Sections 4.03(b)(2) through (b)(12) to the extent that such reclassified Indebtedness could be Incurred pursuant to Section 4.03(a) or one of Sections 4.03(b)(2) through (b)(12), as the case may be, if it were Incurred at the time of such reclassification); and (4) all Indebtedness constituting Other Pari Passu Lien Obligations Incurred after the Closing Date shall be treated as Incurred pursuant to clause (11) of paragraph (b) above unless and until such Indebtedness can no longer be Incurred pursuant to clause (11) of paragraph (b) above. (d) For purposes of determining compliance with any U.S. dollar or euro denominated restriction on the Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a different currency, the amount of such Indebtedness will be the U.S. Dollar Equivalent or Euro Equivalent, as the case may be, determined on the date of the Incurrence of such Indebtedness; provided, however, that if any such Indebtedness denominated in a different currency is subject to a Currency Agreement 53 with respect to U.S. dollars or euros, as the case may be, covering all principal, premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness expressed in U.S. dollars or euros will be as provided in such Currency Agreement. The principal amount of any Refinancing Indebtedness Incurred in the same currency as the Indebtedness being Refinanced will be the U.S. Dollar Equivalent or Euro Equivalent, as appropriate, of the Indebtedness Refinanced determined on the date of the Incurrence of such Indebtedness, except to the extent that (1) such U.S. Dollar Equivalent or Euro Equivalent was determined based on a Currency Agreement, in which case the Refinancing Indebtedness will be determined in accordance with the immediately preceding sentence, and (2) the principal amount of the Refinancing Indebtedness exceeds the principal amount of the Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent or Euro Equivalent, as appropriate, of such excess will be determined on the date such Refinancing Indebtedness is Incurred. SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall not, and shall not permit any Restricted Subsidiary, directly or indirectly, to make any Restricted Payment if at the time the Company or such Restricted Subsidiary makes such Restricted Payment: (1) a Default will have occurred and be continuing (or would result therefrom); (2) the Company could not Incur at least $1.00 of additional Indebtedness under paragraph (a) of the covenant described under " -- Limitation on Indebtedness;" or (3) the aggregate amount of such Restricted Payment and all other Restricted Payments (the amount so expended, if other than in cash, to be determined in good faith by a Financial Officer of the Company, whose determination will be conclusive; provided, however, that with respect to any noncash Restricted Payment in excess of $25,000,000, the amount so expended shall be determined in accordance with the provisions of the definition of Fair Market Value) declared or made subsequent to the Closing Date would exceed the sum, without duplication, of: (A) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the beginning of the fiscal quarter immediately following the fiscal quarter during which the Closing Date occurs to the end of the most recent fiscal quarter for which financial statements have been filed with the SEC prior to the date of such Restricted Payment (or, in case such Consolidated Net Income will be a deficit, minus 100% of such deficit); (B) 100% of the aggregate Net Cash Proceeds received by the Company from the issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to the Closing Date (other than an issuance or sale to a Subsidiary of the Company and other than an 54 issuance or sale to an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees) and 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Closing Date; (C) the amount by which Indebtedness of the Company or its Restricted Subsidiaries is reduced on the Company's Consolidated balance sheet upon the conversion or exchange (other than by a Subsidiary of the Company) subsequent to the Closing Date of any Indebtedness of the Company or its Restricted Subsidiaries issued after the Closing Date which is convertible or exchangeable for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash or the Fair Market Value of other property distributed by the Company or any Restricted Subsidiary upon such conversion or exchange); and (D) an amount equal to the sum of (x) the net reduction in the Investments (other than Permitted Investments) made by the Company or any Restricted Subsidiary in any Person resulting from repurchases, repayments or redemptions of such Investments by such Person, proceeds realized on the sale of such Investment and proceeds representing the return of capital (excluding dividends and distributions), in each case realized by the Company or any Restricted Subsidiary, and (y) to the extent such Person is an Unrestricted Subsidiary, the portion (proportionate to the Company's equity interest in such Subsidiary) of the fair market value of the net assets of such Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding Permitted Investments) previously made (and treated as a Restricted Payment) by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary. (b) The provisions of Section 4.04(a) shall not prohibit: (1) any Restricted Payment made out of the Net Cash Proceeds of the substantially concurrent sale of, or made by exchange for, Capital Stock of the Company (other than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company or an employee stock ownership plan or to a trust established by the Company or any of its Subsidiaries for the benefit of their employees to the extent such sale to such an employee stock ownership plan or trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) or a substantially concurrent cash capital contribution received by the Company from its shareholders; provided, however, that: 55 (A) such Restricted Payment shall be excluded in the calculation of the amount of Restricted Payments, and (B) the Net Cash Proceeds from such sale applied in the manner set forth in Section 4.04(b)(1) shall be excluded from the calculation of amounts under Section 4.04(a)(3)(B); (2) any prepayment, repayment or Purchase for value of Subordinated Obligations of the Company made by exchange for, or out of the proceeds of the substantially concurrent sale of, other Subordinated Obligations or Indebtedness Incurred under Section 4.03(a); provided, however, that such prepayment, repayment or Purchase for value shall be excluded in the calculation of the amount of Restricted Payments; (3) dividends paid within 60 days after the date of declaration thereof if at such date of declaration such dividends would have complied with this covenant; provided, however, that such dividends shall be included in the calculation of the amount of Restricted Payments; (4) any Purchase for value of Capital Stock of the Company or any of its Subsidiaries from employees, former employees, directors or former directors of the Company or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors or former directors), pursuant to the terms of agreements (including employment agreements) or plans (or amendments thereto) approved by the Board of Directors under which such individuals purchase or sell or are granted the option to purchase or sell, shares of such Capital Stock; provided, however, that the aggregate amount of such Purchases for value will not exceed $10,000,000 in any calendar year; provided further, however, that any of the $10,000,000 permitted to be applied for Purchases under this Section 4.04(b)(4) in a calendar year (and not so applied) may be carried forward for use in the following two calendar years; provided further, however, that such Purchases for value shall be excluded in the calculation of the amount of Restricted Payments; (5) so long as no Default has occurred and is continuing, payments of dividends on Disqualified Stock issued after the Closing Date pursuant to Section 4.03; provided, however, that such dividends shall be included in the calculation of the amount of Restricted Payments; (6) repurchases of Capital Stock deemed to occur upon exercise of stock options if such Capital Stock represents a portion of the exercise price of such options; provided, however, that such Restricted Payments shall be excluded in the calculation of the amount of Restricted Payments; (7) so long as no Default has occurred and is continuing, any prepayment, repayment or Purchase for value of Subordinated Obligations from Net Available Cash to the extent permitted under Section 4.06; provided, 56 however, that such prepayment, repayment or Purchase for value shall be excluded in the calculation of the amount of Restricted Payments; (8) payments to holders of Capital Stock (or to the holders of Indebtedness that is convertible into or exchangeable for Capital Stock upon such conversion or exchange) in lieu of the issuance of fractional shares; provided, however, that such payments shall be excluded in the calculation of the amount of Restricted Payments; or (9) any Restricted Payment in an amount which, when taken together with all Restricted Payments made pursuant to this Section 4.04(b)(9), does not exceed $50,000,000; provided, however, that (A) at the time of each such Restricted Payment, no Default shall have occurred and be continuing (or result therefrom) and (B) such Restricted Payments shall be included in the calculation of the amount of Restricted Payments. SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries. The Company shall not, and shall not permit any Restricted Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: (1) pay dividends or make any other distributions on its Capital Stock or pay any Indebtedness or other obligations owed to the Company; (2) make any loans or advances to the Company; or (3) transfer any of its property or assets to the Company, except: (A) any encumbrance or restriction pursuant to applicable law, rule, regulation or order or an agreement in effect at or entered into on the Closing Date; (B) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by the Company) and outstanding on such date; (C) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in Section 4.05(3)(A) or Section 4.05(3)(B) or this 57 Section 4.05(3)(C) or contained in any amendment to an agreement referred to in Section 4.05(3)(A) or Section 4.05(3)(B) or this Section 4.05(3)(C); provided, however, that the encumbrances and restrictions contained in any such Refinancing agreement or amendment are no less favorable in any material respect to the Holders than the encumbrances and restrictions contained in such predecessor agreements; (D) in the case of Section 4.05(3), any encumbrance or restriction (i) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract, or the assignment or transfer of any such lease, license or other contract, or (ii) contained in mortgages, pledges and other security agreements securing Indebtedness of a Restricted Subsidiary to the extent such encumbrance or restriction restricts the transfer of the property subject to such security agreements; (E) with respect to a Restricted Subsidiary, any restriction imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; (F) any encumbrance or restriction existing under or by reason of Indebtedness or other contractual requirements of a Receivables Entity in connection with a Qualified Receivables Transaction; provided, however, that such restrictions apply only to such Receivables Entity; (G) purchase money obligations for property acquired in the ordinary course of business and Capitalized Lease Obligations that impose restrictions on the property purchased or leased of the nature described in Section 4.05(3); (H) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements; (I) restrictions on cash or other deposits or net worth imposed by customers, suppliers or, in the ordinary course of business, other third parties; and (J) with respect to any Foreign Subsidiary, any encumbrance or restriction contained in the terms of any Indebtedness, or any agreement pursuant to which such Indebtedness was issued, if: 58 (i) the encumbrance or restriction applies only in the event of a payment default or a default with respect to a financial covenant contained in such Indebtedness or agreement, or (ii) at the time such Indebtedness is Incurred, such encumbrance or restriction is not expected to materially affect the Company's ability to make principal or interest payments on the Securities, as determined in good faith by a Financial Officer of the Company, whose determination shall be conclusive. SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, make any Asset Disposition unless: (1) the Company or such Restricted Subsidiary receives consideration (including by way of relief from, or by any other Person assuming sole responsibility for, any liabilities, contingent or otherwise) at the time of such Asset Disposition at least equal to the Fair Market Value of the shares and assets subject to such Asset Disposition, (2) at least 75% of the consideration thereof received by the Company or such Restricted Subsidiary is in the form of cash or Additional Assets; provided, however, that in the case of an Asset Disposition of any Collateral or Excluded Securities, any Additional Assets received by the Company and any Restricted Subsidiary are added, substantially concurrently with their acquisition, to the Collateral securing (with the same priority as the assets disposed of) the Securities and the Subsidiary Guarantees; provided further, however, that the 75% consideration requirement of this Section 4.06(a)(2) shall not apply to any Specified Asset Sale, and (3) an amount equal to 100% of the Net Available Cash from such Asset Disposition is applied by the Company (or such Restricted Subsidiary, as the case may be) (A) first, to the extent the Company elects (or is required by the terms of any Applicable Indebtedness) (i) to prepay, repay, purchase, repurchase, redeem, retire, defease or otherwise acquire for value Applicable Indebtedness, (ii) to cause any loan commitment that is available to be drawn under the applicable credit facility and to be Incurred under Section 4.03 and that when drawn would constitute a Priority Lien Obligation, to be permanently reduced by the amount of Net Available Cash or (iii) to make Designated LC Cash Collaterizations, in each case, other than Indebtedness owed to the Company or an Affiliate of the Company and other than obligations in respect of Disqualified Stock, within 365 days after 59 the later of the date of such Asset Disposition or the receipt of such Net Available Cash; (B) second, to acquire Additional Assets (or otherwise to make capital expenditures), in each case within 365 days after the later of the date of such Asset Disposition or the receipt of such Net Available Cash; provided, however, that, in the case of an Asset Disposition of any Collateral or Excluded Securities, such Additional Assets are added, substantially concurrently with their acquisition, to the Collateral securing (with the same priority as the assets disposed of) the Securities and the Subsidiary Guarantees or, in the case of capital expenditures, such capital expenditures are used to improve or maintain assets that constitute Collateral or real property or fixtures thereon owned by the Company or a Subsidiary Guarantor; (C) third, to the extent of the balance of such Net Available Cash after application in accordance with Section 4.06(a)(3)(A) and Section 4.06(a)(3)(B), to make an Offer (as defined in Section 4.06 (c)) to purchase Securities pursuant to and subject to the conditions set Section 4.06(c); provided, however, that if the Company elects (or is required by the terms of any other Senior Indebtedness), such Offer may be made ratably to purchase the Securities and any Applicable Senior Indebtedness, and (D) fourth, to the extent of the balance of such Net Available Cash after application in accordance with 4.06(a)(3)(A), Section 4.06(a)(3)(B) and Section 4.06(a)(3)(C), for any general corporate purpose permitted by the terms of this Indenture; provided, however that in connection with any prepayment, repayment, purchase, repurchase, redemption, retirement, defeasance or other acquisition for value of Indebtedness pursuant to Section 4.06(a)(3)(A) or Section 4.06(a)(3)(C), the Company or such Restricted Subsidiary shall retire such Indebtedness and shall cause the related loan commitment (if any) to be permanently reduced in an amount equal to the principal amount so prepaid, repaid, purchased, repurchased, redeemed, retired, defeased or otherwise acquired for value. Notwithstanding the foregoing provisions of this Section 4.06(a)(3), the Company and its Restricted Subsidiaries will not be required to apply any Net Available Cash in accordance with this Section 4.06 except to the extent that the aggregate Net Available Cash from all Asset Dispositions that is not applied in accordance with this Section 4.06 exceeds $25,000,000. Pending application of Net Available Cash pursuant to this 4.06, such Net Available Cash may be used or invested in any manner that is not prohibited by this Indenture. (b) For the purposes of this covenant, the following are deemed to be cash: 60 (1) the assumption of Applicable Indebtedness of the Company (other than obligations in respect of Disqualified Stock of the Company) or any Restricted Subsidiary (other than obligations in respect of Disqualified Stock and Preferred Stock of a Restricted Subsidiary that is Subsidiary Guarantor) and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness in connection with such Asset Disposition; (2) any Designated Noncash Consideration having an aggregate Fair Market Value that, when taken together with all other Designated Noncash Consideration received pursuant to this clause and then outstanding, does not exceed 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) the greater of (1) $200,000,000 and (2) 1.5% of the total Consolidated assets of the Company as shown on the most recent balance sheet of the Company filed with the SEC; (3) securities, notes or similar obligations received by the Company or any Restricted Subsidiary from the transferee that are promptly converted by the Company or such Restricted Subsidiary into cash; and (4) Temporary Cash Investments. (c) In the event of an Asset Disposition that requires the purchase of Securities pursuant to Section 4.06(a)(3)(C), the Company shall be required (i) to purchase Securities tendered pursuant to an offer by the Company for the Securities (the "Offer") at a purchase price of 100% of their principal amount plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant date to receive interest due on the relevant interest payment date) in accordance with the procedures (including prorating in the event of oversubscription), set forth in Section 4.06(d) and (ii) to purchase Applicable Senior Indebtedness of the Company on the terms and to the extent contemplated thereby; provided that in no event shall the Company offer to purchase such Applicable Senior Indebtedness of the Company at a purchase price in excess of 100% of its principal amount (without premium) or, unless otherwise provided for in such Applicable Senior Indebtedness, the accreted amount, if issued with original issue discount, plus accrued and unpaid interest thereon. If the aggregate purchase price of Securities (and Applicable Senior Indebtedness) tendered pursuant to the Offer is less than the Net Available Cash allotted to the purchase of the Securities (and other Applicable Senior Indebtedness), the Company will apply the remaining Net Available Cash in accordance with Section 4.06(a)(3)(D). The Company shall not be required to make an Offer for Securities (and Applicable Senior Indebtedness) pursuant to this covenant if the Net Available Cash available therefor (after application of the proceeds as provided in Section 4.06(a)(3)(A) and Section 4.06(a)(3)(B)) is less than $25,000,000 for any particular Asset Disposition (which lesser amount will be carried forward for purposes of determining whether an Offer is required with respect to the Net Available Cash from any subsequent Asset Disposition). 61 (d) (1) If the aggregate purchase price of Securities (and other Applicable Senior Indebtedness) tendered pursuant to the Offer exceeds the Net Available Cash allotted to their purchase, the Company shall select the Securities (and other Applicable Senior Indebtedness) to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Securities and other Applicable Senior Indebtedness in denominations of $1,000, or integral multiples thereof, shall be purchased). (2) Promptly, and in any event within 10 days after the Company becomes obligated to make an Offer, the Company shall deliver to the Trustee and send, by first-class mail to each Holder, a written notice stating that the Holder may elect to have his Securities purchased by the Company either in whole or in part (subject to prorating as described in Section 4.06(d)(1) in the event the Offer is oversubscribed) in integral multiples of $1,000 of principal amount at the applicable purchase price. The notice shall specify a purchase date not less than 30 days nor more than 60 days after the date of such notice (the "Purchase Date"). (3) Not later than the date upon which written notice of an Offer is delivered to the Trustee as provided below, the Company shall deliver to the Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer Amount"), including information as to any other Applicable Senior Indebtedness included in the Offer for repurchase, (B) the allocation of the Net Available Cash from the Asset Dispositions pursuant to which such Offer is being made and (C) the compliance of such allocation with the provisions of Section 4.06(a) and (c). By 11:00 a.m. New York City time on the Purchase Date, the Company shall irrevocably deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust) in Temporary Cash Investments, maturing on the last day prior to the Purchase Date or on the Purchase Date if funds are immediately available by open of business, an amount equal to the Offer Amount to be held for payment in accordance with the provisions of this Section. If the Offer includes other Applicable Senior Indebtedness, the deposit described in the preceding sentence may be made with any other paying agent pursuant to arrangements satisfactory to the Trustee. Upon the expiration of the period for which the Offer remains open (the "Offer Period"), the Company shall deliver to the Trustee for cancellation the Securities or portions thereof which have been properly tendered to and are to be accepted by the Company. The Trustee shall, on the Purchase Date, mail or deliver payment (or cause the delivery of payment) to each tendering Holder in the amount of the purchase price. In the event that the aggregate purchase price of the Securities delivered by the Company to the Trustee is less than the Offer Amount applicable to the Securities, the Trustee shall deliver the excess to the Company immediately after the expiration of the Offer Period for application in accordance with this Section 4.06. (4) Holders electing to have a Security purchased shall be required to surrender the Security, with an appropriate form duly completed, to the Company at the address specified in the notice at least three Business Days prior to the 62 Purchase Date. A Holder shall be entitled to withdraw its election if the Trustee or the Company receives not later than one Business Day prior to the Purchase Date, a telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of the Security which was delivered for purchase by such Holder and a statement that such Holder is withdrawing its election to have such Security purchased. Holders whose Securities are purchased only in part shall be issued new Securities equal in principal amount to the unpurchased portion of the Securities surrendered. (5) At the time the Company delivers Securities to the Trustee which are to be accepted for purchase, the Company shall also deliver an Officers' Certificate stating that such Securities are to be accepted by the Company pursuant to and in accordance with the terms of this Section. A Security shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an agent, mails or delivers payment therefor to the surrendering Holder. (e) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.06. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.06, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.06 by virtue thereof. SECTION 4.07. Limitation on Transactions with Affiliates. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into or conduct any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an "Affiliate Transaction") unless such transaction is on terms: (1) that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could be obtained at the time of such transaction in arm's-length dealings with a Person who is not such an Affiliate, (2) that, in the event such Affiliate Transaction involves an aggregate amount in excess of $25,000,000, (A) are set forth in writing, and (B) have been approved by a majority of the members of the Board of Directors having no personal stake in such Affiliate Transaction and, (3) that, in the event such Affiliate Transaction involves an amount in excess of $75,000,000, have been determined by a nationally recognized 63 appraisal, accounting or investment banking firm to be fair, from a financial standpoint, to the Company and its Restricted Subsidiaries. (b) The provisions of Section 4.07(a) will not prohibit: (1) any Restricted Payment permitted to be paid pursuant to Section 4.04, (2) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the Board of Directors, (3) the grant of stock options or similar rights to employees and directors of the Company pursuant to plans approved by the Board of Directors, (4) loans or advances to employees in the ordinary course of business of the Company, (5) the payment of reasonable fees and compensation to, or the provision of employee benefit arrangements and indemnity for the benefit of, directors, officers and employees of the Company and its Restricted Subsidiaries in the ordinary course of business, (6) any transaction between or among any of the Company, any Restricted Subsidiary or any joint venture or similar entity which would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted Subsidiary, joint venture or similar entity, (7) the issuance or sale of any Capital Stock (other than Disqualified Stock) of the Company, (8) any agreement as in effect on the Closing Date and described in the Private Placement Memorandum or in the Company's SEC filings as filed on or prior to the Closing Date, or any renewals, extensions or amendments of any such agreement (so long as such renewals, extensions or amendments are not less favorable in any material respect to the Company or its Restricted Subsidiaries) and the transactions evidenced thereby, (9) transactions with customers, clients, suppliers or purchasers or sellers of goods or services in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company or its Restricted Subsidiaries, in the reasonable determination of the Board of Directors or the senior management thereof, or are on terms at least as favorable as could reasonably have been obtained at such time from an unaffiliated party, or 64 (10) any transaction effected as part of a Qualified Receivables Transaction. SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change of Control, each Holder shall have the right to require the Company to purchase all or any part of such Holder's Securities at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), in accordance with Section 4.08(b). (b) Within 30 days following any Change of Control, the Company shall mail a notice to each Holder with a copy to the Trustee (the "Change of Control Offer"), stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase all or a portion of such Holder's Securities at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date); (2) the circumstances and relevant facts and financial information regarding such Change of Control; (3) the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); and (4) the instructions determined by the Company, consistent with this Section 4.08, that a Holder must follow in order to have its Securities purchased. (c) 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 4.08 applicable to a Change of Control Offer made by the Company and purchases all Securities validly tendered and not withdrawn under such Change of Control Offer. In addition, the Company shall not be required to make a Change of Control Offer upon a Change of Control in respect of any Securities called for redemption to the extent that the Company mails a valid notice of redemption to Holders prior to the Change of Control, and thereafter redeems all Securities called for redemption in accordance with the terms set forth in such redemption notice. (d) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the purchase of Securities pursuant to this Section 4.08. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.08 by virtue thereof. 65 (e) On the purchase date, all Securities purchased by the Company under this Section 4.08 shall be delivered by the Company to the Trustee for cancellation, and the Company shall pay the purchase price plus accrued and unpaid interest, if any, to the Holders entitled thereto. SECTION 4.09. Limitation on Liens. (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or permit to exist any Lien of any nature whatsoever on any of its property or assets (including Capital Stock of a Restricted Subsidiary), whether owned at the Closing Date or thereafter acquired, other than: (1) in the case of any asset that does not constitute Collateral (including assets previously constituting Collateral that have been released from the Liens securing the Securities and the Subsidiary Guarantees), Permitted Liens; provided, however, that any Lien on such assets shall be permitted notwithstanding that it is not a Permitted Lien if all payments due under this Indenture, Securities and Subsidiary Guarantees are secured on an equal and ratable basis with (or, in the case of any such Indebtedness which is a Subordinated Obligation, on a prior basis to) the obligations so secured until such time as such obligations are no longer secured by a Lien on such assets; and (2) in the case of any asset that constitutes Collateral, Permitted Collateral Liens. (b) Notwithstanding the foregoing, to the extent that any asset that does not already constitute Collateral (other than Additional Excluded Collateral) is pledged to secure U.S. Bank Indebtedness or ABL Bank Indebtedness, including any Refinancings thereof, such asset shall also be pledged to secure the Securities and the Subsidiary Guarantees on an immediately junior basis to the U.S. Bank Indebtedness or ABL Bank Indebtedness so secured by such asset and such asset will thereafter be deemed to be part of the Collateral. SECTION 4.10. Limitation on Sale/Leaseback Transactions. The Company shall not, and shall not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any property unless: (1) the Company or such Restricted Subsidiary would be entitled to: (A) Incur Indebtedness with respect to such Sale/Leaseback Transaction pursuant to Section 4.03 and (B) create a Lien on such property securing such Indebtedness without equally and ratably securing the Securities pursuant to Section 4.09; (2) the gross proceeds payable to received by the Company or such Restricted Subsidiary in connection with such Sale/Leaseback Transaction are at least equal to the Fair Market Value of such property; and 66 (3) the transfer of such property is permitted by, and, if applicable, the Company applies the proceeds of such transaction in compliance with, Section 4.06. SECTION 4.11. Future Subsidiary Guarantors. (a) The Company shall cause each Restricted Subsidiary that Guarantees any Indebtedness of the Company or of any Subsidiary Guarantor to become a Subsidiary Guarantor, and if applicable, execute and deliver to the Trustee a supplemental indenture in the form set forth in Exhibit 3 hereto pursuant to which such Subsidiary shall Guarantee payment of the Securities. For the purposes of this Section 4.11(a), a pledge of an intercompany note by a Restricted Subsidiary to secure Indebtedness of the Company or a Subsidiary Guarantor shall be considered a Guarantee by such Restricted Subsidiary unless such intercompany note is also pledged to secure the Securities or the applicable Subsidiary Guarantee with the same level of priority that the Securities or Subsidiary Guarantee bear to the other Indebtedness secured by such pledge. Each Subsidiary Guarantee shall be limited to an amount not to exceed the maximum amount that can be Guaranteed by that Subsidiary Guarantor, without rendering the Subsidiary Guarantee, as it relates to such Subsidiary Guarantor voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. (b) In the event that any Subsidiary Guarantor that is not a Grantor Subsidiary Guarantor shall at any time have Consolidated assets greater than $10,000,000 as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC, then at such time the Company will, within 30 days (or such longer period as may be reasonable under the circumstances), cause such Subsidiary Guarantor to become a Grantor Subsidiary Guarantor and execute and deliver to the Trustee Security Documents pursuant to which its assets (other than Consent Assets) constituting Collateral will be pledged to secure its Subsidiary Guarantee of the Securities. SECTION 4.12. Perfected Security Interests. (a) The Company shall deliver or cause to be delivered to the Trustee on the Closing Date, or, in the case of that portion of the Collateral consisting of Capital Stock of certain of the Company's Foreign Subsidiaries (as required by the Security Documents), within 120 days after the Closing Date (or, in the case of Goodyear Thailand and Goodyear Brazil, such longer period as may be reasonable under the circumstances), evidence satisfactory to the Trustee (which, if permitted by the TIA, may consist of an Officers' Certificate or other certificate of the Company) of (1) the completion and effectiveness of all filings, recordings, registrations and other actions required by the Security Documents to perfect the Pari Passu Liens created by, or intended to be created by, and required to be perfected pursuant to, the Security Documents in favor of the Holders of the Securities and (2) the full payment of all filing fees, taxes and other amounts payable in connection with such filings, recordings, registrations (unless such amounts payable are not accepted at the time of such filings, recordings, registrations or other actions and are otherwise billed to the Company) and the receipt by the Trustee of evidence satisfactory to it of such payments and related actions (which may consist of an Officers' Certificate or other certificate of the Company). 67 (b) In the event that the Company has not provided evidence of the perfection of the Pari Passu Liens in the Capital Stock of the Company's Foreign Subsidiaries as required by Section 4.12(a) (a "Perfection Non-compliance"), the Company shall pay additional cash interest on the Securities at a rate of 1.0% per annum for the period commencing on the first date of a Perfection Non-compliance and ending on the date all Perfection Non-compliance has been cured; provided that the annual interest rate borne by the Securities will be increased by an additional 0.25% per annum every 90 days, up to a maximum of 2.0% per annum, until the Perfection Non-compliance has been cured; provided further that if the annual interest rate borne by the Securities has been increased by 2.0% per annum due to a Perfection Non-compliance, the annual interest rate borne by the Securities shall be permanently increased by 0.25% per annum upon curing of all such Perfection Non-compliance. The Company shall not be required to comply with any of the obligations set forth in this Section 4.12 during any Suspension Period and no additional interest shall accrue on the Securities pursuant to this Section 4.12 during any such Suspension Period. SECTION 4.13. Suspension of Certain Covenants. (a) Following the first day (the "Suspension Date") that: (1) the Securities have an Investment Grade Rating from both of the Rating Agencies, and (2) no Default has occurred and is continuing hereunder, the Company and its Restricted Subsidiaries will not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and Section 5.01(3) (collectively, the "Suspended Covenants"). In addition, the Company may elect to suspend the Subsidiary Guarantees, and the Company may also elect to release any or all of the Collateral from the Liens securing the Securities and Subsidiary Guarantees. (b) In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants for any period of time as a result of the foregoing and on any subsequent date (the "Reversion Date") one or both of the Rating Agencies withdraws its Investment Grade Rating or downgrades the rating assigned to the Securities below an Investment Grade Rating, then the Company and its Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants with respect to future events, the Subsidiary Guarantees shall be reinstated and any Collateral that was released from Liens securing the Securities and Subsidiary Guarantees, as well as any Collateral acquired since the Suspension Date, shall be restored and pledged to secure the Securities and the Subsidiary Guarantees, as applicable. The period of time between the Suspension Date and the Reversion Date is referred to herein as the "Suspension Period." (c) Notwithstanding that the Suspended Covenants may be reinstated, no default shall be deemed to have occurred as a result of a failure to comply with the Suspended Covenants during the Suspension Period. During any Suspension Period, the Company shall not designate any Subsidiary to be an Unrestricted Subsidiary unless the 68 Company would have been permitted to designate such Subsidiary to be an Unrestricted Subsidiary if a Suspension Period had not been in effect for any period. (d) On the Reversion Date, all Indebtedness Incurred during the Suspension Period shall be classified to have been Incurred pursuant to Section 4.03(a) or one of Section 4.03(b)(1) through 4.03(b)(11) (to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Section 4.03(a) or Section 4.03(b), such Indebtedness shall be deemed to have been outstanding on the Closing Date, so that it is classified as permitted under Section 4.03(b)(3)(B). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 4.04 shall be made as though Section 4.04 had been in effect since the Closing Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under Section 4.04(a) and the items specified in Section 4.04(a)(3) shall increase the amount available to be made under Section 4.04(a). For purposes of determining compliance with Section 4.06(a) and Section 4.06(b), the Net Available Cash from all Asset Dispositions not applied in accordance with Section 4.06 shall be deemed to be reset to zero. (e) In addition, the Company and the Restricted Subsidiaries may honor any contractual commitments to take actions after a Reversion Date as long as such contractual commitments were entered into during a Suspension Period and not in anticipation of the Securities' no longer having an Investment Grade Rating from both of the Rating Agencies. SECTION 4.14. 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 signed by a Financial Officer complying with TIA Section 314(a)(4) stating (i) that a review of the activities of the Company and the Subsidiaries during the preceding fiscal year has been made with a view to determining whether the Company and the Subsidiary Guarantors have fulfilled their obligations under this Indenture and (ii) that, to the knowledge of such Financial Officer, no Default or Event of Default occurred during such period (or, if a Default or Event of Default hereunder shall have occurred, describing all such Defaults or Events of Default hereunder of which such Financial Officer may have knowledge and what action the Company has taken, is taking and/or proposes to take with respect thereto). SECTION 4.15. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. 69 ARTICLE 5 Successor Company SECTION 5.01. When Company May Merge or Transfer Assets. (a) The Company shall not, directly or indirectly, consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets, in one or a series of related transactions, to, any Person, unless: (1) the resulting, surviving or transferee Person (the "Successor Company") will be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and the Successor Company (if not the Company) will expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Securities and this Indenture; (2) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; (3) immediately after giving effect to such transaction, (A) the Successor Company would be able to Incur an additional $1.00 of Indebtedness under Section 4.03(a) or (B) the Consolidated Coverage Ratio for the Successor Company would be greater than such ratio for the Company and its Restricted Subsidiaries immediately prior to such transaction; and (4) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture. (b) The Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, and the predecessor Company, other than in the case of a lease, shall be released from the obligation to pay the principal of and interest on the Securities. (c) The Company shall not permit any Subsidiary Guarantor to, directly or indirectly, consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets, in or a series of related transactions, to any Person unless: (1) except in the case of a Subsidiary Guarantor (i) that has been disposed of in its entirety to another Person (other than to the Company or an Affiliate of the Company), whether through a merger, consolidation or sale of Capital Stock or assets or (ii) that, as a result of the disposition of all or a portion of its Capital Stock, ceases to be a Subsidiary, the resulting, surviving or 70 transferee Person (the "Successor Guarantor") shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such Person (if not such Subsidiary Guarantor) shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee; (2) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing; and (3) the Company will have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture. (d) Notwithstanding the foregoing: (1) any Restricted Subsidiary may Consolidate with, merge into or transfer all or part of its properties and assets to the Company or any Subsidiary Guarantor and (2) the Company may merge with an Affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction within the United States of America, any State thereof or the District of Columbia to realize tax or other benefits. ARTICLE 6 Defaults and Remedies SECTION 6.01. Events of Default. An "Event of Default" occurs if: (1) the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for 30 days; (2) the Company defaults in the payment of principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise; (3) the Company or any Subsidiary Guarantor fails to comply with its obligations under Section 5.01; (4) the Company or any Restricted Subsidiary fails to comply with Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 or 4.13 (in each 71 case, other than a failure to purchase Securities) or Section 4.09 of the Collateral Agreement and such failure continues for 30 days after the notice from the Trustee or the Holders specified below; (5) the Company or any Restricted Subsidiary fails to comply with its agreements contained in the Securities, this Indenture or the Security Documents (other than those referred to in clauses (1), (2), (3) or (4) above) and such failure continues for 60 days after the notice from the Trustee or the Holders specified below; (6) the Company or any Restricted Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $50,000,000 or its foreign currency equivalent; (7) the Company or any Significant Subsidiary 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 any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors; or takes any comparable action under any foreign laws relating to insolvency; (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Significant Subsidiary in an involuntary case; (B) appoints a Custodian of the Company or any Significant Subsidiary or for any substantial part of its property; or (C) orders the winding up or liquidation of the Company or any Significant Subsidiary; or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days; 72 (9) any final and nonappealable judgment or decree (not covered by insurance) for the payment of money in excess of $50,000,000 or its foreign currency equivalent (treating any deductibles, self-insurance or retention as not so covered) is rendered against the Company or a Significant Subsidiary and such final judgment or decree remains outstanding and is not satisfied, discharged or waived within a period of 60 days following such judgment; (10) any Subsidiary Guarantee ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantor's obligations under this Indenture or any Subsidiary Guarantee and such Default continues for 10 days after receipt of the notice specified below; or (11) (A) the Company or any Subsidiary Guarantor repudiates or disaffirms its obligations under any of the Security Documents, (B) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Company or any Subsidiary Guarantor for any reason with respect to any material portion of the Collateral or (C) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and this Indenture), or cease to be effective to grant the Trustee a perfected Lien on the Collateral with the priority purported to be created thereby, in each case under this Section 6.01(11)(C), with respect to any material portion of the Collateral. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether such Event of Default is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. Notwithstanding the foregoing, a default under Section 6.01(4), 6.01(5), 6.01(6), 6.01(9) or 6.01(10) (only with respect to any Subsidiary Guarantor that is not a Significant Subsidiary) shall not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% (or, in the case of a default under Section 6.01(4) relating to a failure to comply with Section 4.06 or 4.08, the lessor of 25% and $100 million) in principal amount of the outstanding Securities notify the Company and the Trustee of the default and the Company or the Subsidiary Guarantor, as applicable, does not cure such default within any applicable time specified in Section 6.01(4), 6.01(5), 6.01(6), 6.01(9) or 6.01(10) hereof after receipt of such notice. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any Event of Default under Section 6.01(6), 6.01(10), or 6.01(11) and any event which with the giving of notice or the lapse of time 73 would become an Event of Default under Section 6.01(4), 6.01(5) or 6.01(9), its status and what action the Company is taking or proposes to take with respect thereto. SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(7) or 6.01(8)) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities by notice to the Company may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default specified in Section 6.01(7) or 6.01(8) with respect to the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. The Holders of a majority in principal amount of the Securities by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities 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. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in principal amount of the Securities by notice to the Trustee may waive an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Security (b) a Default arising from the failure to redeem or purchase any Security when required pursuant to this Indenture or (c) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of the Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability; provided, however, that the Trustee may take 74 any other action deemed proper by the Trustee that is not inconsistent with such direction. Subject to Section 7.01, if an Event of Default has occurred and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity against any loss, liability or expense which might be incurred by it in compliance with such request or direction. SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in principal amount of the outstanding Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable indemnity against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (5) the Holders of a majority in principal amount of the Securities do not give the Trustee a direction inconsistent with the request during such 60-day period. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or 6.01(2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in 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, its creditors or its property and, unless 75 prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. Subject to the terms of the Intercreditor Agreement, if the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; SECOND: to Holders for amounts due and unpaid on the Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and interest, respectively; and THIRD: to the Company. The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section. At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 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 Securities. SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the extent it may lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. 76 ARTICLE 7 Trustee SECTION 7.01. Duties of Trustee (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) 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. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) 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) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its 77 duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. SECTION 7.02. Rights of Trustee. (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 need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents 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; provided, however, that the Trustee's conduct does not constitute wilful misconduct or negligence. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder. (g) The Trustee shall not be bound to ascertain or inquire as to the performance or observance of any covenants, conditions, or agreements on the part of the Company, except as otherwise set forth herein, but the Trustee may require of the Company full information and advice as to the performance of the covenants, conditions and agreements contained herein. (h) The permissive rights of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and, with respect to such permissive rights, the Trustee shall not be answerable for other than its negligence or willful misconduct; (i) Except for (a) a default under Sections 6.01(i) or (ii) hereof, or (b) any other event of which a Trust Officer has "actual knowledge" and which event, with the giving of notice or the passage of time or both, would constitute an Event of Default 78 under this Indenture, the Trustee shall not be deemed to have notice of any default or Event of Default unless specifically notified in writing of such event by the Company or the Holders of not less than 25% in aggregate principal amount of the Securities then outstanding; as used herein, the term "actual knowledge" means the actual fact or state of knowing, without any duty to make any investigation with regard thereto. 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 its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture 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 of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and is actually known to a Trust Officer, the Trustee shall mail to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Security (including payments pursuant to the redemption provisions of such Security), the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the Holders. SECTION 7.06. Reports by Trustee to Holders. At the expense of the Company, as promptly as practicable after each January 1 beginning with January 1, 2005, and in any event prior to March 1 in each such year, the Trustee shall mail to each Holder a brief report dated as of such January 1 that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b). A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its services as shall be agreed to in writing from time to time by the Company and the Trustee. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition 79 to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company shall indemnify the Trustee, its agents, representatives, officers, directors, employees and attorneys against any and all loss, liability or expense (including reasonable attorneys' fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall provide reasonable cooperation in such defense. The Trustee may have separate counsel and the Company shall pay the fees and expenses of such counsel reasonably acceptable to the Company, provided, however, that the Company shall not be required to pay such fees and expenses if the Company assumes such defense unless there is a conflict of interest between the Company and the Trustee in connection with such defense as determined by Trustee in consultation with counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee through the Trustee's own wilful misconduct, negligence or bad faith. 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 other than money or property held in trust to pay principal of and interest on particular Securities. The Company's payment obligations pursuant to this Section shall survive the discharge of this Indenture. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(7) or (8) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. 80 A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, unless the Trustee's duty to resign is stayed as provided in TIA Section 310(b), any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA Section 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA Section 310(b); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. 81 SECTION 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with 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. ARTICLE 8 Discharge of Indenture; Defeasance SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a) When (1) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.07) for cancellation or (2) all outstanding Securities have become due and payable, whether at maturity or on a redemption date as a result of the mailing of a notice of redemption pursuant to Article 3 hereof and, in the case of clause (2), the Company irrevocably deposits with the Trustee funds or U.S. Government Obligations sufficient to pay at maturity or upon redemption all outstanding Securities, including premium, if any, and interest thereon to maturity or such redemption date (other than Securities replaced pursuant to Section 2.07), and if in either case the Company pays all other sums payable hereunder by the Company, then this Indenture shall, subject to Section 8.01(c), cease to be of further effect. Upon satisfaction of the above conditions, the Trustee shall acknowledge satisfaction and discharge of this Indenture. (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (1) all its obligations under the Securities and this Indenture with respect to any series of Securities ("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 and 4.13 and the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) and 6.01(11) (but, in the case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) and the limitations contained in Section 5.01(a)(3) ("covenant defeasance option"). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the applicable series of Securities may not be accelerated because of an Event of Default specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9)and 6.01(11) (but, in the case of Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) or because of the failure of the Company to comply with Section 5.01(a)(3). In the event that the Company exercises its legal defeasance option or its covenant defeasance option, each Subsidiary Guarantor will be released from all of its obligations with respect to its Subsidiary Guarantee and the Security Documents. 82 Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates. (c) Notwithstanding clauses (a) and (b) above, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in this Article 8 shall survive until the Securities have been paid in full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive. SECTION 8.02. Conditions to Defeasance. The Company may exercise its legal defeasance option or its covenant defeasance option only if: (1) the Company irrevocably deposits in trust with the Trustee money in U.S. Dollars in an amount sufficient or U.S. Government Obligations, the principal of and interest on which shall be sufficient, or a combination thereof sufficient, to pay the principal of, premium (if any) and interest in respect of the Securities to redemption or maturity, as the case may be; (2) the Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities to maturity or redemption, as the case may be; (3) 91 days pass after the deposit is made and during the 91-day period no Default specified in Sections 6.01(7) or (8) with respect to the Company occurs which is continuing at the end of the period; (4) the deposit does not constitute a default under any other material agreement binding on the Company; (5) the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940; (6) in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating 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 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 will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and 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 deposit and defeasance had not occurred; and 83 (7) in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and 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 deposit and covenant defeasance had not occurred. Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article 3. SECTION 8.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations, as the case may be, through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities. SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money or securities held by them at any time. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors. SECTION 8.05. Indemnity for Government Obligations. The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and each Subsidiary Guarantor's obligations under this Indenture, each Subsidiary Guarantee and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, if the Company has made any payment of interest on or principal of any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. 84 ARTICLE 9 Amendments SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary Guarantors and the Trustee may amend this Indenture, the Security Documents, the Intercreditor Agreement or the Securities without notice to or consent of any Holder: (1) to cure any ambiguity, omission, defect or inconsistency; (2) to provide for the assumption by a successor corporation of the obligations of the Company under this Indenture in compliance with Article 5; (3) to provide for uncertificated Securities in addition to or in place of certificated Securities; provided, however, that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code; (4) to add Guarantees with respect to the Securities or to confirm and evidence the release, termination or discharge of any such Guarantee or security when such release, termination or discharge is permitted under this Indenture; (5) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; (6) to make any change that does not adversely affect the rights of any Holder in any material respect, subject to the provisions of this Indenture; (7) to comply with any requirement of the SEC in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA; (8) to make any amendment to the provisions of this Indenture relating to form, authentication, transfer and legending of Securities; provided, however, that (A) compliance with this Indenture as so amended would not result in Securities being transferred in violation of the Securities Act or any other applicable securities law and (B) such amendment does not materially affect the rights of Holders to transfer Securities; (9) to provide for the addition of Collateral permitted under the terms of this Indenture or any Security Document; or (10) to provide for the issuance of the Exchange Securities or Additional Securities in accordance with the terms of this Indenture. After an amendment under this Section becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give 85 such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.02. With Consent of Holders. (a) The Company, the Subsidiary Guarantors and the Trustee may amend this Indenture, the Security Documents, the Intercreditor Agreement or the Securities with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange for the Securities); provided, however, that if any amendment, waiver or other modification will affect only the Fixed Rate Securities or the Floating Rate Securities, the consent of the Holders of at least a majority in principal amount of only the then outstanding Fixed Rate Securities or Floating Rate Securities (and not the consent of the Holders of at least a majority in principal amount of all Securities), as the case may be, shall be required. Any existing Default or compliance with any provisions of this Indenture, the Security Documents, the Intercreditor Agreement or the Securities may be waived with the consent of the Holders of at least a majority in principal amount of the Securities then outstanding voting as a single class, subject to the restrictions of Section 6.04 and this Section 9.02. Notwithstanding the foregoing, without the consent of each Holder affected thereby, an amendment or waiver may not: (1) reduce the amount of Securities whose Holders must consent to an amendment; (2) reduce the rate of or extend the time for payment of interest on any Security; (3) reduce the principal of or extend the Stated Maturity of any Security; (4) reduce the premium payable upon the redemption of any Security or change the time at which a Security may be redeemed pursuant to Article 3 hereto or paragraph 5 of the Securities; (5) make any Security payable in money other than that stated in the Security; (6) impair the right of any Holder to receive payment of principal of, and interest on, such Holder's Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's Securities; (7) make any change in Section 6.04 or 6.07 or the second sentence of this Section 9.02; (8) make any change in, or release other than in accordance with this Indenture, any Subsidiary Guarantee that would adversely affect the Holders; or 86 (9) make any change in any Security Document, the Intercreditor Agreement or Articles 11, 12 or 13 of this Indenture that would adversely affect the Holders. (b) Notwithstanding anything in Section 9.02(a) to the contrary, without the consent of Holders of 66-2/3% in aggregate principal amount of the Securities then outstanding, an amendment or waiver may not: (1) release any Collateral from the Lien of this Indenture and the Security Documents; (2) change the provisions applicable to the application of the proceeds from the sale of the Collateral in any way adverse to the Holders; or (3) change or alter the priority of the security interests in the Collateral in any way adverse to the Holders, in each case except as provided under the terms of the Security Documents or the Intercreditor Agreement. (c) It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities shall comply with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the execution of such amendment or waiver by the Trustee. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those 87 Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 9.05. Notation on or Exchange of Securities. If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and/or an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture. SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE 10 Subsidiary Guarantees SECTION 10.01. Guarantees. (a) Each Subsidiary Guarantor hereby irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the due and punctual payment and performance of all of the Guaranteed Obligations of such Subsidiary Guarantor, jointly with the other Subsidiary Guarantors and severally. Each of the Subsidiary Guarantors further agrees that its Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any such Guaranteed Obligation. Each of the Subsidiary Guarantors waives presentment to, demand of payment from and protest to the Company or any Subsidiary Guarantor of any of its Guaranteed Obligations, and also 88 waives notice of acceptance of its guarantee, notice of protest for nonpayment and all similar formalities. (b) Each of the Subsidiary Guarantors further agrees that its guarantee hereunder constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Trustee or any Holder to any security held for the payment of its Guaranteed Obligations or to any balance of any deposit account or credit on the books of the Trustee or any Holder in favor of the Company. (c) Except for termination of a Subsidiary Guarantor's obligations hereunder or a release of such Subsidiary Guarantor pursuant to Section 10.06, the obligations of each Subsidiary Guarantor 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 or set-off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations of such Subsidiary Guarantor or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Trustee or any Holder to assert any claim or demand or to enforce any right or remedy under the provisions of this Indenture or any Security Document or otherwise; (ii) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Indenture or any Security Document or any other agreement, including with respect to any other Subsidiary Guarantor under this Agreement; (iii) the release of any security held by the Trustee or any Holder for the Guaranteed Obligations of such Subsidiary Guarantor or any of them; (iv) any default, failure or delay, wilful or otherwise, in the performance of the Guaranteed Obligations of such Subsidiary Guarantor; or (v) any other act or omission that may or might in any manner or to any extent vary the risk of such Subsidiary Guarantor or otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Guaranteed Obligations of such Guarantor). Each Grantor Subsidiary Guarantor expressly authorizes the Collateral Agent and the Trustee, in accordance with the Security Documents, to take and hold security for the payment and performance of the Guaranteed Obligations of such Grantor Subsidiary Guarantor, to exchange, waive or release any or all such security (with or without consideration), to enforce or apply such security and direct the order and manner of any sale thereof in their sole discretion or to release or substitute any one or more other guarantors or obligors upon or in respect of the Guaranteed Obligations of such Grantor Subsidiary Guarantor, all without affecting the obligations of such Grantor Subsidiary Guarantor hereunder. (d) To the fullest extent permitted by applicable law, each Subsidiary Guarantor waives any defense based on or arising out of any defense of the Company or any other Subsidiary Guarantor or the unenforceability of the Guaranteed Obligations of such Subsidiary Guarantor or any part thereof from any cause, or the cessation from any cause of the liability of the Company or any other Subsidiary Guarantor, other than the indefeasible payment in full in cash of all the Guaranteed Obligations of such Subsidiary Guarantor. The Collateral Agent and the Trustee may, at their election and only in 89 accordance with the Security Documents, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Obligations, make any other accommodation with the Company or any Subsidiary Guarantor or exercise any other right or remedy available to them against the Company or any Subsidiary Guarantor, in each case without affecting or impairing in any way the liability of any Subsidiary Guarantor hereunder except to the extent the Guaranteed Obligations of such Subsidiary Guarantor have been fully and indefeasibly paid in full in cash. To the fullest extent permitted by applicable law, each Subsidiary Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Subsidiary Guarantor against the Company or any other Subsidiary Guarantor, as the case may be, or any security. (e) Each of the Subsidiary Guarantors agrees that its guarantee hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Guaranteed Obligation of such Subsidiary Guarantor is rescinded or must otherwise be restored by the Collateral Agent or the Trustee upon the bankruptcy or reorganization of the Company, any other Subsidiary Guarantor or otherwise. SECTION 10.02. Limitation on Liability. Any term or provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. SECTION 10.03. Successors and Assigns. This Article 10 shall be binding upon each Subsidiary Guarantor and its successors and assigns and shall inure to the benefit of the successors, transferees 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 10.04. 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 10.05. Modification. No modification, amendment or waiver of any provision of this Article 10, nor the consent to any departure by any 90 Subsidiary Guarantor 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. No notice to or demand on any Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to any other or further notice or demand in the same, similar or other circumstances. SECTION 10.06. Release of Subsidiary Guarantor. A Subsidiary Guarantor shall be released from its obligations under this Article 10 (other than any obligation that may have arisen under Section 10.07): (1) upon the sale (including any sale pursuant to any exercise of remedies by a holder of Indebtedness of the Company or of such Subsidiary Guarantor) or other disposition (including by way of consolidation or merger) of a Subsidiary Guarantor, (2) upon the sale or disposition of all or substantially all the assets of such Subsidiary Guarantor; (3) upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture, (4) unless there is then existing an Event of Default, at such time and for so long as any such Subsidiary Guarantor that became a Subsidiary Guarantor after the Closing Date pursuant to Section 4.11 does not Guarantee any Indebtedness that would have required such Subsidiary Guarantor to enter into a Supplemental Indenture pursuant to Section 4.11 and the Company provides an Officers' Certificate to the Trustee certifying that no such Guarantee is outstanding and the Company elects to have such Subsidiary Guarantor released from this Article 10, or (5) at any time during a Suspension Period if the Company provides an Officers' Certificate to the Trustee stating that the Company elects to have such Subsidiary Guarantor released from this Article 10, or (6) upon the exercise by the Company of its legal defeasance option or its covenant defeasance option or if the Obligations of the Company under the Indenture and the Securities are discharged pursuant to Article 8; provided, however, that in the case of clauses (1), except with respect to any sale of such Subsidiary Guarantor pursuant to any exercise of any remedies by the Credit Agent permitted under the Intercreditor Agreement, and clause (2) above, (i) such sale or other disposition is made to a Person other than the Company or a Subsidiary of the Company, (ii) such sale or disposition is otherwise permitted by this Indenture and (iii) the Company complies with its obligations under Section 4.06. At the request of the Company, the Trustee shall execute and deliver an appropriate instrument evidencing such release. 91 SECTION 10.07. Contribution. Each Subsidiary Guarantor that makes a payment under its Subsidiary Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture to a contribution from each other Subsidiary Guarantor in an amount equal to such other Subsidiary Guarantor's pro rata portion of such payment based on the respective net assets of all the Subsidiary Guarantors at the time of such payment determined in accordance with GAAP. ARTICLE 11 Security Documents SECTION 11.01. Collateral and Security Documents. (a) The due and punctual payment of the principal of and interest on the Securities when and as the same shall be due and payable, whether on an interest payment date, at Stated Maturity, by acceleration, repurchase, redemption or otherwise, and interest on the overdue principal of and interest on the Securities and performance of all other Obligations of the Company and the Grantor Subsidiary Guarantors to the Holders, the Trustee or the Collateral Agent under this Indenture, the Securities, the Subsidiary Guarantees of the Grantor Subsidiary Guarantors and the Security Documents, according to the terms hereunder or thereunder, are secured as provided in the Security Documents, which define the terms of the Liens that secure the Obligations, in each case subject to the terms of the Intercreditor Agreement. The Trustee, the Company and the Grantor Subsidiary Guarantors hereby acknowledge and agree that the Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the terms of the Security Documents. Each Holder, by accepting a Security, consents and agrees to the terms of the Security Documents (including the provisions providing for foreclosure and release of Collateral) and the Intercreditor Agreement, as the same may be in effect or may be amended from time to time in accordance with their terms and this Indenture, and authorizes and directs the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement and to perform its obligations and exercise its rights thereunder in accordance therewith; provided, however, that if any of the provisions of the Security Documents limit, qualify or conflict with the duties imposed by the provisions of the TIA, the TIA shall control. The Company shall deliver to the Trustee (if it is not itself then the Collateral Agent) copies of all documents delivered to the Collateral Agent pursuant to the Security Documents. SECTION 11.02. Recording Fees; Opinion. (a) The Company and the Grantor Subsidiary Guarantors will from time to time promptly pay and discharge all recording or filing fees, charges and taxes relating to the filing or registration of this Indenture and the Security Documents, any amendments thereto and any other instruments of further assurance. (b) The Company and the Grantor Subsidiary Guarantors shall furnish to the Collateral Agent and the Trustee, on the Closing Date, a reliance letter with respect to 92 the Opinions of Counsel delivered on the Closing Date to the Initial Investors with respect to the Collateral. (c) To the extent applicable, the Company and the Grantor Subsidiary Guarantors shall comply with the provisions of TIA Sections 314(b). SECTION 11.03. Release of Collateral. (a) Subject to subsections (b) and (c) of this Section 11.03, Collateral may be released from the Lien and security interest created by the Security Documents at any time or from time to time in accordance with the provisions of the Security Documents, the Intercreditor Agreement or as provided hereby. Upon the request of the Company pursuant to an Officers' Certificate or an Opinion of Counsel to the effect that all conditions precedent hereunder have been met, and without the consent of any Holder, the Company and the Grantor Subsidiary Guarantors shall be entitled to a release of any assets included in the Collateral from the Liens securing the Securities and the Subsidiary Guarantees, and the Collateral Agent and the Trustee (if the Trustee is not then the Collateral Agent) shall release such Collateral from such Liens at the Company's sole cost and expense, under one or more of the following circumstances: (1) pursuant to an amendment or waiver in accordance with Section 9.02(b); (2) if all other Liens (other than Permitted Collateral Liens described in clause (5) of the definition thereof) on that asset securing Priority Lien Obligations and any Other Pari Passu Lien Obligations then secured by that asset (including all commitments thereunder) are released; provided, however, that after giving effect to the release, at least $300,000,000 of obligations secured by the Priority Liens on the remaining Collateral remain outstanding or committed and available to be drawn under the documents governing such commitment and no Default shall have occurred and be continuing as of the time of such proposed release; (3) in the event of any sale, transfer, lease or other disposition of such Collateral in a transaction permitted or not prohibited under Section 4.06, including any such transactions by the Credit Agent in connection with an exercise of remedies against the Collateral on behalf of lenders under any Priority Lien Obligations secured by such Collateral; provided, however, that all other Priority Liens and Pari Passu Liens (other than Permitted Collateral Liens described in clause (5) of the definition thereof) have also been released in respect of such disposed asset; provided further, however, that such Liens shall not be released in respect of any such sale, transfer, lease or other disposition to the Company or any Subsidiary unless the Company elects to cause such transaction to be an Asset Disposition; (4) if the Company provides substitute collateral in respect of such Collateral with at least an equivalent Fair Market Value; 93 (5) if all of the stock of any Subsidiary that is pledged to the Collateral Agent is released (except in the case of a release because such stock has become part of the Excluded Securities) or if any Subsidiary of the Company that is a Subsidiary Guarantor is released from its Subsidiary Guarantee, that Subsidiary's assets shall also be released; (6) upon payment in full of the principal of, accrued and unpaid interest on the Securities and all other obligations under this Indenture, the Subsidiary Guarantees, the Security Documents and the Intercreditor Agreement that are due and payable at or prior to the time such principal, accrued and unpaid interest are paid; (7) upon a satisfaction and discharge of this Indenture; (8) at any time during a Suspension Period if the Company provides an Officers' Certificate to the Trustee certifying that a Suspension Date has occurred and no Reversion Date has occurred subsequently and that the Company elects to have such Collateral released from the Lien of this Indenture and this Security Documents; or (9) upon a legal defeasance or covenant defeasance pursuant to Article 8. Upon receipt of such Officers' Certificate or Opinion of Counsel and any necessary or proper instruments of termination, satisfaction or release prepared by the Company, the Trustee and the Collateral Agent shall, at the Company's expense, execute, deliver or acknowledge such instruments or releases to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Security Documents. Notwithstanding any of the foregoing to the contrary, the Lien releases referred to in clauses (3), (6), (7), (8) and (9) above shall be automatic, without any action required on the part of the Company, any Grantor Subsidiary Guarantor, the Collateral Agent or the Trustee (other than in the case of clause (3), (i) at the Company's election pursuant to clause (3) and (ii) any releases of Liens on equity interests in any entity organized under the laws of a jurisdiction outside the United States or any real property in any such jurisdiction). (b) Except as otherwise provided in the Intercreditor Agreement, no Collateral may be released from the Lien and security interest created by the Security Documents unless the Officers' Certificate or Opinion of Counsel required by this Section 11.03, dated not more than 30 days prior to the date of the application for such release, has been delivered to the Collateral Agent and the Trustee (if the Trustee is not then the Collateral Agent). (c) At any time when a Default or Event of Default has occurred and is continuing and the maturity of the Securities has been accelerated (whether by declaration or otherwise) and the Trustee (if not then the Collateral Agent) has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant to the 94 provisions of this Indenture or the Security Documents will be effective as against the Holders, except as otherwise provided in the Intercreditor Agreement. SECTION 11.04. Permitted Releases Not to Impair Lien; Trust Indenture Act Requirements. The release of any Collateral from the terms hereof and of the Security Documents or the release of, in whole or in part, the Liens created by the Security Documents, will not be deemed to impair the Lien on the Collateral in contravention of the provisions hereof if and to the extent the Collateral or Liens are released pursuant to the applicable Security Documents and pursuant to the terms of this Article 11. The Trustee, the Collateral Agent and each of the Holders acknowledge that a release of Collateral or a Lien strictly in accordance with the terms of the Security Documents and of this Article 11 will not be deemed for any purpose to be an impairment of the Lien on the Collateral in contravention of the terms of this Indenture. To the extent applicable, the Company will cause TIA Section 314(b), relating to reports, and TIA Section 314(d), relating to the release of property or securities or relating to the substitution therefor of any property or securities to be subjected to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA Section 314(d) 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 Person, which Person shall be an independent engineer, appraiser or other expert selected or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in this Section 11.04, the Company shall not be required to comply with all or any portion of TIA Section 314(d) if it determines, in good faith based on advice of counsel, that the terms of TIA Section 314(d) or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including "no action" letters or exemptive orders, whether or not issued to the Company by the SEC, or any portion of TIA Section 314(d) is inapplicable to one or a series of released Collateral. SECTION 11.05. Certificates of the Trustee. In the event that the Company elects to release Collateral in accordance with this Indenture and the Security Documents at a time when the Trustee is not itself also the Collateral Agent and the Company has delivered the certificates and documents required by the Security Documents and Section 11.03 hereof, the Trustee shall determine whether it has received all documentation required by TIA Section 314(d) in connection with such release and, based on such determination, shall deliver a certificate to the Collateral Agent setting forth such determination. SECTION 11.06. Suits to Protect the Collateral. Subject to the provisions of Article 7 hereof, the Security Documents and the Intercreditor Agreement, the Trustee in its sole discretion and without the consent of the Holders, on behalf of the Holders, may or may direct the Collateral Agent to take all actions it deems necessary or appropriate in order to: (a) enforce any of the terms of the Security Documents; and (b) collect and receive any and all amounts payable in respect of the Security Obligations of the Company hereunder. 95 Subject to the provisions of the Security Documents and the Intercreditor Agreement, the Trustee shall have 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 which may be unlawful or in violation of any of the Security Documents or this Indenture, and such suits and proceedings as the Trustee, in its sole discretion, may deem expedient to preserve or protect its interests 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 Lien on the Collateral or be prejudicial to the interests of the Holders or the Trustee). SECTION 11.07. Authorization of Receipt of Funds by the Trustee Under the Security Documents. Subject to the provisions of the Intercreditor Agreement, the Trustee is hereby authorized to receive any funds for the benefit of the Holders distributed under the Security Documents, and to make further distributions of such funds to the Holders according to the provisions of this Indenture. SECTION 11.08. Purchaser Protected. In no event shall any purchaser in good faith of any property purported to be released hereunder be bound to ascertain the authority of the Collateral Agent or the Trustee to execute the release or to inquire as to the satisfaction of any conditions required by the provisions hereof for the exercise of such authority or to see to the application of any consideration given by such purchaser or other transferee; nor shall any purchaser or other transferee of any property or rights permitted by this Article 11 to be sold be under obligation to ascertain or inquire into the authority of the Company or the applicable Grantor Subsidiary Guarantor to make any such sale or other transfer. SECTION 11.09. Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon the Company or a Grantor Subsidiary Guarantor with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Company or a Grantor Subsidiary Guarantor or of any officer or officers thereof required by the provisions of this Article 11; and if the Trustee shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee. SECTION 11.10. Determinations Relating to Collateral. In the event (a) the Trustee shall receive any written request from the Company, a Grantor Subsidiary Guarantor or the Collateral Agent under any Security Document for consent or approval with respect to any matter or thing relating to any Collateral or the Company's or a Grantor Subsidiary Guarantor's obligations with respect thereto or (b) there shall be due to or from the Trustee or the Collateral Agent under the provisions of any Security Document any material performance or the delivery of any material instrument or (c) the Trustee shall become aware of any material 96 nonperformance by the Company or a Grantor Subsidiary Guarantor of any covenant or any material breach of any representation or warranty of the Company or a Grantor Subsidiary Guarantor set forth in any Security Document, then, in each such event, the Trustee shall be entitled to hire, at the sole reasonable cost and expense of the Company, experts, consultants, agents and attorneys to advise the Trustee on the manner in which the Trustee should respond, or direct the Collateral Agent to respond, to such request or render any requested performance or response to such nonperformance or breach. The Trustee shall be fully protected in accordance with Article 7 hereof in the taking of any action recommended or approved by any such expert, consultant, agent or attorney and by indemnification provided in accordance with Section 6.05 and other sections of this Indenture if such action is agreed to by Holders of a majority in principal amount of the Securities pursuant to Section 6.05 and, the Trustee may, in its sole discretion, prior to taking such action if such action could subject it to environmental liabilities or taxation, require (1) direction from the Holders of a majority in principal amount of the Securities in accordance with Section 6.05 hereof and (2) indemnification in accordance with Section 6.05. SECTION 11.11. Collateral Agent. (a) Wilmington Trust Company shall initially act as Collateral Agent and shall be authorized to appoint co-Collateral Agents as necessary in its sole discretion. Except as otherwise explicitly provided herein or in the Security Documents or the Intercreditor Agreement, neither the Collateral Agent nor any of its respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The Collateral Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither the Collateral Agent nor any of its officers, directors, employees or agents shall be responsible for any act or failure to act hereunder, except for its own willful misconduct, gross negligence or bad faith. (b) The Collateral Agent is authorized and directed to (i) enter into the Security Documents, (ii) enter into the Intercreditor Agreement, (iii) bind the Holders on the terms as set forth in the Security Documents and the Intercreditor Agreement and (iv) perform and observe its obligations under the Security Documents and the Intercreditor Agreement. (c) If the Company (i) Incurs Priority Lien Obligations at any time when no intercreditor agreement is in effect or at any time when Indebtedness constituting Priority Lien Obligations entitled to the benefit of an existing intercreditor agreement is concurrently retired, and (ii) delivers to the Collateral Agent an Officers' Certificate so stating and requesting the Collateral Agent to enter into an intercreditor agreement in favor of a designated agent or representative for the holders of the Indebtedness so Incurred, the Collateral Agent shall (and is hereby authorized and directed to) enter into such intercreditor agreement, bind the Holders on the terms set forth therein, and perform and observe its obligations thereunder. 97 SECTION 11.12. Designations. Except as provided in the next sentence, for purposes of the provisions hereof and the Intercreditor Agreement requiring the Company to designate Indebtedness for the purposes of the term " Priority Lien Obligation", "Other Pari Passu Lien Obligation" or any other such designations hereunder or under the Intercreditor Agreement, any such designation shall be sufficient if the relevant designation is set forth in writing, signed on behalf of the Company by an Officer and delivered to the Trustee, the Collateral Agent and the Credit Agent. For all purposes hereof and the Intercreditor Agreement, the Company hereby designates the U.S. Bank Indebtedness and the ABL Bank Indebtedness as in effect on the Closing Date as " Priority Lien Obligations" and the European Revolving Loan Bank Indebtedness as in effect on the Closing Date as "Other Pari Passu Lien Obligations". SECTION 11.13. Further Assurances. (a) Upon request of the Trustee or Collateral Agent at any time and from time to time, the Company shall, and shall cause each of the Grantor Subsidiary Guarantors to, promptly execute, acknowledge and deliver such Security Documents, financing statements, instruments, certificates, notices and other documents and take such other actions which the Trustee or Collateral Agent may reasonably request to cause the security interests purported to be created by the Security Documents or required to be created under the terms of this Indenture to constitute valid security interests, perfected in accordance with this Indenture and protect, assure or enforce the Liens and benefits intended to be conferred as contemplated by this Indenture, in each case for the benefit of the Holders. (b) In the event that the Company or any Grantor Subsidiary Guarantor shall at any time directly own any equity interests in any Subsidiary (other than (a) equity interests in any Subsidiary with Consolidated assets not greater than $10,000,000 as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC, (b) equity interests in any Consent Subsidiary or any Excluded Securities or any Excluded Equity Interests and (c) equity interests as to which the actions required by this paragraph have already been taken), the Company will promptly notify the Trustee and the Collateral Agent and shall, within 30 days (or such longer period as may be reasonable under the circumstances) after such notification, cause such equity interests to be pledged under the Collateral Agreement and cause to be delivered to the Collateral Agent (or the Credit Agent, acting on behalf of the Collateral Agent pursuant to the Intercreditor Agreement) any certificates representing such equity interests, together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank; provided, however, that (1) neither the Company nor any Grantor Subsidiary Guarantor shall be required to pledge more than 65% of outstanding voting equity interests of any Foreign Subsidiary or Goodyear Canada and (2) neither the Company nor any Grantor Subsidiary Guarantor shall be required to pledge any equity interests in any Foreign Subsidiary if the Company shall have delivered an Officers' Certificate to the Trustee certifying that the Company has determined, on the basis of reasonable inquiries in the jurisdiction of such Foreign Subsidiary, that such pledge would affect materially and adversely the ability of such Foreign Subsidiary to conduct its business in such jurisdiction. 98 (c) In the event that the Company or any Grantor Subsidiary Guarantor shall at any time directly own any equity interests of any Material Foreign Subsidiary (other than equity interests as to which the actions required by this paragraph have already been taken and equity interests in any Consent Subsidiary or any Excluded Securities or any Excluded Equity Interests), the Company will promptly notify the Trustee and the Collateral Agent and will take all such actions as the Trustee and the Collateral Agent shall reasonably request and as shall be available under applicable law to cause such equity interests to be pledged under a Foreign Pledge Agreement and cause to be delivered to the Collateral Agent (or the Credit Agent, acting on behalf of the Collateral Agent pursuant to the Intercreditor Agreement) any certificates representing such equity interests, together with undated stock powers or other instruments of transfer with respect thereto endorsed in blank; provided, however, that (1) neither the Company nor any Grantor Subsidiary Guarantor shall be required to pledge more than 65% of outstanding voting equity interests of any Foreign Subsidiary or Goodyear Canada and (2) neither the Company nor any Grantor Subsidiary Guarantor shall be required to pledge any equity interests in any Foreign Subsidiary if the Company shall have delivered an Officers' Certificate to the Trustee certifying that the Company has determined, on the basis of reasonable inquiries in the jurisdiction of such Foreign Subsidiary, that such pledge would affect materially and adversely the ability of such Foreign Subsidiary to conduct its business in such jurisdiction. (d) In the event that the Company or any Grantor Subsidiary Guarantor shall at any time own any Material Intellectual Property (other than Material Intellectual Property as to which the actions required by this paragraph have already been taken), the Company will promptly notify the Trustee and the Collateral Agent and will file all Uniform Commercial Code financing statements and recordations with the United States Patent and Trademark Office as shall be required by law or reasonably requested by the Trustee or the Collateral Agent to be filed or recorded to perfect the Liens intended to be created on such Collateral (to the extent such Liens may be perfected by filings under the Uniform Commercial Code as in effect in any applicable jurisdiction or by filings with the United States Patent and Trademark Office); provided, however, that if the consents of Persons other than the Company and the Wholly Owned Subsidiaries would be required under applicable law or the terms of any agreement in order for a security interest to be created in any Material Intellectual Property under the Collateral Agreement, a security interest shall not be required to be created in such Material Intellectual Property prior to the obtaining of such consents. The Company shall endeavor in good faith to obtain any consents required to permit any security interest in Material Intellectual Property to be created under the Collateral Agreement. SECTION 11.14. Intercreditor Agreement. THIS INDENTURE, AND THE LIENS, RIGHTS, REMEDIES, DUTIES AND OBLIGATIONS PROVIDED FOR HEREIN SHALL BE SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THIS INDENTURE AND THE INTERCREDITOR AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL. EACH HOLDER (a) WILL BE DEEMED TO HAVE CONSENTED TO THE SUBORDINATION OF THE 99 LIENS SECURING THE NOTES ON THE TERMS SET FORTH IN THE INTERCREDITOR AGREEMENT, (b) WILL BE DEEMED TO HAVE AGREED THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND (c) WILL BE DEEMED TO HAVE AUTHORIZED AND INSTRUCTED THE COLLATERAL AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENT AND TO SUBJECT THE NOTES AND THE LIENS SECURING THE NOTES TO THE PROVISIONS THEREOF. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE SENIOR OBLIGATIONS SECURED PARTIES (AS DEFINED IN THE INTERCREDITOR AGREEMENT) TO EXTEND CREDIT TO THE GOODYEAR TIRE & RUBBER COMPANY AND ITS SUBSIDIARIES, AND SUCH SENIOR OBLIGATIONS SECURED PARTIES ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. SECTION 11.15. Release upon Termination of Company's Obligations. In the event that the Company's obligations under this Indenture and the Securities have been satisfied and discharged in accordance with the terms hereof and thereof or otherwise defeased in accordance with the provisions of Article 8, the Trustee shall or shall cause the Collateral Agent to (i) execute and deliver such releases, termination statements and other instruments (in recordable form, where appropriate) as the Company or any Guarantor, as applicable, may reasonably request to evidence the termination of the Liens created by the Security Documents and (ii) not be deemed to hold the Liens for its benefit and the benefit of the Holders. SECTION 11.16. Fonde de Pouvoir. (a) Without prejudice to the provisions of this Article XI, the Trustee hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) to act as the person holding the power of attorney (in such capacity, the "FONDE DE POUVOIR") of the Trustee as contemplated under Article 2692 of the Civil Code of Quebec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are conferred upon the fonde de pouvoir under any hypothec. Moreover, without prejudice to such appointment and authorization to act as the person holding the power of attorney as aforesaid, the Trustee hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) (in such capacity, the "CUSTODIAN") to act as agent and custodian for and on behalf of the Trustee to hold and to be the sole registered holder of any debenture which may be issued under any hypothec, the whole notwithstanding Section 32 of the Act respecting the special powers of legal persons (Quebec) or any other applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of any such debenture and owing to the Trustee (all of which information shall be certified in writing to the Custodian by the Trustee upon request of the Custodian, and the Custodian shall be fully protected in conclusively relying thereon), and (ii) the Trustee will be entitled to the benefits of any charged property covered by any hypothec and will participate in the proceeds of realization of any such charged property, the whole in accordance with the terms hereof. (b) Each of the fonde de pouvoir and the Custodian shall (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically 100 restricted by the terms hereof, all rights and remedies given to fonde de pouvoir and the Custodian (as applicable) with respect to the charged property under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise, (b) benefit from and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Trustee, and (c) be entitled to delegate from time to time any of its powers or duties under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise and on such terms and conditions as it may determine from time to time. Any person who becomes a Trustee shall be deemed to have consented to and confirmed: (y) the fonde de pouvoir as the person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a Trustee, all actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the agent and custodian as aforesaid and to have ratified, as of the date it becomes a Trustee, all actions taken by the Custodian in such capacity. ARTICLE 12 Application of Trust Moneys SECTION 12.01. "Trust Moneys" Defined. All cash or cash equivalents received by the Trustee or the Collateral Agent on behalf of the Trustee: (1) upon the release of property from the Lien of this Indenture and the Security Documents, including all moneys received in respect of the principal of all purchase money, governmental and other obligations; (2) as compensation for, or proceeds of sale of, any part of the Collateral taken by eminent domain or purchased by, or sold pursuant to an order of, a governmental authority or otherwise disposed of; (3) as proceeds of insurance upon any part of the Collateral; or (4) for application under this Article as elsewhere provided in this Indenture or any Security Document, or whose disposition is not elsewhere otherwise specifically provided for herein or in any Security Document; (all such moneys being herein sometimes called "Trust Moneys"), shall be released by the Trustee or the Collateral Agent, as the case may be, to the Company; provided that, if an Event of Default has occurred and is continuing, such Trust Moneys shall be held by the Trustee, or the Collateral Agent, as the case may be, for the benefit of the Holders, as part of the Collateral, subject to the terms of the Intercreditor Agreement and the Collateral Agreement. SECTION 12.02. Investment and Use of Trust Moneys. All or any part of any Trust Moneys held by the Trustee, or the Collateral Agent on behalf of the Trustee hereunder, shall from time to time at the direction of the Company be invested or reinvested by the Trustee, or the Collateral Agent, in Temporary Cash Investments. 101 Such Temporary Cash Investments shall be held by the Trustee, or the Collateral Agent, as a part of the Collateral, subject to the same provisions hereof as the cash used by it to purchase such cash equivalents. The Trustee shall not be liable or responsible for any loss resulting from such investments or sales except only for its own negligent action, its own negligent failure to act or its own willful misconduct in complying with this Section 12.02. ARTICLE 13 Miscellaneous SECTION 13.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 13.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows: if to the Company or any Subsidiary Guarantor: The Goodyear Tire & Rubber Company 1144 East Market Street Akron, Ohio 44216 fax: Attention of Treasurer if to the Trustee: Wells Fargo Bank, N.A. MAC N9303-120 6th and Marquette Avenue Minneapolis, Minnesota 55579 fax: 612-667-9825 Attention of Wells Fargo Corporate Trust Services The Company, any Subsidiary Guarantor or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. 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 a notice or 102 communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 13.03. 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, any Subsidiary Guarantor, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee, to the extent reasonably requested by the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee 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 (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with (provided, however, that such counsel may rely as to matters of fact on Officer's Certificates). SECTION 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual 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 individual, he has made such examination or investigation as is necessary to enable him 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 individual, such covenant or condition has been complied with. SECTION 13.06. When Securities Disregarded. In determining whether the Holders of the required principal amount of Securities 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 disregarded and deemed not to be outstanding, 103 except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Also, subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 13.08. Legal Holidays. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 13.09. Governing Law. This Indenture, the Collateral Agreement and the Securities shall be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. SECTION 13.10. No Recourse Against Others. A director, officer, employee or shareholder, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company under the Securities or this Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee, the Security Documents or this Indenture, the Intercreditor Agreement or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. SECTION 13.11. Successors. All agreements of the Company in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 13.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. THE GOODYEAR TIRE & RUBBER COMPANY, by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President and Treasurer WELLS FARGO BANK, n.a., as Trustee, by /s/ Michael T. Lechner ------------------------------------- Name: Michael T. Lechner Title: Assistant Vice President SUBSIDIARY GUARANTORS ALLIED TIRE SALES, INC., By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President BELT CONCEPTS OF AMERICA, INC., by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President CELERON CORPORATION, by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President COSMOFLEX, INC., by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President DAPPER TIRE CO, INC. by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President DIVESTED COMPANIES HOLDING COMPANY, By /s/ Randall M. Loyd ------------------------------------- Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------------- Name: Ronald J. Carr Title: Vice President DIVESTED LITCHFIELD PARK PROPERTIES, INC., By /s/ Randall M. Loyd ------------------------------------- Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------------- Name: Ronald J. Carr Title: Vice President GOODYEAR CANADA INC., by /s/ Linda Alexander ------------------------------------- Name: Linda Alexander Title: Vice President by /s/ D. S. Hamilton ------------------------------------- Name: D. S. Hamilton Title: Secretary GOODYEAR FARMS, INC., by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President GOODYEAR INTERNATIONAL CORPORATION, by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President GOODYEAR WESTERN HEMISPHERE CORPORATION, by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President THE KELLY-SPRINGFIELD TIRE CORPORATION, by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President WHEEL ASSEMBLIES INC., by /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC, By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT VENTURES EIGHT INC., By /s/ Ronald J. Carr ------------------------------------- Name: Ronald J. Carr Title: Vice President APPENDIX A PROVISIONS RELATING TO INITIAL SECURITIES, ADDITIONAL SECURITIES AND EXCHANGE SECURITIES 1. Definitions 1.1 Definitions For the purposes of this Appendix A the following terms shall have the meanings indicated below: "Applicable Procedures" means, with respect to any transfer or transaction involving a Regulation S Global Security or beneficial interest therein, the rules and procedures of the Depository for such Global Security to the extent applicable to such transaction and as in effect from time to time. "Definitive Security" means a certificated Initial Security or Exchange Security (bearing the Restricted Securities Legend if the transfer of such Security is restricted by applicable law) that does not include the Global Securities Legend. "Depository" means The Depository Trust Company, its nominees and their respective successors. "Exchange Securities" means (1) the Fixed Rate Securities (the "Exchange Fixed Rate Securities") and the Floating Rate Securities (the "Exchange Floating Rate Securities") issued pursuant to this Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Securities, if any, issued pursuant to a registration statement filed with the SEC under the Securities Act. "Global Securities Legend" means the legend set forth under that caption in Exhibits 1a, 1b, 2a and 2b to this Indenture. "IAI" means an institutional "accredited investor" as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "IAI Securities" means all Initial Securities sold to IAI's. "Initial Investors" means (1) in respect of the Initial Securities, the investors listed on Annex A to the Purchase Agreement, and (2) in respect of each issuance of Additional Securities, the Persons purchasing such Additional Securities under the related Purchase Agreement. "Initial Securities" means (1)(a) $450,000,000 aggregate principal amount of 11% Senior Secured Notes due 2011 (the "Initial Fixed Rate Securities") and (b) $200,000,000 aggregate principal amount of Senior Secured Floating Rate Notes due 2011 (the "Initial Floating Rate Securities"), in each case issued on the Closing Date and (2) Additional Securities, if any, issued in a transaction exempt from the registration requirements of the Securities Act. 2 "Purchase Agreement" means (a) the Note Purchase Agreement dated March 12, 2004, among the Company, the Subsidiary Guarantors and the Initial Investors and (b) any other similar Purchase Agreement relating to Additional Securities. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Registered Exchange Offer" means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for their Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act. "Registration Rights Agreement" means (a) the Registration Rights Agreements dated March 12, 2004 among the Company, the Subsidiary Guarantors and the Initial Investors and (b) any other similar Registration Rights Agreement relating to Additional Securities. "Regulation S" means Regulation S under the Securities Act. "Regulation S Securities" means all Initial Securities offered and sold outside the United States in reliance on Regulation S. "Restricted Period", with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (a) the day on which such Securities are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S, notice of which day shall be promptly given by the Company to the Trustee, and (b) the Closing Date, and with respect to any Additional Securities that are Transfer Restricted Securities, it means the comparable period of 40 consecutive days. "Restricted Securities Legend" means the legend set forth in Section 2.3(e)(i) herein. "Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Rule 144A" means Rule 144A under the Securities Act. "Rule 144A Securities" means all Initial Securities offered and sold to QIBs in reliance on Rule 144A. "Securities Act" means the Securities Act of 1933, as amended. "Securities Custodian" means the custodian with respect to a Global Security or any successor person thereto, who shall initially be the Trustee. "Shelf Registration Statement" means a registration statement filed by the Company in connection with the offer and sale of Initial Securities pursuant to the Registration Rights Agreement. 3 "Transfer Restricted Securities" means Definitive Securities (in the form of a Fixed Rate Security, a "Transfer Restricted Fixed Rate Security" and in the form of a Floating Rate Security, a "Transfer Restricted Floating Rate Security") and any other Securities that bear or are required to bear or are subject to the Restricted Securities Legend. 1.2 Other Definitions
Term: Defined in Section: ------------------- "Agent Members"......................................... 2.1(c) "IAI Global Security"................................... 2.1(b) "Global Security"....................................... 2.1(b) "Regulation S Global Security".......................... 2.1(b) "Rule 144A Availability Date"........................... 2.1(b) "Rule 144A Global Security"............................. 2.1(b)
2. The Securities 2.1 Form and Dating (a) The Initial Securities issued on the date hereof will be (i) offered and sold by the Company pursuant to the Purchase Agreement and (ii) resold, prior to the consummation of the Registered Exchange Offer or the effectiveness of the Shelf Registration Statement or other registration statement under the Securities Act covering the Securities, only pursuant to an exemption from registration under the Securities Act. Additional Securities offered after the date hereof may be offered and sold by the Company from time to time pursuant to one or more Purchase Agreements in accordance with applicable law. The Initial Securities shall be issued initially in the form of Definitive Securities. (b) Global Securities. As promptly as practicable after the first date on which the Initial Securities may be transferred under applicable law to a QIB in accordance with Rule 144A (the "Rule 144A Availability Date"), the Trustee shall, at the request of the Company, mail to each Holder a form (the "Global Election Form"), which shall be in a form reasonably acceptable to the Trustee and the Company and which Global Election Form shall request that each Holder (or the custodian of such Holder's Initial Security, if applicable) provide certain information with respect to such Holder's Initial Security and return such completed Global Election Form (and, if not already held by the Securities Custodian, such Holder's Definitive Security) to the Trustee in order to exchange such Holder's Definitive Security for a beneficial interest in the Global Security (as defined below). After the Rule 144A Availability Date, one or more permanent global Securities of each such series, as applicable, representing the Rule 144A Securities, in definitive, fully registered form (collectively, the "Rule 144A Global Securities"), one or more permanent global Securities of each such series, as applicable, representing the Regulation S Securities, in definitive, fully registered form 4 (collectively, the "Regulation S Global Securities") and one or more permanent global Securities of each such series, as applicable, representing the IAI Securities, in definitive, fully registered form (collectively, the "IAI Global Securities"), in each case without interest coupons and bearing the Global Securities Legend and Restricted Securities Legend, shall be issued on behalf of the Holders of the Securities and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in this Indenture and held by the Trustee; provided that, no such crediting of a beneficial interest in the Global Securities (as defined below) shall occur with respect to Initial Securities that have not been delivered to the Trustee for cancellation, (it being understood that any Securities held in custody by the Trustee as of the Rule 144A Availability Date shall be deemed so delivered to the Trustee for cancellation) or with respect to any Initial Security held by the Trustee as at the Rule 144A Availability Date for which a Global Election Form has not been delivered by or on behalf of the Holder of such Initial Security. Upon issuance of the Global Securities and registration thereof in the name of the Depository or a nominee thereof, the Initial Securities which have been previously delivered to or held by the Trustee, and with respect to which a Global Election Form has been delivered to the Trustee, shall be cancelled and be of no further force or effect. Each Global Election Form shall request (i) the name in which such Holder desires its beneficial interest in the Global Security to be registered, (ii) the relevant wire instructions for payments of principal and interest, (iii) any required tax identification number, (iv) name and address information for delivery of notices and financial information of the Company pursuant to the Indenture, (v) the participant account number to be credited with the beneficial interest in the Global Security in the aggregate principal amount of the Initial Security delivered by such Holder (or its custodian, as applicable) to the Trustee for cancellation and (vi) any other information reasonably requested by the Trustee. Beneficial ownership interests in the Regulation S Global Securities shall not be exchangeable for interests in the Rule 144A Global Securities, the IAI Global Securities or any other Securities without a Restricted Securities Legend until the expiration of the Restricted Period. The Rule 144A Global Securities, the IAI Global Securities and the Regulation S Global Securities are each referred to herein as a "Global Security" and are collectively referred to herein as "Global Securities", provided, that the term "Global Security" when used in Sections 2.1(b), 2.1(c), 2.3(g)(i), 2.3(h)(i) and 2.4 shall also include any Security in global form issued in connection with a Registered Exchange Offer. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee and on the schedules thereto as hereinafter provided. (c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a Global Security deposited with or on behalf of the Depository. The Company shall, in accordance with Section 2.1(b), execute and the Trustee shall, in accordance with this Section 2.1(c) and Section 2.2 and pursuant to an order of the Company signed by two Officers, authenticate and deliver one or more Global Securities that (i) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository and (ii) shall be 5 delivered by the Trustee to such Depository or pursuant to such Depository's instructions or held by the Trustee as Securities Custodian. Members of, or participants in, the Depository ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depository or under such Global Security, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Security. (d) Definitive Securities. Except as provided in Section 2.3 or 2.4, owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of certificated Securities. 2.2 Authentication. The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by two Officers (a) original Securities, in the form of Definitive Securities, for original issue on the date hereof Fixed Rate Securities in an aggregate principal amount of $450,000,000 and Floating Rate Securities in an aggregate principal amount of $200,000,000, (b) subject to the terms of this Indenture, Additional Securities, in the form of Definitive Securities or Global Securities, as may be applicable, of any series in an aggregate principal amount to be determined at the time of issuance and specified therein, (c) as promptly as practicable after the Rule 144A Availability Date, Global Securities, subject to the terms of this Indenture and (d) the Exchange Securities of each series for issue only in a Registered Exchange Offer pursuant to a Registration Rights Agreement and for a like principal amount of Initial Securities exchanged pursuant thereto. Such order shall specify the amount of the Securities to be authenticated, the applicable series of Securities, the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities or Exchange Securities. Notwithstanding anything to the contrary in this Appendix or otherwise in this Indenture, any issuance of Additional Securities after the Closing Date shall be in a principal amount of at least $1,000. 2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive Securities. When Definitive Securities are presented to the Registrar with a request: (i) to register the transfer of such Definitive Securities; or (ii) to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Securities surrendered for transfer or exchange: 6 (1) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and (2) in the case of Transfer Restricted Securities, are accompanied by the following additional information and documents, as applicable: (A) if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Security); or (B) if such Definitive Securities are being transferred to the Company, a certification to that effect (in the form set forth on the reverse side of the Initial Security); or (C) if such Definitive Securities are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (x) a certification to that effect (in the form set forth on the reverse side of the Initial Security), (y) if the Company so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i) and (z) if being transferred prior to the Rule 144A Availability Date, a certification from the transferee to the effect set forth in Section 2.5. The Company will make available to the Trustee a reasonable supply of Definitive Securities in fully registered form without coupons for the purpose of effecting such transfers of Definitive Securities. (b) Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security. A Definitive Security may not be exchanged for a beneficial interest in a Global Security until after such date as a Global Security has been issued, authenticated and deposited in accordance with Section 2.1, which shall be on or after the Rule 144A Availability Date, and except upon satisfaction of the requirements set forth below. In such case, upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar (if applicable), together with: (i) certification (in the form set forth on the reverse side of the Initial Security) that such Definitive Security is being (1) transferred to the Company, (2) delivered to the Registrar for registration in the name of the Holder, without transfer, (3) transferred pursuant to an effective registration statement under the Securities Act, (4) transferred to a QIB in accordance with Rule 144A, (5) transferred to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit 3 or (6) transferred outside the United States 7 in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and (ii) written instructions, including the Global Election Form, directing the Trustee to make, or to direct the applicable Registrar to make, an adjustment on its books and records with respect to such Global Security to reflect an increase in the aggregate principal amount of the Securities represented by the Global Security, such instructions to contain information regarding the Depository account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the applicable Registrar to cause, in accordance with the standing applicable procedures of the Depository and the applicable Registrar, the aggregate principal amount of Securities represented by the Global Security to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Agent Member specified in such instructions a beneficial interest in the Global Security equal to the principal amount of the Definitive Security so canceled. (c) Transfer and Exchange of Global Securities. The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depository in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Security shall deliver a written order given in accordance with the Depository's procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in such Global Security or another Global Security and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Security and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Security being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Security or the IAI Global Security to a transferee who takes delivery of such interest through the Regulation S Global Security, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification in the form provided on the reverse of the Initial Securities from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act. In the case of a transfer of a beneficial interest in either the Regulation S Global Security or the Rule 144A Global Security for an interest in the IAI Global Security, the transferee must furnish a signed letter substantially in the form of Exhibit 3 to the Trustee and, if requested by the Company or the Trustee, an opinion of counsel or other evidence satisfactory to the Trustee and/or the Company as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). (i) If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an 8 amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Security from which such interest is being transferred. (ii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository, or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. (iii) In the event that a Global Security is exchanged for Definitive Securities pursuant to Section 2.4 prior to the consummation of the Registered Exchange Offer or the effectiveness of the Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Securities intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company. (d) Restrictions on Transfer of Regulation S Global Security. (i) During the Restricted Period, beneficial ownership interests in the Regulation S Global Securities may only be sold, pledged or transferred in accordance with the Applicable Procedures and only (1) to the Company, (2) when and for so long as such securities are eligible for resale pursuant to Rule 144A, to a person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (3) in an offshore transaction in accordance with Regulation S, (4) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act, (5) to an IAI purchasing for its own account, or for the account of such an IAI, in each case, in a minimum principal amount of Securities of $250,000 or (6) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Securities to a transferee who takes delivery of such interest through the Rule 144A Global Securities or the IAI Global Securities shall be made only in accordance with Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Security to the effect that such transfer is being made to (1) a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (2) an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of the Securities of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in the Regulation S Global Securities for an interest in the 9 IAI Global Securities, the transferee must furnish a signed letter substantially in the form of Exhibit 3 to the Trustee and, if requested by the Company or the Trustee, an opinion of counsel or other evidence satisfactory to the Trustee and/or the Company as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). (ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Securities shall be transferable in accordance with applicable law and the other terms of this Indenture. (e) Legend. (i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Security certificate evidencing the Global Securities and the Definitive Securities (and all Securities issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only): "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, 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, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) WHEN AND FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN 10 THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. Each Definitive Security shall bear the following additional legend: "IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS." (ii) Upon any sale or transfer of a Transfer Restricted Security that is a Definitive Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Security if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Security) and, if requested by the Company or the Trustee, delivers an opinion of counsel or other evidence reasonably satisfactory to the Registrar and/or the Company as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). (iii) After a transfer of any Initial Securities during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities, all requirements pertaining to the Restricted Securities Legend on such Initial Securities shall cease to apply and the requirements that any such Initial Securities be issued in global form shall continue to apply. (iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities pursuant to which Holders of such Initial Securities are offered Exchange Securities in exchange for their Initial Securities, all requirements pertaining to Initial Securities that Initial Securities be issued in 11 global form shall continue to apply, and Exchange Securities in global form without the Restricted Securities Legend shall be available to Holders that exchange such Initial Securities in such Registered Exchange Offer. (v) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Security acquired pursuant to Regulation S, all requirements that such Initial Security bear the Restricted Securities Legend shall cease to apply and the requirements requiring any such Initial Security be issued in global form shall continue to apply. (vi) Any Additional Securities sold in a registered offering shall not be required to bear the Restricted Securities Legend. (f) Cancellation or Adjustment of Global Security. At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by the Depository to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee with respect to such Global Security, by the Trustee, to reflect such reduction. (g) Obligations with Respect to Transfers and Exchanges of Securities. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate, Definitive Securities and Global 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, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of this Indenture). (iii) Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary. (iv) All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the 12 same benefits under this Indenture as the Securities surrendered upon such transfer or exchange. (h) No Obligation of the Trustee. (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depository or any other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depository or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depository, subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners. (ii) 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 the Depository, participants, members or beneficial owners 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. 2.4 Definitive Securities (a) A Global Security deposited with the Depository and held by the Trustee pursuant to Section 2.1 or issued in connection with a Registered Exchange Offer shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as a Depository for such Global Security or if at any time the Depository ceases to be a "clearing agency" registered under the Exchange Act and, in either case, a successor Depository is not appointed by the Company within 120 days of such notice or after the Company becomes aware of such cessation, or (ii) the Depository so requests, or any beneficial owner thereof requests such exchange in writing delivered through the Depository in either case, following an Event of Default under this Indenture or (iii) the 13 Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Securities under this Indenture. (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. Any portion of a Global Security transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $1,000 and any integral multiple thereof and registered in such names as the Depository shall direct. Any certificated Initial Security in the form of a Definitive Security delivered in exchange for an interest in the Global Security shall, except as otherwise provided by Section 2.3(e), bear the Restricted Securities Legend. (c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members to take any action which a Holder is entitled to take under this Indenture or the Securities. (d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to the Trustee a reasonable supply of Definitive Securities in fully registered form without interest coupons. 2.5 Transferee Certification. In connection with any transfer of a Transfer Restricted Security prior to the Rule 144A Availability Date, the transferee shall certify to the transferor and the Company that: (a) such transferee is (i) a sophisticated institutional investor and has such knowledge and experience in financial and business matters and expertise in assessing credit risk, (ii) capable of evaluating the merits, risks and suitability of investing in the Securities; (iii) relying exclusively on its sources of information and credit analysis with respect to the Securities and (iv) able to bear the economic risks of, and an entire loss of, its investment in the Securities; (b) neither the transferor nor any of its affiliates has provided such transferee with any information or advice with respect to the Securities and (ii) neither the transferor nor any of its affiliates has made or makes any representation as to the credit quality of the Securities or the Company; (c) such transferee has determined, or will determine, based on its own independent review and such professional advice as it has deemed, or will deem, appropriate under the circumstances, that its acquisition of the Securities (i) is fully consistent with its (or if such transferee is acquiring the Securities in a fiduciary capacity, the beneficiary's) financial need, objectives and condition, (ii) complies and is fully 14 consistent with all investment policies, guidelines and restrictions applicable to such transferee (whether acquiring the Securities as principal or in a fiduciary capacity), and (iii) is a proper and suitable investment for such transferee (or if such transferee is acquiring the Securities in a fiduciary capacity, for the beneficiary), notwithstanding the clear and substantial risks inherent in investing in or holding the Securities; and (d) such transferee has not relied on the transferor or any of its affiliates in connection with its determination as to the legality of its acquisition of the Securities or as to the other matters referred to in clause (c) above. EXHIBIT 1a [FORM OF FACE OF INITIAL FIXED RATE SECURITY] [Global Securities Legend to be placed on Global Securities after the Rule 144A Availability Date] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. [Restricted Securities Legend] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, 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, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) WHEN AND FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE 2 PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. Each Definitive Fixed Rate Security shall bear the following additional legend: IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. No. Rfi- $__________ 11% Senior Secured Note due 2011 CUSIP No. 382550AK7 ISIN No. US382550AK77 THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation, promises to pay to [ ], or registered assigns, the principal sum [of $ ] [listed on the Schedule of Increases or Decreases in Global Fixed Rate Security attached hereto](1) on March 1, 2011. Interest Payment Dates: March 1 and September 1, commencing September 1, 2004 Record Dates: February 15 and August 15 - ------------- (1) Use the Schedule of Increases and Decreases language if Note is in Global Form. 2 Additional provisions of this Fixed Rate Security are set forth on the other side of this Fixed Rate Security. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. THE GOODYEAR TIRE & RUBBER COMPANY, by _____________________________ Name: Title: by _____________________________ Name: Title: Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION WELLS FARGO BANK, N.A., as Trustee, certifies that this is one of the Securities referred to in the Indenture. By: __________________________ Authorized Signatory - ----------------- */ If the Fixed Rate Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit 1a captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FIXED RATE SECURITY". 3 [FORM OF REVERSE SIDE OF INITIAL FIXED RATE SECURITY] 11% Senior Secured Note due 2011 1. Interest (a) THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (such corporation, 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 Fixed Rate Security at the rate per annum shown above. The Company shall pay interest semiannually on March 1 and September 1 of each year. Interest on the Fixed Rate Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from March 12, 2004 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Fixed Rate Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. (b) Additional Interest--Registration. The Holder of this Fixed Rate Security is entitled to the benefits of a Registration Rights Agreement, dated as of March 12, 2004, among the Company, the Subsidiary Guarantors and certain purchasers of the Securities named therein (the "Registration Rights Agreement"). Capitalized terms used in this paragraph (b) but not defined herein have the meanings assigned to them in the Registration Rights Agreement. Upon the occurrence of a Registration Default, the Company shall notify the Trustee of such Registration Default and pay additional interest to each Holder of Registrable Securities, during the period of such Registration Default in such amounts and subject to such limitations as set forth in the Registration Rights Agreement. All accrued additional interest shall be paid to Holders in the same manner as interest payments on the Fixed Rate Securities on semi-annual payment dates which correspond to interest payment dates for the Fixed Rate Securities. Following the cure of all outstanding Registration Defaults, the accrual of additional interest shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such additional interest. (c) Additional Interest--Perfection With respect to that portion of the Collateral consisting of Capital Stock of certain of the Company's Foreign Subsidiaries (as required by the Security Documents), within 120 days after the Closing Date (or, in the case of Goodyear Thailand and Goodyear Brazil, such longer period as may be reasonable under the circumstances), the Company shall deliver or cause to be delivered to the Trustee evidence satisfactory to the Trustee that the security interests granted to the Trustee for the benefit of the Holders of the Fixed Rate Securities have been perfected under applicable foreign law in favor of the Holders of the Fixed Rate Securities and all related filing fees, taxes and other amounts have been paid. In the event that the Company has not provided evidence of such perfection (a "Perfection Non-compliance"), the Company shall pay additional cash interest on the Fixed Rate Securities at a rate of 1.0% per annum for the period commencing on the first date of a Perfection Non-compliance and ending on the date all Perfection Non-compliance has been cured; provided that the annual interest rate borne by the Fixed Rate Securities will be increased by an additional 0.25% per annum every 90 days, up to a maximum of 2.0% per annum, until 4 the Perfection Non-compliance has been cured; provided further that if the annual interest rate borne by the Fixed Rate Securities has been increased by 2.0% per annum due to a Perfection Non-compliance, the annual interest rate borne by the Fixed Rate Securities shall be permanently increased by 0.25% per annum upon curing of all such Perfection Non-compliance. The Company shall not be required to comply with any of the obligations set forth in this provision during any Suspension Period and no additional interest shall accrue on the Fixed Rate Securities pursuant to this provision during any such Suspension Period. All accrued additional interest shall be paid to Holders in the same manner as interest payments on the Fixed Rate Securities on semi-annual payment dates which correspond to interest payment dates for the Fixed Rate Securities. Following the cure of all outstanding Perfection Failures or during any Suspension Period, the accrual of additional interest shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such additional interest. (d) Additional Interest--General All references to payments of interest include payments of additional interest, if any. 2. Method of Payment The Company shall pay interest on the Fixed Rate Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the February 15 or August 15 next preceding the interest payment date even if Fixed Rate Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Fixed Rate Securities to a Paying Agent to collect principal payments. The Company shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Fixed Rate Securities represented by a Global Fixed Rate Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor Depository. The Company will make all payments in respect of a certificated Fixed Rate Security (including principal, premium, if any, and interest), at the office of the Paying Agent, except that, at the option of the Company, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a Fixed Rate Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States of America if such Holder has elected payment by wire transfer by providing written wire instructions to the Trustee or the Paying Agent on or after the Closing Date but, in any event, no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Wells Fargo Bank, N.A., a national banking association (the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent or Registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar. 5 4. Indenture The Company issued the Fixed Rate Securities under an Indenture dated as of March 12, 2004 (the "Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Fixed Rate Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Section. 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Fixed Rate Securities are subject to all terms and provisions of the Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions. The Fixed Rate Securities are senior secured obligations of the Company. This Fixed Rate Security is one of the Initial Fixed Rate Securities referred to in the Indenture. The Fixed Rate Securities include the Initial Fixed Rate Securities and any Exchange Fixed Rate Securities issued in exchange for Initial Fixed Rate Securities pursuant to the Indenture and the Registration Rights Agreement. The Initial Fixed Rate Securities, any Exchange Fixed Rate Securities and all other Securities (including the Floating Rate Securities) are treated as a single class of securities under the Indenture; provided, however, that in respect of any amendment, waiver, other modification or optional redemption by the Company that affects only the Fixed Rate Securities or the Floating Rate Securities, as the case may be, such affected series of Securities is treated as a single class under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, sell assets, including shares of capital stock of Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and create or incur Liens. The Indenture also imposes limitations on the ability of the Company and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property. Following the first day (the "Suspension Date") that (i) the Fixed Rate Securities have an Investment Grade Rating from both of the Rating Agencies, and (ii) no Default has occurred and is continuing under the Indenture, the Company and its Restricted Subsidiaries will not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and Section 5.01(3) (collectively, the "Suspended Covenants") of the Indenture. In addition, the Company may elect to suspend the Subsidiary Guarantees, and the Company may also elect to release any or all of the Collateral from the Liens securing the Fixed Rate Securities and Subsidiary Guarantees. Upon and following any Reversion Date, the Company and its Restricted Subsidiaries shall again be subject to the Suspended Covenants with respect to future events, the Subsidiary Guarantees shall be reinstated and any Collateral that was released from Liens securing the Fixed Rate Securities and Subsidiary Guarantees, as well as any Collateral acquired since the Suspension Date, shall be restored and pledged to secure the Fixed Rate Securities and the Subsidiary Guarantees, as applicable. 6 5. Guarantee The payment by the Company of the principal of, and premium and interest on, the Fixed Rate Securities is fully and unconditionally guaranteed on a joint and several senior secured basis by each of the Grantor Subsidiary Guarantors and on a senior unsecured basis by each other Subsidiary Guarantor, in each case, to the extent set forth in the Indenture and the Security Documents. The precise terms of the Guarantee of the Fixed Rate Securities and the Guaranteed Obligations of the Subsidiary Guarantors are expressly set forth in Article 10 of the Indenture. 6. Optional Redemption Except as set forth below in this paragraph 5 the Company will not be entitled to redeem the Fixed Rate Securities. After March 1, 2008, the Company may redeem the Fixed Rate Securities, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12 month period commencing on March 1 of the years set forth below:
Redemption Year Price - ---- ---------- ~~2008................................. 105.50% 2009................................. 102.75% 2010................................. 100.000%~~
In addition, prior to March 1, 2007, the Company may, on one or more occasions, redeem up to a maximum of 35% of the original aggregate principal amount of the Fixed Rate Securities (calculated giving effect to any issuance of Additional Fixed Rate Securities) with the Net Cash Proceeds of one or more Public Equity Offerings by the Company, at a redemption price equal to 111.00% of the principal amount thereof, plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that (1) at least 65% of the original aggregate principal amount of the Fixed Rate Securities (calculated giving effect to any issuance of Additional Fixed Rate Securities) remains outstanding after giving effect to any such redemption and (2) any such redemption by the Company is made within 90 days after the closing of such Public Equity Offering and is made in accordance with certain procedures set forth in the Indenture. In addition, prior to March 1, 2008, the Company may at its option redeem the Fixed Rate Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Fixed Rate Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). Notice of such redemption must be 7 mailed by first-class mail to each Holder's registered address, not less than 30 nor more than 60 days prior to the redemption date. "Applicable Premium" means, with respect to a Fixed Rate Security at any redemption date, the greater of (1) 1.00% of the principal amount of such Fixed Rate Security and (2) the excess of (A) the present value at such redemption date of (i) the redemption price of such Security on March 1, 2008 (such redemption price being described in the first paragraph in this section exclusive of any accrued interest), plus (ii) all required remaining scheduled interest payments due on such Fixed Rate Security through March 1, 2008 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such note on such redemption date. "Adjusted Treasury Rate" means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after March 1, 2008, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, in each case of (1) and (2), plus 0.50%. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Fixed Rate Securities from the redemption date to March 1, 2008, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of U.S. Dollar denominated corporate debt securities of a maturity most nearly equal to March 1, 2008. "Comparable Treasury Price" means, with respect to any redemption date, if clause (2) of the Adjusted Treasury Rate is applicable, the average of three, or if not possible, such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date. "Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company. "Reference Treasury Dealer" means J.P. Morgan Securities Inc. and its successors and assigns and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers. 8 "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date. 7. Sinking Fund The Fixed Rate Securities are not subject to any sinking fund. 8. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Fixed Rate Securities to be redeemed at his, her or its registered address. Fixed Rate Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Fixed Rate Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Fixed Rate Securities (or such portions thereof) called for redemption. 9. Repurchase of Fixed Rate Securities at the Option of Holders Upon a Change of Control, any Holder of Fixed Rate Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Fixed Rate Securities of such Holder at a purchase price equal to 101% of the principal amount of the Fixed Rate Securities to be repurchased plus accrued and unpaid interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture. In accordance with Section 4.06 of the Indenture, the Company will be required to offer to purchase Fixed Rate Securities upon the occurrence of certain events. 10. Denominations; Transfer; Exchange The Fixed Rate Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Fixed Rate Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Fixed Rate Securities selected for redemption (except, in the case of a Fixed Rate Security to be redeemed in part, the portion of the Fixed Rate Security not to be redeemed) or to transfer or exchange any Fixed Rate Securities for a period of 15 days prior to a selection of Securities to be redeemed or for a period of 15 days prior to an interest payment date. 9 11. Persons Deemed Owners Except as provided in paragraph 2 hereof, the registered Holder of this Fixed Rate Security may be treated as the owner of it for all purposes. 12. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look to the Company for payment as general creditors and the Trustee and the Paying Agent shall have no further liability with respect to such monies. 13. Discharge and Defeasance Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Fixed Rate Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on the Fixed Rate Securities to redemption, or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of all of the Securities then outstanding voting as a single class and (ii) any Default may be waived with the written consent of the Holders of at least a majority in principal amount of all of the Securities then outstanding voting as a single class; provided, however, that if any amendment, waiver or other modification will affect only the Fixed Rate Securities, only the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Fixed Rate Securities (and not the consent of the Holders of at least a majority in aggregate principal amount of all Securities) shall be required. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantors and the Trustee may amend the Indenture or the Fixed Rate Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a successor corporation of the obligations of the Company under the Indenture in compliance with Article 5 of the Indenture; (iii) to provide for uncertificated Fixed Rate Securities in addition to or in place of certificated Fixed Rate Securities; (iv) to add Guarantees with respect to the Fixed Rate Securities or to confirm and evidence the release, termination or discharge of any such Guarantee or security when such release, termination or discharge is permitted under the Indenture; (v) to add additional covenants or to surrender rights and powers conferred on the Company; (vi) to make any change that does not adversely affect the rights of any Holder in any material respect, subject to the provisions of the Indenture; (vii) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; (viii) to make any amendment to provisions of the Indenture relating to form, authentication, transfer and legending of Securities; provided, however, that compliance with the Indenture as so amended would not result in Securities being transferred in violation of the Securities Act; (ix) to provide for the addition of Collateral permitted under the terms of the 10 Indenture or any Security Document; or (x) to provide for the issuance of the Exchange Fixed Rate Securities or Additional Fixed Rate Securities in accordance with the terms of the Indenture. 15. Defaults and Remedies An "Event of Default" occurs if: (i) the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for 30 days; (ii) the Company defaults in the payment of principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise; (iii) the Company or any Subsidiary Guarantor fails to comply with its obligations under Section 5.01 of the Indenture; (iv) the Company or any Restricted Subsidiary fails to comply with Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 or 4.13 of the Indenture (in each case, other than a failure to purchase Securities) or Section 4.09 of the Collateral Agreement and such failure continues for 30 days after the notice from the Trustee or the Holders specified below; (v) the Company or any Restricted Subsidiary fails to comply with its agreements contained in the Securities, the Indenture or the Security Documents (other than those referred to in clauses (i), (ii), (iii) or (iv) above) and such failure continues for 60 days after the notice from the Trustee or the Holders specified below; (vi) the Company or any Restricted Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $50,000,000 or its foreign currency equivalent; (vii) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary under Sections 6.01(7) and (8) of the Indenture; (viii) any final and nonappealable judgment or decree (not covered by insurance) for the payment of money in excess of $50,000,000 or its foreign currency equivalent (treating any deductibles, self-insurance or retention as not so covered) is rendered against the Company or a Significant Subsidiary and such final judgment or decree remains outstanding and is not satisfied, discharged or waived within a period of 60 days following such judgment; (ix) any Subsidiary Guarantee ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantor's obligations under the Indenture or any Subsidiary Guarantee and such Default continues for 10 days after receipt of the notice specified below; or (x)(A) the Company or any Subsidiary Guarantor repudiates or disaffirms its obligations under any of the Security Documents, (B) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Company or any Subsidiary Guarantor for any reason with respect to any material portion of the Collateral or (C) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Trustee a perfected Lien on the Collateral with the priority purported to be created thereby, in each case under Section 6.01(11)(C) of the Indenture, with respect to any material portion of the Collateral. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether such Event of Default is voluntary or involuntary or is effected by 11 operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. Notwithstanding the foregoing, a default under clause (iv), (v), (vi), (viii) or (ix) (only with respect to any Subsidiary Guarantor that is not a Significant Subsidiary) shall not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% (or, in the case of a default under clause (iv) relating to a failure to comply with Section 4.06 or 4.08 of the Indenture, the lesser of 25% and $100 million) in principal amount of the outstanding Securities notify the Company and the Trustee of the default and the Company or the Subsidiary Guarantor, as applicable, does not cure such default within any applicable time specified in clause (iv), (v), (vi), (viii) or (ix) hereof after receipt of such notice. If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of all of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences. 16. Security The Fixed Rate Securities will be secured by a security interest in the Collateral, as described and defined in the Indenture, the Security Documents and Intercreditor Agreement. The Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the Indenture, the Security Documents and the Intercreditor Agreement. Each Holder, by accepting this Security, consents and agrees to the terms of the Indenture, the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Trustee and the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement, and to perform their obligations and exercise their rights thereunder in accordance therewith. Initially, Wilmington Trust Company will act as Collateral Agent. 17. Trustee Dealings with the Company Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Fixed Rate Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 12 18. No Recourse Against Others A director, officer, employee or shareholder, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company under the Fixed Rate Securities or the Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Fixed Rate Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Fixed Rate Securities. 19. Authentication This Fixed Rate Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Fixed Rate Security. 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. Governing Law THIS FIXED RATE SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 22. CUSIP Numbers and ISINs The Company has caused CUSIP numbers and ISINs to be printed on the Securities and has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Fixed Rate Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. THE COMPANY WILL FURNISH TO ANY HOLDER OF FIXED RATE SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS FIXED RATE SECURITY. 13 ASSIGNMENT FORM To assign this Fixed Rate Security, fill in the form below: I or we assign and transfer this Fixed Rate Security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint agent to transfer this Fixed Rate Security on the books of the Company. The agent may substitute another to act for him. ____________________________________________________________ Date: ________________ Your Signature: _____________________ ____________________________________________________________ Sign exactly as your name appears on the other side of this Fixed Rate Security. 14 CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED SECURITIES This certificate relates to $____________ principal amount of Fixed Rate Securities, CUSIP_________, held in (check applicable space) ____ book-entry or _____ definitive form by the undersigned. The undersigned (check one box below): - - has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Fixed Rate Security held by the Depository a Fixed Rate Security or Fixed Rate Securities in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Fixed Rate Security (or the portion thereof indicated above); - - has requested the Trustee by written order, in exchange for its Definitive Securities, to credit the participant account of the Depository specified by the Holder with a beneficial interest in the Global Fixed Rate Security held by the Depository in an aggregate principal amount equal to the principal amount represented by its Definitive Securities (or the portion thereof indicated above); - - has requested the Trustee by written order to exchange or register the transfer of a Fixed Rate Security or Fixed Rate Securities. In connection with any transfer of any of the Fixed Rate Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that such Fixed Rate Securities are being transferred in accordance with its terms: CHECK ONE BOX BELOW (1) - to the Company; or (2) - to the Registrar for registration in the name of the Holder, without transfer; or (3) - pursuant to an effective registration statement under the Securities Act of 1933; or (4) - inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or 15 (5) - outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or (6) - to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or (7) - pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933. Unless one of the boxes is checked, the Trustee will refuse to register any of the Fixed Rate Securities evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Fixed Rate Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. __________________________ Your Signature Signature Guarantee: Date: ___________________ ____________________________ Signature must be guaranteed Signature of Signature by a participant in a Guarantee recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee ___________________________________________________________ TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED. The undersigned represents and warrants that it is purchasing this Fixed Rate Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ________________ ______________________________ NOTICE: To be executed by an executive officer 16 TRANSFEREE CERTIFICATE(2) The undersigned represents and warrants to the transferor and the Company that: (a) the undersigned is (i) a sophisticated institutional investor and has such knowledge and experience in financial and business matters and expertise in assessing credit risk, (ii) capable of evaluating the merits, risks and suitability of investing in this Fixed Rate Security; (iii) relying exclusively on its sources of information and credit analysis with respect to this Fixed Rate Security and (iv) able to bear the economic risks of, and an entire loss of, its investment in this Fixed Rate Security; (b) neither the transferor nor any of its affiliates has provided the undersigned with any information or advice with respect to this Security and (ii) neither the transferor nor any of its affiliates has made or makes any representation as to the credit quality of this Fixed Rate Security or the Company; (c) the undersigned has determined, or will determine, based on its own independent review and such professional advice as it has deemed, or will deem, appropriate under the circumstances, that its acquisition of this Fixed Rate Security (i) is fully consistent with its (or if the undersigned is acquiring this Fixed Rate Security in a fiduciary capacity, the beneficiary's) financial need, objectives and condition, (ii) complies and is fully consistent with all investment policies, guidelines and restrictions applicable to the undersigned (whether acquiring this Fixed Rate Security as principal or in a fiduciary capacity), and (iii) is a proper and suitable investment for the undersigned (or if the undersigned is acquiring this Fixed Security in a fiduciary capacity, for the beneficiary), notwithstanding the clear and substantial risks inherent in investing in or holding this Fixed Rate Security; and (d) the undersigned has not relied on the transferor or any of its affiliates in connection with its determination as to the legality of its acquisition of this Fixed Rate Security or as to the other matters referred to in clause (c) above. Dated: _________________ _______________________________________ NOTICE: To be executed by an executive officer - ---------------- (2) To be delivered by transferees upon transfer of transfer restricted securities prior to the Rule 144A Availability Date. 17 [TO BE ATTACHED TO GLOBAL FIXED RATE SECURITIES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FIXED RATE SECURITY The initial principal amount of this Global Fixed Rate Security is $[ ]. The following increases or decreases in this Global Fixed Rate Security have been made:
Principal amount of this Amount of decrease in Amount of increase in Global Fixed Rate Security Signature of authorized Date of Principal Amount of this Principal Amount of this following such decrease or signatory of Trustee or Exchange Global Fixed Rate Security Global Fixed Rate Security increase Securities Custodian
18 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Fixed Rate Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box: Asset Sale - Change of Control - If you want to elect to have only part of this Fixed Rate Security purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount ($1,000 or an integral multiple thereof): $ Date: __________________ Your Signature: __________________ (Sign exactly as your name appears on the other side of the Fixed Rate Security) Signature Guarantee:_______________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee [FORM OF FACE OF EXCHANGE FIXED RATE SECURITY] [Global Securities Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. No. Fi- $__________ 11% Senior Secured Note due 2011 CUSIP No. ____________ ISIN No. ____________ THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation, promises to pay to Cede & Co., or registered assigns, the principal sum [of $ ] [listed on the Schedule of Increases or Decreases in Global Fixed Rate Security attached hereto](3) on March 1, 2011. Interest Payment Dates: March 1 and September 1, commencing September 1, 2004 Record Dates: February 15 and August 15 - ---------------- (3) Use the Schedule of Increases and Decreases language if Note is in Global Form. Additional provisions of this Security are set forth on the other side of this Security. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. THE GOODYEAR TIRE & RUBBER COMPANY, by __________________________ Name: Title: by __________________________ Name: Title: Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION WELLS FARGO BANK, N.A., as Trustee, certifies that this is one of the Securities referred to in the Indenture. By: _________________________ Authorized Signatory - ------------------- */ If the Fixed Rate Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit 1b captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FIXED RATE SECURITY". [FORM OF REVERSE SIDE OF EXCHANGE FIXED RATE SECURITY] 11% Senior Secured Note due 2011 1. Interest (a) THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (such corporation, 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 Fixed Rate Security at the rate per annum shown above. The Company shall pay interest semiannually on March 1 and September 1 of each year. Interest on the Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from March 12, 2004 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Fixed Rate Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. (b) Additional Interest--Perfection With respect to that portion of the Collateral consisting of Capital Stock of certain of the Company's Foreign Subsidiaries (as required by the Security Documents), within 120 days after the Closing Date (or, in the case of Goodyear Thailand and Goodyear Brazil, such longer period as may be reasonable under the circumstances), the Company shall deliver or cause to be delivered to the Trustee evidence satisfactory to the Trustee that the security interests granted to the Trustee for the benefit of the Holders of the Fixed Rate Securities have been perfected under applicable foreign law in favor of the Holders of the Fixed Rate Securities and all related filing fees, taxes and other amounts have been paid. In the event that the Company has not provided evidence of such perfection (a "Perfection Non-compliance"), the Company shall pay additional cash interest on the Fixed Rate Securities at a rate of 1.0% per annum for the period commencing on the first date of a Perfection Non-compliance and ending on the date all Perfection Non-compliance has been cured; provided that the annual interest rate borne by the Fixed Rate Securities will be increased by an additional 0.25% per annum every 90 days, up to a maximum of 2.0% per annum, until the Perfection Non-compliance has been cured; provided further that if the annual interest rate borne by the Fixed Rate Securities has been increased by 2.0% per annum due to a Perfection Non-compliance, the annual interest rate borne by the Fixed Rate Securities shall be permanently increased by 0.25% per annum upon curing of all such Perfection Non-compliance. The Company shall not be required to comply with any of the obligations set forth in this provision during any Suspension Period and no additional interest shall accrue on the Fixed Rate Securities pursuant to this provision during any such Suspension Period. All accrued additional interest shall be paid to Holders in the same manner as interest payments on the Fixed Rate Securities on semi-annual payment dates which correspond to interest payment dates for the Fixed Rate Securities. Following the cure of all outstanding Perfection Failures or during any Suspension Period, the accrual of additional interest shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such additional interest. (c) Additional Interest--General All references to payments of interest include payments of additional interest, if any. 2. Method of Payment The Company shall pay interest on the Fixed Rate Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the February 15 or August 15 next preceding the interest payment date even if Fixed Rate Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Fixed Rate Securities to a Paying Agent to collect principal payments. The Company shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Fixed Rate Securities represented by a Global Fixed Rate Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor Depository. The Company will make all payments in respect of a certificated Fixed Rate Security (including principal, premium, if any, and interest), at the office of the Paying Agent, except that, at the option of the Company, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a Fixed Rate Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States of America if such Holder has elected payment by wire transfer by providing written wire instructions to the Trustee or the Paying Agent on or after the Closing Date but, in any event, no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Wells Fargo Bank, N.A., a national banking association (the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent or Registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar. 4. Indenture The Company issued the Fixed Rate Securities under an Indenture dated as of March 12, 2004 (the "Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Fixed Rate Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Fixed Rate Securities are subject to all terms and provisions of the Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions. The Fixed Rate Securities are senior secured obligations of the Company. This Fixed Rate Security is one of the Exchange Securities referred to in the Indenture. The Fixed Rate Securities include the Initial Fixed Rate Securities and the Exchange Fixed Rate Securities issued in exchange for Initial Fixed Rate Securities pursuant to the Indenture and the Registration Rights Agreement. The Initial Fixed Rate Securities, the Exchange Fixed Rate Securities and all other Securities (including the Floating Rate Securities) are treated as a single class of securities under the Indenture; provided, however, that in respect of any amendment, waiver, other modification or optional redemption by the Company that affects only the Fixed Rate Securities or the Floating Rate Securities, as the case may be, such affected series of Securities is treated as a single class under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, sell assets, including shares of capital stock of Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and create or incur Liens. The Indenture also imposes limitations on the ability of the Company and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property. Following the first day (the "Suspension Date") that (i) the Fixed Rate Securities have an Investment Grade Rating from both of the Rating Agencies, and (ii) no Default has occurred and is continuing under the Indenture, the Company and its Restricted Subsidiaries will not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and Section 5.01(3) (collectively, the "Suspended Covenants") of the Indenture. In addition, the Company may elect to suspend the Subsidiary Guarantees, and the Company may also elect to release any or all of the Collateral from the Liens securing the Fixed Rate Securities and Subsidiary Guarantees. Upon and following any Reversion Date, the Company and its Restricted Subsidiaries shall again be subject to the Suspended Covenants with respect to future events, the Subsidiary Guarantees shall be reinstated and any Collateral that was released from Liens securing the Fixed Rate Securities and Subsidiary Guarantees, as well as any Collateral acquired since the Suspension Date, shall be restored and pledged to secure the Fixed Rate Securities and the Subsidiary Guarantees, as applicable. 5. Guarantee The payment by the Company of the principal of, and premium and interest on, the Fixed Rate Securities is fully and unconditionally guaranteed on a joint and several senior secured basis by each of the Grantor Subsidiary Guarantors and on a senior unsecured basis by each other Subsidiary Guarantor, in each case, to the extent set forth in the Indenture and the Security Documents. The precise terms of the Guarantee of the Fixed Rate Securities and the Guaranteed Obligations of the Subsidiary Guarantors are expressly set forth in Article 10 of the Indenture. 6. Optional Redemption Except as set forth below in this paragraph 5 the Company will not be entitled to redeem the Fixed Rate Securities. After March 1, 2008, the Company may redeem the Fixed Rate Securities, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12 month period commencing on March 1 of the years set forth below:
Redemption Year Price - ---- ---------- ~~2008................................... 105.50% 2009................................... 102.75% 2010................................... 100.000%~~
In addition, prior to March 1, 2007, the Company may, on one or more occasions, redeem up to a maximum of 35% of the original aggregate principal amount of the Fixed Rate Securities (calculated giving effect to any issuance of Additional Fixed Rate Securities) with the Net Cash Proceeds of one or more Public Equity Offerings by the Company, at a redemption price equal to 111.00% of the principal amount thereof, plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that (1) at least 65% of the original aggregate principal amount of the Securities (calculated giving effect to any issuance of Additional Fixed Rate Securities) remains outstanding after giving effect to any such redemption and (2) any such redemption by the Company is made within 90 days after the closing of such Public Equity Offering and is made in accordance with certain procedures set forth in the Indenture. In addition, prior to March 1, 2008, the Company may at its option redeem the Fixed Rate Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Fixed Rate Securities plus the Applicable Premium as of, and accrued and unpaid interest to, the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). Notice of such redemption must be mailed by first-class mail to each Holder's registered address, not less than 30 nor more than 60 days prior to the redemption date. "Applicable Premium" means, with respect to a Fixed Rate Security at any redemption date, the greater of (1) 1.00% of the principal amount of such Fixed Rate Security and (2) the excess of (A) the present value at such redemption date of (i) the redemption price of such Fixed Rate Security on March 1, 2008 (such redemption price being described in the first paragraph in this section exclusive of any accrued interest), plus (ii) all required remaining scheduled interest payments due on such Security through March 1, 2008 (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such note on such redemption date. "Adjusted Treasury Rate" means, with respect to any redemption date, (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after March 1, 2008, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, in each case of (1) and (2), plus 0.50%. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the from the redemption date to March 1, 2008, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of U.S. Dollar denominated corporate debt securities of a maturity most nearly equal to March 1, 2008. "Comparable Treasury Price" means, with respect to any redemption date, if clause (2) of the Adjusted Treasury Rate is applicable, the average of three, or if not possible, such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date. "Quotation Agent" means the Reference Treasury Dealer selected by the Trustee after consultation with the Company. "Reference Treasury Dealer" means J.P. Morgan Securities Inc. and its successors and assigns and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date. 7. Sinking Fund The Fixed Rate Securities are not subject to any sinking fund. 8. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Fixed Rate Securities to be redeemed at his, her or its registered address. Fixed Rate Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Fixed Rate Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Fixed Rate Securities (or such portions thereof) called for redemption. 9. Repurchase of Securities at the Option of Holders Upon a Change of Control, any Holder of Fixed Rate Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Fixed Rate Securities of such Holder at a purchase price equal to 101% of the principal amount of the Fixed Rate Securities to be repurchased plus accrued and unpaid interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture. In accordance with Section 4.06 of the Indenture, the Company will be required to offer to purchase Fixed Rate Securities upon the occurrence of certain events. 10. Denominations; Transfer; Exchange The Fixed Rate Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Fixed Rate Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Fixed Rate Securities selected for redemption (except, in the case of a Fixed Rate Security to be redeemed in part, the portion of the Fixed Rate Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Fixed Rate Securities to be redeemed or for a period of 15 days prior to an interest payment date. 11. Persons Deemed Owners Except as provided in paragraph 2 hereof, the registered Holder of this Fixed Rate Security may be treated as the owner of it for all purposes. 12. Unclaimed Money If money for the payment of principal, interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look to the Company for payment as general creditors and the Trustee and the Paying Agent shall have no further liability with respect to such monies. 13. Discharge and Defeasance Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Fixed Rate Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on the Fixed Rate Securities to redemption, or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of all of the Securities then outstanding voting as a single class and (ii) any Default may be waived with the written consent of the Holders of at least a majority in principal amount of all of the Securities then outstanding voting as a single class; provided, however, that if any amendment, waiver or other modification will affect only the Fixed Rate Securities, only the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Fixed Rate Securities (and not the consent of the Holders of at least a majority in aggregate principal amount of all Securities) shall be required. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantors and the Trustee may amend the Indenture or the Fixed Rate Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a successor corporation of the obligations of the Company under the Indenture in compliance with Article 5 of the Indenture; (iii) to provide for uncertificated Fixed Rate Securities in addition to or in place of certificated Fixed Rate Securities; (iv) to add Guarantees with respect to the Fixed Rate Securities or to confirm and evidence the release, termination or discharge of any such Guarantee or security when such release, termination or discharge is permitted under the Indenture; (v) to add additional covenants or to surrender rights and powers conferred on the Company; (vi) to make any change that does not adversely affect the rights of any Holder in any material respect, subject to the provisions of the Indenture; (vii) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; (viii) to make any amendment to provisions of the Indenture relating to form, authentication, transfer and legending of Securities; provided, however, that compliance with the Indenture as so amended would not result in Securities being transferred in violation of the Securities Act; (ix) to provide for the addition of Collateral permitted under the terms of the Indenture or any Security Document; or (x) to provide for the issuance of the Exchange Fixed Rate Securities or Additional Fixed Rate Securities in accordance with the terms of the Indenture. 15. Defaults and Remedies An "Event of Default" occurs if: (i) the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for 30 days; (ii) the Company defaults in the payment of principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise; (iii) the Company or any Subsidiary Guarantor fails to comply with its obligations under Section 5.01 of the Indenture; (iv) the Company or any Restricted Subsidiary fails to comply with Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 or 4.13 of the Indenture (in each case, other than a failure to purchase Securities) or Section 4.09 of the Collateral Agreement and such failure continues for 30 days after the notice from the Trustee or the Holders specified below; (v) the Company or any Restricted Subsidiary fails to comply with its agreements contained in the Securities, the Indenture or the Security Documents (other than those referred to in clauses (i), (ii), (iii) or (iv) above) and such failure continues for 60 days after the notice from the Trustee or the Holders specified below; (vi) the Company or any Restricted Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $50,000,000 or its foreign currency equivalent; (vii) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary under Sections 6.01(7) and (8) of the Indenture; (viii) any final and nonappealable judgment or decree (not covered by insurance) for the payment of money in excess of $50,000,000 or its foreign currency equivalent (treating any deductibles, self-insurance or retention as not so covered) is rendered against the Company or a Significant Subsidiary and such final judgment or decree remains outstanding and is not satisfied, discharged or waived within a period of 60 days following such judgment; (ix) any Subsidiary Guarantee ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantor's obligations under the Indenture or any Subsidiary Guarantee and such Default continues for 10 days after receipt of the notice specified below; or (x)(A) the Company or any Subsidiary Guarantor repudiates or disaffirms its obligations under any of the Security Documents, (B) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Company or any Subsidiary Guarantor for any reason with respect to any material portion of the Collateral or (C) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Trustee a perfected Lien on the Collateral with the priority purported to be created thereby, in each case under Section 6.01(11)(C) of the Indenture, with respect to any material portion of the Collateral. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether such Event of Default is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. Notwithstanding the foregoing, a default under clause (iv), (v), (vi), (viii) or (ix) (only with respect to any Subsidiary Guarantor that is not a Significant Subsidiary) shall not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% (or, in the case of a default under clause (iv) relating to a failure to comply with Section 4.06 or 4.08 of the Indenture, the lesser of 25% and $100 million) in principal amount of the outstanding Securities notify the Company and the Trustee of the default and the Company or the Subsidiary Guarantor, as applicable, does not cure such default within any applicable time specified in clause (iv), (v), (vi), (viii) or (ix) hereof after receipt of such notice. If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of all of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences. 16. Security The Fixed Rate Securities will be secured by a security interest in the Collateral, as described and defined in the Indenture, the Security Documents and Intercreditor Agreement. The Collateral Agent hold the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the Indenture, the Security Documents and the Intercreditor Agreement. Each Holder, by accepting this Fixed Rate Security, consents and agrees to the terms of the Indenture, the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Trustee and the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement, and to perform their obligations and exercise their rights thereunder in accordance therewith. Initially, Wilmington Trust Company will act as Collateral Agent. 17. Trustee Dealings with the Company Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Fixed Rate Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 18. No Recourse Against Others A director, officer, employee or shareholder, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company under the Fixed Rate Securities or the Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Fixed Rate Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 19. Authentication This Fixed Rate Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Fixed Rate Security. 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. Governing Law THIS FIXED RATE SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 22. CUSIP Numbers and ISINs The Company has caused CUSIP numbers and ISINs to be printed on the Fixed Rate Securities and has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Fixed Rate Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. THE COMPANY WILL FURNISH TO ANY HOLDER OF FIXED RATE SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS FIXED RATE SECURITY. ASSIGNMENT FORM To assign this Fixed Rate Security, fill in the form below: I or we assign and transfer this Fixed Rate Security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint agent to transfer this Fixed Rate Security on the books of the Company. The agent may substitute another to act for him. ____________________________________________________________ Date: ________________ Your Signature: _____________________ ____________________________________________________________ Sign exactly as your name appears on the other side of this Fixed Rate Security. Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee. [TO BE ATTACHED TO GLOBAL FIXED RATE SECURITIES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FIXED RATE SECURITY The initial principal amount of this Global Fixed Rate Security is $[ ]. The following increases or decreases in this Global Fixed Rate Security have been made:
Principal amount of this Amount of decrease in Amount of increase in Global Fixed Rate Security Signature of authorized Date of Principal Amount of this Principal Amount of this following such decrease or signatory of Trustee or Exchange Global Fixed Rate Security Global Fixed Rate Security increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Fixed Rate Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box: Asset Sale [ ] Change of Control [ ] If you want to elect to have only part of this Fixed Rate Security purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount ($1,000 or an integral multiple thereof): $ Date: __________________ Your Signature: __________________ (Sign exactly as your name appears on the other side of the Fixed Rate Security) Signature Guarantee:_______________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee Exhibit 2a [FORM OF FACE OF INITIAL FLOATING RATE SECURITY] [Global Securities Legend to be placed on Global Securities after the Rule 144A Availability Date] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. [Restricted Securities Legend] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, 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, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) WHEN AND FOR SO LONG AS THE SECURITIES 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 UNDER THE SECURITIES ACT 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 THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. Each Definitive Floating Rate Security shall bear the following additional legend: IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. No. RF1- $__________ Senior Secured Floating Rate Note due 2011 CUSIP No. 382550AN1 ISIN No. US382550AN17 THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation, promises to pay to [ ], or registered assigns, the principal sum [of $ ] [listed on the Schedule of Increases or Decreases in Global Floating Rate Security attached hereto](4) on March 1, 2011. Interest Payment Dates: March 1 and September 1, commencing September 1, 2004 Record Dates: February 15 and August 15 - -------------- (4) Use the Schedule of Increases and Decreases language if Note is in Global Form. Additional provisions of this Floating Rate Security are set forth on the other side of this Floating Rate Security. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. THE GOODYEAR TIRE & RUBBER COMPANY, by ______________________________ Name: Title: by ______________________________ Name: Title: Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION WELLS FARGO BANK, N.A., as Trustee, certifies that this is one of the Securities referred to in the Indenture. By: ___________________________ Authorized Signatory - -------------- */ If the Floating Rate Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit 2a captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FLOATING RATE SECURITY". [FORM OF REVERSE SIDE OF INITIAL FLOATING RATE SECURITY] Senior Secured Floating Rate Note due 2011 1. Interest (a) THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (such corporation, 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 Floating Rate Security at the rate per annum equal to the Applicable Floating Rate. The Applicable Floating Rate will be reset semiannually on March 1 and September 1 of each year. The Applicable Floating Rate for the first semi-annual period beginning March 12, 2004 will be 9.15%. The Company shall pay interest semiannually on March 1 and September 1 of each year. Interest on the Floating Rate Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from March 12, 2004 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Floating Rate Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. "Applicable Floating Rate" means, for each semi-annual period during which any Floating Rate Security is outstanding subsequent to the initial semi-annual period, 800 basis points over the rate determined by the Company (notice of such rate to be sent to the Trustee by the Company on the date of determination thereof), equal to the British Bankers' Association LIBOR rate for deposits in U.S. dollars for a period of six months as reported by any generally recognized financial information service as of 11:00 a.m. (London time) two Business Days immediately prior to the first day of such semi-annual period; provided, however, that, if no British Bankers' Association LIBOR rate is available to the Company, the Applicable Floating Rate for the relevant semi-annual period shall instead be at the rate at which J.P. Morgan Securities Ltd. or one of its affiliate banks offers to place deposits in U.S. dollars with first-class banks in the London interbank market for a period of six months at approximately 11:00 a.m. (London time) two Business Days immediately prior to the first day of such semi-annual period, in amounts equal to $1,000,000. The semi-annual periods referred to in this definition shall commence on March 1 and September 1 of each year; provided, however, that the Applicable Floating Rate for the initial semi-annual period commencing upon original issuance of the Floating Rate Securities shall be 9.15%. The interest rate on the Floating Rate Securities will in no event be higher than the maximum rate permitted by New York law as the same may be modified by U.S. law of general application. (b) Additional Interest--Registration. The Holder of this Floating Rate Security is entitled to the benefits of a Registration Rights Agreement, dated as of March 12, 2004, among the Company, the Subsidiary Guarantors and certain purchasers of the Securities named therein (the "Registration Rights Agreement"). Capitalized terms used in this paragraph (b) but not defined herein have the meanings assigned to them in the Registration Rights Agreement. Upon the occurrence of a Registration Default, the Company shall notify the Trustee of such Registration Default and pay additional interest to each Holder of Registrable Securities, during the period of such Registration Default in such amounts and subject to such limitations as set forth in the Registration Rights Agreement. All accrued additional interest shall be paid to Holders in the same manner as interest payments on the Floating Rate Securities on semi-annual payment dates which correspond to interest payment dates for the Floating Rate Securities. Following the cure of all outstanding Registration Defaults, the accrual of additional interest shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such additional interest. (c) Additional Interest--Perfection With respect to that portion of the Collateral consisting of Capital Stock of certain of the Company's Foreign Subsidiaries (as required by the Security Documents), within 120 days after the Closing Date (or, in the case of Goodyear Thailand and Goodyear Brazil, such longer period as may be reasonable under the circumstances), the Company shall deliver or cause to be delivered to the Trustee evidence satisfactory to the Trustee that the security interests granted to the Trustee for the benefit of the Holders of the Floating Rate Securities have been perfected under applicable foreign law in favor of the Holders of the Floating Rate Securities and all related filing fees, taxes and other amounts have been paid. In the event that the Company has not provided evidence of such perfection (a "Perfection Non-compliance"), the Company shall pay additional cash interest on the Floating Rate Securities at a rate of 1.0% per annum for the period commencing on the first date of a Perfection Non-compliance and ending on the date all Perfection Non-compliance has been cured; provided that the annual interest rate borne by the Floating Rate Securities will be increased by an additional 0.25% per annum every 90 days, up to a maximum of 2.0% per annum, until the Perfection Non-compliance has been cured; provided further that if the annual interest rate borne by the Floating Rate Securities has been increased by 2.0% per annum due to a Perfection Non-compliance, the annual interest rate borne by the Floating Rate Securities shall be permanently increased by 0.25% per annum upon curing of all such Perfection Non-compliance. The Company shall not be required to comply with any of the obligations set forth in this provision during any Suspension Period and no additional interest shall accrue on the Floating Rate Securities pursuant to this provision during any such Suspension Period. All accrued additional interest shall be paid to Holders in the same manner as interest payments on the Fixed Rate Securities on semi-annual payment dates which correspond to interest payment dates for the Fixed Rate Securities. Following the cure of all outstanding Perfection Non-compliance or during any Suspension Period, the accrual of additional interest shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such additional interest. (d) Additional Interest--General All references to payments of interest include payments of additional interest, if any. 2. Method of Payment The Company shall pay interest on the Floating Rate Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the February 15 or August 15 next preceding the interest payment date even if Floating Rate Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Floating Rate Securities to a Paying Agent to collect principal payments. The Company shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Floating Rate Securities represented by a Global Floating Rate Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor Depository. The Company will make all payments in respect of a certificated Floating Rate Security (including principal, premium, if any, and interest), at the office of the Paying Agent, except that, at the option of the Company, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a Floating Rate Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States of America if such Holder has elected payment by wire transfer by providing written wire instructions to the Trustee or the Paying Agent on or after the Closing Date but, in any event, no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Wells Fargo Bank, N.A., a national banking association (the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent or Registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar. 4. Indenture The Company issued the Floating Rate Securities under an Indenture dated as of March 12, 2004 (the "Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Floating Rate Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Floating Rate Securities are subject to all terms and provisions of the Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions. The Floating Rate Securities are senior secured obligations of the Company. This Floating Rate Security is one of the Initial Floating Rate Securities referred to in the Indenture. The Floating Rate Securities include the Initial Floating Rate Securities and any Exchange Floating Rate Securities issued in exchange for Initial Floating Rate Securities pursuant to the Indenture and the Registration Rights Agreement. The Initial Floating Rate Securities, any Exchange Floating Rate Securities and all other Securities (including the Fixed Rate Securities) are treated as a single class of securities under the Indenture; provided, however, that in respect of any amendment, waiver, other modification or optional redemption by the Company that affects only the Fixed Rate Securities or the Floating Rate Securities, as the case may be, such affected series of Securities is treated as a single class under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, sell assets, including shares of capital stock of the Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and create or incur Liens and make asset sales. The Indenture also imposes limitations on the ability of the Company and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property. Following the first day (the "Suspension Date") that (i) the Floating Rate Securities have an Investment Grade Rating from both of the Rating Agencies, and (ii) no Default has occurred and is continuing under the Indenture, the Company and its Restricted Subsidiaries will not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and Section 5.01(3) (collectively, the "Suspended Covenants") of the Indenture. In addition, the Company may elect to suspend the Subsidiary Guarantees, and the Company may also elect to release any or all of the Collateral from the Liens securing the Floating Rate Securities and Subsidiary Guarantees. Upon and following any Reversion Date, the Company and its Restricted Subsidiaries shall again be subject to the Suspended Covenants with respect to future events, the Subsidiary Guarantees shall be reinstated and any Collateral that was released from Liens securing the Floating Rate Securities and Subsidiary Guarantees, as well as any Collateral acquired since the Suspension Date, shall be restored and pledged to secure the Floating Rate Securities and the Subsidiary Guarantees, as applicable. 5. Guarantee The payment by the Company of the principal of, and premium and interest on, the Floating Rate Securities is fully and unconditionally guaranteed on a joint and several senior secured basis by each of the Grantor Subsidiary Guarantors and on a senior unsecured basis by each other Subsidiary Guarantor, in each case, to the extent set forth in the Indenture and the Security Documents. The precise terms of the Guarantee of the Floating Rate Securities and the Guaranteed Obligations of the Subsidiary Guarantors are expressly set forth in Article 10 of the Indenture. 6. Optional Redemption Except as set forth below in this paragraph 5 the Company will not be entitled to redeem the Floating Rate Securities. After March 1, 2008, the Company may redeem the Floating Rate Securities, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12 month period commencing on March 1 of the years set forth below:
Redemption Year Price - ---- ---------- ~~2008.................................... 104.00% 2009.................................... 102.00% 2010.................................... 100.000%~~
In addition, prior to March 1, 2007, the Company may, on one or more occasions, redeem up to a maximum of 35% of the original aggregate principal amount of the Floating Rate Securities (calculated giving effect to any issuance of Additional Floating Rate Securities) with the Net Cash Proceeds of one or more Public Equity Offerings by the Company, at a redemption price equal to the principal amount thereof multiplied by the sum of (a) 100.00% plus (b) the Applicable Floating Rate in effect on the date on which the redemption notice is given, plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that (1) at least 65% of the original aggregate principal amount of the Floating Rate Securities (calculated giving effect to any issuance of Additional Floating Rate Securities) remains outstanding after giving effect to any such redemption and (2) any such redemption by the Company is made within 90 days after the closing of such Public Equity Offering and is made in accordance with certain procedures set forth in the Indenture. 7. Sinking Fund The Floating Rate Securities are not subject to any sinking fund. 8. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Floating Rate Securities to be redeemed at his, her or its registered address. Floating Rate Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Floating Rate Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Floating Rate Securities (or such portions thereof) called for redemption. 9. Repurchase of Floating Rate Securities at the Option of Holders Upon a Change of Control, any Holder of Floating Rate Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Floating Rate Securities of such Holder at a purchase price equal to 101% of the principal amount of the Floating Rate Securities to be repurchased plus accrued and unpaid interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture. In accordance with Section 4.06 of the Indenture, the Company will be required to offer to purchase Floating Rate Securities upon the occurrence of certain events. 10. Denominations; Transfer; Exchange The Floating Rate Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Floating Rate Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Floating Rate Securities selected for redemption (except, in the case of a Floating Rate Security to be redeemed in part, the portion of the Floating Rate Security not to be redeemed) or to transfer or exchange any Floating Rate Securities for a period of 15 days prior to a selection of Floating Rate Securities to be redeemed or for a period of 15 days prior to an interest payment date. 11. Persons Deemed Owners Except as provided in paragraph 2 hereof, the registered Holder of this Floating Rate Security may be treated as the owner of it for all purposes. 12. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look to the Company for payment as general creditors and the Trustee and the Paying Agent shall have no further liability with respect to such monies. 13. Discharge and Defeasance Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Floating Rate Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on the Floating Rate Securities to redemption, or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding voting as a single class and (ii) any Default may be waived with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding voting as a single class; provided, however, that if any amendment, waiver or other modification will affect only the Floating Rate Securities, only the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Floating Rate Securities (and not the consent of the Holders of at least a majority in aggregate principal amount of all Securities) shall be required. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantors and the Trustee may amend the Indenture or the Floating Rate Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a successor corporation of the obligations of the Company under the Indenture in compliance with Article 5 of the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Floating Rate Securities; (iv) to add Guarantees with respect to the Floating Rate Securities or to confirm and evidence the release, termination or discharge of any such Guarantee or security when such release, termination or discharge is permitted under the Indenture; (v) to add additional covenants or to surrender rights and powers conferred on the Company; (vi) to make any change that does not adversely affect the rights of any Holder in any material respect, subject to the provisions of the Indenture; (vii) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; or (viii) to make any amendment to provisions of the Indenture relating to form, authentication, transfer and legending of Securities; provided, however, that compliance with the Indenture as so amended would not result in Securities being transferred in violation of the Securities Act; (ix) to provide for the addition of Collateral permitted under the terms of the Indenture or any Security Document; or (x) to provide for the issuance of the Exchange Floating Rate Securities or Additional Floating Rate Securities in accordance with the terms of the Indenture. 15. Defaults and Remedies An "Event of Default" occurs if: (i) the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for 30 days; (ii) the Company defaults in the payment of principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise; (iii) the Company or any Subsidiary Guarantor fails to comply with its obligations under Section 5.01 of the Indenture; (iv) the Company or any Restricted Subsidiary fails to comply with Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 or 4.13 of the Indenture (in each case, other than a failure to purchase Securities) or Section 4.09 of the Collateral Agreement and such failure continues for 30 days after the notice from the Trustee or the Holders specified below; (v) the Company or any Restricted Subsidiary fails to comply with its agreements contained in the Securities, the Indenture or the Security Documents (other than those referred to in clauses (i), (ii), (iii) or (iv) above) and such failure continues for 60 days after the notice from the Trustee or the Holders specified below; (vi) the Company or any Restricted Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $50,000,000 or its foreign currency equivalent; (vii) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary under Section 6.01(7) and (8) of the Indenture; (viii) any final and nonappealable judgment or decree (not covered by insurance) for the payment of money in excess of $50,000,000 or its foreign currency equivalent (treating any deductibles, self-insurance or retention as not so covered) is rendered against the Company or a Significant Subsidiary and such final judgment or decree remains outstanding and is not satisfied, discharged or waived within a period of 60 days following such judgment; (ix) any Subsidiary Guarantee ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantor's obligations under the Indenture or any Subsidiary Guarantee and such Default continues for 10 days after receipt of the notice specified below; or (x)(A) the Company or any Subsidiary Guarantor repudiates or disaffirms its obligations under any of the Security Documents, (B) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Company or any Subsidiary Guarantor for any reason with respect to any material portion of the Collateral or (C) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Trustee a perfected Lien on the Collateral with the priority purported to be created thereby, in each case under Section 6.01(11)(C) of the Indenture, with respect to any material portion of the Collateral. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether such Event of Default is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. Notwithstanding the foregoing, a default under clause (iv), (v), (vi), (viii) or (ix) (only with respect to any Subsidiary Guarantor that is not a Significant Subsidiary) shall not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% (or, in the case of a default under clause (iv) relating to a failure to comply with Section 4.06 or 4.08 of the Indenture, the lesser of 25% and $100 million) in principal amount of the outstanding Securities notify the Company and the Trustee of the default and the Company or the Subsidiary Guarantor, as applicable, does not cure such default within any applicable time specified in clause (iv), (v), (vi), (viii) or (ix) hereof after receipt of such notice. If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of all of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences. 16. Security The Floating Rate Securities will be secured by a security interest in the Collateral, as described and defined in the Indenture, the Security Documents and Intercreditor Agreement. The Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the Indenture, the Security Documents and the Intercreditor Agreement. Each Holder, by accepting this Floating Rate Security, consents and agrees to the terms of the Indenture, the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Trustee and the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement, and to perform their obligations and exercise their rights thereunder in accordance therewith. Initially, Wilmington Trust Company will act as Collateral Agent. 17. Trustee Dealings with the Company Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Floating Rate Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 18. No Recourse Against Others A director, officer, employee or shareholder, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company under the Floating Rate Securities or the Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Floating Rate Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Floating Rate Securities. 19. Authentication This Floating Rate Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Floating Rate Security. 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. Governing Law THIS FLOATING RATE SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 22. CUSIP Numbers and ISINs The Company has caused CUSIP numbers and ISINs to be printed on the Floating Rate Securities and has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Floating Rate Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. THE COMPANY WILL FURNISH TO ANY HOLDER OF FLOATING RATE SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS FLOATING RATE SECURITY. ASSIGNMENT FORM To assign this Floating Rate Security, fill in the form below: I or we assign and transfer this Floating Rate Security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint agent to transfer this Floating Rate Security on the books of the Company. The agent may substitute another to act for him. ____________________________________________________________ Date: ________________ Your Signature: _____________________ ____________________________________________________________ Sign exactly as your name appears on the other side of this Floating Rate Security. CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED SECURITIES This certificate relates to $_________ principal amount of Floating Rate Securities CUSIP _____________, held in (check applicable space) ____ book-entry or _____ definitive form by the undersigned. The undersigned (check one box below): [ ] has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Floating Rate Security held by the Depository a Floating Rate Security or Floating Rate Securities in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Floating Rate Security (or the portion thereof indicated above); [ ] has requested the Trustee by written order, in exchange for its Definitive Securities, to credit the participant account of the Depository specified by the Holder with a beneficial interest in the Global Fixed Rate Security held by the Depository in an aggregate principal amount equal to the principal amount represented by its Definitive Securities (or the portion thereof indicated above); [ ] has requested the Trustee by written order to exchange or register the transfer of a Floating Rate Security or Floating Rate Securities. In connection with any transfer of any of the Floating Rate Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that such Floating Rate Securities are being transferred in accordance with its terms: CHECK ONE BOX BELOW (1) [ ] to the Company; or (2) [ ] to the Registrar for registration in the name of the Holder, without transfer; or (3) [ ] pursuant to an effective registration statement under the Securities Act of 1933; or (4) [ ] inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (5) [ ] outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or (6) [ ] to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or (7) [ ] pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. ___________________________ Your Signature Signature Guarantee: Date: ___________________ _____________________________ Signature must be guaranteed Signature of Signature by a participant in a Guarantee recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee ____________________________________________________________ TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED. The undersigned represents and warrants that it is purchasing this Floating Rate Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ________________ _______________________________ NOTICE: To be executed by an executive officer TRANSFEREE CERTIFICATE(5) The undersigned represents and warrants to the transferor and the Company that: (a) the undersigned is (i) a sophisticated institutional investor and has such knowledge and experience in financial and business matters and expertise in assessing credit risk, (ii) capable of evaluating the merits, risks and suitability of investing in this Floating Rate Security; (iii) relying exclusively on its sources of information and credit analysis with respect to this Floating Rate Security and (iv) able to bear the economic risks of, and an entire loss of, its investment in this Floating Rate Security; (b) neither the transferor nor any of its affiliates has provided the undersigned with any information or advice with respect to this Floating Rate Security and (ii) neither the transferor nor any of its affiliates has made or makes any representation as to the credit quality of this Floating Rate Security or the Company; (c) the undersigned has determined, or will determine, based on its own independent review and such professional advice as it has deemed, or will deem, appropriate under the circumstances, that its acquisition of this Floating Rate Security (i) is fully consistent with its (or if the undersigned is acquiring this Floating Rate Security in a fiduciary capacity, the beneficiary's) financial need, objectives and condition, (ii) complies and is fully consistent with all investment policies, guidelines and restrictions applicable to the undersigned (whether acquiring this Floating Rate Security as principal or in a fiduciary capacity), and (iii) is a proper and suitable investment for the undersigned (or if the undersigned is acquiring this Floating Rate Security in a fiduciary capacity, for the beneficiary), notwithstanding the clear and substantial risks inherent in investing in or holding this Floating Rate Security; and - ------------------ (5) To be delivered by transferees upon transfer of transfer restricted securities prior to the Rule 144A Availability Date. (d) the undersigned has not relied on the transferor or any of its affiliates in connection with its determination as to the legality of its acquisition of this Floating Rate Security or as to the other matters referred to in clause (c) above. Dated: _________________ __________________________________________ NOTICE: To be executed by an executive officer [TO BE ATTACHED TO GLOBAL FLOATING RATE SECURITIES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FLOATING RATE SECURITY The initial principal amount of this Global Floating Rate Security is $[ ]. The following increases or decreases in this Global Floating Rate Security have been made:
Amount of decrease in Amount of increase in Principal amount of this Principal Amount of this Principal Amount of this Global Floating Rate Signature of authorized Date of Global Floating Rate Global Floating Rate Security following such signatory of Trustee or Exchange Security Security decrease or increase Securities Custodian
OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Floating Rate Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box: Asset Sale [ ] Change of Control [ ] If you want to elect to have only part of this Floating Rate Security purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount ($1,000 or an integral multiple thereof): $ Date: __________________ Your Signature: __________________ (Sign exactly as your name appears on the other side of the Floating Rate Security) Signature Guarantee:_______________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee Exhibit 2b [FORM OF FACE OF EXCHANGE FLOATING RATE SECURITY] [Global Securities Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. 2 No. F1- $__________ Senior Secured Floating Rate Note due 2011 CUSIP No. ____________ ISIN No. ____________ THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation, promises to pay to Cede & Co., or registered assigns, the principal sum [of $ ] [listed on the Schedule of Increases or Decreases in Global Floating Rate Security attached hereto](6) on March 1, 2011. Interest Payment Dates: March 1 and September 1, commencing September 1, 2004 Record Dates: February 15 and August 15 - ------------------ (6) Use the Schedule of Increases and Decreases language if Note is in Global Form. 3 Additional provisions of this Floating Rate Security are set forth on the other side of this Floating Rate Security. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. THE GOODYEAR TIRE & RUBBER COMPANY, by __________________________ Name: Title: by __________________________ Name: Title: Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION WELLS FARGO BANK, N.A., as Trustee, certifies that this is one of the Securities referred to in the Indenture. By: __________________________________ Authorized Signatory - ------------------- */ If the Floating Rate Security is to be issued in global form, add the Global Securities Legend and the attachment from Exhibit 2b captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FLOATING RATE SECURITY". 4 [FORM OF REVERSE SIDE OF EXCHANGE FLOATING RATE SECURITY] Senior Secured Floating Rate Note due 2011 1. Interest (a) THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (such corporation, 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 Floating Rate Security at the rate per annum equal to the Applicable Floating Rate. The Applicable Floating Rate will be reset semiannually on March 1 and September 1 of each year. The Applicable Floating Rate for the first semi-annual period beginning March 12, 2004 will be 9.15%. The Company shall pay interest semiannually on March 1 and September 1 of each year. Interest on the Floating Rate Securities shall accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from March 12, 2004 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Floating Rate Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. "Applicable Floating Rate means, for each semi-annual period during which any Floating Rate Security is outstanding subsequent to the initial semi-annual period, 800 basis points over the rate determined by the Company (notice of such rate to be sent to the Trustee by the company on the date of determination thereof), equal to the British Bankers' Association LIBOR rate for deposits in U.S. dollars for a period of six months as reported by any generally recognized financial information service as of 11:00 A.M. (London time) two Business Days immediately prior to the first day of such semi-annual period; provided, however, that, if no British Bankers' Association LIBOR rate is available to the Company, the Applicable Floating Rate for the relevant semi-annual period shall instead by at the rate at which J.P. Morgan Securities Ltd. or one of its affiliate banks offers to place deposits in U.S. dollars with first-class banks in the London interbank market for a period of six months at approximately 11:00 a.m. (London time) two Business Days immediately prior to the first day of such semi-annual period, in amounts equal to $1,000,000. The semi-annual periods referred to in this definition shall commence on March 1 and September 1 of each year; provided, however, that the Applicable Floating Rate for the initial semi-annual period commencing upon original issuance of the Floating Rate Securities shall be 9.15%. The interest rate on the Floating Rate Securities will in no event be higher than the maximum rate permitted by New York law as the same may be modified by U.S. law of general application. (b) Additional Interest--Perfection With respect to that portion of the Collateral consisting of Capital Stock of certain of the Company's Foreign Subsidiaries (as required by the Security Documents), within 120 days after the Closing Date (or, in 5 the case of Goodyear Thailand and Goodyear Brazil, such longer period as may be reasonable under the circumstances), the Company shall deliver or cause to be delivered to the Trustee evidence satisfactory to the Trustee that the security interests granted to the Trustee for the benefit of the Holders of the Floating Rate Securities have been perfected under applicable foreign law in favor of the Holders of the Floating Rate Securities and all related filing fees, taxes and other amounts have been paid. In the event that the Company has not provided evidence of such perfection (a "Perfection Non-compliance"), the Company shall pay additional cash interest on the Floating Rate Securities at a rate of 1.0% per annum for the period commencing on the first date of a Perfection Non-compliance and ending on the date all Perfection Non-compliance has been cured; provided that the annual interest rate borne by the Floating Rate Securities will be increased by an additional 0.25% per annum every 90 days, up to a maximum of 2.0% per annum, until the Perfection Non-compliance has been cured; provided further that if the annual interest rate borne by the Floating Rate Securities has been increased by 2.0% per annum due to a Perfection Non-compliance, the annual interest rate borne by the Floating Rate Securities shall be permanently increased by 0.25% per annum upon curing of all such Perfection Non-compliance. The Company shall not be required to comply with any of the obligations set forth in this provision during any Suspension Period and no additional interest shall accrue on the Floating Rate Securities pursuant to this provision during any such Suspension Period. All accrued additional interest shall be paid to Holders in the same manner as interest payments on the Fixed Rate Securities on semi-annual payment dates which correspond to interest payment dates for the Fixed Rate Securities. Following the cure of all outstanding Perfection Non-compliance or during any Suspension Period, the accrual of additional interest shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such additional interest. (c) Additional Interest--General All references to payments of interest include payments of additional interest, if any. 2. Method of Payment The Company shall pay interest on the Floating Rate Securities (except defaulted interest) to the Persons who are registered Holders at the close of business on the February 15 or August 15 next preceding the interest payment date even if Floating Rate Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Floating Rate Securities to a Paying Agent to collect principal payments. The Company shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Floating Rate Securities represented by a Global Floating Rate Security (including principal, premium, if any, and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor Depository. The Company will make all payments in respect of a certificated Floating Rate Security (including principal, premium, if any, and interest), at the office of the Paying Agent, except that, at the option of the Company, payment of interest may be made by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a 6 Floating Rate Security will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States of America if such Holder has elected payment by wire transfer by providing written wire instructions to the Trustee or the Paying Agent on or after the Closing Date but, in any event, no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Wells Fargo Bank, N.A., a national banking association (the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent or Registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent or Registrar. 4. Indenture The Company issued the Floating Rate Securities under an Indenture dated as of March 12, 2004 (the "Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Floating Rate Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Floating Rate Securities are subject to all terms and provisions of the Indenture, and Holders (as defined in the Indenture) are referred to the Indenture and the TIA for a statement of such terms and provisions. The Floating Rate Securities are senior secured obligations of the Company. This Floating Rate Security is one of the Exchange Floating Rate Securities referred to in the Indenture. The Floating Rate Securities include the Initial Floating Rate Securities and the Exchange Floating Rate Securities issued in exchange for Initial Floating Rate Securities pursuant to the Indenture and the Registration Rights Agreement. The Initial Floating Rate Securities, the Exchange Floating Rate Securities and all other Securities (including the Fixed Rate Securities) are treated as a single class of securities under the Indenture; provided, however, that in respect of any amendment, waiver, other modification or optional redemption by the Company that affects only the Fixed Rate Securities or the Floating Rate Securities, as the case may be, such affected series of Securities is treated as a single class under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by such Restricted Subsidiaries, sell assets, including shares of capital stock of the Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and create or incur Liens and make asset sales. The Indenture also imposes limitations on the ability of the Company and each Subsidiary Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its property. 7 Following the first day (the "Suspension Date") that (i) the Floating Rate Securities have an Investment Grade Rating from both of the Rating Agencies, and (ii) no Default has occurred and is continuing under the Indenture, the Company and its Restricted Subsidiaries will not be subject to Sections 4.03, 4.04, 4.05, 4.06, 4.07, 4.11 and Section 5.01(3) (collectively, the "Suspended Covenants") of the Indenture. In addition, the Company may elect to suspend the Subsidiary Guarantees, and the Company may also elect to release any or all of the Collateral from the Liens securing the Floating Rate Securities and Subsidiary Guarantees. Upon and following any Reversion Date, the Company and its Restricted Subsidiaries shall again be subject to the Suspended Covenants with respect to future events, the Subsidiary Guarantees shall be reinstated and any Collateral that was released from Liens securing the Floating Rate Securities and Subsidiary Guarantees, as well as any Collateral acquired since the Suspension Date, shall be restored and pledged to secure the Floating Rate Securities and the Subsidiary Guarantees, as applicable. 5. Guarantee The payment by the Company of the principal of, and premium and interest on, the Floating Rate Securities is fully and unconditionally guaranteed on a joint and several senior secured basis by each of the Grantor Subsidiary Guarantors and on a senior unsecured basis by each other Subsidiary Guarantor, in each case, to the extent set forth in the Indenture and the Security Documents. The precise terms of the Guarantee of the Floating Rate Securities and the Guaranteed Obligations of the Subsidiary Guarantors are expressly set forth in Article 10 of the Indenture. 6. Optional Redemption Except as set forth below in this paragraph 5 the Company will not be entitled to redeem the Floating Rate Securities. After March 1 2008, the Company may redeem the Floating Rate Securities, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12 month period commencing on March 1 of the years set forth below:
Redemption Year Price - ---- ---------- ~~2008.................................. 102.00% 2009.................................. 104.00% 2010.................................. 100.000%~~
In addition, prior to March 1, 2007, the Company may, on one or more occasions, redeem up to a maximum of 35% of the original aggregate principal amount of the Floating Rate Securities (calculated giving effect to any issuance of Additional 8 Floating Rate Securities) with the Net Cash Proceeds of one or more Public Equity Offerings by the Company, at a redemption price equal to the principal amount thereof multiplied by the sum of (a) 100.00% plus (b) the Applicable Floating Rate in effect on the date on which the redemption notice is given, plus accrued and unpaid interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date); provided, however, that (1) at least 65% of the original aggregate principal amount of the Floating Rate Securities (calculated giving effect to any issuance of Additional Floating Rate Securities) remains outstanding after giving effect to any such redemption and (2) any such redemption by the Company is made within 90 days after the closing of such Public Equity Offering and is made in accordance with certain procedures set forth in the Indenture. 7. Sinking Fund The Floating Rate Securities are not subject to any sinking fund. 8. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Floating Rate Securities to be redeemed at his, her or its registered address. Floating Rate Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Floating Rate Securities (or such portions thereof) called for redemption. 9. Repurchase of Floating Rate Securities at the Option of Holders Upon a Change of Control, any Holder of Floating Rate Securities will have the right, subject to certain conditions specified in the Indenture, to cause the Company to repurchase all or any part of the Floating Rate Securities of such Holder at a purchase price equal to 101% of the principal amount of the Floating Rate Securities to be repurchased plus accrued and unpaid interest to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase) as provided in, and subject to the terms of, the Indenture. In accordance with Section 4.06 of the Indenture, the Company will be required to offer to purchase Floating Rate Securities upon the occurrence of certain events. 10. Denominations; Transfer; Exchange The Floating Rate Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Floating Rate Securities in accordance with the Indenture. Upon any transfer 9 or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Floating Rate Securities selected for redemption (except, in the case of a Floating Rate Security to be redeemed in part, the portion of the Floating Rate Security not to be redeemed) or to transfer or exchange any Floating Rate Securities for a period of 15 days prior to a selection of Floating Rate Securities to be redeemed or for a period of 15 days prior to an interest payment date. 11. Persons Deemed Owners Except as provided in paragraph 2 hereof, the registered Holder of this Floating Rate Security may be treated as the owner of it for all purposes. 12. Unclaimed Money If money for the payment of principal, interest remains unclaimed for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look to the Company for payment as general creditors and the Trustee and the Paying Agent shall have no further liability with respect to such monies. 13. Discharge and Defeasance Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Floating Rate Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of, and interest on the Floating Rate Securities to redemption, or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities then outstanding voting as a single class and (ii) any Default may be waived with the written consent of the Holders of at least a majority in principal amount of the Securities then outstanding voting as a single class; provided, however, that if any amendment, waiver or other modification will affect only the Floating Rate Securities, only the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Floating Rate Securities (and not the consent of the Holders of at least a majority in aggregate principal amount of all Securities) shall be required. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Guarantors and the Trustee may amend the Indenture or the Floating Rate Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to provide for the assumption by a successor corporation of the obligations of the 10 Company under the Indenture in compliance with Article 5 of the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Floating Rate Securities; (iv) to add Guarantees with respect to the Floating Rate Securities or to confirm and evidence the release, termination or discharge of any such Guarantee or security when such release, termination or discharge is permitted under the Indenture; (v) to add additional covenants or to surrender rights and powers conferred on the Company; (vi) to make any change that does not adversely affect the rights of any Holder in any material respect, subject to the provisions of the Indenture; (vii) to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA; or (viii) to make any amendment to provisions of the Indenture relating to form, authentication, transfer and legending of Securities; provided, however, that compliance with the Indenture as so amended would not result in Securities being transferred in violation of the Securities Act; (ix) to provide for the addition of Collateral permitted under the terms of the Indenture or any Security Document; or (x) to provide for the issuance of the Exchange Floating Rate Securities or Additional Floating Rate Securities in accordance with the terms of the Indenture. 15. Defaults and Remedies An "Event of Default" occurs if: (i) the Company defaults in any payment of interest on any Security when the same becomes due and payable, and such default continues for 30 days; (ii) the Company defaults in the payment of principal of any Security when the same becomes due and payable at its Stated Maturity, upon optional redemption or required repurchase, upon declaration of acceleration or otherwise; (iii) the Company or any Subsidiary Guarantor fails to comply with its obligations under Section 5.01 of the Indenture; (iv) the Company or any Restricted Subsidiary fails to comply with Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12 or 4.13 of the Indenture (in each case, other than a failure to purchase Securities) or Section 4.09 of the Collateral Agreement and such failure continues for 30 days after the notice from the Trustee or the Holders specified below; (v) the Company or any Restricted Subsidiary fails to comply with its agreements contained in the Securities, the Indenture or the Security Documents (other than those referred to in clauses (i), (ii), (iii) or (iv) above) and such failure continues for 60 days after the notice from the Trustee or the Holders specified below; (vi) the Company or any Restricted Subsidiary fails to pay any Indebtedness (other than Indebtedness owing to the Company or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $50,000,000 or its foreign currency equivalent; (vii) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary under Section 6.01(7) and (8) of the Indenture; (viii) any final and nonappealable judgment or decree (not covered by insurance) for the payment of money in excess of $50,000,000 or its foreign currency equivalent (treating any deductibles, self-insurance or retention as not so covered) is rendered against the Company or a Significant Subsidiary and such final judgment or decree remains outstanding and is not satisfied, discharged or waived within a period of 60 days following such judgment; (ix) any Subsidiary Guarantee ceases to be in full force and effect in all material respects (except as contemplated by the terms thereof) or any 11 Subsidiary Guarantor denies or disaffirms such Subsidiary Guarantor's obligations under the Indenture or any Subsidiary Guarantee and such Default continues for 10 days after receipt of the notice specified below; or (x)(A) the Company or any Subsidiary Guarantor repudiates or disaffirms its obligations under any of the Security Documents, (B) the determination in a judicial proceeding that any of the Security Documents is unenforceable or invalid against the Company or any Subsidiary Guarantor for any reason with respect to any material portion of the Collateral or (C) any Security Document shall cease to be in full force and effect (other than in accordance with the terms of the applicable Security Document and the Indenture), or cease to be effective to grant the Trustee a perfected Lien on the Collateral with the priority purported to be created thereby, in each case under Section 6.01(11)(C) of the Indenture, with respect to any material portion of the Collateral. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether such Event of Default is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. Notwithstanding the foregoing, a default under clause (iv), (v), (vi), (viii) or (ix) (only with respect to any Subsidiary Guarantor that is not a Significant Subsidiary) shall not constitute an Event of Default until the Trustee notifies the Company or the Holders of at least 25% (or, in the case of a default under clause (iv) relating to a failure to comply with Section 4.06 or 4.08 of the Indenture, the lesser of 25% and $100 million) in principal amount of the outstanding Securities notify the Company and the Trustee of the default and the Company or the Subsidiary Guarantor, as applicable, does not cure such default within any applicable time specified in clause (iv), (v), (vi), (viii) or (ix) hereof after receipt of such notice. If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of all of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences. 16. Security The Floating Rate Securities will be secured by a security interest in the Collateral, as described and defined in the Indenture, the Security Documents and Intercreditor Agreement. The Collateral Agent holds the Collateral in trust for the benefit of the Trustee and the Holders, in each case pursuant to the Indenture, the Security Documents 12 and the Intercreditor Agreement. Each Holder, by accepting this Floating Rate Security, consents and agrees to the terms of the Indenture, the Security Documents (including the provisions providing for the foreclosure and release of Collateral) and the Intercreditor Agreement as the same may be in effect or may be amended from time to time in accordance with their terms and the Indenture and authorizes and directs the Trustee and the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement, and to perform their obligations and exercise their rights thereunder in accordance therewith. Initially, Wilmington Trust Company will act as Collateral Agent. 17. Trustee Dealings with the Company Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Floating Rate Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 18. No Recourse Against Others A director, officer, employee or shareholder, as such, of the Company or any Subsidiary Guarantor shall not have any liability for any obligations of the Company under the Floating Rate Securities or the Indenture or of such Subsidiary Guarantor under its Subsidiary Guarantee, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Floating Rate Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Floating Rate Securities. 19. Authentication This Floating Rate Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Floating Rate Security. 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. Governing Law THIS FLOATING RATE SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF 13 CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 22. CUSIP Numbers and ISINs The Company has caused CUSIP numbers and ISINs to be printed on the Floating Rate Securities and has directed the Trustee to use CUSIP numbers and ISINs in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Floating Rate Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. THE COMPANY WILL FURNISH TO ANY HOLDER OF FLOATING RATE SECURITIES UPON WRITTEN REQUEST AND WITHOUT CHARGE TO THE HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS FLOATING RATE SECURITY. 14 ASSIGNMENT FORM To assign this Floating Rate Security, fill in the form below: I or we assign and transfer this Floating Rate Security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint __________ agent to transfer this Floating Rate Security on the books of the Company. The agent may substitute another to act for him. ____________________________________________________________ Date: ________________ Your Signature: _____________________ ____________________________________________________________ Sign exactly as your name appears on the other side of this Floating Rate Security. Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee. 15 [TO BE ATTACHED TO GLOBAL FLOATING RATE SECURITIES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL FLOATING RATE SECURITY The initial principal amount of this Global Floating Rate Security is $[ ]. The following increases or decreases in this Global Floating Rate Security have been made:
Amount of decrease in Amount of increase in Principal amount of this Principal Amount of this Principal Amount of this Global Floating Rate Signature of authorized Date of Global Floating Rate Global Floating Rate Security following such signatory of Trustee or Exchange Security Security decrease or increase Securities Custodian
16 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Floating Rate Security purchased by the Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the Indenture, check the box: Asset Sale [ ] Change of Control [ ] If you want to elect to have only part of this Floating Rate Security purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount ($1,000 or an integral multiple thereof): $ Date: __________________ Your Signature: __________________ (Sign exactly as your name appears on the other side of the Floating Rate Security) Signature Guarantee:_______________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee EXHIBIT 3 [FORM OF SUPPLEMENTAL INDENTURE] SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of ______, among [GUARANTOR] (the "New Guarantor"), a subsidiary of THE GOODYEAR TIRE & RUBBER COMPANY (or its successor), an Ohio corporation (the "Company"), [OTHER EXISTING GUARANTORS] and WELLS FARGO BANK, N.A., a national banking association, as trustee under the indenture referred to below (the "Trustee"). W I T N E S S E T H : WHEREAS the Company and [EXISTING GUARANTORS] (the "Existing Guarantors") have heretofore executed and delivered to the Trustee an Indenture (the "Indenture") dated as of March 12, 2004, providing for the issuance of the Company's (i) 11% Senior Secured Notes due 2011 (the "Fixed Rate Securities"), initially in the aggregate principal amount of $450,000,000 and (ii) Senior Secured Floating Rate Notes due 2001 (the "Floating Rate Securities") initially in the aggregate principal amount of $200,000,000 (the Fixed Rate Securities and the Floating Rate Securities, together the "Securities"). WHEREAS Section 4.11 of the Indenture provides that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all the Company's obligations under the Securities pursuant to a Subsidiary Guarantee on the terms and conditions set forth herein; and WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the Existing Guarantors are authorized to execute and deliver this Supplemental Indenture; NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Company, the Existing Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Securities as follows: 1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly and severally with all Existing Guarantors, to unconditionally guarantee the Company's obligations under the Securities on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Securities. 2. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified 2 and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Securities heretofore or hereafter authenticated and delivered shall be bound hereby. 3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 4. Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture. 5. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 6. Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. [NEW GUARANTOR], by Name: Title: THE GOODYEAR TIRE & RUBBER COMPANY, by Name: Title: Name: Title: [EXISTING GUARANTORS], by Name: Title: 3 WELLS FARGO BANK, N.A., as Trustee, by Name: Title: EXHIBIT 4 Form of Transferee Letter of Representation [Company] In care of [ ] [ ] [ ] Ladies and Gentlemen: This certificate is delivered to request a transfer of [ $[ ] principal amount of the 11% Senior Secured Notes due 2011 / $ [ ] principal amount of the Senior Secured Floating Rate Notes due 2001] (the "Securities") of THE GOODYEAR TIRE & RUBBER COMPANY (the "Company"). Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows: Name:________________________ Address:_____________________ Taxpayer ID Number:__________ The undersigned represents and warrants to you that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor" at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment. 2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the 2 Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act ("Rule 144A"), to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, when and for so long as the Securities are eligible for resale pursuant to Rule 144A, (d) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional "accredited investor," in each case in a minimum principal amount of Securities of $250,000, or (f) pursuant to another available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Company and the Trustee. TRANSFEREE:_________________, by:___________________________ EX-4.12 13 l07358aexv4w12.txt EX-4.12 NOTE PURCHASE AGRMT-DATED MARCH 12, 2004 EXHIBIT 4.12 THE GOODYEAR TIRE & RUBBER COMPANY $450,000,000 11% Senior Secured Notes due 2011 $200,000,000 Senior Secured Floating Rate Notes due 2011 Note Purchase Agreement March 12, 2004 The Investors Listed on Annex A Hereto Ladies and Gentlemen: The Goodyear Tire & Rubber Company, an Ohio corporation (the "COMPANY"), proposes to issue and sell $450,000,000 aggregate principal amount of its 11% Senior Secured Notes due 2011 (the "FIXED RATE SECURITIES") and $200,000,000 aggregate principal amount of its Senior Secured Floating Rate Notes due 2011 (the "FLOATING RATE SECURITIES," and together with the Fixed Rate Securities, "SECURITIES"). The Securities will be issued pursuant to an Indenture (the "INDENTURE") to be dated as of the Closing Date (as defined below), among the Company, the guarantors listed in Schedule 1 hereto (the "GUARANTORS") and Wells Fargo Bank, N.A., as trustee (the "TRUSTEE"), and will be guaranteed on a senior secured basis by each of the Guarantors identified on Schedule 1 as a grantor and on a senior basis by each of the remaining Guarantors (collectively, the "GUARANTEES"). The Securities will be sold to the Investors listed in Annex A hereto (the "INVESTORS") without being registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"), in reliance upon exemptions from the registration requirements thereof. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Indenture. Holders of the Securities will be entitled to the benefits of a registration rights agreement, to be dated the Closing Date (the "REGISTRATION RIGHTS AGREEMENT"). The Registration Rights Agreement will be in the form attached hereto as Exhibit A. Pursuant to the Registration Rights Agreement, the Company and the Guarantors will agree to file a registration statement with respect to the Securities with the Securities and Exchange Commission (the "COMMISSION") providing for the registration under the Securities Act of the Securities or the Exchange Securities referred to (and as defined) in the Registration Rights Agreement. The Securities and the Guarantees of the Guarantors indicated on Schedule 1 as grantors will be secured by certain collateral (the "COLLATERAL"), as more fully described and set forth in the Indenture and (a) the Intercreditor Agreement, dated as of the Closing Date (the "INTERCREDITOR AGREEMENT"), among the Company, the Guarantors party thereto, JPMorgan Chase Bank, as Credit Agent, and the Trustee, (b) the Collateral Agreement, dated as of the Closing Date (the "COLLATERAL AGREEMENT"), among the Company, the Guarantors party thereto and Wells Fargo Bank, N.A., as collateral agent (in such capacity, the "COLLATERAL AGENT"), (c) the Canadian Security Agreement, dated as of the Closing Date (the "CANADIAN SECURITY AGREEMENT"), among the Company, Goodyear Canada Inc. and the Collateral Agent, (d) a mortgage with respect to 1144 East Market Street, Akron, Ohio (the "CORPORATE HEADQUARTERS"), to the extent that such property does not constitute a "manufacturing facility" as defined in the Bond Agreement dated as of March 17, 1986 between the Company and Union Bank of Switzerland, Credit Suisse, Swiss Bank Corporation and Morgan Stanley S.A. or a "Restricted Property" under (i) the Indenture dated as of March 15, 1996 between the Company and Chemical Bank, as trustee, as supplemented on December 3, 1996, March 11, 1998 and March 17, 1998, (ii) the Indenture dated as of March 11, 1998 between the Company and The Chase Manhattan Bank, as trustee, as supplemented on March 14, 2000 and August 15, 2001 or (iii) the Fiscal Agency Agreement dated June 6, 2000 among the Company, Citibank and Banque Internationale a Luxembourg and (e) foreign pledge agreements dated as of the Closing Date between the Company and the Collateral Agent with respect to the capital stock of each of the subsidiaries of the Company listed on Schedule 2 hereto (the "FOREIGN PLEDGE AGREEMENTS"). The Collateral Agreement, the Canadian Security Agreement, the mortgage on the Corporate Headquarters, any Foreign Pledge Agreements and any other instruments or documents entered into or delivered in connection with any of the foregoing, or that grant or perfect a security interest in the Collateral pursuant to the Indenture, are collectively referred to as the "SECURITY DOCUMENTS." The Security Documents grant a security interest in the Collateral for the benefit of the Trustee, the Collateral Agent and each holder of the Securities and any future Other Pari Passu Lien Obligations and the successors and assigns of the foregoing (the "SECURED PARTIES"). Pursuant to the Intercreditor Agreement, such security interest will rank junior in priority to the security interest in the Collateral securing any Priority Lien Obligations. The proceeds of the Securities will be used on the Closing Date (i) to prepay all of the Company's U.S. Term Loan Facility in the amount of $246.5 million, (ii) to prepay part or all of the borrowings and permanently reduce commitments under the Company's U.S. Revolving Credit Facility and (iii) for general corporate purposes, which may include, among other things, contributions to the Company's pension plans, the temporary repayment of the Company's U.S. Revolving Credit Facility and the revolving portions of the Company's ABL Facilities and European Credit Facilities, and prepayment or repurchase of debt, whether through negotiated or open-market purchases, tender offers or other available means. The Company hereby confirms its agreement with the several Investors concerning the purchase and resale of the Securities, as follows: 1. Purchase of the Securities. (a) The Company agrees to issue and sell the Securities to the several Investors as provided in this Agreement, and each Investor, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective principal amount of Securities set forth on such Investor's signature page to this Agreement at a price equal to 99.413% of the principal amount thereof with respect to the Fixed Rate Securities and 100% of the principal amount thereof with respect to the Floating Rate Securities. The Company will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein. (b) Each Investor severally and not jointly, represents, warrants to the Company and the Guarantors and agrees that: 2 (i) It is an accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act. (ii) It is purchasing Securities for its own account and not with a view to the distribution thereof; provided that the disposition of their property (including the Securities) shall at all times be within their control. (iii) It acknowledges that the Securities have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available. (iv) It is (A) a sophisticated investor and has such knowledge and experience in financial and business matters and expertise in assessing credit risk, (B) capable of evaluating the merits, risks and suitability of investing in the Securities, (C) has been afforded the opportunity to ask questions of and receive answers from the Company regarding the Company and its affiliates, (D) aware that there may be material non-public information with respect to the Securities and the Company that the Company would be willing to provide to the Investor and that the Investor has either received or decided in its sole discretion not to request and (E) able to bear the economic risks of, and an entire loss of, its investment in the Securities. (v) It has determined, based on its own independent review and such professional advice as it has deemed appropriate under the circumstances, that its acquisition of the Securities (A) is fully consistent with its (or if such Investor is acquiring the Securities in a fiduciary capacity, the beneficiary's) financial need, objectives and condition, (B) complies and is fully consistent with all investment policies, guidelines and restrictions applicable to such Investor (whether acquiring the Securities as principal or in a fiduciary capacity), and (C) is a proper and suitable investment for such Investor (or if such Investor is acquiring the Securities in a fiduciary capacity, for the beneficiary), notwithstanding the risks inherent in investing in or holding the Securities. (vi) It has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act ("REGULATION D") or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. (vii) It will offer, sell or transfer Securities only in accordance with the restrictions set forth in Annex B hereto. (c) Each Investor acknowledges and agrees that the Company and, for purposes of the opinions to be delivered to the Investors pursuant to Sections 5(e), counsel for the Company, may rely upon the accuracy of the representations and warranties of the Investors, and compliance by the Investors with their agreements, contained in paragraph (b) above (including Annex B hereto), and each Investor hereby consents to such reliance. 3 (d) The Company acknowledges and agrees that the Investors may offer and sell Securities to or through any affiliate of an Investor and that any such affiliate may offer and sell Securities purchased by it to or through any Investor; provided that any such offers or sales shall be made in accordance with this Agreement. (e) Each Investor agrees to maintain the confidentiality of any Information (as defined below) it receives except that Information may be disclosed (i) to its and its affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential in accordance with the terms of this Section 1(e) and such Investor will be responsible for any breach by any such persons of the provisions of this Section 1(e)), (ii) to the extent requested or demanded by any regulatory authority having jurisdiction over such Investor or its affiliates, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the Securities or the enforcement of rights hereunder or thereunder, (v) with the written consent of the Company or (vi) to the extent such Information (A) becomes publicly available other than as a result of a breach of this paragraph (e) or (B) becomes available to the Investor on a nonconfidential basis from a source other than the Company. For the purposes of this paragraph (e), "Information" means all information received from the Company, if any, relating to the Company or its business, other than any such information that is available to any Investor on a nonconfidential basis prior to disclosure by the Company; provided that in the case of information received from the Company after the date hereof, such information is clearly identified at the time of delivery as confidential. (f) Each Investor, severally and not jointly, represents and warrants that the purchase, holding and/or transfer of the Securities will not give rise to a transaction described in Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975(c)(1) of the Internal Revenue Code of 1986, as amended (the "CODE") for which a statutory or administrative exemption is unavailable and will not violate any provisions of any applicable Federal, state, local, non-United States or other laws, rules or regulations that are similar to such provisions of ERISA and the Code. 2. Payment and Delivery. (a) Payment for and delivery of the Securities will be made at the offices of Covington & Burling at 9:00 a.m., New York City time or as soon thereafter as practicable, on March 12, 2004, or at such other time or place on the same or such other date as the Investors and the Company may agree upon. The time and date of such payment and delivery is referred to herein as the "CLOSING DATE". (b) Payment for the Securities shall be made by wire transfer in immediately available funds to the account(s) specified by the Company to the Investors against delivery to the Investors of the certificates representing the Securities, with any transfer taxes payable in connection with the sale of the Securities by the Company to the Investors duly paid by the Company. Upon delivery, the Securities shall be in definitive form, registered in such names and in such denominations as each Investor shall have requested in writing not less than two business days prior to the Closing Date. The Company agrees to make one or more specimen certificates 4 evidencing the Securities available for inspection by the Investors not later than 2:00 P.M., New York City time, on the business day prior to the Closing Date. 3. Representations and Warranties of the Company and the Guarantors. The Company and the Guarantors jointly and severally represent and warrant to each Investor that: (a) No Material Adverse Change. Since the Company's Quarterly Report for the quarter ended September 30, 2003 (the "THIRD QUARTER REPORT"), except as disclosed in the Offering Memorandum dated March 9, 2004 (including any documents incorporated therein by reference and as supplemented or amended prior to the date hereof, the "OFFERING MEMORANDUM"), including the results of the pending internal investigation and investigation by the Commission described therein, (i) there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken as a whole, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of its capital stock, or any material adverse change (or change that would reasonably be expected to have a material adverse change) in the business, properties, financial position or results of operations of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole, in each case other than in the ordinary course of business; and (iii) neither the Company nor any of its subsidiaries has sustained any loss or interference with its business that is material to the Company and its subsidiaries taken as a whole from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority. (b) Organization and Good Standing. The Company and each of the Guarantors have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all requisite power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified, in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, financial position or results of operations of the Company and its subsidiaries taken as a whole or on the performance by the Company and the Guarantors of their obligations under the Securities and the Guarantees (a "MATERIAL ADVERSE EFFECT"). As of December 31, 2002, there were no subsidiaries of the Company that were significant subsidiaries, other than those listed in Schedule 3 to this Agreement. (c) Capitalization. The Company's authorized capital stock is as set forth in the Offering Memorandum; and all the outstanding shares of capital stock or other equity interests of each Guarantor and significant subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable (except, in the case of any foreign subsidiary, for directors' qualifying shares) and the capital stock or other equity interests of each Guarantor and 5 each significant subsidiary of the Company owned directly or indirectly by the Company, is owned free and clear of any lien, charge, encumbrance or security interest, other than (i) Permitted Liens or (ii) any such lien, charge, encumbrance or security interest securing Priority Lien Obligations. (d) Due Authorization. The Company and each of the Guarantors have full right, power and authority to execute and deliver this Agreement, the Securities, the Indenture (including each Guarantee set forth therein), the Exchange Securities, the Registration Rights Agreement, the Security Documents and the Intercreditor Agreement (collectively, the "TRANSACTION DOCUMENTS") and to perform their respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby has been duly and validly taken. (e) The Indenture. The Indenture has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability, regardless of whether considered in a proceeding in equity or at law (collectively, the "ENFORCEABILITY EXCEPTIONS"); and on the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), and the rules and regulations of the Commission applicable to an indenture that is qualified thereunder. (f) The Securities and the Guarantees. The Securities have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the Guarantees have been duly authorized by each of the Guarantors and, when the Securities have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of each of the Guarantors, enforceable against each of the Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. (g) The Exchange Securities. On the Closing Date, the Exchange Securities (including the related guarantees) will have been duly authorized by the Company and each of the Guarantors and, when duly executed, authenticated, issued and delivered as contemplated by the Registration Rights Agreement, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, as issuer, and each of the Guarantors, as guarantor, enforceable against the Company and each of the Guarantors in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture. 6 (h) Purchase and Registration Rights Agreement. This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors; and the Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, subject to the Enforceability Exceptions, and except that rights to indemnity and contribution thereunder may be limited by applicable law and public policy. (i) Other Transaction Documents. Each of the Security Documents and the Intercreditor Agreement have been duly authorized by the Company and each of the Guarantors (to the extent a party thereto), and on the Closing Date, will be duly executed and delivered by the Company and each of the Guarantors (to the extent a party thereto) and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors (to the extent a party thereto) enforceable against the Company and each of the Guarantors (to the extent a party thereto) in accordance with its terms, subject to the Enforceability Exceptions. (j) No Violation or Default. Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) (solely with respect to subsidiaries that are not Guarantors or Material Foreign Subsidiaries), (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect. (k) No Conflicts. The execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance (except liens, charges or encumbrances created or imposed under the Transaction Documents) upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) 7 (solely with respect to subsidiaries that are not Guarantors or Material Foreign Subsidiaries), (ii) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (l) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance and sale of the Securities (including the Guarantees) and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, orders and registrations or qualifications as may be required (i) under applicable state securities laws in connection with the purchase and resale of the Securities by the Investors, (ii) with respect to the Exchange Securities (including the related guarantees) under the Securities Act and applicable state securities laws as contemplated by the Registration Rights Agreement and (iii) that if not obtained or made, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (m) Legal Proceedings. Except as disclosed in the Offering Memorandum, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is the subject as to which there is a reasonable possibility of an adverse determination and that, if adversely determined would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and, to the knowledge of the Company, no such investigations, actions, suits or proceedings are threatened or contemplated by any governmental or regulatory authority or threatened by others. (n) Independent Accountants. PricewaterhouseCoopers LLP, who have certified certain consolidated financial statements of the Company and its consolidated subsidiaries are, to the Company's knowledge after consultation with PricewaterhouseCoopers LLP, independent public accountants with respect to the Company and its subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and its interpretations and rulings thereunder. (o) Title to Real and Personal Property. Except as disclosed in the Offering Memorandum, the Company and its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property of the Company and its subsidiaries, except any failures that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. There are no Liens on the Collateral other than (i) Liens existing on the Closing Date and set forth on Schedule 4 and (ii) Permitted Collateral Liens (other than those specified in Section (4) of the definition thereof). (p) Title to Intellectual Property. The Company and its subsidiaries own, license or otherwise possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable 8 proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses, except where the failure to own, license or otherwise possess such rights would not reasonably be expected to have a Material Adverse Effect; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and, to the Company's knowledge, its subsidiaries, have not received written notice of any claim of infringement of or conflict with any such rights of others, except such conflicts or infringements that, if adversely determined against the Company or any of its subsidiaries, would not reasonably be expected to have a Material Adverse Effect. (q) Investment Company Act and Holding Company Status. Neither the Company nor any of the Guarantors is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in this Agreement none of them will be, an "investment company" or an entity "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, "INVESTMENT COMPANY Act"). Neither the Company nor any of the Guarantors is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in this Agreement none of them will be, a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935, as amended. (r) Taxes. (i) The Company and its subsidiaries have paid all federal, state, local and foreign taxes (except for such taxes that are not yet delinquent or that are being contested in good faith and by proper proceedings) and filed all tax returns required to be paid or filed through the date hereof, except in each case where the failure to pay or file would not reasonably be expected to have a Material Adverse Effect; and (ii) except as would not reasonably be expected to have a Material Adverse Effect, there is no tax deficiency that has been, or would reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets. (s) Licenses and Permits. The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect; and except as would not reasonably be expected to have a Material Adverse Effect, neither the Company, nor to the Company's knowledge any of its subsidiaries, has received written notice of any revocation or modification of any such license, certificate, permit or authorization and does not have any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course. (t) No Labor Disputes. No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the best knowledge of the Company, is contemplated or threatened, in each case that would be reasonably expected to have a Material Adverse Effect. 9 (u) Compliance With Environmental Laws. Except as disclosed in the Offering Memorandum, the Company and its subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, "ENVIRONMENTAL LAWS"); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except in any such case for any such failure to comply with, or failure to receive required permits, licenses or approvals, or liability, as would not, individually or in the aggregate, have a Material Adverse Effect. (v) Compliance With ERISA. Except as disclosed in the Offering Memorandum, (i) each employee benefit plan, within the meaning of Section 3(3) of ERISA, that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and its affiliates is in compliance in all material respects with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption that is reasonably likely to result in a Material Adverse Effect; and (iii) for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred, whether or not waived. (w) Accounting Controls; Sarbanes Oxley. Except as may be determined in connection with the pending internal investigation or investigation by the Commission and as otherwise disclosed in the Offering Memorandum or as would not reasonably be expected to have a Material Adverse Effect, (i) the Company and its subsidiaries maintain systems of internal accounting controls sufficient to provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorizations; (B) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (ii) there is and has been no failure on the part of the Company and any of the Company's directors or officers, in their capacities as such, to comply with any provision of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the "SARBANES OXLEY ACT"), including Section 402 related to loans and Sections 302 and 906 related to certifications. (x) Insurance. Except as would not reasonably be expected to have a Material Adverse Effect, (i) the Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are customary among companies of established reputation engaged in the same or similar businesses and operating in 10 the same or similar locations and (ii) the Company does not have any reason to believe that it or any of its subsidiaries will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost as may be necessary to continue its business. (y) No Unlawful Payments. Except as would not have a Material Adverse Effect, neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (z) Solvency. On the Closing Date, the Company (after giving effect to the issuance of the Securities and the application of the proceeds therefrom) will be Solvent. As used in this paragraph, the term "SOLVENT" means that (i) the present fair market value (or present fair saleable value) of the assets of the Company is not less than the total amount required to pay the liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) (which liabilities are calculated for purposes of this representation in the manner used in the preparation of the Company's consolidated financial statements) as they become absolute and matured; (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business (assuming the ability to refinance existing obligations); (iii) the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature (assuming the ability to refinance existing obligations); and (iv) the Company is not engaged in any business or transaction, and does not propose to engage in any business or transaction, for which it has unreasonably small capital. (aa) No Broker's Fees. Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against any Investor for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Securities. (bb) Future Rule 144A Eligibility. On the Closing Date, no series of the Securities will be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in an automated inter-dealer quotation system. (cc) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act. (dd) No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than J.P. Morgan Securities 11 Inc., Citigroup Global Markets Inc. and Credit Suisse First Boston (collectively, the "PLACEMENT AGENTS") or the Investors, as to which no representation is made) has (i) solicited offers for, or offered or sold, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engaged in any directed selling efforts within the meaning of Regulation S under the Securities Act ("REGULATION S"), and all such persons have complied with the offering restrictions requirement of Regulation S. (ee) Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Investors contained in Section 1(b) and their compliance with their agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Securities to the Investors and any resale of the Securities by the Investors in accordance with the requirements of this Agreement, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act. (ff) No Stabilization. Neither the Company nor any of the Guarantors has taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities. (gg) Margin Rules. Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company as described in this Agreement will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors. (hh) Security Interests. On and as of the Closing Date: (i) Upon (A) delivery to the Credit Agent of the certificated securities representing or evidencing the Pledged Securities (as defined in the Collateral Agreement) together with instruments of transfer duly executed in blank in accordance with the Collateral Agreement (or in the case of certificates or instruments representing or evidencing Collateral which are then in the possession of the Credit Agent, upon the execution and delivery of the Intercreditor Agreement) the Collateral Agreement will create, to the extent contemplated thereby, a perfected security interest in all right, title and interest of the Company and the Grantors in such certificated securities to the extent perfection is governed by the Uniform Commercial Code (the "UCC"), as in effect in the applicable jurisdiction and (B) in the case of Collateral not constituting certificated securities or instruments, the filing of UCC financing statements or, in the case of such Collateral of Goodyear Canada Inc. ("GOODYEAR CANADA"), Personal Property Security Act ("PPSA") financing statements, in appropriate form in the offices specified in the Perfection Certificate, the Collateral Agreement will create a perfected security interest (or hypothec, as applicable) in all right, title and interest of the Company and the Grantors in Collateral other than the certificated Pledged Securities (as defined in the Collateral Agreement), to the extent perfection can be obtained by filing UCC financing statements or PPSA financing statements, as applicable, in such jurisdictions. (ii) Upon the recordation of the Collateral Agreement with the United States Patent and Trademark Office, the Collateral Agreement will create a perfected security 12 interest on all right, title and interest of the Collateral consisting of Material Intellectual Property (as defined in the Collateral Agreement) in which a security interest may be perfected by such recordation in the United States Patent and Trademark Office. (iii) Upon the recordation of the Collateral Agreement with the Federal Aviation Administration, the Collateral Agreement will create a perfected security interest on all right, title and interest of the Collateral consisting of Aircraft Collateral (as defined in the Collateral Agreement) in which a security interest may be perfected by such recordation in the Federal Aviation Administration. (iv) The mortgage on the Corporate Headquarters, upon execution and delivery by the parties thereto, will create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all the Company's right, title and interest in and to the Corporate Headquarters and the proceeds thereof, subject to the Enforceability Exceptions, and when the mortgage has been filed in Summit county, Ohio, the mortgage will create a perfected lien on all right, title and interest of the Company in the Corporate Headquarters and the proceeds thereof. (ii) Perfection Certificate. The Perfection Certificate is not incorrect in any respect material to the rights or interests of the Holders of the Securities. (jj) Offering Memorandum; Reporting Requirements. As of the Closing Date, the Offering Memorandum will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that, with respect to any projected financial information set forth therein, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. The Company is subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act, and except as disclosed in the Offering Memorandum, including the results of the pending internal investigation and investigation by the Commission described therein, the Company is in compliance with such requirements, except where any non-compliance would not reasonably be expected to have a Material Adverse Effect. (kk) Collateral. The Collateral consists of all assets of the Company and the Grantor Subsidiary Guarantors pledged to secure the U.S. Bank Indebtedness and the ABL Bank Indebtedness, other than Additional Excluded Collateral. 4. Further Agreements of the Company and the Guarantors. The Company and each of the Guarantors jointly and severally covenant and agree with each Investor that: (a) Blue Sky Compliance. The Company will cooperate with the Investors and their counsel to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as any Investor shall reasonably request and will continue such qualifications in effect so long as required for the offering and resale of the Securities; provided that neither the Company nor any of the Guarantors shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) take any action that would subject it to general service of process in 13 any such jurisdiction or (iii) take any action that would subject itself to taxation in any such jurisdiction if it is not otherwise so subject. (b) Use of Proceeds. The proceeds of the Securities will be used on the Closing Date (i) to prepay part or all of the Company's U.S. Term Loan Facility in the amount of $246.5 million, (ii) to prepay part or all of the borrowings and permanently reduce commitments under the Company's U.S. Revolving Credit Facility and (iii) for general corporate purposes, which may include, among other things, contributions to the Company's pension plans, the temporary repayment of the Company's U.S. Revolving Credit Facility and the revolving portions of the Company's ABL Facilities and European Credit Facilities, and prepayment or repurchase of debt, whether through negotiated or open-market purchases, tender offers or other available means. (c) Supplying Information. While the Securities remain outstanding and are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company and each of the Guarantors will, during any period in which the Company is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, furnish, as soon as practicable after such information is available, to holders of the Securities and any prospective purchasers of the Securities designated by such holders, upon the request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (d) PORTAL and DTC. The Company, once the Securities become eligible for resale pursuant to Rule 144A under the Securities Act, will arrange for the Securities to be designated Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market securities in accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL Market and for the Securities to be eligible for clearance and settlement through The Depository Trust Company ("DTC"). (e) No Resales by the Company. Until the issuance of the Exchange Securities or the effectiveness of a registration statement under the Securities Act covering the Securities, the Company will not, and will not permit any of its affiliates (as defined in Rule 144 under the Securities Act) to, resell any of the Securities that have been acquired by any of them, except for Securities purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act. (f) No Integration. Neither the Company nor any of its affiliates (as defined in Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit offers to buy or otherwise negotiate in respect of, any security (as defined in the Securities Act), that is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act. (g) No General Solicitation or Directed Selling Efforts. None of the Company or any of its affiliates or any other person acting on its or their behalf (other than the placement agents, as to which no covenant is given) will (i) solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of 14 Rule 502(c) of Regulation D or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed selling efforts within the meaning of Regulation S, and all such persons will comply with the offering restrictions requirement of Regulation S. (h) Investment Company Act. For so long as the Securities are outstanding, neither the Company nor any of the Guarantors will be or become, or be or become owned by, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act, and will not be or become owned by a closed-end investment company required to be registered, but not registered thereunder. (i) No Stabilization. Neither the Company nor any of the Guarantors will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Securities. 5. Conditions of Investors' Obligations. The obligation of each Investor to purchase Securities on the Closing Date as provided herein is subject to the performance by the Company and each of the Guarantors of their respective covenants and other obligations hereunder and to the following additional conditions: (a) Representations and Warranties. The representations and warranties of the Company and the Guarantors contained herein shall be true and correct in all respects, without regard to any "materiality" or "Material Adverse Effect" qualifiers therein, on the date hereof and on and as of the Closing Date; and the statements of the Company, the Guarantors and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct in all respects, without regard to any "materiality" or "Material Adverse Effect" qualifiers therein on and as of the Closing Date, except where the failure of such representations, warranties and statements to be true and correct, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. (b) No Downgrade. Subsequent to the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the ratings accorded the Securities or any other debt securities or preferred stock issued or guaranteed by the Company or any of the Guarantors by any "nationally recognized statistical rating organization", as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act; and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Securities or of any other debt securities or preferred stock issued or guaranteed by the Company or any of the Guarantors (other than an announcement with positive implications of a possible upgrading). (c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement, (i) there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries that is material to the Company and its subsidiaries taken as a whole, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of its capital stock, or any material adverse change (or change that would reasonably be expected to have a material adverse change) in the business, properties, 15 financial position or results of operations of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole, in each case other than in the ordinary course of business; and (iii) neither the Company nor any of its subsidiaries has sustained any loss or interference with its business that is material to the Company and its subsidiaries taken as a whole from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, the effect of which in any such case described above, is, in the judgment of the Investors, such as to make it impracticable or inadvisable to proceed with the offering, sale or delivery of the Securities on the terms and in the manner contemplated by this Agreement. (d) Officer's Certificate. The Investors shall have received a certificate, dated the Closing Date, of Darren R. Wells, Vice President and Treasurer of the Company, addressed to the Investors and stating that as of the Closing Date, the representations and warranties of the Company in this Agreement are true and correct in all respects, without regard to any "materiality" or "Material Adverse Effect" qualifiers therein, on the Closing Date, and the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder on or prior to the Closing Date and subsequent to September 30, 2003, except as set forth in the Offering Memorandum, including the results of the pending internal investigation and investigation by the Commission described therein, there has been no material adverse change (or change that would reasonably be expected to have a material adverse change) in the business, properties, financial position or results of operations of the Company and its subsidiaries, taken as a whole. (e) Opinion of Counsel for the Company. (i) C. Thomas Harvie, Esq., Senior Vice President, General Counsel and Secretary for the Company, shall have furnished to the Investors, at the request of the Company, his written opinion, dated the Closing Date and addressed to the Investors, in form and substance reasonably satisfactory to the Investors, to the effect set forth in Annex C hereto. (ii) Covington & Burling, counsel for the Company, shall have furnished to the Investors, at the request of the Company, their written opinion, dated the Closing Date and addressed to the Investors, in form and substance reasonably satisfactory to the Investors, to the effect set forth in Annex D hereto. (iii) Ohio counsel for the Company shall have furnished to the Investors, at the request of the Company, their written opinion regarding the mortgage on the Corporate Headquarters, dated the Closing Date and addressed to the Investors, in form and substance reasonably satisfactory to the Investors. (f) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees; and no injunction or order of 16 any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Securities or the issuance of the Guarantees. (g) Good Standing. The Investors shall have received satisfactory evidence of the good standing of the Company and the Guarantors in their respective jurisdictions of organization and their good standing in such other jurisdictions as the Investors may reasonably request, in each case in writing or any standard form of telecommunication, from the appropriate governmental authorities of such jurisdictions. (h) Registration Rights Agreement. The Investors shall have received a counterpart of the Registration Rights Agreement that shall have been executed and delivered by a duly authorized officer of the Company and each of the Guarantors. (i) Additional Documents. On or prior to the Closing Date, the Company and the Guarantors shall have furnished to the Investors such further certificates and documents as the Investors may reasonably request (including secretary's certificates of the Company and the Guarantors). (j) Perfection Certificate. The Investors shall have received (i) a completed Perfection Certificate dated the Closing Date and signed by a Financial Officer, together with all attachments contemplated thereby, and (ii) the results of a search of the Uniform Commercial Code (or equivalent) filings or registrations made with respect to the Company and the Guarantors in their respective jurisdictions of organization and copies of the financing statements (or similar documents) disclosed by such search. (k) Personal Property and Intellectual Property. All Uniform Commercial Code and other personal property security financing statements and recordations with the United States Patent and Trademark Office, the United States Copyright Office and the Canadian Intellectual Property Office, as the case may be, required by law or reasonably requested by the Collateral Agent to be filed or recorded to perfect the liens intended to be created on the Collateral (to the extent such liens may be perfected by filings under the Uniform Commercial Code or other personal property security legislation, as the case may be, as in effect in any applicable jurisdiction or by filings with the United States Patent and Trademark Office, the United States Copyright Office or the Canadian Intellectual Property Office, as the case may be) shall have been filed or recorded or delivered to the Collateral Agent for filing or recording. (l) Mortgage. The Investors shall have received in respect of the mortgage on the Corporate Headquarters, a mortgagee's title policy of title insurance or marked up title commitment for such insurance. Such policy or title commitment shall (i) be in an amount equal to the amount of title insurance coverage already provided to the Credit Facilities Secured Parties in respect of their security interest in the Corporate Headquarters; (ii) name the Collateral Agent, for the benefit of the Holders of the Securities, the Trustee and the Collateral Agent, as the insured thereunder; and (iii) be in the form of ALTA Loan Policy-1992. (m) Investment Company Act. For so long as the Securities are outstanding, neither the Company nor any of the Guarantors will be or become, or be or become owned by, an open-end investment company, unit investment trust or face-amount certificate company that is or is 17 required to be registered under Section 8 of the Investment Company Act, and will not be or become owned by a closed-end investment company required to be registered, but not registered thereunder. (n) Security Documents. On or prior to the Closing Date, a copy of each of the duly executed Security Documents shall have been delivered to the Investors. All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Investors. Delivery of any opinions, letters, certificates or other documents on the Closing Date to Weil Gotshal & Manges LLP, as counsel for certain of the Investors, shall be deemed to constitute delivery to each Investor for all purposes hereunder. 6. Termination. This Agreement may be terminated with respect to any Investor in the absolute discretion of such Investor, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the over-the-counter market; (ii) trading of any securities issued or guaranteed by the Company or any of the Guarantors shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of such Investor, is material and adverse and makes it impracticable or inadvisable to proceed with the purchase of the Securities on the terms and in the manner contemplated by this Agreement. 7. Defaulting Investor. (a) If, on the Closing Date, any Investor defaults on its obligation to purchase the Securities that it has agreed to purchase hereunder, the non-defaulting Investors or the Company may in their discretion arrange for the purchase of such Securities by other persons satisfactory to the Company and the non-defaulting Investors on the terms contained in this Agreement. If no such arrangements are made such that the Closing can occur on or before March 15, 2004, then, at the option of the Company, either (i) this Agreement shall terminate without liability on the part of the non-defaulting Investors or (ii) the Closing shall occur without the defaulting Investors. Any termination of this Agreement pursuant to this Section 7 shall be without liability on the part of the Company or the Guarantors. As used in this Agreement, the term "Investor" includes, for all purposes of this Agreement unless the context otherwise requires, any person not an original party to this Agreement that, pursuant to this Section 7, purchases Securities that a defaulting Investor agreed but failed to purchase. (b) Nothing contained herein shall relieve a defaulting Investor of any liability it may have to the Company, the Guarantors or any non-defaulting Investor for damages caused by its default. 18 8. Payment of Expenses. Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company and each of the Guarantors jointly and severally agrees to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Securities and any taxes payable in that connection; (ii) the costs of reproducing and distributing each of the Transaction Documents; (iii) the costs incident to the preparation, printing and delivery of the certificates evidencing the Securities, including stamp duties and transfer taxes, if any, payable upon issuance of the Securities; (iv) the fees and expenses of the Company's and the Guarantors' counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities under the laws of such jurisdictions as the Investors may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related reasonable fees and expenses of counsel for the Investors); (vi) any fees charged by rating agencies for rating the Securities; (vii) the fees and expenses of the Trustee, Collateral Agent and any paying agent (including related fees and expenses of any counsel to such parties); (viii) the fees and expenses of one counsel for the Investors, to the extent separately agreed by the Company in writing prior to the date hereof; (ix) all expenses and application fees incurred in connection with the application for the inclusion of the Securities on the PORTAL Market and the approval of the Securities for book-entry transfer by DTC; (x) all expenses incurred by the Company in connection with any "road show" presentation to potential investors; (xi) the reasonable costs incident to perfecting the Secured Parties' security interests in the Collateral required pursuant to the Indenture and the Security Documents (including, without limitation, the fees and expenses of foreign counsel and any search, filing or registration fees). In addition, whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company and each of the Guarantors jointly and severally agrees to pay or cause to be paid the reasonable fees and disbursements of one firm of outside counsel for the Investors in connection with the negotiation and preparation of this Agreement, the Indenture (including the negotiation of the terms of the Securities), the Security Documents and the Registration Rights Agreement; and (xii) all other costs and expenses incident to the performance of the obligations of the Company and the Guarantors under this Agreement. 9. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and any controlling persons referred to herein, and the affiliates, officers and directors of each Investor. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Securities from any Investor shall be deemed to be a successor merely by reason of such purchase. 10. Survival. The respective representations, warranties and agreements of the Company, the Guarantors and the Investors contained in this Agreement or made by or on behalf of the Company, the Guarantors or the Investors pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company, the Guarantors or the Investors. 19 11. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise expressly provided, the term "AFFILIATE" has the meaning set forth in Rule 405 under the Securities Act; (b) the term "BUSINESS DAY" means any day other than a day on which banks are permitted or required to be closed in New York City; (c) the term "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended; (d) the term "SUBSIDIARY" has the meaning set forth in Rule 405 under the Securities Act ; and (e) the term "SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02 of Regulation S-X under the Exchange Act. 12. Miscellaneous. (a) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given (i) upon receipt if delivered personally, (ii) upon receipt of a transmission confirmation if sent by facsimile (with a confirming copy sent by overnight courier) and (iii) on the next Business Day if sent for next day delivery by Federal Express, United Parcel Service, Express Mail or other reputable overnight courier. Notices to the Investors shall be given to them at the addresses or facsimile number set forth on Annex A hereto, with a copy to Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York, 10153, Attention: Brian Haskel, Esq. (fax: (212) 310-8007). Notices to the Company and the Guarantors shall be given to them at The Goodyear Tire & Rubber Company, 1144 East Market Street, Akron, Ohio 44316, (fax: (330) 796-2121), Attention: Bertram Bell, Assistant Secretary, with a copy to Covington & Burling, 1330 Avenue of the Americas, New York, New York 10019, Attention: David Rosinus (fax: (212) 841-1010). The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. (b) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. (c) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument. (d) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto. (e) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. (f) Certificates Deemed Representations. Any certificate signed by an officer of the Company and delivered to the Investors in connection with the sale of the Securities shall be deemed a representation and warranty by the Company, as to the matters covered thereby, to each Investor. (g) Information for Trustee. The information set forth on Annex A may be used and relied upon by the Trustee for notice, delivery of certificates, and any other purpose under the Indenture. 20 If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below. Very truly yours, THE GOODYEAR TIRE & RUBBER COMPANY By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President and Treasurer ALLIED TIRE SALES, INC. By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President BELT CONCEPTS OF AMERICA, INC. By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President CELERON CORPORATION By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President 21 COSMOFLEX, INC. By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President DAPPER TIRE CO., INC. By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President DIVESTED COMPANIES HOLDING COMPANY By /s/ Randall M. Loyd ------------------------------------ Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------------ Name: Ronald J. Carr Title: Vice President DIVESTED LITCHFIELD PARK PROPERTIES, INC. By /s/ Randall M. Loyd ------------------------------------ Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------------ Name: Ronald J. Carr Title: Vice President 22 GOODYEAR FARMS, INC. By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President GOODYEAR INTERNATIONAL CORPORATION By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President GOODYEAR WESTERN HEMISPHERE CORPORATION By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President THE KELLY-SPRINGFIELD TIRE CORPORATION By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President WHEEL ASSEMBLIES INC. By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President 23 WINGFOOT COMMERCIAL TIRE SYSTEMS LLC By /s/ D. R. Wells ------------------------------------ Name: D. R. Wells Title: Vice President WINGFOOT VENTURES EIGHT, INC. By /s/ Ronald J. Carr ------------------------------------ Name: Ronald J. Carr Title: Vice President GOODYEAR CANADA INC. By /s/ Linda Alexander ------------------------------------ Name: Linda Alexander Title: Vice President By /s/ D. S. Hamilton ------------------------------------ Name: D. S. Hamilton Title: Secretary 24 [Remaining Signature Pages Intentionally Omitted] 25 Schedule 1 Guarantors ALLIED TIRE SALES, INC.* BELT CONCEPTS OF AMERICA, INC.* CELERON CORPORATION COSMOFLEX, INC.* DAPPER TIRE CO., INC.* DIVESTED COMPANIES HOLDING COMPANY* DIVESTED LITCHFIELD PARK PROPERTIES, INC.* GOODYEAR FARMS, INC.* GOODYEAR INTERNATIONAL CORPORATION* GOODYEAR WESTERN HEMISPHERE CORPORATION THE KELLY-SPRINGFIELD TIRE CORPORATION* WHEEL ASSEMBLIES INC. WINGFOOT COMMERCIAL TIRE SYSTEMS LLC* WINGFOOT VENTURES EIGHT, INC.* GOODYEAR CANADA INC.* * Indicates grantor 26 Schedule 2 Foreign Subsidiaries
Subsidiary Jurisdiction ---------- ------------ Goodyear do Brasil productos de Borracha Ltda. Brazil Goodyear Orient Company Private Limited Singapore Compania Goodyear Del Peru S.A. Peru Corporacion Industrial Mercurio S.A. de C.V. Mexico Goodyear Malaysia Berhad Malaysia Goodyear (Thailand) Public Company Limited Thailand Goodyear de Chile S.A.I.C. Chile Goodyear Finance Holding S.A. Luxembourg
27 ANNEX B Restrictions on Offers, Sales and Transfers Prior to the effectiveness of any registration statement under the Securities Act covering the Securities, the Investors will offer, sell or otherwise transfer the Securities purchased pursuant to the Purchase Agreement to which this Annex B is attached only: (A) at any time that the Securities would be eligible for resale pursuant to Rule 144A under the Securities Act ("Rule 144A"), within the United States to persons whom it reasonably believes to be qualified institutional buyers in transactions pursuant to Rule 144A and where in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; (B) pursuant to offers and sales that occur outside the United States within the meaning of Regulation S; (C) to an "Accredited Investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is an institutional accredited investor acquiring the Security for its own account or for the account of such an institutional accredited investor, in each case in a minimum principal amount of the Securities of $250,000, for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act; or (D) pursuant to any other available exemption from the registration requirements of the Securities Act, subject to the Company's and the Trustee's right prior to any such offer, sale or transfer pursuant to clauses (B), (C) or (D) to require the delivery of an opinion of counsel, certification and/or other information satisfactory to each of them. In connection with any offer, sale or transfer of a Security pursuant to clause (C) above, the transferee shall certify to such transferor and the Company that: (a) such transferee is (i) a sophisticated institutional investor and has such knowledge and experience in financial and business matters and expertise in assessing credit risk, (ii) capable of evaluating the merits, risks and suitability of investing in the Securities; (iii) relying exclusively on its sources of information and credit analysis with respect to the Securities and (iv) able to bear the economic risks of, and an entire loss of, its investment in the Securities; (b) neither such transferor nor any of its affiliates has provided such transferee with any information or advice with respect to the Securities and (ii) neither such Investor nor any of its affiliates has made or makes any representation as to the credit quality of the Securities or the Company; (d) such transferee has determined, or will determine, based on its own independent review and such professional advice as it has deemed, or will deem, appropriate under the circumstances, that its acquisition of the Securities (i) is fully consistent with its (or if such transferee is acquiring the Securities in a fiduciary capacity, the beneficiary's) financial need, objectives and condition, (ii) complies and is fully consistent with all investment policies, 28 guidelines and restrictions applicable to such transferee (whether acquiring the Securities as principal or in a fiduciary capacity), and (iii) is a proper and suitable investment for such transferee (or if such transferee is acquiring the Securities in a fiduciary capacity, for the beneficiary), notwithstanding the risks inherent in investing in or holding the Securities; and (e) such transferee has not relied on such transferor or any of its affiliates in connection with its determination as to the legality of its acquisition of the Securities or as to the other matters referred to in clause (d) above. 29 EX-4.13 14 l07358aexv4w13.txt EX-4.13 REGISTRATION RIGHTS AGRMT-DATED 3/12/04 EXHIBIT 4.13 REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT dated March 12, 2004 (the "Agreement") is entered into by and among The Goodyear Tire & Rubber Company, an Ohio corporation (the "Company"), the Guarantors named in the Purchase Agreement (the "Guarantors"), and the investors listed on Annex A hereto (the "Investors"). The Company, the Guarantors and the Investors are parties to the Note Purchase Agreement dated as of March 12, 2004 (the "Purchase Agreement"), which provides for the sale by the Company to the Investors of $450,000,000 aggregate principal amount of the Company's 11% Senior Secured Notes due 2011 and $200,000,000 aggregate principal amount of the Company's Senior Secured Floating Rate Notes due 2011 (collectively, the "Securities"), which will be guaranteed on a senior secured basis by each of the Guarantors. As an inducement to the Investors to enter into the Purchase Agreement, the Company and the Guarantors have agreed to provide to the Investors and the Holders (as defined below) from time to time of the Securities the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the closing under the Purchase Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following terms shall have the following meanings: "Agreement" shall have the meaning set forth in the preamble. "Business Day" shall mean any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed. "Closing Date" shall mean the Closing Date as defined in the Purchase Agreement. "Company" shall have the meaning set forth in the preamble and shall also include the Company's successors. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. "Exchange Dates" shall have the meaning set forth in Section 2(a)(ii) hereof. "Exchange Offer" shall mean the exchange offer by the Company and the Guarantors of Exchange Securities for Registrable Securities pursuant to Section 2(a) hereof. "Exchange Offer Registration" shall mean a registration under the Securities Act effected pursuant to Section 2(a) hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form) and all amendments and supplements to such registration statement, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein. "Exchange Securities" shall mean senior secured notes issued by the Company and guaranteed by the Guarantors under the Indenture containing terms identical in all material respects to the Securities (except that the Exchange Securities will not be subject to restrictions on transfer or to any increase in annual interest rate for failure to comply with this Agreement) and to be offered to Holders of Securities in exchange for Securities pursuant to the Exchange Offer. "Guarantors" shall have the meaning set forth in the preamble and shall also include any Guarantor's successors. "Holders" shall mean the Investors, for so long as they own any Registrable Securities, and each of their successors, assigns and direct and indirect transferees who become owners of Registrable Securities under the Indenture; provided that for purposes of Sections 6 and 7 of this Agreement, the term "Holders" shall include Participating Broker Dealers. "Indemnified Person" shall have the meaning set forth in Section 7(c) hereof. "Indemnifying Person" shall have the meaning set forth in Section 7(c) hereof. "Indenture" shall mean the Indenture relating to the Securities dated as of March 12, 2004 among the Company, the Guarantors and Wells Fargo Bank, N.A., as trustee, and as the same may be amended from time to time in accordance with the terms thereof. "Inspector" shall have the meaning set forth in Section 4(m) hereof. "Investors" shall have the meaning set forth in the preamble. "Liquidated Damages" shall have the meaning set forth in Section 3(d) hereof. "Liquidated Damages Payment Date" means each March 1 and September 1. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of outstanding Registrable Securities; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities owned directly or indirectly by the Company or any of its affiliates (other than Holders of Registrable Securities if such Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage or amount. "Participating Broker-Dealer" shall have the meaning set forth in Section 6(a) hereof. "Person" shall mean an individual, partnership, limited liability company, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including a prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, 2 and by all other amendments and supplements to such prospectus, and in each case including any document incorporated by reference therein. "Purchase Agreement" shall have the meaning set forth in the preamble. "Registrable Securities" shall mean the Securities; provided that the Securities shall cease to be Registrable Securities (i) when a Registration Statement with respect to such Securities has been declared effective under the Securities Act and such Securities have been exchanged or disposed of pursuant to such Registration Statement, (ii) when such Securities are eligible to be sold pursuant to Rule 144(k) (or any similar provision then in force, but not Rule 144A) under the Securities Act or (iii) when such Securities cease to be outstanding. "Registration Default" shall have the meaning set forth in Section 3(d) hereof. "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company and the Guarantors with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. registration and filing fees and expenses, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of one counsel for the Underwriters and Holders in connection with any blue sky qualification of any Exchange Securities or Registrable Securities), (iii) all reasonable expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus and any amendments or supplements thereto, any underwriting agreements, securities sales agreements or other similar agreements and any other documents relating to the performance of and compliance with this Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating to the qualification of the Indenture under applicable securities laws, (vi) the fees and disbursements of the Trustee and its counsel, (vii) the fees and disbursements of counsel for the Company and the Guarantors and, in the case of a Shelf Registration Statement, the reasonable fees and disbursements of one counsel for the Holders (which counsel shall initially be Weil, Gotshal & Manges LLP, but may be any other counsel selected by the Majority Holders; provided that, such counsel shall be reasonably acceptable to the Company) and (viii) the fees and disbursements of the independent public accountants of the Company and the Guarantors, including the expenses of any special audits or "comfort" letters required by or incident to the performance of and compliance with this Agreement, but excluding fees and expenses of counsel to the Underwriters (other than fees and expenses set forth in clause (ii) above) or the Holders and underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder. "Registration Statement" shall mean any registration statement of the Company and the Guarantors that covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement and all amendments and supplements to any such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein. "Rules" shall have the meaning set forth in Section 4(r). "SEC" shall mean the Securities and Exchange Commission. 3 "Securities" shall have the meaning set forth in the preamble. "Securities Act" shall mean the Securities Act of 1933, as amended from time to time. "Shelf Effectiveness Period" shall have the meaning set forth in Section 3(a) hereof. "Shelf Registration" shall mean a registration effected pursuant to Section 3(a) hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company and the Guarantors that covers all or a portion of the Registrable Securities (but no other securities unless approved by the Holders whose Registrable Securities are to be covered by such Shelf Registration Statement) on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and any document incorporated by reference therein. "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as amended from time to time. "Trustee" shall mean Wells Fargo Bank, N.A., the trustee under the Indenture. "Underwriter" means the investment bank or investment bankers and manager or managers selected by the Majority Holders pursuant to Section 5. "Underwritten Offering" shall mean an offering in which Registrable Securities are sold to an Underwriter for reoffering to the public. 2. Registration Under the Securities Act. (a) To the extent not prohibited by any applicable law or applicable interpretations of the Staff of the SEC, the Company and the Guarantors shall, at their own cost, use commercially reasonable efforts to prepare and cause to be filed an Exchange Offer Registration Statement covering an offer to the Holders to exchange all the Registrable Securities for Exchange Securities. The Company and the Guarantors shall commence the Exchange Offer promptly after the Exchange Offer Registration Statement is declared effective by the SEC and use commercially reasonable efforts to complete the Exchange Offer not later than 60 days after such effective date. The Company and the Guarantors shall commence the Exchange Offer by mailing the related Prospectus, appropriate letters of transmittal and other accompanying documents to each Holder stating, in addition to such other disclosures as are required by applicable law: (i) that the Exchange Offer is being made pursuant to this Agreement and that all Registrable Securities validly tendered and not properly withdrawn will be accepted for exchange; (ii) the dates of acceptance for exchange (which shall be a period of at least 20 Business Days from the date such notice is mailed) (the "Exchange Dates"); (iii) that any Registrable Security not tendered will remain outstanding and continue to accrue interest but will not retain any rights under this Agreement; 4 (iv) that any Holder electing to have a Registrable Security exchanged pursuant to the Exchange Offer will be required to surrender such Registrable Security, together with the appropriate letters of transmittal, to the institution and at the address (located in the Borough of Manhattan, The City of New York) and in the manner specified in the notice, prior to the close of business on the last Exchange Date; and (v) that any Holder will be entitled to withdraw its election, not later than the close of business on the last Exchange Date, by sending to the institution and at the address (located in the Borough of Manhattan, The City of New York) specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange and a statement that such Holder is withdrawing its election to have such Registrable Securities exchanged. As a condition to participating in the Exchange Offer, a Holder will be required to represent to the Company and the Guarantors that (i) any Exchange Securities to be received by it will be acquired in the ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer it has no arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the provisions of the Securities Act, (iii) it is not an "affiliate" (within the meaning of Rule 405 under Securities Act) of the Company or any Guarantor and (iv) if such Holder is a broker-dealer that will receive Exchange Securities for its own account in exchange for Registrable Securities that were acquired as a result of market-making or other trading activities, then such Holder will deliver a Prospectus in connection with any resale of such Exchange Securities. As soon as practicable after the last Exchange Date, the Company and the Guarantors shall: (i) accept for exchange Registrable Securities or portions thereof validly tendered and not properly withdrawn pursuant to the Exchange Offer; and (ii) deliver, or cause to be delivered, to the Trustee for cancellation all Registrable Securities or portions thereof so accepted for exchange by the Company and issue, and cause the Trustee to promptly authenticate and deliver to each Holder, Exchange Securities equal in principal amount to the principal amount of the Registrable Securities surrendered by such Holder. The Company and the Guarantors shall use commercially reasonable efforts to complete the Exchange Offer as provided above and shall comply in all material respects with the applicable requirements of the Securities Act, the Exchange Act and other applicable laws and regulations in connection with the Exchange Offer. The Exchange Offer shall not be subject to any conditions, other than that the Exchange Offer does not violate any applicable law or applicable interpretations of the Staff or the SEC. 3. Shelf Registration. (a) In the event that (i) the Company and the Guarantors determine that the Exchange Offer Registration provided for in Section 2(a) above is not available or may not be completed as soon as practicable after the last Exchange Date because it would violate any applicable law or applicable interpretations of the Staff of the SEC, (ii) the Exchange Offer is not for any other reason completed by December 7, 2004 or (iii) upon 5 completion of the Exchange Offer any Investor shall so request in connection with any offering or sale of Registrable Securities that were ineligible to be exchanged in the Exchange Offer, the Company and the Guarantors shall, at their own cost, prepare and use commercially reasonable efforts to cause to be filed as soon as reasonably practicable after such determination, date or request, as the case may be, a Shelf Registration Statement providing for the sale of the Registrable Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 of the Securities Act (the "Shelf Registration") and to have such Shelf Registration Statement declared effective as soon as reasonably practicable by the SEC; provided that, the Company and the Guarantors shall not be required to file such Shelf Registration Statement or cause such Shelf Registration Statement to become and stay effective if and when, in the case of (i) or (ii), the Exchange Offer Registration is available. In the event that the Company and the Guarantors are required to file a Shelf Registration Statement pursuant to clause (iii) of the preceding sentence, the Company and the Guarantors shall use commercially reasonable efforts to file and have declared effective by the SEC both an Exchange Offer Registration Statement pursuant to Section 2(a) with respect to all Registrable Securities and a Shelf Registration Statement (which may be a combined Registration Statement with the Exchange Offer Registration Statement) with respect to offers and sales of Registrable Securities held by the Investors after completion of the Exchange Offer. The Company and the Guarantors agree to use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective until the expiration of the period referred to in Rule 144(k) under the Securities Act with respect to the Registrable Securities or such shorter period that will terminate when all the Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement (the "Shelf Effectiveness Period"). The Company and the Guarantors further agree to supplement or amend the Shelf Registration Statement and the related Prospectus if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder of Registrable Securities with respect to information relating to such Holder, and to use commercially reasonable efforts to cause any such amendment to become effective and such Shelf Registration Statement and Prospectus to become usable as soon as reasonably practicable thereafter. The Company and the Guarantors agree to furnish to the Holders of Registrable Securities named in the Shelf Registration Statement copies of any such supplement or amendment promptly after its being used or filed with the SEC. (b) The Company and the Guarantors shall pay all Registration Expenses in connection with the performance by the Company and the Guarantors of their obligations pursuant to this Agreement. Each Holder shall pay their own costs and expenses, including all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to the Shelf Registration Statement or the Exchange Offer Registration Statement. 6 (c) An Exchange Offer Registration Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement pursuant to Section 3(a) hereof will not be deemed to have become effective unless it has been declared effective by the SEC. (d) In the event that either the Exchange Offer is not completed or the Shelf Registration Statement, if required hereby, is not declared effective on or prior to December 7, 2004, the interest rate on the Registrable Securities will be increased by (x) 1.0% per annum for the first 90-day period immediately following December 7, 2004 and (y) an additional 0.25% per annum with respect to each such subsequent 90-day period, up to a maximum of 2.0% per annum, until the Exchange Offer is completed or the Shelf Registration Statement, if required hereby, is declared effective by the SEC; provided that if the interest rate borne by the Registrable Securities has been increased by 2.0% per annum due to a failure to timely complete the Exchange Offer or timely have the Shelf Registration Statement declared effective by the SEC, the interest rate borne by the Registrable Securities shall be permanently increased by 0.25% per annum upon the completion of the Exchange Offer or the effectiveness of the Shelf Registration Statement or the Securities becoming freely tradable under Rule 144 (or any other applicable rule other than Rule 144A) of the Securities Act. If the Shelf Registration Statement has been declared effective and thereafter either ceases to be effective or the Prospectus contained therein ceases to be usable at any time during the Shelf Effectiveness Period, and such failure to remain effective or usable exists for more than 45 days (whether or not consecutive) in any 12-month period, then the interest rate on the Registrable Securities will be increased by (x) 1.0% per annum for the first 90-day period immediately following such 45th day of ineffectiveness or lack of usability and (y) an additional 0.25% per annum with respect to each such subsequent 90-day period of ineffectiveness or lack of usability, up to a maximum of 2.0% per annum of additional interest, commencing on the 45th day in such 12-month period and ending on such date that the Shelf Registration Statement has again been declared effective by the SEC or the Prospectus again becomes usable. The events described in the preceding two paragraphs are collectively referred to as "Registration Defaults." The payments in the preceding two paragraphs are collectively referred to as "Liquidated Damages," and shall be payable semiannually in arrears on each Liquidated Damages Payment Date. Upon the cure of all Registration Defaults relating to any particular Registrable Security, the accrual of Liquidated Damages with respect to such Registrable Security will cease, subject to the proviso set forth in the first paragraph of this Section 3(d). In no event shall Liquidated Damages ever be greater than 2.00% per annum. (e) Without limiting the remedies available to the Investors and the Holders, the Company and the Guarantors acknowledge that any failure by the Company or the Guarantors to comply with their obligations under Section 2(a) and Section 3(a) hereof may result in material irreparable injury to the Investors or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Investors or any Holder may obtain such relief as may be required to specifically enforce the Company's and the Guarantors' obligations under Section 2(a) and Section 3(a) hereof; provided that, the Investors shall not be entitled to any monetary damages other than the Liquidated Damages provided for in this Agreement. 7 4. Registration Procedures. In connection with their obligations pursuant to Section 2(a) and Section 3(a) hereof, the Company and the Guarantors shall as expeditiously as possible: (a) prepare and file with the SEC a Registration Statement on the appropriate form under the Securities Act, which form (x) shall be selected by the Company and the Guarantors, (y) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof and (z) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith; and use commercially reasonable efforts to cause such Registration Statement to become effective and remain effective for the applicable period in accordance with Section 2 and Section 3 hereof, as applicable; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period in accordance with Section 2 and Section 3 hereof, as applicable, and cause each 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 keep each Prospectus current during the period described in Section 4(3) of and Rule 174 under the Securities Act that is applicable to transactions by brokers or dealers with respect to the Registrable Securities or Exchange Securities; (c) in the case of a Shelf Registration, or in the case of an Exchange Offer Registration Statement, with respect to Participating Broker-Dealers that hold Registrable Securities as a result of market-making or other trading activities, furnish to each Holder of Registrable Securities, to counsel for the Investors, to counsel for such Holders and to each Underwriter of an Underwritten Offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto, as reasonably requested, in order to facilitate the sale or other disposition of the Registrable Securities thereunder; and the Company and the Guarantors consent to the use of such Prospectus and any amendment or supplement thereto in accordance with applicable law by each of the selling Holders of Registrable Securities and any such Underwriters in connection with the offering and sale of the Registrable Securities covered by and in the manner described in such Prospectus or any amendment or supplement thereto in accordance with applicable law; (d) use commercially reasonable efforts to register or qualify the Registrable Securities under all applicable state securities or blue sky laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement shall reasonably request in writing by the time the applicable Registration Statement is declared effective by the SEC; provide all such information as may be requested by any Holder and required by the National Association of Securities Dealers, Inc. in connection with an offering under a Shelf Registration Statement of the Registrable Securities (including, without limitation, such as may be required by Rule 2710 or 2720 thereunder), and cooperate with the Holders in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; and do any and all other acts and things that may be reasonably necessary or advisable to enable each Holder to complete the disposition in each such jurisdiction of the Registrable Securities owned by such Holder; provided that neither the Company nor any Guarantor shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it 8 would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not so subject; (e) in the case of a Shelf Registration, notify each Holder of Registrable Securities included within the coverage of the Shelf Registration Statement, counsel for such Holders and counsel for the Investors promptly and, if requested by any such Holder or counsel, confirm such advice in writing (i) when a Registration Statement has become effective and when any post-effective amendment thereto has been filed and becomes effective, (ii) of any request by the SEC or any state securities authority for amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company or any Guarantor contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to an offering of such Registrable Securities cease to be true and correct in all material respects, (v) if the Company or any Guarantor receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (vi) of the happening of any event during the period a Registration Statement is effective that makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or that requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading, (vii) of the suspension by the Company, in the exercise of its reasonable judgment, of the use of the Registration Statement or Prospectus in order to avoid premature disclosure of material non-public information, the premature disclosure of which the Company determines, in its good faith judgment, would be harmful to the Company and (viii) of any determination by the Company or any Guarantor, after consultation with counsel, that a post-effective amendment to a Registration Statement is necessary; (f) use commercially reasonable efforts to obtain (i) the withdrawal of any order suspending the effectiveness of a Registration Statement and the use of any related Prospectus and (ii) the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for offer or sale in any jurisdiction in which they have been qualified for sale, in each case as soon as reasonably practicable, and shall provide notice to each Holder and the Investors of the withdrawal of any such orders or suspensions; (g) in the case of a Shelf Registration, furnish each Holder of Registrable Securities, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto (without any documents incorporated therein by reference or exhibits thereto, unless requested); (h) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and enable such Registrable Securities to be issued in such denominations and registered in such names 9 (consistent with the provisions of the Indenture) as the selling Holders may reasonably request at least five Business Day prior to the closing of any sale of Registrable Securities; (i) in the case of a Shelf Registration or an Exchange Offer Registration, upon the occurrence of any event contemplated by Section 4(e)(vi) hereof, use commercially reasonable efforts to prepare and file with the SEC a supplement or post-effective amendment to a Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities, such Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and the Company and the Guarantors shall notify the Holders of Registrable Securities included in the coverage of the Shelf Registration Statement or the Exchange Offer Registration Statement, as the case may be, to suspend use of the Prospectus as promptly as practicable after the occurrence of such an event, and such Holders hereby agree to suspend use of the Prospectus until the Company and the Guarantors have amended or supplemented the Prospectus to correct such misstatement or omission (provided that the provisions of this section shall not otherwise limit the obligation of the Company to pay additional interest pursuant to Section 3(d)); (j) within a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or of any document that is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Investors and their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable Securities included in the coverage of the Shelf Registration Statement and their counsel) and make such of the representatives of the Company and the Guarantors as shall be reasonably requested by the Investors or their counsel (and, in the case of a Shelf Registration Statement, to the Holders of Registrable Securities included in the coverage of the Shelf Registration Statement and their counsel) available for discussion of such document; and the Company and the Guarantors shall not file any Registration Statement, Prospectus, amendment of or supplement to a Registration Statement or a Prospectus, or any document that is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, of which the Investors and their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities included in the coverage of the Shelf Registration Statement and their counsel) shall not have previously been advised and furnished a copy pursuant to this paragraph or to which the Investors or their counsel (and, in the case of a Shelf Registration Statement, the Holders of Registrable Securities included in the coverage of the Shelf Registration Statement or their counsel) shall reasonably object within a reasonable period of time after receipt of such documents and in each case after having been afforded the opportunity to discuss such matters with the Company and the Guarantors; (k) obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement; (l) cause the Indenture to be qualified under the Trust Indenture Act in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be; cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be 10 required for the Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and execute, and use commercially reasonable efforts to cause the Trustee to execute, all documents as may be required to effect such changes and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; (m) in the case of a Shelf Registration, or in the case of an Exchange Offer Registration Statement, with respect to Participating Broker-Dealers that hold Registrable Securities as a result of market-making or other trading activities, make available for inspection by a representative of the Holders of the Registrable Securities included in the coverage of the Shelf Registration Statement (an "Inspector"), any Underwriter participating in any disposition pursuant to such Shelf Registration Statement, and attorneys and accountants (but in any event, only one law firm, which shall initially be Weil, Gotshal & Manges LLP, but may be another law firm, and one accounting firm to represent the Holders, in each case selected by the Majority Holders and reasonably acceptable to the Company) designated by the Holders, at reasonable times and in a reasonable manner, all pertinent financial and other records, documents and properties of the Company and the Guarantors, and use commercially reasonable efforts to cause the respective officers, directors and employees of the Company and the Guarantors to supply all information reasonably requested by any such Inspector, Underwriter, attorney or accountant in connection with a Shelf Registration Statement; provided that if any such information is identified by the Company or any Guarantor as being confidential or proprietary, each Person receiving such information shall agree in writing with the Company pursuant to a confidentiality agreement in customary form to keep such information confidential; (n) in the case of a Shelf Registration, use commercially reasonable efforts to cause all Registrable Securities to be reserved for listing on any securities exchange or any automated quotation system on which similar securities issued or guaranteed by the Company or any Guarantor are then listed no later than the date such Shelf Registration Statement is declared effective, and, cause all such Registrable Securities to be so listed, in all cases to the extent such Registrable Securities satisfy applicable listing requirements; (o) in the case of a Shelf Registration Statement, if reasonably requested by any Holder of Registrable Securities covered by a Registration Statement, promptly incorporate in a Prospectus supplement or post-effective amendment such information with respect to such Holder as such Holder reasonably requests to be included therein and promptly make all required filings of such Prospectus supplement or such post-effective amendment after the Company has received notification of the matters to be incorporated in such filing; provided that the Company shall not be obligated to file more than one post-effective amendment or supplement in any 30-day period as a result of any such requests; and (p) in the case of a Shelf Registration, enter into such customary agreements and take all such other actions reasonably requested by the Holders in connection therewith in order to expedite or facilitate the disposition of such Registrable Securities including, but not limited to, an Underwritten Offering (if requested by the Majority Holders) and in such connection, use commercially reasonable efforts to (i) to the extent possible, make such representations and warranties to the Holders and any Underwriters of such Registrable Securities with respect to the business of the Company and its subsidiaries, the Registration Statement, Prospectus and documents incorporated by reference or deemed incorporated by reference, if any, in each case, 11 in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested, (ii) obtain opinions of counsel to the Company and the Guarantors (which counsel and opinions, in form, scope and substance, shall be reasonably satisfactory to the Holders and such Underwriters and their respective counsel) addressed to each selling Holder and Underwriter of Registrable Securities, covering the matters customarily covered in opinions requested in underwritten offerings, (iii) obtain "comfort" letters from the independent certified public accountants of the Company and the Guarantors (and, if necessary, any other certified public accountant of any subsidiary of the Company or any Guarantor, or of any business acquired by the Company or any Guarantor for which financial statements and financial data are or are required to be included in the Registration Statement) addressed to each selling Holder and Underwriter of Registrable Securities, such letters to be in customary form and covering matters of the type customarily covered in "comfort" letters in connection with underwritten offerings and (iv) deliver such documents and certificates as may be reasonably requested by the Majority Holders of the Registrable Securities being sold or the Underwriters, and which are customarily delivered in underwritten offerings, to evidence the continued validity of the representations and warranties of the Company and the Guarantors made pursuant to clause (i) above and to evidence compliance with any customary conditions contained in an underwriting agreement. (q) In the case of a Shelf Registration Statement, the Company may require each Holder of Registrable Securities to furnish to the Company such information regarding such Holder and the proposed disposition by such Holder of such Registrable Securities as the Company and the Guarantors may from time to time reasonably request in writing. (r) In the case of a Shelf Registration Statement, in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc.) thereof, whether as a Holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will, to the extent requested by such broker-dealer, assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Shelf Registration Statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 7 hereof and (iii) providing such information to such broker-dealer as is reasonably requested and may be required in order for such broker-dealer to comply with the requirements of the Rules; provided that the Company shall not be responsible for the fees or expenses of any such qualified independent underwriter or any expenses incurred by any such broker-dealer in connection with its compliance with the Rules. (s) In the case of a Shelf Registration Statement, each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company and the Guarantors of the 12 happening of any event of the kind described in clauses (ii), (iii), (v), (vii) and (viii) of Section 4(e) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 4(i) hereof and, if so directed by the Company and the Guarantors, such Holder will deliver to the Company and the Guarantors all copies in its possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities that is current at the time of receipt of such notice. If the Company and the Guarantors shall give any such notice pursuant to this Section 4(s) or Section 4(i) hereof to suspend the disposition of Registrable Securities pursuant to a Registration Statement, the Company and the Guarantors shall extend the period during which the Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date when the Holders shall have received copies of the supplemented or amended Prospectus necessary to resume such dispositions. Any suspension shall be subject to the applicable increases in the interest rate borne by the Registrable Securities pursuant to Section 3(d) hereof. The Company and the Guarantors may not suspend the disposition of Registrable Securities for any of the reasons specified in Section 4(e)(vi) or (vii) for more than 100 days in any 365 day period. 5. Underwritten Offerings. If requested by the Holders of at least $50,000,000 of aggregate principal amount of the Registrable Securities, the Holders of Registrable Securities covered by a Shelf Registration Statement who desire to do so may sell such Registrable 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 will be selected by the Majority Holders of the Registrable Securities included in such offering, and must be acceptable to the Company. 6. Participation of Broker-Dealers in Exchange Offer. (a) If any broker-dealer that receives Exchange Securities for its own account in the Exchange Offer in exchange for Securities that were acquired by such broker-dealer as a result of market-making or other trading activities (a "Participating Broker-Dealer") may be deemed to be an "underwriter" within the meaning of the Securities Act and must deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Securities, the Company and the Guarantors agree to use commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend or supplement the Prospectus contained in the Exchange Offer Registration Statement, if requested by one or more Participating Broker-Dealers, in order to expedite or facilitate the disposition of any Exchange Securities by Participating Broker-Dealers consistent with the positions of the Staff recited in Section 6(a) above, for the period equal to the lesser of (i) 180 days after the last Exchange Date (as such period may be extended pursuant to the penultimate paragraph of Section 4 of this Agreement) and (ii) the date on which all such Participating Broker-Dealers have sold all such Exchange Securities held by them. Each such Participating Broker-Dealer agrees to promptly notify the Company when all such Exchange Securities have been sold by such Participating Broker-Dealer. The Company and the Guarantors further agree that Participating Broker-Dealers 13 shall be authorized to deliver such Prospectus during such period in connection with the resales contemplated by this Section 6. (b) The Participating Broker-Dealers shall be indemnified by the Company and the Guarantors with respect to any request that they may make pursuant to Section 6(a) in accordance with Section 7 hereof. 7. Indemnification and Contribution. (a) The Company and each Guarantor, jointly and severally, agree to indemnify and hold harmless each Investor and each Holder, their respective affiliates, directors and officers and each Person, if any, who controls any Investor or any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses reasonably incurred in connection with any suit, action, inquiry, proceeding, investigation, claim asserted or appeal taken from the foregoing, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any Prospectus or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except (i) insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Investor or any Holder furnished to the Company in writing by such Investor or such Holder expressly for use therein and (ii) with respect to any untrue statement in or omission from any preliminary prospectus relating to a Registration Statement, the indemnity agreement contained in this paragraph (a) shall not inure to the benefit of any Holder to the extent that the sale to the person asserting any such loss, claim, damage or liability results from the fact that (i) a copy of the Prospectus was not sent or given to such person at or prior to the written confirmation of the sale of such Securities to such Person and (ii) the untrue statement in or omission from such preliminary prospectus was corrected in the final Prospectus unless, in either case, such failure to deliver the Prospectus was a result of non-compliance by the Company with the provisions of this Agreement. In connection with any Underwritten Offering permitted by Section 5, the Company and the Guarantors, jointly and severally, will also indemnify the Underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their respective affiliates and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement. (b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Company, the Guarantors, the Investors and the other selling Holders, their respective affiliates, the directors of the Company and the Guarantors, each officer of the Company and the Guarantors who signed the Registration Statement and each Person, if any, who controls the Company, the Guarantors, any Investor and any other selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information 14 relating to such Holder furnished to the Company in writing by such Holder expressly for use in any Registration Statement, any Prospectus. (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such Person (the "Indemnified Person") shall promptly notify the Person against whom such indemnification may be sought (the "Indemnifying Person") in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 7 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 7. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 7 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded (based on advice of counsel) that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person and such counsel is reasonably acceptable to the Company; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, and such counsel is reasonably acceptable to the Company. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm (x) for any Holder, its affiliates, directors and officers and any control Persons of such Holder shall be designated in writing by the Majority Holders and be reasonably acceptable to the Company and (y) in all other cases shall be designated in writing by the Company. The Indemnifying Person 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 Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel reasonably incurred as contemplated by this paragraph (and shall be entitled to such reimbursement pursuant to the provisions hereof), the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 60 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person 15 shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person. (d) If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors from the offering of the Securities and the Exchange Securities, on the one hand, and by the Holders from receiving Securities or Exchange Securities registered under the Securities Act, on the other hand, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company and the Guarantors on the one hand and the Holders on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors on the one hand and the Holders on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company and the Guarantors or by the Holders and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Company, the Guarantors and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 7 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 that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Holder be required to contribute any amount in excess of the amount by which the total price at which the Securities or Exchange Securities sold by such Holder exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (f) The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity. 16 (g) The indemnity and contribution provisions contained in this Section 7 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of the Investors or any Holder, their respective affiliates or any Person controlling any Investor or any Holder, or by or on behalf of the Company or the Guarantors, their respective affiliates or the officers or directors of or any Person controlling the Company or the Guarantors, (iii) acceptance of any of the Exchange Securities and (iv) any sale of Registrable Securities pursuant to a Shelf Registration Statement. 8. General. (a) No Inconsistent Agreements. The Company and the Guarantors represent, warrant and agree that (i) 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 any other outstanding securities issued or guaranteed by the Company or any Guarantor under any other agreement and (ii) neither the Company nor any Guarantor has entered into, or on or after the date of this Agreement will enter into, any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. (b) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company and the Guarantors have obtained the written consent of the Majority Holders affected by such amendment, modification, supplement, waiver or consent; provided that no amendment, modification, supplement, waiver or consent to any departure from the provisions of Section 7 hereof shall be effective as against any Holder of Registrable Securities unless consented to in writing by such Holder, except for any such amendments, modifications, supplements or waivers that would not adversely effect such Holder in any respect. Any amendments, modifications, supplements, waivers or consents pursuant to this Section 8(b) shall be by a writing executed by each of the parties hereto. (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if to any Holder, at the most current address of such Holder maintained by the Trustee under the Indenture (provided that while the Securities are in book-entry form, notice to the Trustee shall serve as notice to the Holders); (ii) if to the Company and the Guarantors, initially at the Company's address set forth in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 8(c); and (iii) to such other persons at their respective addresses as provided in the Purchase Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 8(c). 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 is 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. 17 (d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement and such Person shall be entitled to receive the benefits hereof. The Investors (in their capacity as Investors) shall have no liability or obligation to the Company or the Guarantors with respect to any failure by a Holder to comply with, or any breach by any Holder of, any of the obligations of such Holder under this Agreement. (e) Purchases and Sales of Securities. The Company and the Guarantors shall not, and shall use commercially reasonable efforts to cause their affiliates (as defined in Rule 405 under the Securities Act) not to, purchase and then resell or otherwise transfer any Registrable Securities. (f) Third Party Beneficiaries. Each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Investors, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder. (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, are not a part of this Agreement and shall not limit or otherwise affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. (j) Miscellaneous. This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto. If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable or against public policy, the remainder of the terms, provisions, covenants and restrictions contained herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated. The Company, the Guarantors and the Investors shall endeavor in good faith negotiations to replace the invalid, void or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, void or unenforceable provisions. 18 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. THE GOODYEAR TIRE & RUBBER COMPANY By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President and Treasurer ALLIED TIRE SALES, INC. By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President BELT CONCEPTS OF AMERICA, INC. By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President CELERON CORPORATION By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President COSMOFLEX, INC. By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President 19 DAPPER TIRE CO., INC. By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President DIVESTED COMPANIES HOLDING COMPANY By /s/ Randall M. Loyd ------------------------------------- Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------------- Name: Ronald J. Carr Title: Vice President DIVESTED LITCHFIELD PARK PROPERTIES, INC. By /s/ Randall M. Loyd ------------------------------------- Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------------- Name: Ronald J. Carr Title: Vice President GOODYEAR FARMS, INC. By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President 20 GOODYEAR INTERNATIONAL CORPORATION By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President GOODYEAR WESTERN HEMISPHERE CORPORATION By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President THE KELLY-SPRINGFIELD TIRE CORPORATION By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President WHEEL ASSEMBLIES INC. By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC By /s/ D. R. Wells ------------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT VENTURES EIGHT, INC. By /s/ Ronald J. Carr ------------------------------------- Name: Ronald J. Carr Title: Vice President 21 GOODYEAR CANADA INC. By /s/ Linda Alexander ------------------------------------- Name: Linda Alexander Title: Vice President By /s/ D. S. Hamilton ------------------------------------- Name: D. S. Hamilton Title: Secretary 22 [Remaining Signature Pages Intentionally Omitted] 23 EX-4.14 15 l07358aexv4w14.txt EX-4.14 COLLATERAL AGREEMENT - MARCH 12, 2004 EXHIBIT 4.14 =============================================================================== COLLATERAL AGREEMENT dated as of March 12, 2004, among THE GOODYEAR TIRE & RUBBER COMPANY, THE SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY identified as Grantors herein and Wilmington Trust Company, as Collateral Agent =============================================================================== TABLE OF CONTENTS ARTICLE I Definitions 1 SECTION 1.01. Certain Defined Terms............................................................. 1 ARTICLE II Intercreditor Agreement 11 SECTION 2.01. Intercreditor Agreement........................................................... 11 ARTICLE III Pledge of Securities 11 SECTION 3.01. Pledge............................................................................ 11 SECTION 3.02. Voting Rights; Dividends and Interest............................................. 11 ARTICLE IV Security Interests in Personal Property 13 SECTION 4.01. Creation of Security Interests.................................................... 13 SECTION 4.02. Certain Filings................................................................... 13 SECTION 4.03. Representations and Warranties.................................................... 13 SECTION 4.04. Covenants......................................................................... 14 SECTION 4.05. Other Actions..................................................................... 16 SECTION 4.06. Covenants Regarding Patent, Trademark and Copyright Collateral.................... 17 SECTION 4.07. Lockbox System.................................................................... 19 SECTION 4.08. Insurance......................................................................... 20 SECTION 4.09. Liens............................................................................. 20 ARTICLE V Other Pledges, Mortgage and Other Security Interests 20 SECTION 5.01. Summary of Certain Other Security Documents....................................... 20 SECTION 5.02. Other Security Documents Subject to this Agreement................................ 20 ARTICLE VI Remedies 21 SECTION 6.01. Remedies Upon Default............................................................. 21 SECTION 6.02. Exercise of Remedies under Other Security Documents............................... 22

i SECTION 6.03. Application of Proceeds........................................................... 23 SECTION 6.04. Grant of License to Use Intellectual Property..................................... 23 SECTION 6.05. Securities Act.................................................................... 24 SECTION 6.06. Registration...................................................................... 24 ARTICLE VII Indemnity, Subrogation and Subordination 25 SECTION 7.01. Indemnity and Subrogation......................................................... 25 SECTION 7.02. Contribution and Subrogation...................................................... 25 SECTION 7.03. Subordination..................................................................... 25 ARTICLE VIII Acts of Secured Parties; Amounts of Obligations 26 SECTION 8.01. Acts of Secured Parties........................................................... 26 SECTION 8.02. Determination of Amounts of Obligations and Existence of Events of Default; Acceleration............................................................. 26 ARTICLE IX Duties of Collateral Agent 27 SECTION 9.01. Notices to Trustee and Representatives............................................ 27 SECTION 9.02. Actions Under this Agreement...................................................... 27 ARTICLE X Concerning the Collateral Agent 27 SECTION 10.01. Limitations on Responsibility of Collateral Agent................................. 27 SECTION 10.02. Reliance by Collateral Agent; Indemnity Against Liabilities, etc.................. 28 SECTION 10.03. Appointment, Resignation and Removal of the Collateral Agent...................... 30 SECTION 10.04. Expenses and Indemnification...................................................... 30 ARTICLE XI Designated Pari Passu Obligations 31 SECTION 11.01. Designation....................................................................... 31 ARTICLE XII Subordination of Intercompany Indebtedness 32 SECTION 12.01. Subordination..................................................................... 32 SECTION 12.02. Dissolution or Insolvency......................................................... 32

ii SECTION 12.03. Subrogation....................................................................... 32 SECTION 12.04. Other Creditors................................................................... 32 SECTION 12.05. No Waiver......................................................................... 33 SECTION 12.06. Obligations Hereunder Not Affected................................................ 33 ARTICLE XIII Miscellaneous 34 SECTION 13.01. Notices........................................................................... 34 SECTION 13.02. Waivers; Amendment................................................................ 34 SECTION 13.03. Collateral Agent's Fees and Expenses; Indemnification............................. 34 SECTION 13.04. Successors and Assigns............................................................ 35 SECTION 13.05. Survival of Agreement............................................................. 35 SECTION 13.06. Counterparts; Effectiveness; Several Agreement.................................... 35 SECTION 13.07. Severability...................................................................... 36 SECTION 13.08. Governing Law; Jurisdiction; Consent to Service of Process........................ 36 SECTION 13.09. WAIVER OF JURY TRIAL.............................................................. 36 SECTION 13.10. Headings.......................................................................... 37 SECTION 13.11. Security Interest Absolute........................................................ 37 SECTION 13.12. Termination or Release............................................................ 37 SECTION 13.13. Additional Grantors............................................................... 37 SECTION 13.14. Collateral Agent Appointed Attorney-in-Fact....................................... 37 SECTION 13.15. Secured Party Obligations......................................................... 38

iii Schedules Schedule I Aircraft Schedule II Control Agreements Schedule III Foreign Pledge Agreements Schedule IV Material Intellectual Property Schedule V County Lien Searches Exhibits Exhibit I Form of Accession Agreement Exhibit II Form of Perfection Certificate iv COLLATERAL AGREEMENT dated as of March 12, 2004, among THE GOODYEAR TIRE & RUBBER COMPANY (the "Company"), the Subsidiaries of the Company identified herein and WILMINGTON TRUST COMPANY, as Collateral Agent. Reference is made to the Indenture and the Intercreditor Agreement (such terms, and each other capitalized term used and not otherwise defined herein, having the meaning assigned to it in Article I). Wells Fargo Bank, N.A., as trustee (the "Trustee") has agreed to enter into the Indenture and the Investors and Noteholders have agreed to purchase the Notes on the terms and subject to the conditions set forth in the Indenture. The obligations of the Investors to purchase the Notes are conditioned upon, among other things, the execution and delivery of this Agreement by the Company and the other Grantors. The Grantors, other than the Company, are subsidiaries of the Company, will derive substantial benefits from the extension of credit to the Company pursuant to the Indenture and are willing to execute and deliver this Agreement in order to induce the Investors and the Noteholders to purchase the Notes issued under the Indenture. Accordingly, the parties hereto agree as follows: ARTICLE I Definitions SECTION 1.01. Certain Defined Terms. (a) All terms defined in the New York UCC (as defined herein) and not defined in this Agreement have the meanings specified therein; the term "instrument" shall have the meaning specified in Article 9 of the New York UCC. (b) All terms defined in the Indenture and not defined in this Agreement have the meanings specified therein. All terms defined in the Intercreditor Agreement not defined in this Agreement or the Indenture have the meanings specified therein. The rules of construction specified in Section 1.04 of the Indenture shall also apply to this Agreement. (c) As used in this Agreement, the following terms have the meanings specified below: "ABL Facilities Agreement" means the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, as amended on February 19, 2004, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as documentation agents. "Accession Agreement" means an accession agreement substantially in the form of Exhibit I under which a Representative of the holders of Designated Pari Passu Obligations shall become a party hereto and appoint the Collateral Agent as collateral agent for such Representative on behalf of the holders of such Designated Pari Passu Obligations. "Account Debtor" means any Person who is or who may become obligated to any Current Assets Grantor under, with respect to or on account of an Account. "Act" has the meaning assigned to such term in Section 8.01. "Additional Subsidiary Agreement" has the meaning assigned to such term in Section 13.14. "Aircraft" means all airships, airplanes, helicopters and other aircraft owned on the date hereof or hereafter acquired by any Other Collateral Grantor, including those listed on Schedule I hereto, as updated from time to time pursuant to Section 4.04(c). "Aircraft Collateral" means the Aircraft, Aircraft Parts and Aircraft Log Books. "Aircraft Log Books" means any and all log books, maintenance records, airworthiness certificates, registration documents and other records and documents relating to the Aircraft or Aircraft Parts. "Aircraft Parts" means all engines and propellers (whether or not affixed to any Aircraft) owned by any Other Collateral Grantor and used or intended for use in connection with the Aircraft, and all avionics equipment, radio equipment, navigation equipment, radar equipment and other equipment, appliances, accessories and accessions used or intended for use in connection with the Aircraft. "Article 9 Collateral" means the Current Assets Collateral and the Other Collateral. "Bankruptcy Code" means Title 11 of the U.S. Code. "Canadian Intellectual Property Collateral" means all Intellectual Property in which security interests are created under the Canadian Security Agreements. "Canadian Security Agreements" means the Canadian Collateral Agreement dated as of March 12, 2004 between Goodyear Canada Inc. and the Collateral Agent, the Quebec Hypothec and the other Canadian Security Documents (as such terms are defined in the Canadian Collateral Agreement). "Claiming Party" has the meaning assigned to such term in Section 7.02. "Collateral" means the Pledged Collateral, the Current Assets Collateral and the Other Collateral. "Collateral Agent" means Wilmington Trust Company and any successors thereof appointed in accordance with the terms of this Agreement and, as applicable, the Indenture and any Designated Pari Passu Obligations Governing Document, in each case as collateral agent for the holders of the Note Obligations and the Designated Pari Passu Obligations. "Collateral Agent Obligations" means all obligations, monetary and otherwise, of any Indenture Party to the Collateral Agent, or to its Related Parties, in connection with acts or omissions related to its role as Collateral Agent under the Noteholder Documents, the Intercreditor Agreement or any Designated Pari Passu Obligations Governing Document, including, without limitation, fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including attorneys' and other agents' fees, costs and expenses and monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding). "Consent Asset" means any asset or right of a Grantor the creation of a security interest in which would be prohibited by or not be effective under applicable law or would violate or result in a default under any agreement or instrument in effect on the date hereof (or in the case of any future grantor on the date it becomes a Grantor) between such Grantor and any Person other than (a) the Company, (b) any Wholly Owned Subsidiary (as defined in the Indenture) or (c) any Subsidiary that is not a Wholly 2 Owned Subsidiary unless the waiver of such default or violation would require the consent of any Person other than the Company or another Subsidiary; provided, however, that no asset or right shall be a Consent Asset to the extent that Section 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code as in effect in the applicable jurisdiction, or any other law of the applicable jurisdiction, shall permit (and excuse any default or violation resulting from) the creation of a security interest in such asset or right notwithstanding the provision of such agreement or instrument prohibiting the creation of a security interest therein or shall render such provision unenforceable. "Consent Subsidiary" has the meaning assigned to such term in the Indenture. "Contributing Party" has the meaning assigned to such term in Section 7.02. "Control Agreements" means the agreements listed on Schedule II. "Control Notice" has the meaning assigned to such term in each Lockbox Agreement. "Copyright License" means any written agreement, now or hereafter in effect, granting any right to any third party under any copyright now or hereafter owned by any Other Collateral Grantor or that such Other Collateral Grantor otherwise has the right to license, or granting any right to any Other Collateral Grantor under any copyright now or hereafter owned by any third party, and all rights of such Other Collateral Grantor under any such agreement. "Copyrights" means all of the following now owned or hereafter acquired by any Other Collateral Grantor: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office. "Current Assets Collateral" means any and all of the following assets and properties now owned or at any time hereafter acquired by any Current Assets Grantor or in which such Current Assets Grantor now has or at any time in the future may acquire any right, title or interest: (a) all Accounts; (b) all Chattel Paper; (c) all Deposit Accounts (and all cash, checks and other negotiable instruments, funds and other evidences of payment held therein); (d) all Inventory; (e) to the extent evidencing, governing, securing or otherwise related to the items referred to in the preceding clauses (a), (b), (c) and (d), all Documents, General Intangibles (other than Intellectual Property and, in the case of any Current Assets Grantor that is organized under the laws of Canada or one or more provinces thereof, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), goodwill, registrations and franchises), Instruments, Investment Property (other than (i) Pledged Equity Interests, (ii) the Equity Interests described in clauses (b), (c), (d) and (e) of the definition of Excluded Security Interests and (iii) Proceeds in respect of Equity Interests described in clauses (i), (ii) and (iii)) and Letter of Credit Rights; (f) all books and records related to the foregoing; and (g) all Proceeds of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing. "Current Assets Grantors" means the Company, each Subsidiary that is listed as a Current Assets Grantor on the signature pages hereto or that becomes a Current Assets Grantor pursuant to Section 13.14. "Deposit Account Institution" means each financial institution at which a Deposit Account in the Lockbox System is maintained. 3 "Designated Pari Passu Obligations" has the meaning assigned to such term in Section 11.01. "Designated Pari Passu Obligations Governing Documents" means, as to any Designated Pari Passu Obligations, the credit agreement, note agreement, indenture or other instrument or document under which such Designated Pari Passu Obligations shall have been issued or incurred. "Designated Pari Passu Obligations Secured Parties" means, at any time, each holder of, or obligee in respect of, any Designated Pari Passu Obligations outstanding at such time. "Effective Date" means the date of this Agreement. "Equity Interests" means shares of capital stock, partnership interests, membership interests in limited liability companies, beneficial interests in trusts or other equity ownership interests in any Persons, and any warrants, options or other rights entitling the holders thereof to purchase or acquire any such equity interests. "European Facilities Agreement" means the $650,000,000 Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among Goodyear Dunlop Tires Europe B.V., the other borrowers thereunder, certain lenders, JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as syndication agent. "Event of Default" means an Event of Default under and as defined in the Indenture or any Designated Pari Passu Obligations Governing Document. "Excluded Operating Account" means payroll and other operating accounts of the Company or any other Current Assets Grantor that are not used to receive (a) payments from any Account Debtor in respect of Accounts or (b) payments in respect of Inventory, and that contain only such amounts as are required in the Company's or such other Current Assets Grantor's good faith judgment for near-term operational purposes. "Excluded Security Interests" means (a) Equity Interests in any Subsidiary with consolidated assets not greater than $10,000,000 as of September 30, 2003, or if such Equity Interests are acquired by the Company or a Subsidiary after the date hereof, as of the end of the most recent fiscal quarter for which financial statements have been filed with the SEC, (b) Equity Interests in any Consent Subsidiary, (c) Equity Interests in Goodyear Canada Inc. and Goodyear S.A., (d) Equity Interests in any Foreign Subsidiary with respect to which a Financial Officer has delivered an Officer's Certificate Certificate certifying that the Company has determined, on the basis of reasonably inquiries in the jurisdiction of such Foreign Subsidiary, that such pledge would affect materially and adversely the ability of such Foreign Subsidiary to conduct its business in such jurisdiction and (e) that portion of capital stock or other securities of any Subsidiary having a value (defined as the principal amount, par value, book value as carried by the Company or market value, whichever is greatest) that, when considered in the aggregate with all other capital stock or other securities of such Subsidiary subject to a security interest securing the Note Obligations, exceeds 19.99% of the principal amount of the then outstanding Notes (such portion, the "Excluded Securities"); provided, however, that in the event that Rule 3-16 of Regulation S-X under the Securities Act of 1933, as now or hereafter in effect, is amended, modified or interpreted by the Securities and Exchange Commission to require (or is replaced with another rule or regulation or any other law, rule or regulation is adopted, which would require) the filing with the Securities and Exchange Commission (or any other governmental agency) of separate financial statements of any Subsidiary due to the fact that such Subsidiary's capital stock or other securities secure the Note Obligations, then the Excluded Securities of such Subsidiary shall automatically be deemed to include 4 that part of the capital stock and other securities of such Subsidiary such that such Subsidiary remains exempt from such requirement, and in such event, this Agreement may be amended or modified, without the consent of any Noteholder or other Secured Party, for so long as and to the extent necessary to release the security interests in the Excluded Securities securing the Note Obligations; provided further, however, that the holders of Designated Pari Passu Obligations will continue to be secured by a security interest in any Excluded Securities unless specified to the contrary in the applicable Accession Agreement. Notwithstanding the foregoing, if any Priority Lien Obligation (as defined in the Indenture) or Designated Pari Passu Lien Obligation is secured by a security interest in any securities that are Excluded Securities, such obligation is registered under the Securities Act of 1933, as now or hereafter in effect, and in connection with such registration, the Company is required to file with the Securities and Exchange Commission (or any other governmental agency) separate financial statements of the Subsidiary of the Company that is the issuer of such securities, then such securities will not be considered Excluded Securities and will be deemed part of Pledged Collateral to secure Note Obligations. "FAA" means the Federal Aviation Administration or the United States Department of Transportation or both, as the context may require, or any successors thereto. "Federal Securities Laws" has the meaning assigned to such term in Section 6.05. "Financial Officer" means the chief financial officer, principal accounting officer, treasurer or any assistant treasurer of the Company. "Foreign Pledge Agreement" means a pledge agreement securing the Obligations or any of them that is governed by the law of a jurisdiction other than the United States of America and reasonably satisfactory in form and substance to the Collateral Agent. "Foreign Subsidiary" means any Subsidiary organized under the laws of a jurisdiction other than the United States of America or any of its territories or possessions or any political subdivision thereof. "General Intangibles" means, as to any Grantor, all choses in action and causes of action and all other intangible personal property of every kind and nature (other than Accounts) now owned or hereafter acquired by such Grantor, including to the extent relevant corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Swap Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and, in the case of any Current Assets Grantor only, any letter of credit, guarantee, claim, security interest or other security held by or granted to such Grantor to secure payment by an Account Debtor of any Accounts. "Grantor" means each of the Current Assets Grantors and the Other Collateral Grantors. "Guarantor" means any Subsidiary that has issued a Subsidiary Guarantee (as defined in the Indenture). "Indemnified Party" has the meaning assigned to such term in Section 10.04. "Indenture" means the Indenture dated as of March 12, 2004, among the Company, as Issuer, the Guarantors and Wells Fargo Bank, N.A., as Trustee, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. "Indenture Parties" means the Company and each Guarantor. 5 "Intellectual Property" means, as to any Grantor, all intellectual and similar property of every kind and nature now owned or hereafter acquired by such Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing. "Intercompany Indebtedness" means any Indebtedness (as defined in the Indenture) of the Company or any Subsidiary to the Company or any other Subsidiary. "Intercompany Obligor" means, with respect to any Intercompany Indebtedness, the obligor in respect of such Intercompany Indebtedness. "Intercreditor Agreement" means the Lien Subordination and Intercreditor Agreement dated as of March 12, 2004, among JPMorgan Chase Bank, as Credit Facilities Collateral Agent, Wilmington Trust Company, as Note Collateral Agent, the Company, the Subsidiaries named therein and any other persons becoming parties thereto in accordance with the provisions thereof. "License" means any Patent License, Trademark License, Copyright License or other license or sublicense agreement to which any Other Collateral Grantor is a party. "Local Collection Account" means a deposit account of a Grantor not subject to the control of the Collateral Agent pursuant to the Lockbox System; provided that (a) such account shall not receive any payments in respect of Accounts or Inventory other than that generated or sold by the Company's retail or Wingfoot divisions and (b) the applicable Grantor shall irrevocably instruct the Deposit Account Institution at which such deposit account is maintained to remit all funds on deposit in such deposit account to a Deposit Account in the Lockbox System periodically, and in no event less frequently than weekly, such instructions to be given, in the case of a Local Collection Account opened after the Effective Date, as promptly as practicable (and in no event later than 10 Business Days (as defined in the Indenture)) after the opening of such Local Collection Account. "Lockbox System" has the meaning assigned to such term in Section 4.07. "Master Guarantee and Collateral Agreement" has the meaning assigned to such term in the Intercreditor Agreement. "Material Adverse Change" means a material adverse change in or effect on (a) the business, operations, properties, assets or financial condition (including as a result of the effects of any contingent liabilities thereon) of the Company and its Subsidiaries, taken as a whole, (b) the ability of the Company and the Guarantors, taken as a whole, to perform obligations under the Noteholders Documents that are material to the rights or interests of the Noteholders or (c) the rights of or benefits available to the Noteholders under the Noteholder Documents that are material to the interests of the Noteholders. "Material Intellectual Property" means all Intellectual Property of the Other Collateral Grantors, other than Intellectual Property that in the aggregate is not material to the business of the Company and the Subsidiaries, taken as a whole. "Mortgage" means the Fourth Priority Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement From the Company to the Collateral Agent, dated as of March 12, 2004, with respect to the Company's corporate headquarters in Akron, Ohio. 6 "Mortgaged Property" means the property subject to the Mortgage to the extent that such property does not constitute a Senior Unsecured Indenture Property or a "manufacturing facility" as defined in the Swiss Franc Bond Agreement. "New Control Agreement" means, with respect to each Control Agreement, such Control Agreement as amended, supplemented or otherwise modified in form and substance reasonably satisfactory to the Collateral Agent (which their execution thereof shall evidence); provided that any amendment, supplement or modification to any Control Agreement substantially similar to the amendments made to the Blocked Account Control Agreement, dated as of May 15, 2003, by and among the Company, the Credit Agent and JPMorgan Chase Bank, in its capacity as depository bank, shall be deemed to be reasonably satisfactory to the Collateral Agent. "New York UCC" means the Uniform Commercial Code as from time to time in effect in the State of New York. "Note Obligations" means (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) all other monetary obligations of the Company or any of its Subsidiaries to any of the Note Secured Parties under any Noteholder Document or the Intercreditor Agreement, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and (iv) all amounts due under any guarantee of any of the foregoing, including any guarantee contained in the Indenture, and (b) the due and punctual performance of all other obligations of the Company or any of its Subsidiaries to any of the Note Secured Parties under any Noteholder Document. "Note Secured Parties" means, at any time, the Trustee, the Collateral Agent and each other holder of, or obligee in respect of, any Note Obligations outstanding at such time. "Noteholder Documents" means the Indenture, the Notes, this Agreement, the Other Security Documents, and such other agreements, instruments and certificates executed and delivered pursuant to any Noteholder Document at any time or otherwise evidencing or securing any Note Obligations. "Noteholders" means the holders of the Notes. "Notes" or "Senior Secured Notes" means the 11% Senior Secured Notes due 2011 and the Senior Secured Floating Rate Notes due 2011 issued on the Effective Date and any Additional Securities. "Obligations" means the Note Obligations, the Designated Pari Passu Obligations and the Collateral Agent Obligations. "Other Collateral" means any and all of the following assets and properties (other than assets or properties constituting Senior Unsecured Indenture Properties or "manufacturing facilities" under and as defined in the Swiss Franc Bond Agreement) now owned or at any time hereafter acquired by any Other Collateral Grantor or in which such Other Collateral Grantor now has or at any time in the future may acquire any right, title or interest: (a) all Documents; (b) all Equipment (other than fixtures to real property not constituting the Mortgaged Property); (c) all General Intangibles (including Intellectual 7 Property); (d) all Instruments; (e) all Investment Property (other than (i) Pledged Equity Interests, (ii) the Equity Interests described in clauses (b), (c), (d) and (e) of the definition of Excluded Equity Interests and (iii) Proceeds in respect of Equity Interests described in clauses (i), (ii) and (iii)); (f) all Letter-of-Credit rights; (g) all books and records pertaining to any of the foregoing; (h) all Aircraft Collateral; and (i) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing; provided, however, that, notwithstanding any of the foregoing provisions of this definition, the Other Collateral shall not include any (i) Current Assets Collateral or (ii) Consent Assets. "Other Collateral Grantors" means the Company and each Subsidiary that is listed as an Other Collateral Grantor on the signature pages hereto or that becomes an Other Collateral Grantor pursuant to Section 13.14. "Other Security Documents" means the Mortgage, the Canadian Security Agreements, the Foreign Pledge Agreements and the New Control Agreements. "Patent License" means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a patent, now or hereafter owned by Other Collateral Grantor or that any Other Collateral Grantor otherwise has the right to license, is in existence, or granting to any Other Collateral Grantor any right to make, use or sell any invention on which a patent, now or hereafter owned by any third party, is in existence, and all rights of any such Grantor under any such agreement. "Patents" means all of the following now owned or hereafter acquired by any Other Collateral Grantor: (a) all letters patent of the United States or the equivalent thereof in any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or the equivalent thereof in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule II to the Perfection Certificate, as updated from time to time pursuant to Section 4.04(c), and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein. "Perfection Certificate" means a certificate substantially in the form of Exhibit II. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Pledged Collateral" means (a) the Pledged Equity Interests; (b) the Pledged Debt Securities; (c) subject to Section 3.02, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds received in respect of, the securities referred to in the preceding clauses (a) and (b); (d) subject to Section 3.02, all rights and privileges of the Collateral Grantors with respect to the securities and other property referred to in clauses (a), (b) and (c) above; and (e) all Proceeds of any of the foregoing. "Pledged Debt Securities" means all debt securities (as defined in Article 8 of the New York UCC) owned by any Other Collateral Grantor (other than Excluded Security Interests) on the date hereof or obtained by it in the future, and any promissory notes or other instruments evidencing any such debt securities. 8 "Pledged Equity Interests" means all Equity Interests in Subsidiaries (other than Excluded Security Interests) owned by any Other Collateral Grantor on the date hereof or obtained or owned by it in the future, and the certificates representing all the foregoing Equity Interests, including the Equity Interests listed on Schedule 3A to the Perfection Certificate, as updated from time to time pursuant to Section 4.04(c); provided, that the Pledged Equity Interests shall not include more than 65% of the issued and outstanding Equity Interests of any Foreign Subsidiary. "RBC Deposit Account" means the Deposit Account maintained with The Royal Bank of Canada, with respect to which a Lockbox Agreement shall be executed by the applicable Current Assets Grantor and The Royal Bank of Canada. "Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents, counsel and other advisors of such Person and such Person's Affiliates. "Representative" means (a) in the case of the Note Obligations, the Trustee and (b) in the case of any Designated Pari Passu Obligations, any administrative agent, trustee or similar representative designated pursuant to Article IX. "Secured Parties" means, at any time, the Trustee, the Collateral Agent and each other holder of, or obligee in respect of, any Obligations outstanding at such time. "Security Documents" means this Agreement and the Other Security Documents. "Security Interest" means each security interest granted under Article IV. "Senior Obligations Security Documents" means the Senior Obligations Security Documents as defined in the Intercreditor Agreement. "Senior Payment in Full" means such time as all of the Senior Obligations (as defined in the Intercreditor Agreement) have been paid in full and any commitments to extend credit that would constitute Senior Obligations has been terminated. "Senior Unsecured Indenture Properties" means each "Restricted Property" (as defined in the Senior Unsecured Indentures) of the Company and each "Restricted Subsidiary" (as defined in the Senior Unsecured Indentures). "Senior Unsecured Indentures" means (a) the Indenture dated as of March 15, 1996, between the Company and Chemical Bank, as trustee, as supplemented on December 3, 1996, March 11, 1998, and March 17, 1998, (b) the Indenture dated as of March 1, 1999, between the Company and The Chase Manhattan Bank, as trustee, as supplemented on March 14, 2000, and August 15, 2001 and (c) the Fiscal Agency Agreement among the Company and Citibank N.A., London and Banque Internationale a Luxembourg S.A. "Subsidiary" means any corporation, limited liability company, partnership, association or other entity the accounts of which are consolidated with those of the Company in the Company's consolidated financial statements in accordance with GAAP (as defined in the Indenture) as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership 9 interests are, as of such date, owned, controlled or held by the Company or one or more subsidiaries of the Company or by the Company and one or more subsidiaries of the Company. "Swap Agreement" means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates or prices for one or more currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions. "Swiss Franc Bond Agreement" means the Bond Agreement dated as of March 17, 1986, between the Company and Union Bank of Switzerland, Credit Suisse, Morgan Stanley S.A. and Swiss Bank Corporation, as in effect on the date hereof. "Trademark License" means any written agreement, now or hereafter in effect, granting to any third party any right to use any trademark now or hereafter owned by any Other Collateral Grantor or that any such Grantor otherwise has the right to license, or granting to any Other Collateral Grantor any right to use any trademark now or hereafter owned by any third party, and all rights of any such Grantor under any such agreement. "Trademarks" means all of the following now owned or hereafter acquired by any Other Collateral Grantor: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule II to the Perfection Certificate, as updated from time to time pursuant to Section 4.04(c), (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill. "Trustee" means the trustee under the Indenture. "US Dollar Equivalent" means with respect to any monetary amount in a currency other than US dollars, at any time for determination thereof, the amount of US dollars obtained by converting such foreign currency involved in such computation into US dollars at the spot rate for the purchase of US dollars with the applicable foreign currency as published in The Wall Street Journal in the "Exchange Rates" column under the heading "Currency Trading" on the date two Business Days prior to such determination. "US Revolving Facility Agreement" means the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMorgan Chase Bank, as administrative agent. "US Term Facility Agreement" means the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, and BNP Paribas, as syndication agent. 10 ARTICLE II Intercreditor Agreement SECTION 2.01. Intercreditor Agreement. THIS AGREEMENT AND THE OTHER NOTEHOLDER DOCUMENTS, AND THE LIENS, RIGHTS, REMEDIES, DUTIES AND OBLIGATIONS PROVIDED FOR HEREIN AND THEREIN SHALL BE SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND, TO THE EXTENT PROVIDED THEREIN, THE SENIOR OBLIGATIONS SECURITY DOCUMENTS. IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THIS AGREEMENT OR ANY OTHER NOTEHOLDER DOCUMENT AND THE INTERCREDITOR AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL. ARTICLE III Pledge of Securities SECTION 3.01. Pledge. As security for the payment or performance, as the case may be, in full of the Note Obligations and the Designated Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent Obligations, each Other Collateral Grantor hereby pledges and grants to the Collateral Agent (and its agents or sub-agents, as the Collateral Agent may designate or appoint from time to time), and their successors and assigns a security interest in all such Other Collateral Grantor's right, title and interest in, to and under the Pledged Collateral, to have and to hold all such Pledged Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the benefit of the applicable Secured Parties; subject, however, to the terms, covenants and conditions hereinafter set forth. SECTION 3.02. Voting Rights; Dividends and Interest. (a) Unless and until an Event of Default shall have occurred and be continuing and the Collateral Agent shall have notified the Other Collateral Grantors that their rights under this Section 3.02 are being suspended: (i) Each Other Collateral Grantor shall be entitled to exercise any and all voting and/or other rights and powers inuring to an owner of the Pledged Collateral or any part thereof for any purpose consistent with the terms of this Agreement and the Indenture, including the right to sell or otherwise transfer such Pledged Collateral in accordance with the terms of the Indenture. (ii) The Collateral Agent shall execute and deliver to each Other Collateral Grantor, or cause to be executed and delivered to such Other Collateral Grantor, all such proxies, powers of attorney, certificates and other instruments as such Other Collateral Grantor may reasonably request in writing for the purpose of enabling such Other Collateral Grantor to exercise the voting and/or rights and powers it is entitled to exercise pursuant to subparagraph (i) above. (iii) Each Other Collateral Grantor shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect of the Pledged Collateral to the extent and only to the extent that such dividends, interest, principal and other distributions are permitted by, and otherwise paid or distributed in accordance with, the terms and conditions of the Indenture and applicable laws; provided that any noncash dividends, interest, principal or other distributions that would constitute Pledged Equity Interests or Pledged Debt Securities, whether resulting from a subdivision, combination or reclassification of the 11 outstanding Equity Interests of the issuer of any Pledged Collateral or received in exchange for Pledged Collateral or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Pledged Collateral. (b) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Other Collateral Grantors of the suspension of their rights under paragraph (a)(iii) of this Section, then all rights of any Other Collateral Grantor to dividends, interest, principal or other distributions that such Other Collateral Grantor is authorized to receive pursuant to paragraph (a)(iii) of this Section shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to receive and retain such dividends, interest, principal or other distributions. All dividends, interest, principal or other distributions received by any Other Collateral Grantor contrary to the provisions of this Section shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Other Collateral Grantor and shall be forthwith delivered to the Collateral Agent upon demand in the form in which so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 6.03; provided that in no event shall the Collateral Agent be obligated to invest and/or pay interest on any such money or other property. After all Events of Default have been cured or waived and the Company has delivered to the Collateral Agent a certificate to that effect, the Collateral Agent shall promptly repay to each Other Collateral Grantor (without interest) all dividends, interest, principal or other distributions that such Other Collateral Grantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of this Section and that remain in such account. (c) Upon the occurrence and during the continuance of an Event of Default, after the Collateral Agent shall have notified the Other Collateral Grantors of the suspension of their rights under paragraph (a)(i) of this Section, then all rights of any Other Collateral Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers; provided that, unless otherwise directed by (A) each of (x) the Trustee (if there is an Event of Default under the Indenture) and (y) each Representative (if there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document) or (B) holders of at least 25% in aggregate principal amount of the outstanding (x) Notes (if there is an Event of Default under the Indenture) and (y) Designated Pari Passu Obligations (to the extent that there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document), the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Other Collateral Grantors to exercise such rights. (d) Any notice given by the Collateral Agent to the Other Collateral Grantors suspending their rights under paragraph (a) of this Section (i) may be given by telephone if promptly confirmed in writing, (ii) may be given to one or more of the Other Collateral Grantors at the same or different times and (iii) may suspend the rights of the Other Collateral Grantors under paragraph (a)(i) or paragraph (a)(iii) in part without suspending all such rights (as specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent's rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing. 12 ARTICLE IV Security Interests in Personal Property SECTION 4.01. Creation of Security Interests. (a) As security for the payment or performance, as the case may be, in full of the Note Obligations and the Designated Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent Obligations, each Current Assets Grantor hereby grants to the Collateral Agent (and its agents or sub-agents, as the Collateral Agent may designate or appoint from time to time) and their successors and assigns, for the benefit of the Secured Parties, a security interest in all right, title or interest in or to any and all the Current Assets Collateral now owned or at any time hereafter acquired by such Current Assets Grantor or in which such Current Assets Grantor now has or at any time in the future may acquire any right, title or interest. (b) As security for the payment or performance, as the case may be, in full of the Note Obligations and the Designated Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent Obligations, each Other Collateral Grantor hereby grants to the Collateral Agent (and its agents or sub-agents, as the Collateral Agent may designate or appoint from time to time) and their successors and assigns, for the benefit of the Secured Parties, a security interest in all right, title or interest in or to any and all the Other Collateral now owned or at any time hereafter acquired by such Other Collateral Grantor or in which such Other Collateral Grantor now has or at any time in the future may acquire any right, title or interest. (c) The security interests granted under this Section are granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Article 9 Collateral. SECTION 4.02. Certain Filings. (a) Each Grantor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any initial financing statements (including fixture filings) with respect to the Article 9 Collateral of such Grantor or any part thereof and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment, including (i) whether such Grantor is an organization, the jurisdiction in which it is organized, the type of organization and any organizational identification number issued to such Grantor and (ii) in the case of a financing statement filed as a fixture filing, a sufficient description of the real property to which such Article 9 Collateral relates. Each Grantor agrees to provide such information to the Collateral Agent promptly upon request. Each Grantor also ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. (b) The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting any security interest granted by any Grantor in any Material Intellectual Property, without the signature of such Grantor, and naming such Grantor or Grantors as debtors and the Collateral Agent as secured party. SECTION 4.03. Representations and Warranties. The Grantors jointly and severally represent and warrant to the Secured Parties that: (a) Each Grantor has good and valid rights (including ownership rights) in the material Article 9 Collateral with respect to which it has purported to grant a Security Interest hereunder. 13 (b) When executed and delivered, this Agreement will be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a valid and enforceable security interest in the Collateral to the extent contemplated by this Agreement, and (i) when the Collateral constituting certificated securities (as defined in the Uniform Commercial Code) is delivered to the Credit Agent together with instruments of transfer duly endorsed in blank (or in the case of any such certificated securities which are then in the possession of the Credit Agent, upon execution and delivery of the Intercreditor Agreement), this Agreement will create, to the extent contemplated by this Agreement, a perfected security interest in all right, title and interest of the Grantors in such certificated securities to the extent perfection is governed by the Uniform Commercial Code as in effect in any applicable jurisdiction, subject to no other Lien other than Permitted Collateral Liens that take priority over security interests in certificated securities perfected by the possession of such securities under the Uniform Commercial Code as in effect in the applicable jurisdiction, and (ii) when financing statements in appropriate form are filed in the offices specified in the Perfection Certificate, this Agreement will create a perfected security interest in all right, title and interest of the Grantors in the remaining Collateral to the extent perfection can be obtained by filing Uniform Commercial Code financing statements in such jurisdictions, subject to no other Lien other than Permitted Collateral Liens. The exclusion of the Consent Assets from the Collateral does not materially reduce the aggregate valued of the Collateral. (c) The Mortgage, upon execution and delivery by the parties thereto, will create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all the Company's right, title and interest in and to the Mortgaged Property and the proceeds thereof, and when the Mortgage has been filed in the appropriate jurisdiction, the Mortgage will create a perfected Lien on all right, title and interest of the Company in the Mortgaged Property and the proceeds thereof, prior and superior in right to Liens in favor of any other Person (other than Liens or other encumbrances for which exceptions are taken in the policies of title insurance delivered in respect of the Mortgaged Property on or prior to the Effective Date and Permitted Collateral Liens). (d) Upon the recordation of this Agreement or a memorandum of this Agreement with the United States Patent and Trademark Office, this Agreement will create a perfected Lien on all right, title and interest of the Grantors in the Material, Intellectual Property in which a security interest may be perfected by such recordation in the United States Patent and Trademark Office, in each case prior and superior in right to any other Person, subject to Permitted Collateral Liens (it being understood that subsequent recordings in the United Sates Patent and Trademark Office may be necessary to perfect a Lien on registered trademarks and trademark applications acquired by the Grantors after the Effective Date). As of the Effective Date, Schedule IV sets forth all the Material Intellectual Property. (e) Upon the recordation of this Agreement with the Federal Aviation Administration, this Agreement will create a perfected Lien on all right, title and interest of the Grantors in the Aircraft Collateral in which a security interest may be perfected by such recordation with the Federal Aviation Administration, in each case prior and superior in right to any other Person, subject to Permitted Collateral Liens. (f) None of the Perfection Certificate or any other written information relating to the Collateral delivered after the date hereof by or on behalf of any Grantor to the Trustee, the Collateral Agent or any Noteholders pursuant to any provision of the Noteholder Documents is or will be incorrect when delivered in any respect material to the rights or interest of the (x) Noteholders or (y) the holders of the Designated Pari Passu Obligations. SECTION 4.04. Covenants. (a) Each Grantor agrees promptly (and in any event within 30 days) to notify the Collateral Agent in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, (iii) in its identity or type of organization or corporate structure, 14 (iv) in its federal taxpayer identification number or organizational identification number or (v) in its jurisdiction of organization. Each Grantor agrees promptly to provide the Collateral Agent with certified organizational documents reflecting any of the changes described in the first sentence of this paragraph. (b) Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Article 9 Collateral owned by it as shall be consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Article 9 Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent schedules (the "Article 9 Schedules") in form and detail reasonably satisfactory to the Collateral Agent showing the identity, amount and location of any specified Article 9 Collateral; provided that until the Senior Payment in Full shall have occurred, the Grantors' obligations under this Section 4.04(b) to prepare and deliver the Article 9 Schedules shall be satisfied by the prompt delivery by the Company to the Collateral Agent of those schedules delivered in accordance with Section 4.04(b) of the Master Guarantee and Collateral Agreement. (c) Each year, at the time of the delivery of annual financial statements of the Company, with respect to the preceding fiscal year pursuant to the Indenture, the Company shall deliver to the Collateral Agent a certificate executed on behalf of the Company by a Financial Officer and a legal officer of the Company setting forth the information required pursuant to the Perfection Certificate (including the Schedules thereto) or confirming that there has been no change in such information since the date of such certificate or the date of the most recent certificate delivered pursuant to this paragraph, and setting forth for the Aircraft owned by any Other Collateral Grantor and not already listed on Schedule I hereto information sufficient to permit the Collateral Agent to file notices of its security interests in such Aircraft with the Federal Aviation Administration, including the model number, the tail number, the name, the serial number and the location of such Aircraft (and Schedule 1 shall be automatically updated to list any Aircraft identified in any such certificate). (d) At any time after the Senior Payment in Full shall have occurred or an Event of Default shall have occurred and be continuing, the Collateral Agent and such Persons as the Collateral Agent may reasonably designate shall have the right, at the Grantors' own cost and expense, to inspect the Article 9 Collateral and the premises upon which any of the Article 9 Collateral is located and to verify under reasonable procedures, in accordance with the provisions of the Indenture, the validity, amount, quality, quantity, value, condition and status of, or any other matter relating to, the Article 9 Collateral, including, only after the occurrence and during the continuance of an Event of Default, in the case of Accounts or the Article 9 Collateral in the possession of any third person, by contacting Account Debtors or the third person possessing such Article 9 Collateral for the purpose of making such a verification. The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party. (e) At any time after the Senior Payment in Full shall have occurred, at its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Article 9 Collateral and not permitted pursuant to the Indenture and may pay for the maintenance and preservation of the Article 9 Collateral to the extent any Grantor fails to do so as required by the Indenture or this Agreement, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided that nothing in this paragraph shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other 15 promises of any Grantor with respect to taxes, assessments, charges, fees, Liens, security interest or other encumbrances and maintenance as set forth herein or in the Indenture. (f) The Grantors, at their own expense, shall maintain or cause to be maintained, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customary among companies of established reputation engaged in the same or similar businesses and operating in the same or similar locations, except to the extent the failure to do so would not be materially likely to result in a Material Adverse Change. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of the Article 9 Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this paragraph or otherwise incurred in connection therewith, including reasonable attorneys' fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby. Notwithstanding the foregoing, until the Senior Payment in Full shall have occurred, the Grantors' obligations under this Section 4.04(f) to maintain or cause to maintain insurance shall be satisfied by complying with Section 4.04(f) of the Master Guarantee and Collateral Agreement. (g) Each Grantor shall maintain, in form and manner reasonably satisfactory to the Collateral Agent (or, until the Senior Payment in Full shall have occurred, the Credit Agent), records of its Chattel Paper and its books, records and documents evidencing or pertaining thereto. (h) If at any time after the Senior Payment in Full shall have occurred, the Company comes into possession of any Pledged Collateral that was previously delivered to the Credit Agent and is required to be delivered to the Collateral Agent pursuant to the terms of any Noteholder Document, then the Company shall promptly deliver such Pledged Collateral to the Collateral Agent. (i) Each Grantor agrees to prepare and execute any and all further documents, certificates, financing statements, agreements and instruments, and take all such further actions, as may be reasonably requested by the Collateral Agent in order to cause the security interests purported to be created by the Security Documents or required to be created under the terms of this Agreement to constitute valid security interests, perfected in accordance with this Agreement. SECTION 4.05. Other Actions. (a) In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the security interests created hereby, each Grantor agrees, in each case at such Grantor's own expense, to take the following actions with respect to the following Article 9 Collateral: if any Grantor shall at any time hold or acquire any Instrument representing Indebtedness in excess of $3,000,000, such Grantor shall forthwith endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request. 16 (b) Until the Senior Payment in Full shall have occurred, the Grantors' obligations under Section 4.05(a) shall be satisfied by complying with Section 4.05 of the Master Guarantee and Collateral Agreement. (c) The Company shall obtain, at its sole cost and expense, an ALTA/ACSM Survey of the land and facilities comprising the Company's corporate headquarters building, theater/bank building (Goodyear Hall), medical facility, research and development center, test track, and such parcels of Akron "Other" as the Collateral Agent may reasonably require ("Akron Other") in Akron, Ohio. The Company shall promptly order such ALTA/ACSM Survey after First American and the Collateral Agent have been apprised of the intended content and scope of such ALTA/ACSM Survey and have approved thereof, such approval not to be unreasonably withheld, delayed, or conditioned (the date on which the last such approval shall be received by the Company is referred to herein as the "Survey Approval Date"). The Company shall use its commercially reasonable efforts to cause the delivery of the Survey to First American and the Collateral Agent within four (4) months after the Survey Approval Date. After such delivery, the Company shall promptly request that First American: (i) issue a "land same as survey" endorsement to the Lender's Policy; and (ii) delete the general survey exception from the Lender's Policy, substituting in lieu thereof an exception that reads the Survey and recites such specific matters as the Survey discloses. Subject to the foregoing sentence, the Company shall have no obligation to request or obtain, and First American shall have no obligation to issue, any additional endorsements to the Lender's Policy except for the Pre-Closing Endorsements to the extent that they have not yet been issued, or take other action with respect to matters revealed by such Survey, except as expressly provided in the following paragraph. If a discrepancy exists between the legal description for the Company's corporate headquarters building, theater/bank building (Goodyear Hall), medical facility, research and development center, test track, or Akron Other as determined by the Survey and the legal description contained in the Mortgage, the parties shall promptly amend, at the Company's sole cost and expense, the legal description contained in the Mortgage to reflect the legal description for the Company's corporate headquarters building, theater/bank building (Goodyear Hall), medical facility, research and development center, test track, or Akron Other as defined by the Survey. Such amendment shall occur simultaneously with amendments to the legal description, at the Company's sole cost and expense, for the Company's corporate headquarters building, theater/bank building (Goodyear Hall), medical facility, research and development center, test track, or Akron Other contained in the mortgages for all then-extant lenders having a security interest in the Company's corporate headquarters. As used in this Section 4.05(c): "ALTA/ACSM Survey" shall mean a survey made (i) in accordance with the current "Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys" jointly established and adopted by American Land Title Association and American Congress on Surveying and Mapping in 1999, and includes Items 1 through 13 of Table A thereof and (ii) pursuant to the Accuracy Standards (as adopted by ALTA and ACSM and in effect on the date of certification of an Urban Survey); "First American" shall mean First American Title Insurance Company; "Lender's Policy" shall mean the lender's title insurance policy issued by First American to the Trustee and the Collateral Agent, as insureds, pursuant to Title Commitment Number NCS-78634-T-CLE. "Pre-Closing Endorsements" shall mean the following endorsements: Street Assessment, Doing Business, First Loss, Last Dollar, Subdivision, Tax Parcel, Variable Rate, Usury, Revolving Credit, ALTA 9, Letter of Credit. "Survey" shall mean an ALTA/ACSM ordered by the Company with content approved by First American and the Collateral Agent. SECTION 4.06. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Other Collateral Grantor agrees that it will not do or omit to do any act (and will exercise commercially reasonable efforts to prevent its licensees from doing or omitting to do any act) whereby 17 any Patent constituting Material Intellectual Property may become invalidated or dedicated to the public, and agrees that it shall continue to mark any products covered by such Patent with the relevant patent number consistent with good business judgment to establish and preserve its rights under applicable patent laws. (b) Each Other Collateral Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark constituting Material Intellectual Property, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark, (iii) display such Trademark with notice of Federal or foreign registration consistent with good business judgment to establish and preserve its rights under applicable law and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights. (c) Each Other Collateral Grantor (either itself or through its licensees or sublicensees) shall, for each work covered by a Copyright constituting Material Intellectual Property, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice consistent with good business judgment to establish and preserve its rights under applicable copyright laws. (d) Each Other Collateral Grantor shall notify the Collateral Agent promptly if it knows or has reason to know that any Patent, Trademark or Copyright constituting Material Intellectual Property may become abandoned, lost or dedicated to the public, or of any materially adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such Other Collateral Grantor's ownership of any Patent, Trademark or Copyright, its right to register the same, or its right to keep and maintain the same; provided that such notification need not be given if such impairment of such Intellectual Property is not material viewed against the Material Intellectual Property as a whole. (e) Each Other Collateral Grantor shall take all steps consistent with good business judgment that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each application relating to the Patents, Trademarks and/or Copyrights constituting Material Intellectual Property (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights constituting Material Intellectual Property, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancelation proceedings against third parties. (f) Upon and during the continuance of an Event of Default, each Grantor shall endeavor in good faith to obtain all requisite consents or approvals by the licensor of each Copyright License, Patent License or Trademark License to effect the assignment of all such Grantor's right, title and interest thereunder to the Collateral Agent or its designee; provided, however, that until the Senior Payment in Full shall have occurred, the Grantors' obligations under this Section 4.06(f) shall be satisfied by complying with Section 4.06(f) of the Master Guarantee and Collateral Agreement. (g) The failure to comply with any of the foregoing covenants in this Section 4.06 shall not be deemed a breach thereof for purposes of Section 6.01 (Events of Default) of the Indenture unless such failure is willful or material to the rights or interests of the Noteholders. 18 SECTION 4.07. Lockbox System. (a) The Current Assets Grantors shall establish, subject to the control of the Collateral Agent pursuant to the New Control Agreements, a system of lockboxes and related Deposit Accounts (the "Lockbox System"). Each Current Assets Grantor agrees that it shall have no Deposit Accounts other than (a) Deposit Accounts in the Lockbox System, (b) Excluded Operating Accounts and (c) Local Collection Accounts. Each Current Assets Grantor further agrees (i) to execute and deliver, and to cause the Deposit Account Institution at which any Deposit Account (other than an Excluded Operating Account or a Local Collection Account) is maintained to promptly execute and deliver a New Control Agreement as promptly as reasonably practicable following (and in any event, no later than 60 days following) the Closing Date, (ii) to notify and direct promptly each Account Debtor and every other Person obligated to make payments on Accounts or in respect of any Inventory to make all such payments directly to one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes, (iii) to use all reasonable efforts to cause each such Account Debtor and other Person to make all payments with respect to Accounts and Inventory directly to one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes and (iv) promptly to deposit all payments received by it on account of Accounts and Inventory, whether in the form of cash, checks, notes, drafts, bills of exchange, money orders or otherwise, in one or more Deposit Accounts in the Lockbox System (or, in the case of Accounts or Inventory of the Company's retail or Wingfoot divisions, Local Collection Accounts) or related lockboxes in the form in which received (but with any endorsements of such Current Assets Grantor necessary for deposit or collection). Effective upon notice to the Company after the occurrence and during the continuance of an Event of Default at any time after the Senior Payment in Full shall have occurred, the RBC Deposit Account and each Deposit Account (other than Excluded Operating Accounts and Local Collection Accounts) will, without further action on the part of any Current Assets Grantor or the Collateral Agent, convert into a closed lockbox account under the sole dominion and control of the Collateral Agent in which all funds are held subject to the rights of the Collateral Agent hereunder. Without the prior written consent of the Collateral Agent, no Current Assets Grantor shall, in a manner adverse to the Secured Parties, change the general instructions given to Account Debtors in respect of payments to be deposited in the Lockbox System. Effective upon the occurrence of the Senior Payment in Full, each Current Assets Grantor irrevocably authorizes the Collateral Agent, upon the occurrence of an Event of Default, to deliver a Control Notice under each New Control Agreement. The Collateral Agent agrees with each Current Assets Grantor that the Collateral Agent shall not give any instructions pursuant to any New Control Agreement terminating such New Control Agreement or the right of such Current Assets Grantor to make withdrawals from any Deposit Account in the Lockbox System unless an Event of Default shall have occurred and be continuing or, after giving effect to any withdrawal, would occur. After the Senior Payment in Full shall have occurred and be continuing, the Company shall ensure that the aggregate amount contained in all Local Collection Accounts taken together shall not at any time exceed the greater of (i) the last amount determined by the Credit Agent prior to the Senior Payment in Full and (ii) $150,000,000. (b) In the event that all of the US Facilities Obligations (as defined in the Intercreditor Agreement) have been paid in full and any commitment to extend credit that would constitute US Facilities Obligations shall have been terminated and Designated Senior Obligations (as defined in the Intercreditor Agreement) remain outstanding, each Current Assets Grantor agrees to use commercially reasonable efforts to cause any lockbox agreements entered into with the collateral agents on behalf of the holders of such Designated Senior Obligations to be substantially in the form of the New Control Agreements. 19 SECTION 4.08. Insurance. The Company shall, on or promptly after the Closing Date, cause the Collateral Agent to be named as loss payee on all property insurance maintained in respect of the Collateral. SECTION 4.09. Liens. The Company shall, as soon as practicable after the Closing Date, and in any event within 45 days after the Closing Date, deliver an Officer's Certificate to the Collateral Agent stating that the lien searches in the counties specified in Schedule V have not revealed any Liens (other than (i) Liens existing on the Closing Date and set forth on Schedule 4 to the Note Purchase Agreement, (ii) Permitted Collateral Liens (other than those specified in Section (4) of the definition thereof) and (iii) Liens which have been satisfied or discharged). ARTICLE V Other Pledges, Mortgage and Other Security Interests SECTION 5.01. Summary of Certain Other Security Documents. In addition to the security interests created under Articles III and IV the parties acknowledge that: (a) Certain Other Collateral Grantors are entering into the Foreign Pledge Agreements with respect to the Foreign Subsidiaries listed in Schedule III, and may in the future enter into additional Foreign Pledge Agreements, under which they are pledging Equity Interests in Foreign Subsidiaries owned by them to secure the Note Obligations and the Designated Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent Obligations. (b) The Company is entering into the Mortgage under which it is mortgaging the Company's corporate headquarters in Akron, Ohio and interests in the corporate headquarters owned by it to secure the Note Obligations and the Designated Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent Obligations. (c) Certain Current Assets Grantors that are organized under the laws of Canada or one or more provinces thereof are entering into the Canadian Security Agreements, under which they are creating security interests in the Current Assets Collateral and the Canadian Intellectual Property Collateral owned by them to secure the Note Obligations and the Designated Pari Passu Obligations, on an equal and ratable basis, and the Collateral Agent Obligations. (d) The Master Guarantee and Collateral Agreement creates security interests in the Collateral to secure the European Facilities Revolving Obligations (as defined in the European Facilities Agreement) on an equal and ratable basis with the Obligations (other than with respect to that portion of the Collateral consisting of the Company's equity interests in Luxembourg Finance which secures the European Facility Revolving Obligations on a priority basis). SECTION 5.02. Other Security Documents Subject to this Agreement. (a) The parties to the Noteholder Documents shall observe the following provisions: (i) the provisions of Section 6.03 (governing the distribution of the proceeds realized from the exercise of remedies under the Security Documents); (ii) the provisions of Article VIII (governing the manner in which Acts of the Secured Parties are to be evidenced and the manner in which the amounts of the Obligations at any time are to be determined); (iii) the provisions of Articles IX and X (relating to the duties and responsibilities of the Collateral Agent); and (iv) the provisions of Section 13.12 (providing for releases of Collateral securing the Obligations). 20 (b) The Mortgage shall contain a provision substantially to the effect set forth below and satisfactory to the Collateral Agent and its counsel: "THIS AGREEMENT AND THE PLEDGES, SECURITY INTERESTS AND OTHER LIENS AND CHARGES CREATED HEREBY ARE SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THE COLLATERAL AGREEMENT DATED AS OF MARCH 12, 2004, AMONG THE GOODYEAR TIRE & RUBBER COMPANY, THE SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY IDENTIFIED AS GRANTORS THEREIN, AND WILMINGTON TRUST COMPANY, AS COLLATERAL AGENT, AND ANY PROVISION OF THIS AGREEMENT THAT IS INCONSISTENT WITH THE PROVISIONS OF SUCH COLLATERAL AGREEMENT SHALL BE DEEMED FOR ALL PURPOSES TO HAVE BEEN AMENDED TO CONFORM IN ALL RESPECTS TO SUCH PROVISIONS." (c) In the event of any conflict or inconsistency between any provision of this Agreement and any Other Security Documents, the provisions of this Agreement shall govern, and the terms of any such Other Security Documents shall be deemed for all purposes to have been amended to conform in all respects to the provisions of this Agreement. ARTICLE VI Remedies SECTION 6.01. Remedies Upon Default. Subject to Section 9.02 hereof, upon the occurrence and during the continuance of an Event of Default and the receipt by the Collateral Agent of a written notice by (A) each of (x) the Trustee (if there is an Event of Default under the Indenture) and (y) each other Representative (if there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document) or (B) holders of at least 25% in aggregate principal amount of the outstanding (x) Notes (if there is an Event of Default under the Indenture) and (y) Designated Pari Passu Obligations (to the extent that there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document) instructing it to exercise remedies, to the extent permitted by law (a) the Collateral Agent may demand that each Grantor deliver each item of Collateral owned or held by it to the Collateral Agent, and each Grantor agrees so to deliver all such Collateral, and (b) the Collateral Agent shall have the right to take any of or all the following actions at the same or different times with respect to any Collateral: (i) with respect to any Collateral consisting of Intellectual Property, on demand, to cause its security interest in such Collateral to become an assignment, transfer and conveyance of any of or all such Collateral by the applicable Grantors to the Collateral Agent, or to grant any license or sublicense, whether general, special or otherwise, and whether on an exclusive or nonexclusive basis, with respect to any such Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (ii) with or without legal process and with or without prior notice or demand for performance, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral and, generally, to exercise any and all rights afforded to a secured party under the Uniform Commercial Code or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral at a public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale of securities (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons 21 who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any sale of Collateral shall (to the extent permitted by law) 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 law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. In the case of any Collateral that constitutes Article 9 Collateral, the Collateral Agent shall give the applicable Grantors 10 days' written notice (which each Grantor agrees is reasonable notice within the meaning of Section 9-611 of the New York UCC or its equivalent in other jurisdictions) of the Collateral Agent's intention to make any sale of such Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to any Noteholder Document, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any claim then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor (to the extent permitted by law). For purposes hereof, a written agreement to purchase any Collateral or portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Obligations secured by the Collateral paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose any Noteholder Document and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the provisions of this Section 6.01 shall be deemed to conform to the commercially reasonable standards as provided in Section 9-610(b) of the New York UCC or its equivalent in other jurisdictions. SECTION 6.02. Exercise of Remedies under Other Security Documents. The Collateral Agent shall also have the right to exercise remedies provided for in each Noteholder Document upon the occurrence and during the continuance of an Event of Default and the receipt by the Collateral Agent of a 22 written notice by (A) each of (x) the Trustee (if there is an Event of Default under the Indenture) and (y) each Representative (if there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document) or (B) holders of at least 25% in aggregate principal amount of the outstanding (x) Notes (if there is an Event of Default under the Indenture) and (y) Designated Pari Passu Obligations (to the extent that there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document) instructing it to exercise remedies. SECTION 6.03. Application of Proceeds. (a) Unless otherwise required by applicable law, the Collateral Agent shall apply the proceeds of the collection or sale of any Collateral securing any Obligations, including any Collateral consisting of cash, as follows: FIRST, to the payment of all fees, costs and expenses due to or incurred by the Collateral Agent in connection with such collection or sale or otherwise due to or incurred in connection with this any Noteholder Document, the Intercreditor Agreement or any Designated Pari Passu Obligations Governing Documents, or otherwise in connection with any of such Obligations, including all court costs and the fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under the Indenture or under any Designated Pari Passu Obligations Governing Documents on behalf of any Grantor and any other fees, costs or expenses incurred in connection with the exercise of any right or remedy hereunder or otherwise in connection herewith or under any Noteholder Document, the Intercreditor Agreement or any Designated Pari Passu Obligations Governing Documents (in each case, insofar as they relate to such Obligations) at the direction or for the benefit of holders of such Obligations; SECOND, to the payment of all other Obligations secured by such Collateral on an equal and ratable basis to the extent and in the manner provided in the Indenture and the Designated Pari Passu Obligations Governing Documents; and THIRD, to the applicable Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. SECTION 6.04. Grant of License to Use Intellectual Property. (a) Each Grantor hereby grants to the Collateral Agent, to the extent necessary to enable the Collateral Agent to exercise rights and remedies under the Noteholder Documents at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or sublicense any Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, to the extent and only to the extent such license would not violate or result in a default under any license or other agreement, whether express or implied, between the Grantor and any Person other than a Wholly Owned Subsidiary as defined in the Indenture. The rights of the Collateral Agent under such license may be exercised, at the option of the Collateral Agent, solely upon the occurrence and during the continuation of 23 an Event of Default; provided that any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of any Event of Default. (b) Notwithstanding any other provision contained in this Agreement, any security interest granted hereunder in any Collateral consisting of Intellectual Property to secure the Obligations shall be subject to the license granted under the preceding paragraph (a), as such license may be exercised for the benefit of the Secured Parties, and any sale or transfer of Collateral consisting of Intellectual Property upon any exercise of remedies under this Agreement shall be made expressly subject to such license. SECTION 6.05. Securities Act. In view of the position of the Grantors in relation to the Pledged Collateral, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the "Federal Securities Laws") with respect to any disposition of the Pledged Collateral permitted hereunder. Each Grantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Collateral, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Collateral could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Collateral under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Grantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Collateral, limit the purchasers to those who will agree, among other things, to acquire such Pledged Collateral for their own account, for investment, and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Collateral or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential purchaser to effect such sale. Each Grantor acknowledges and agrees that any such sale might result in prices and other terms less favorable than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Collateral at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells. SECTION 6.06. Registration. Each Grantor agrees that, upon the occurrence and during the continuance of an Event of Default, if for any reason the Collateral Agent desires to sell any of the Pledged Collateral at a public sale, it will, at any time and from time to time, upon the written request of the Collateral Agent, use its best efforts to take or to cause the issuer of such Pledged Collateral to take such action and prepare, distribute and/or file such documents, as are required or advisable in the reasonable opinion of counsel for the Collateral Agent to permit the public sale of such Pledged Collateral under applicable law. Each Grantor further agrees to indemnify, defend and hold harmless the Collateral Agent, each other Secured Party, any underwriter and their respective officers, directors, affiliates and controlling persons from and against all loss, liability, expenses, costs of counsel (including, without limitation, reasonable fees and expenses of the Collateral Agent's legal counsel and agents), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus 24 (or any amendment or supplement thereto) or in any notification or offering circular relating to the offering for sale of any Pledged Collateral, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to such Grantor or the issuer of such Pledged Collateral by the Collateral Agent or any other Secured Party expressly for use therein. Each Grantor further agrees, upon such written request referred to above, to use its best efforts to qualify, file or register, or cause the issuer of such Pledged Collateral to qualify, file or register, any of the Pledged Collateral under the Blue Sky or other securities laws of such jurisdictions as may be requested by the Collateral Agent and keep effective, or cause to be kept effective, all such qualifications, filings or registrations. Each Grantor will bear all costs and expenses of carrying out its obligations under this Section. Each Grantor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section may be specifically enforced. ARTICLE VII Indemnity, Subrogation and Subordination SECTION 7.01. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Grantors may have under applicable law (but subject to Section 7.03), the Company agrees that in the event any assets of any Grantor shall be sold pursuant to any Noteholder Document to satisfy in whole or in part an Obligation of the Company, the Company shall indemnify such Grantor in an amount equal to the greater of the book value or the fair market value of the assets so sold. SECTION 7.02. Contribution and Subrogation. Each Grantor other than the Company (a "Contributing Party") agrees (subject to Section 7.03) that, in the event assets of any other Grantor (other than the Company) shall be sold pursuant to any Security Document to satisfy Obligations and such other Grantor (the "Claiming Party") shall not have been fully indemnified by the Company as provided in Section 7.01, the Contributing Party shall indemnify the Claiming Party in an amount equal to the greater of the book value or the fair market value of such assets, multiplied by a fraction of which the numerator shall be the net worth of the Contributing Party and the denominator shall be the aggregate net worth of all the Grantors, other than the Company, that have granted Liens to secure the Obligations. For the purposes of the previous sentence, the net worth of each Grantor shall be determined on the Effective Date (or, in the case of any Grantor becoming a Grantor after the date hereof, the date on which such Grantor shall have become a Grantor). Any Contributing Party making any payment to a Claiming Party pursuant to this Section shall be subrogated to the rights of such Claiming Party under Section 7.01 to the extent of such payment. SECTION 7.03. Subordination. (a) Notwithstanding any provision of this Agreement to the contrary, all rights of the Grantors under Sections 7.01 and 7.02 and all other rights of indemnity, contribution or subrogation under applicable law or otherwise shall be fully subordinated to the payment in full in cash of the Obligations, and no Grantor shall seek to enforce any of such rights until the Obligations have been paid in full. No failure on the part of any Grantor to make the payments required by Sections 7.01 and 7.02 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Grantor with respect to its obligations hereunder, and each Grantor shall remain liable for the full amount of the obligations of such Grantor hereunder. 25 (b) To the fullest extent permitted under law, each Grantor hereby agrees that all Indebtedness (as defined in the Indenture) and other monetary obligations owed by it to any other Grantor or any other Subsidiary shall be fully subordinated to the payment in full in cash of the Obligations. ARTICLE VIII Acts of Secured Parties; Amounts of Obligations SECTION 8.01. Acts of Secured Parties. Any request, demand, authorization, direction, notice, consent, waiver or other action permitted or required by this Agreement to be given or taken by any Secured Party (other than the Collateral Agent) may be, and at the request of the Collateral Agent shall be, embodied in and evidenced by one or more instruments reasonably satisfactory in form and substance to the Collateral Agent and signed by such Secured Party, acting individually or on behalf of the applicable Secured Parties, as the case may be, and, except as otherwise expressly provided in any such instrument, any such action shall become effective when such instrument or instruments shall have been delivered to the Collateral Agent as provided herein. The instrument or instruments evidencing any action (and the action embodied therein and evidenced thereby) are sometimes referred to herein as an "Act" of the persons signing such instrument or instruments. All Acts hereunder on the part of (i) any holders of Note Obligations (other than the Collateral Agent) shall be taken on their behalf by the Trustee and (ii) any holder of Designated Pari Passu Obligations (other than the Collateral Agent) shall be taken on their behalf by the applicable Representative. The Collateral Agent shall be entitled to rely absolutely upon an Act of the Trustee or Representative if such Act purports to be taken by or on behalf of the holders of Note Obligations or Designated Pari Passu Obligations, as applicable (in each case, other than the Collateral Agent), and nothing in this Section or elsewhere in this Agreement shall be construed to require such Trustee or any Representative of the holders of Designated Pari Passu Obligations, as applicable, to demonstrate that it has been authorized by the holders of Note Obligations or Designated Pari Passu Obligations, as applicable (in each case, other than the Collateral Agent) thereunder to take any action that it purports to be taking, the Collateral Agent being entitled to rely conclusively without any independent investigation whatsoever, and being fully protected in so relying, on any Act of such Trustee or Representative. SECTION 8.02. Determination of Amounts of Obligations and Existence of Events of Default; Acceleration. Whenever the Collateral Agent is required to determine the existence or amount of any of the Obligations or the existence of any Event of Default for any purposes of this Agreement, it shall request written certification of such existence or amount from the Trustee or the Representatives, as the case may be, and shall be entitled to make such determination, and to rely thereon, on the basis of such certification alone; provided, however, that if, notwithstanding the request of the Collateral Agent, the Trustee or the Representatives, as the case may be, shall fail or refuse reasonably promptly to certify as to the existence or amount of any Obligation or the existence of any Event of Default, the Collateral Agent shall be entitled to determine such existence or amount by such method as the Collateral Agent may, in the exercise of its good faith judgment, determine, including by reliance upon a certificate of the Company. The Collateral Agent may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to the Company, any other Grantor, any other Secured Party or any other person as a result of such determination. 26 ARTICLE IX Duties of Collateral Agent SECTION 9.01. Notices to Trustee and Representatives. The Collateral Agent shall promptly notify the Trustee and the Representatives of any Designated Pari Passu Obligations in the event it shall receive (a) any notice of an Event of Default under the Indenture or (b) any instructions given by the Trustee or any Representative to commence the exercise of remedies under Article VI. SECTION 9.02. Actions Under this Agreement. (a) The Collateral Agent shall not be obligated to take any action under any Noteholder Document except for the performance of such duties as are specifically set forth herein and therein. Subject to the provisions of Article X of this Agreement and to the succeeding provisions of this Section, the Collateral Agent shall take such actions, and only such actions, under the Noteholder Documents with respect to any Collateral as are requested by (A) each of (x) the Trustee (if there is an Event of Default under the Indenture) and (y) each Representative (if there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document) or (B) holders of at least 25% in aggregate principal amount of the outstanding (x) Notes (if there is an Event of Default under the Indenture) and (y) Designated Pari Passu Obligations (to the extent that there is an Event of Default under the applicable Designated Pari Passu Obligations Governing Document), and as are not inconsistent with or contrary to the provisions of any Noteholder Document or any Designated Pari Passu Obligations Governing Document, as well as ministerial and/or administrative actions required or permitted by any Noteholder Document. The Trustee and the Representatives of the holders of Designated Pari Passu Obligations shall have the right to initiate the exercise of remedies with respect to the Collateral and shall jointly control the manner of the exercise of such remedies. Therefore, in the event the Trustee or any Representative of the holders of Designated Pari Passu Obligations notifies the Collateral Agent and the Trustee and/or the other Representatives of the holders of Designated Pari Passu Obligations, as the case may be, of its desire to commence the exercise of remedies and/or to foreclose on specified Collateral, the Trustee and the Representatives of the holders of Designated Pari Passu Obligations shall promptly confer to determine the manner in which the Collateral Agent should proceed. The Trustee and the Representatives of the holders of Designated Pari Passu Obligations, acting in good faith, shall use their best efforts to reach agreement on such matters so that one or more remedies (which shall include foreclosure on such Collateral if requested in such notification) will be exercised reasonably promptly after such notification. In connection with the foregoing, none of the Trustee or the Representatives of the Designated Pari Passu Obligations will give instructions to the Collateral Agent with the intent of preventing, hindering or delaying the exercise of any remedies requested by the Trustee or any Representative of the holders of Designated Pari Passu Obligations. ARTICLE X Concerning the Collateral Agent SECTION 10.01. Limitations on Responsibility of Collateral Agent. The Collateral Agent shall not be responsible in any manner whatsoever for the correctness of any recitals, statements, representations or warranties contained in any Noteholder Document. The Collateral Agent makes no representation as to the value or condition of the Collateral or any part thereof, as to the title of any Grantor to the Collateral, as to the security afforded by any Noteholder Document, as to the validity, execution, enforceability, legality or sufficiency of any Noteholder Document or any other document or instrument referred to or provided for herein, or as to the perfection of any security interests granted 27 pursuant to any of the foregoing documents or instruments and the Collateral Agent shall incur no liability or responsibility in respect of any such matters. The Collateral Agent shall not be responsible for insuring the Collateral, for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise for the maintenance of the Collateral, except as provided in the immediately following sentence when the Collateral Agent has possession or control of the Collateral. Except as otherwise provided herein, the Collateral Agent shall have no duty to the Grantors or to the Secured Parties as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except the duty to accord such Collateral the same care that it normally accords to its own assets and the duty to account for moneys received by it. The Collateral Agent shall not be required to ascertain or inquire as to the performance by any Grantor of any of the covenants or agreements contained herein or in any other agreement. Neither the Collateral Agent nor any officer, agent or representative thereof shall be liable for any action taken or omitted to be taken by any such person in connection with any Noteholder Document or the Intercreditor Agreement except for such person's own gross negligence or willful misconduct (it being understood that any action taken in accordance with the terms of any Noteholder Document or the Intercreditor Agreement by the Collateral Agent or any such officer, agent or representative at the direction or instruction of the Trustee or the Representatives or the holders of at least 25% of the aggregate principal amount of (x) the Notes and (y) any Designated Pari Passu Obligations in accordance with the terms of this Agreement (or not taken, in the absence of any such directions or instructions) shall not constitute gross negligence or willful misconduct). Neither the Collateral Agent nor any officer, agent or representative thereof shall be liable for any action taken by any such person in accordance with any notice given by the Trustee and the Representatives or the holders of at least 25% in aggregate principal amount of the (x) Notes and (y) any Designated Pari Passu Obligations, even if, at the time such action is taken by any such Person, the Trustee and the Representatives or holders of at least 25% in aggregate principal amount of the (x) Notes and any (y) Designated Pari Passu Obligations, which gave the notice to take such action shall no longer be the Trustee and the Representatives or the holders of at least 25% in aggregate principal amount of the (x) Notes and (y) any Designated Pari Passu Obligations. The Collateral Agent may execute any of the powers granted under this Agreement and perform any duty hereunder either directly or by or through agents, accountants, appraisers, attorneys-in-fact or other experts. SECTION 10.02. Reliance by Collateral Agent; Indemnity Against Liabilities, etc. (a) Whenever in the performance of its duties under any Noteholder Document the Collateral Agent shall deem it necessary or desirable that a matter be proved or established with respect to any Grantor or any other person in connection with the taking, suffering or omitting of any action hereunder by the Collateral Agent, such matter may be conclusively deemed to be proved or established by a certificate executed by an officer of such Person which is believed by the Collateral Agent to be genuine and to have been signed or sent by the proper Person or a written opinion from legal counsel acceptable to the Collateral Agent, and the Collateral Agent shall have no liability with respect to any action taken, not taken, suffered or omitted in reliance thereon. (b) The Collateral Agent may consult with counsel and shall not incur any liability in taking or not taking any action under any Noteholder Document in good faith in accordance with any advice of such counsel. The Collateral Agent shall have the right but not the obligation at any time to seek instructions concerning the administration of any Noteholder Document, the duties created hereunder or the Collateral from the Trustee or any Representative or any court of competent jurisdiction. (c) The Collateral Agent shall not incur any liability in relying upon any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order or other paper or document which it in good faith believes to be genuine and to have been signed or presented by the proper party. The Collateral Agent may conclusively rely, as to the truth of the statements and the 28 correctness of the opinions expressed therein, upon any certificate or opinions that are believed by the Collateral Agent to be genuine and signed or furnished by the proper Person furnished to the Collateral Agent in connection with any Noteholder Document. (d) The Collateral Agent shall not be deemed to have actual, constructive, direct or indirect notice or knowledge of the occurrence of any Event of Default unless and until the Collateral Agent shall have received written notice thereof from the Trustee or a Representative, as the case may be. The Collateral Agent shall have no obligation whatsoever either prior to or after receiving such a notice which is believed by the Collateral Agent to be genuine and to have been signed or sent by the proper Person to inquire whether an Event of Default has, in fact, occurred and shall be entitled to rely conclusively, and shall be fully protected in so relying, on any such notice so furnished to it. (e) If the Collateral Agent has been requested to take any specific action by the Trustee or any Representative pursuant to any provision of any Noteholder Document, the Collateral Agent shall not be under any obligation to exercise any of the rights or powers vested in it by such Noteholder Document or expend any funds in the manner so requested unless it shall have been provided indemnity by the Secured Parties on whose behalf such request shall have been made reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred by it in compliance with such request or direction. (f) In the event there is any disagreement between the parties to any Noteholder Document resulting in any claims being made in connection with or otherwise giving rise to any dispute relating to the Collateral held by the Collateral Agent, and the terms of the Noteholder Documents do not unambiguously mandate the action the Collateral Agent is to take or not to take in connection therewith under the circumstances then existing, or the Collateral Agent is in doubt as to what action it is required to take or not to take, it shall be entitled to refrain from taking any action until directed otherwise in writing by (i) a request signed by or on behalf of the holders of at least 25% in aggregate principal amount of the outstanding Notes and Designated Pari Passu Obligations, taken together (or, if conflicting instructions are received from different holders of at least such amount, then the holders of a greater percentage of the aggregate principal amount of the outstanding Notes and Designated Pari Passu Obligations, taken together) or (ii) order of a court of competent jurisdiction. (g) No direction given to the Collateral Agent by any party which imposes, purports to impose or might reasonably be expected to impose upon the Collateral Agent any obligation or liability not set for in or arising under the Indenture or any Noteholder Document accepted by the Collateral Agent, or any amendment, supplement or other modification to the Indenture or any other Noteholder Document adverse to the rights and obligations of the Collateral Agent, shall be binding upon the Collateral Agent unless the Collateral Agent elects, at its sole option, to accept such direction or any such amendment, supplement or modification. (h) Without prejudice to the provisions of this Article X, the Trustee hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) to act as the person holding the power of attorney (in such capacity, the "fonde de pouvoir") of the Trustee as contemplated under Article 2692 of the Civil Code of Quebec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties which are conferred upon the fonde de pouvoir under any hypothec. Moreover, without prejudice to such appointment and authorization to act as the person holding the power of attorney as aforesaid, the Trustee hereby irrevocably appoints and authorizes the Collateral Agent (and any successor acting as Collateral Agent) (in such capacity, the "Custodian") to act as agent and custodian for and on behalf of the Trustee to hold and to be the sole registered holder of any debenture which may be issued under any hypothec, the whole notwithstanding Section 32 of the Act respecting the special powers of legal persons (Quebec) or 29 any other applicable law. In this respect, (i) the Custodian shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by any pledge of any such debenture and owing to the Trustee (all of which information shall be certified in writing to the Custodian by the Trustee upon request of the Custodian, and the Custodian shall be fully protected in conclusively relying thereon), and (ii) the Trustee will be entitled to the benefits of any charged property covered by any hypothec and will participate in the proceeds of realization of any such charged property, the whole in accordance with the terms hereof. (i) Each of the fonde de pouvoir and the Custodian shall (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to fonde de pouvoir and the Custodian (as applicable) with respect to the charged property under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise, (b) benefit from and be subject to all provisions hereof with respect to the Collateral Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Trustee, and (c) be entitled to delegate from time to time any of its powers or duties under any hypothec, any debenture or pledge thereof relating to any hypothec, applicable laws or otherwise and on such terms and conditions as it may determine from time to time. Any person who becomes a Trustee shall be deemed to have consented to and confirmed: (y) the fonde de pouvoir as the person holding the power of attorney as aforesaid and to have ratified, as of the date it becomes a Trustee, all actions taken by the fonde de pouvoir in such capacity, (z) the Custodian as the agent and custodian as aforesaid and to have ratified, as of the date it becomes a Trustee, all actions taken by the Custodian in such capacity. SECTION 10.03. Appointment, Resignation and Removal of the Collateral Agent. The Collateral Agent hereby accepts its appointment as the Collateral Agent pursuant to the Indenture and agrees to serve as the Collateral Agent until the Collateral Agent is removed or resigns. The Collateral Agent may at any time, by giving 30 days' prior written notice to the Company, the Trustee and the Representatives of the holders of the Designated Pari Passu Obligations, resign and be discharged from the responsibilities created under any Noteholder Document, such resignation to become effective upon the appointment of a successor by the Trustee with, so long as no Event of Default has occurred and is continuing, the consent of the Company (such consent not to be unreasonably withheld) and the acceptance of such appointment by such successor. If no successor shall be appointed and approved within 30 days after the date of any such resignation, the Collateral Agent may apply to any court of competent jurisdiction to appoint a successor to act until a successor shall have been appointed as above provided or may, on behalf of the Secured Parties, appoint a successor Collateral Agent which shall be a bank with an office in New York, New York having a combined capital and surplus of at least $50,000,000. SECTION 10.04. Expenses and Indemnification. By accepting the benefits of this Agreement, each of the Noteholders and the holders of Designated Pari Passu Obligations severally agrees (i) to pay and reimburse the Collateral Agent, on demand, in the amount of its pro rata share from time to time (based on the principal amount of the Notes and Designated Pari Passu Obligations, of such Secured Party and the other applicable Secured Parties), of any fees and expenses referred to in the Intercreditor Agreement or any Noteholder Document securing Obligations owed to such Secured Parties and/or any other fees due to and expenses incurred by the Collateral Agent in connection with the performance of its duties hereunder, the administration of any Security Documents and the enforcement and protection of the rights of the Collateral Agent and the Secured Parties which shall not have been paid or reimbursed by the Company or any other Grantor or paid from the proceeds of Collateral as provided herein and (ii) to indemnify and hold harmless the Collateral Agent and its Affiliates and their respective directors, officers, employees, agents and attorneys (each, an "Indemnified Party"), on demand, in the amount of such pro rata share, from and against any and all liabilities, taxes, obligations, losses, damages, 30 penalties, actions, judgments, suits, costs, expenses or disbursements referred to in this Agreement and/or incurred by the Collateral Agent in connection with the execution, delivery, performance, preparation and administration of the Intercreditor Agreement or any Noteholder Documents or the enforcement and protection of the rights of the Secured Parties, to the extent the same shall not have been paid or reimbursed by the Company or any other Grantor or paid from the proceeds of Collateral as provided herein; provided, in each case, that no Secured Party shall be liable to any Indemnified Party for any portion of such expenses, liabilities, taxes, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of such Person as determined by a court of competent jurisdiction. ARTICLE XI Designated Pari Passu Obligations SECTION 11.01. Designation. The Company may from time to time, subject to any limitations contained in any existing Designated Pari Passu Obligations Governing Documents and the Indenture, designate additional obligations of the Company or any of its Subsidiaries (the "Designated Pari Passu Obligations") that are, or are to be, secured, on an equal and ratable basis with the Note Obligations, by Liens on any Collateral by delivering to the Collateral Agent, the Trustee and each Representative of holders of Designated Pari Passu Obligations a notice: (i) describing the obligations being designated as Designated Pari Passu Obligations, and including a statement of the maximum aggregate outstanding principal amount of such obligations; (ii) listing the Designated Pari Passu Obligations Governing Documents under which such Designated Pari Passu Obligations are issued or incurred, and attaching copies of such Designated Pari Passu Obligations Governing Documents; (iii) appointing the Collateral Agent as collateral agent with respect to such Designated Pari Passu Obligations, and identifying any Representative of the holders of such Designated Pari Passu Obligations; (iv) certifying that the incurrence of such Designated Pari Passu Obligations, the creation of the Liens securing such Designated Pari Passu Obligations and the designation of such Designated Pari Passu Obligations as Designated Pari Passu Obligations hereunder do not violate or result in the Indenture or any other Designated Pari Passu Obligations Governing Documents; (v) certifying that the Designated Pari Passu Obligations Governing Documents governing such Designated Pari Passu Obligations contain provisions under which the related Designated Pari Passu Obligations Secured Parties agree, or are deemed to agree, to be bound by the provisions of this Agreement; and (vi) attaching a fully executed Accession Agreement under which the Representative of the holders of the Designated Pari Passu Obligations shall become a party this Agreement and appoint the Collateral Agent as collateral agent with respect to such Designated Pari Passu Obligations. Upon the delivery of such notice and the related attachments as provided above, the obligations designated in such notice shall become Designated Pari Passu Obligations for all purposes of 31 this Agreement. Notwithstanding any other provision contained in this Section or elsewhere in this Agreement, no obligation shall constitute a Designated Pari Passu Obligation if the incurrence of such obligation, the creation of the Liens securing such obligation or the designation of such obligation as a Designated Pari Passu Obligation hereunder would violate or result in a default under any provision of the Indenture or any existing Designated Pari Passu Obligations Governing Document. ARTICLE XII Subordination of Intercompany Indebtedness SECTION 12.01. Subordination. To the fullest extent permitted under law, the Company and each other Grantor hereby agrees that all Intercompany Indebtedness owed to it by any Intercompany Obligor is hereby expressly subordinated, to the extent and in the manner set forth in this Article XII, to the payment in full in cash of all Obligations of such Intercompany Obligor. SECTION 12.02. Dissolution or Insolvency. Upon any dissolution, winding up, liquidation or reorganization of any Intercompany Obligor, whether in bankruptcy, insolvency, reorganization, arrangement or receivership proceedings or otherwise, or upon any assignment for the benefit of creditors or any other marshalling of the assets and liabilities of any Intercompany Obligor, or otherwise: (a) the applicable Secured Parties shall, as between such Secured Parties and the Company or any other Grantor, first be entitled to receive payment in full in cash of the Obligations of such Intercompany Obligor in accordance with the terms of such Obligations before the Company or such Grantor shall be entitled to receive any payment on account of the Intercompany Indebtedness of such Intercompany Obligor, whether as principal, interest or otherwise; and (b) any payment by, or distribution of the assets of, such Intercompany Obligor of any kind or character, whether in cash, property or securities, to which the Company or any other Grantor would be entitled except for the provisions of clause (a) above shall, upon receipt by the Company or such Grantor, be held in trust (or in a compte de sequestre, if applicable) for the applicable Secured Parties and promptly paid or delivered directly to the Collateral Agent for the benefit of such Secured Parties to the extent necessary to make payment in full in cash of all such Obligations remaining unpaid, after giving effect to any concurrent payment or distribution to such Secured Parties in respect of such Obligations. SECTION 12.03. Subrogation. Subject to (and only upon) the prior payment in full in cash of all the Obligations of any Intercompany Obligor, the Company or any other Grantor holding Intercompany Indebtedness of such Intercompany Obligor shall be subrogated to the rights of the applicable Secured Parties to receive payments or distributions in cash, property or securities applicable to such Obligations until all amounts owing on the Intercompany Indebtedness of such Intercompany Obligor shall be paid in full, and as between and among such Intercompany Obligor, its creditors (other than its Secured Parties) and the Company or any other Grantor holding Intercompany Indebtedness of such Intercompany Obligor, no such payment or distribution made to the Secured Parties by virtue of this Agreement that otherwise would have been made to the Company or any other Grantor in respect of such Intercompany Indebtedness shall be deemed to be a payment by such Intercompany Obligor on account of such Intercompany Indebtedness. SECTION 12.04. Other Creditors. Nothing contained in this Article is intended to or shall impair, as between and among any Intercompany Obligor, its creditors (other than the Secured 32 Parties) and the Company or any other Grantor holding Intercompany Indebtedness of such Intercompany Obligor, the obligations of such Intercompany Obligor to pay its Intercompany Indebtedness as and when the same shall become due and payable in accordance with the terms thereof, or affect the relative rights of the Company or any other Grantor holding Intercompany Indebtedness of such Intercompany Obligor and the creditors of such Intercompany Obligor (other than the Secured Parties). SECTION 12.05. No Waiver. No right of any Secured Party to enforce this Article shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of any of the Collateral Agent, the other Secured Parties, or any Intercompany Obligor, or by any noncompliance by any Intercompany Obligor with the terms, provisions and covenants contained in any Noteholder Document or any Designated Pari Passu Obligations Governing Document, and the Secured Parties are hereby expressly authorized to extend, renew, increase, decrease, modify or amend the terms of the Obligations or any security therefor, and to release, sell or exchange any such security and otherwise deal freely with any Intercompany Obligor, all without notice to or consent of the Company or any other Grantor and without affecting the liabilities and obligations of the parties hereto. SECTION 12.06. Obligations Hereunder Not Affected. (a) All rights and interests of the Secured Parties under this Article, and all agreements and obligations of the Company and each other Grantor under this Article, shall remain in full force and effect irrespective of: (i) any lack of validity or enforceability any Noteholder Document or any Designated Pari Passu Obligations Governing Document; (ii) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or consent to departure from any Noteholder Document or any Designated Pari Passu Obligations Governing Document; (iii) any exchange, release or nonperfection of any security interest in any Collateral, in respect of all or any of the Obligations; or (iv) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Intercompany Obligor in respect of Obligations or of the Company or any Grantor in respect of the agreements contained in this Article. (b) The agreements contained in this Article shall continue to be effective or be reinstated, as the case may be, if at any time any payment of the Obligations or any part thereof is rescinded or must otherwise be returned by any Secured Party upon the insolvency, bankruptcy or reorganization of any Intercompany Obligor or otherwise, all as though such payment had not been made. (c) The Company and each Grantor hereby agree that the Secured Parties may, without affecting or impairing any of the obligations of the Company or such Grantor hereunder, from time to time to (i) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of, the Obligations or any part thereof and (ii) exercise or refrain from exercising any rights against any Intercompany Obligor or any other Person. 33 ARTICLE XIII Miscellaneous SECTION 13.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be given as provided in the Indenture and the Designated Pari Passu Obligations Governing Documents. All communications and notices hereunder to any Grantor other than the Company shall be given to it in care of the Company as provided in the Indenture. SECTION 13.02. Waivers; Amendment. (a) No failure or delay by the Collateral Agent or any Secured Party in exercising any right or power hereunder or under the Indenture or any Designated Pari Passu Obligations Governing Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent and the Secured Parties hereunder and under the Indenture and the Designated Pari Passu Obligations Governing Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any Indenture Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, no issuance of Additional Notes under the Indenture or Designated Pari Passu Obligations shall be construed as a waiver of any default hereunder, regardless of whether the Collateral Agent or any Secured Party may have had notice or knowledge of such default at the time. No notice or demand on any Indenture Party in any case shall entitle such Indenture Party to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Indenture Party or Indenture Parties and the Designated Pari Passu Obligations Secured Parties (or the Representatives thereof) with respect to which such waiver, amendment or modification is to apply, subject to any consent required under the Indenture or any Designated Pari Passu Obligations Governing Documents. SECTION 13.03. Collateral Agent's Fees and Expenses; Indemnification. (a) The Company agrees to pay the Collateral Agent for its services rendered hereunder the fees described in the separate fee letter between the Company and the Collateral Agent, and to pay all fees and expenses incurred by the Collateral Agent in connection with the performance of its duties and enforcement of its rights hereunder and otherwise in connection with the preparation, operation, administration and enforcement of this Agreement, including, without limitation, reasonable attorney's fees and expenses and other reasonable and related expenses incurred by the Collateral Agent. (b) Each Grantor, to the fullest extent permitted under law, jointly and severally agrees to indemnify the Collateral Agent, its Affiliates and their respective officers, directors, employees, agents and representatives (the "Indemnified Parties") against, and hold each Indemnified Party harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, charges and disbursements of any counsel for any Indemnified Party, incurred by or asserted against any Indemnified Party arising out of the execution, delivery or performance of this Agreement or any agreement or instrument referred to herein or contemplated hereby and the enforcement and protection of the rights of the Collateral Agent thereunder or any claim, litigation, investigation or proceeding relating to any of the foregoing or to the Collateral, whether or not any Indemnified Party is a party thereto; provided that such indemnity shall not, as to any Indemnified Party, be available to the extent that such 34 losses, claims, damages, liabilities or related expenses shall have resulted from the gross negligence or willful misconduct of such Indemnified Party as determined by a court of competent jurisdiction. (c) The provisions of this Section shall remain operative and in full force and effect regardless of the termination of any Noteholder Documents or any Designated Pari Passu Obligations Governing Documents, the consummation of the transactions contemplated hereby, the repayment of any of the Obligation, the invalidity or unenforceability of any term or provision of any Noteholder Documents or any Designated Pari Passu Obligations Governing Documents, or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section shall be payable promptly after written demand therefor. SECTION 13.04. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. SECTION 13.05. Survival of Agreement. All covenants, agreements, representations and warranties made by the Indenture Parties in the Indenture, in the Designated Pari Passu Obligations Governing Documents and in the certificates or other instruments prepared or delivered in connection with or pursuant to the Noteholder Documents or the Designated Pari Passu Obligations Governing Documents shall be considered to have been relied upon by the Secured Parties and shall survive the execution and delivery of the Noteholder Documents and the Designated Pari Passu Obligations Governing Documents and the Designated Pari Passu Obligations, regardless of any investigation made by any Secured Party or on its behalf and notwithstanding that (i) the Collateral Agent, or any Noteholder or (ii) the Collateral Agent or any holder of Designated Pari Passu Obligations, may have had notice or knowledge of an Event of Default or incorrect representation or warranty at the time any Notes are issued under the Noteholder Documents or the Designated Pari Passu Obligations are issued, as the case may be, and shall, subject to Section 13.12, continue in full force and effect as long as the principal of or any accrued interest on any Notes or Designated Pari Passu Obligations, as the case may be, or any fee or any other amount payable under the Indenture or the Designated Pari Passu Governing Documents, as the case may be, is outstanding and unpaid. SECTION 13.06. Counterparts; Effectiveness; Several Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective as provided in this Section. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. This Agreement shall become effective (i) as to any Indenture Party when a counterpart hereof executed on behalf of such Indenture Party shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent and (ii) as to any Designated Pari Passu Obligations Secured Party when an Accession Agreement executed on behalf of such Designated Pari Passu Obligations Secured Party shall have been delivered to the Collateral Agent and such Accession Agreement shall have been executed on behalf of the Collateral Agent. Thereafter this Agreement shall be binding upon such Indenture Party of Designated Pari Passu Obligations Secured Party and the Collateral Agent and their respective permitted successors and assigns, and shall inure to the benefit of such Indenture Party, Designated Pari Passu Obligations Secured Party, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Indenture Party or Designated Pari Passu Obligations Secured Party shall have the right to assign or transfer its rights or obligations hereunder (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement. This Agreement shall be construed as a separate agreement with respect to each Indenture Party or Designated Pari Passu 35 Obligations Secured Party and may be amended, modified, supplemented, waived or released with respect to any Indenture Party without the approval of any other Indenture Party or Designated Pari Passu Obligations Secured Party and without affecting the obligations of any other Indenture Party or Designated Pari Passu Obligations Secured Party hereunder. SECTION 13.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 13.08. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. (b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to the Noteholder Documents or the Designated Pari Passu Obligations Governing Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in any Noteholder Document or in any Designated Pari Passu Obligations Governing Document shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to any Noteholder Document or any Designated Pari Passu Obligations Governing Document in the courts of any jurisdiction. (c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the Indenture or any Designated Pari Passu Obligations Governing Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 13.01. Nothing in this Agreement or the Indenture or any Designated Pari Passu Obligation Governing Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 13.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO ANY NOTEHOLDER DOCUMENT OR ANY DESIGNATED PARI PASSU OBLIGATIONS GOVERNING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, 36 THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 13.10. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 13.11. Security Interest Absolute. The pledges and security interests created by the Noteholder Documents shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture, any Designated Pari Passu Obligations Governing Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement. SECTION 13.12. Termination or Release. The termination of this Agreement and each security interest granted hereby and the release of any Collateral pledged or in which a security interest has been granted hereunder shall be governed by the terms and conditions of the Indenture and any Designated Pari Passu Obligations Governing Document. In connection with any termination or release pursuant to the Indenture or any Designated Pari Passu Obligations Governing Document, the Collateral Agent will execute and deliver to each applicable Grantor, at such Grantor's expense, all documents that such Grantor shall reasonably request to evidence such termination or release. SECTION 13.13. Additional Grantors. (a) Upon execution and delivery by the Collateral Agent and a Subsidiary of an instrument in a form agreed to by the Collateral Agent and the Company (an "Additional Subsidiary Agreement"), such Subsidiary shall become a party hereto and a Grantor under the Indenture and any applicable Designated Pari Passu Obligations Governing Document referenced therein to the extent set forth in such Additional Subsidiary Agreement and shall, to the extent applicable, create pledges of and security interests in its assets to secure the Obligations set forth in such Additional Subsidiary Agreement with the same force and effect as if originally named as a Current Assets Grantor and an Other Collateral Grantor herein. At the time any Subsidiary shall become a party to this Agreement as provided in the preceding sentence, the Schedules hereto shall be supplemented as appropriate to reflect the pledges and security interests, as applicable, given or created by such Subsidiary, and such supplemented Schedules shall replace the Schedules that shall therefore have been attached to this Agreement. The execution and delivery of any Additional Subsidiary Agreement and the amendment of the Schedules hereto as above provided shall not require the consent of any other Indenture Party. The rights and obligations of each Indenture Party shall remain in full force and effect notwithstanding the addition of any new Indenture Party as a party to this Agreement. SECTION 13.14. Collateral Agent Appointed Attorney-in-Fact. Each Grantor hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest in each case upon the occurrence and during the continuance of an Event of Default. Without limiting the generality of the foregoing, the Collateral Agent shall have the 37 right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent's name or in the name of such Grantor (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral of such Grantor or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent relating to the Collateral; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct or the breach of such Person of its obligations set forth herein. SECTION 13.15. Secured Party Obligations. Each Secured Party will perform its obligations and pay all amounts owed by it under the Indenture and the Designated Pari Passu Obligations Governing Documents in accordance with the terms thereof. 38 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. THE GOODYEAR TIRE & RUBBER COMPANY, by /s/ D. R. Wells ----------------------------------- Name: D. R. Wells Title: Vice President and Treasurer 39 WILMINGTON TRUST COMPANY, as Collateral Agent, by /s/ Auita E. Dallago -------------------------------- Name: Auita E. Dallago Title: Senior Financial Services Officer 40 ALLIED TIRE SALES, INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President BELT CONCEPTS OF AMERICA, INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President COSMOFLEX, INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President DAPPER TIRE CO., INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President 41 DIVESTED COMPANIES HOLDING COMPANY, as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ Randall M. Loyd -------------------------------- Name: Randall M. Loyd Title: Vice President by /s/ Ronald J. Carr -------------------------------- Name: Ronald J. Carr Title: Vice President DIVESTED LITCHFIELD PARK PROPERTIES, INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ Randall M. Loyd -------------------------------- Name: Randall M. Loyd Title: Vice President by /s/ Ronald J. Carr -------------------------------- Name: Ronald J. Carr Title: Vice President 42 GOODYEAR CANADA INC., as a CURRENT ASSETS GRANTOR, by /s/ Linda Alexander -------------------------------- Name: Linda Alexander Title: Vice President by /s/ D. S. Hamilton -------------------------------- Name: D. S. Hamilton Title: Secretary GOODYEAR FARMS, INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President GOODYEAR INTERNATIONAL CORPORATION, as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President THE KELLY-SPRINGFIELD TIRE CORPORATION, as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President 43 WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ D. R. Wells -------------------------------- Name: D. R. Wells Title: Vice President WINGFOOT VENTURES EIGHT INC., as a CURRENT ASSETS GRANTOR and an OTHER COLLATERAL GRANTOR, by /s/ Ronald J. Carr -------------------------------- Name: Ronald J. Carr Title: Vice President 44 ACCEPTED AND AGREED, SOLELY FOR PURPOSES OF ARTICLE X: WELLS FARGO BANK, N.A., individually and as Trustee, by /s/ Michael T. Lechner -------------------------------- Name: Michael T. Lechner Title: Assistant Vice President 45 EXHIBIT I FORM OF ACCESSION AGREEMENT AGREEMENT dated as of [-], among [NAME OF ACCEDING REPRESENTATIVE OF HOLDERS OF DESIGNATED PARI PASSU OBLIGATIONS] (the "Acceding Representative"), THE GOODYEAR TIRE & RUBBER COMPANY (the "Company") and WILMINGTON TRUST COMPANY, as Collateral Agent (the "Collateral Agent"). A. Reference is made to the Collateral Agreement, dated as of March 12, 2004 (the "Collateral Agreement"), among the Company and the Collateral Agent. B. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Intercreditor Agreement. C. The Company proposes to issue or incur [describe Designated Pari Passu Obligations] (the "Acceding Obligations"), and the Acceding Representative will serve as Representative for the holders of the Acceding Obligations. The Acceding Obligations are being designated by the Company as Designated Pari Passu Obligations pursuant to Section 11.01 of the Collateral Agreement. D. The Acceding Representative wishes to appoint the Collateral Agent as Collateral Agent under the Collateral Agreement with respect to the Acceding Obligations. Accordingly, the Acceding Representative, the Company and the Collateral Agent agree as follows: SECTION 1. Accession to the Collateral Agreement. The Acceding Representative, on behalf of the holders of the Acceding Obligations hereby (a) becomes a Representative under the Collateral Agreement, (b) accedes and becomes a party thereto and, (b) appoints the Collateral Agent as Collateral Agent thereunder with respect to the Acceding Obligations. SECTION 2. Acceptance of Appointment. The Collateral Agent hereby accepts its appointment as Collateral Agent for the Acceding Representative on behalf of the holders of Acceding Obligations under the Collateral Agreement. SECTION 3. Representations and Warranties Acceding Representative. The Acceding Representative represents and warrants that it has the power and authority to enter into this Agreement and has been authorized to do so by the holders of the Acceding Obligations. SECTION 3. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument. SECTION 4. Benefit of Agreement. The agreements set forth herein or undertaken pursuant hereto are for the benefit of, and may be enforced by, any party to the Collateral Agreement. SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 6. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 13.02 of the Indenture. All communications and notices hereunder to the Acceding Representative shall be given to it at the address set forth under its signature hereto. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. [NAME OF ACCEDING REPRESENTATIVE] By:_______________________ Name: Title: For Notices Attention of: Address: Telecopy No.: WILMINGTON TRUST COMPANY, AS COLLATERAL AGENT By:_______________________ Name: Title: THE GOODYEAR TIRE & RUBBER COMPANY By:_______________________ Name: Title: EX-4.15 16 l07358aexv4w15.txt EX-4.15 LIENSUBORDINATIONINTERCREDITORAGRE 3/12/04 EXHIBIT 4.15 LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of March 12, 2004, among JPMORGAN CHASE BANK, as Credit Facilities Collateral Agent, WILMINGTON TRUST COMPANY, as Initial Junior Indebtedness Collateral Agent and THE GOODYEAR TIRE & RUBBER COMPANY and the Subsidiaries named herein LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of March 12, 2004, among JPMORGAN CHASE BANK, as collateral agent for the Credit Facility Secured Parties referred to herein; WILMINGTON TRUST COMPANY, as collateral agent for the Initial Junior Indebtedness Secured Parties referred to herein; THE GOODYEAR TIRE & RUBBER COMPANY; and the subsidiaries of The Goodyear Tire & Rubber Company named herein. Reference is made to (a) the Credit Agreements (such term, and each other capitalized term used and not otherwise defined herein, having the meaning assigned to it in Article I), under which the Lenders referred to therein have extended and agreed to extend credit to the Company and certain of its subsidiaries, and (b) the Initial Junior Indebtedness Governing Document, under which the Company proposes to issue the Initial Junior Indebtedness. In consideration of the amendment of the Credit Agreements to permit the issuance of the Initial Junior Indebtedness, the purchase of the Initial Junior Indebtedness by the purchasers thereof, the mutual agreements herein contained and other good and valuable consideration, the receipt of which is hereby acknowledged, the Credit Facilities Collateral Agent (for itself and on behalf of the Credit Facilities Secured Parties), the Initial Junior Indebtedness Collateral Agent (for itself and on behalf of the Initial Junior Indebtedness Secured Parties), the Company and the subsidiaries of the Company named herein agree as follows: ARTICLE I Definitions SECTION 1.01. Construction; Certain Defined Terms. (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified, (ii) any reference herein to any person shall be construed to include such person's successors and assigns, but shall not be deemed to include the subsidiaries of such person unless express reference is made to such subsidiaries, (iii) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles and Sections shall be construed to refer to Articles and Sections of this Agreement and (v) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. 2 (b) As used in this Agreement, the following terms have the meanings specified below: "ABL Facilities Agreement" means the Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, Citicorp USA Inc., as syndication agent, and Bank of America, N.A. and The CIT Group/Business Credit, Inc., as documentation agents, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. "Accession Agreement" means an accession agreement in substantially the form of Annex I hereto under which a collateral agent or similar Representative of Designated Senior Obligations or Designated Junior Obligations shall become a party hereto and the Designated Senior Obligations Collateral Agent for such Designated Senior Obligations or the Designated Junior Obligations Collateral Agent for such Designated Junior Obligations hereunder, as the case may be. "Bankruptcy Code" means Title 11 of the U.S. Code. "Collateral" means the US Facilities Collateral, the Designated Senior Obligations Collateral, the Initial Junior Indebtedness Collateral and the Designated Junior Obligations Collateral. "Collateral Agent" means any of the Credit Facilities Collateral Agent, any Designated Senior Obligations Collateral Agent, the Initial Junior Indebtedness Collateral Agent and any Designated Junior Obligations Collateral Agent. "Company" means The Goodyear Tire & Rubber Company, an Ohio corporation. "Credit Agreements" means the US Facilities Credit Agreements and the European Facilities Credit Agreement. "Credit Facilities Collateral Agent" means JPMorgan Chase Bank, in its capacity as Collateral Agent under the Credit Agreements and the Credit Facilities Security Documents, and its successors in such capacity. "Credit Facilities Obligations" means the US Facilities Obligations and the European Facilities Obligations. "Credit Facilities Secured Parties" means the US Facilities Secured Parties and the European Facilities Secured Parties. "Credit Facilities Security Documents" means the Master Guarantee and Collateral Agreement, the "Other Security Documents", as defined therein, and any other documents now existing or entered into after the date hereof that create Liens on any assets or properties of the Company or any of its subsidiaries to secure any Credit Facilities Obligations. 3 "Designated Junior Obligations" means all obligations of the Company or any of its subsidiaries that shall have been designated as such in accordance with Article IV, including any Guarantee of any such obligations by the Company or any of its subsidiaries. "Designated Junior Obligations Collateral" means any assets or properties of the Company or any of its subsidiaries now or at any time hereafter subject to Liens securing any Designated Junior Obligations. "Designated Junior Obligations Collateral Agent" means, with respect to any Designated Junior Obligations, any collateral agent or similar Representative appointed to act on behalf of the applicable Designated Junior Obligations Secured Parties with respect to the Designated Junior Obligations Collateral securing such Designated Junior Obligations; provided, that if no such collateral agent or other Representative shall have been so appointed by the applicable Designated Junior Obligations Secured Parties, then the Designated Junior Obligations Collateral Agent with respect to such Designated Junior Obligations will be deemed to be such Designated Junior Obligations Secured Parties. "Designated Junior Obligations Governing Documents" means, as to any Designated Junior Obligations, the credit agreement, note agreement, indenture or other instrument or document under which such Designated Junior Obligations shall have been issued or incurred. "Designated Junior Obligations Secured Parties" means, at any time, each holder of, or obligee in respect of, any Designated Junior Obligations outstanding at such time. "Designated Junior Obligations Security Documents" means any documents that create Liens on any assets or properties of the Company or any of its subsidiaries to secure any Designated Junior Obligations. "Designated Lenders" means, at any time, the Majority Lenders under and as defined in the Credit Agreement that accounts for the greatest principal amount of the aggregate outstanding loans and letter of credit exposures under all the Credit Agreements at such time. "Designated Senior Obligations" means all obligations of the Company or any of its subsidiaries that shall have been designated as such in accordance with Article IV. "Designated Senior Obligations Collateral" means any assets or properties of the Company or any of its subsidiaries now or at any time hereafter subject to Liens securing any Designated Senior Obligations. "Designated Senior Obligations Collateral Agent" means, with respect to any Designated Senior Obligations, any collateral agent or similar Representative appointed to act on behalf of the applicable Designated Senior Obligations Secured 4 Parties with respect to the Designated Senior Obligations Collateral securing such Designated Senior Obligations; provided, that if no such collateral agent or other Representative shall have been so appointed by the applicable Designated Senior Obligations Secured Parties, then the Designated Senior Obligations Collateral Agent with respect to such Designated Senior Obligations will be deemed to be such Designated Senior Obligations Secured Parties. "Designated Senior Obligations Governing Documents" means, as to any Designated Senior Obligations, the credit agreement, note agreement, indenture or other instrument or document under which such Designated Senior Obligations shall have been issued or incurred. "Designated Senior Obligations Secured Parties" means, at any time, each holder of, or obligee in respect of, any Designated Senior Obligations outstanding at such time. "Designated Senior Obligations Security Documents" means any documents entered into after the date hereof that create Liens on any assets or properties of the Company or any of its subsidiaries to secure any Designated Senior Obligations. "European Facilities Credit Agreement" means the $650,000,000 Term Loan and Revolving Credit Agreement dated as of March 31, 2003, among Goodyear Dunlop Tires Europe B.V., the other borrowers thereunder, certain lenders, JPMorgan Chase Bank, as administrative agent, and Deutsche Bank AG, as syndication agent, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. "European Facilities Guarantees" means the guarantees by the Company and the US Subsidiary Guarantors, under Article II of the Master Guarantee and Collateral Agreement, of the European Facilities Obligations. "European Facilities Obligations" means all "Revolving Obligations" as such term is defined in the European Facilities Credit Agreement and, if the Credit Facilities Security Documents shall at any time be amended to provide collateral for the guarantees thereof by the Company and any of the US Subsidiary Guarantors, all "Term Obligations" as such term is defined in the European Facilities Credit Agreement. "European Facilities Secured Parties" means, at any time, each person that is a "Secured Party" under and as defined in the European Facilities Credit Agreement and each other holder of, or obligee in respect of, any European Facilities Obligations outstanding at such time. "European Facilities US Collateral" means all Collateral subject to European Facilities US Liens. "European Facilities US Liens" means Liens on assets and properties of the Company and the US Subsidiary Guarantors (other than the Luxembourg Finance 5 Pledged Collateral) created under Credit Facilities Security Documents to secure the European Facilities Guarantees. "Grantor" means the Company and each subsidiary of the Company that shall have created any Senior Lien or Junior Lien on its assets or properties to secure any Senior Obligations or Junior Obligations. "Initial Junior Indebtedness" means the $450,000,000 aggregate principal amount of 11% Senior Secured Notes due 2011 and $200,000,000 aggregate principal amount of Senior Secured Floating Rate Notes due 2011 issued on or about the date of this Agreement pursuant to the Initial Junior Indebtedness Governing Document. "Initial Junior Indebtedness Collateral" means the "Collateral", as defined in the Initial Junior Indebtedness Collateral Agreement, and any other assets or properties of the Company or any of its subsidiaries now or at any time hereafter subject to Liens securing any Initial Junior Indebtedness Obligations. "Initial Junior Indebtedness Collateral Agent" means Wilmington Trust Company, in its capacity as Collateral Agent under the Initial Junior Indebtedness Governing Document and the Initial Junior Indebtedness Security Documents, and its successors in such capacity. "Initial Junior Indebtedness Collateral Agreement" means the Collateral Agreement dated as of March 12, 2004, among the Company, certain subsidiaries of the Company and the Initial Junior Indebtedness Collateral Agent, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. "Initial Junior Indebtedness Governing Document" means the Indenture dated as of March 12, 2004, among the Company, as Issuer, certain subsidiaries of the Company, as Guarantors, and Wells Fargo Bank, N.A., as Trustee, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. "Initial Junior Indebtedness Obligations" means (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Initial Junior Indebtedness, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) all other monetary obligations of the Company or any of its subsidiaries to any of the Initial Junior Indebtedness Secured Parties under the Initial Junior Indebtedness Governing Document or any Initial Junior Indebtedness Security Document, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and (iv) all amounts due under any guarantee of any of the foregoing, including any guarantee contained in the Initial Junior Indebtedness Governing Document, and (b) the due and punctual performance of all other obligations of the Company or any of its subsidiaries to 6 any of the Initial Junior Indebtedness Secured Parties under the Initial Junior Indebtedness Governing Document or any Initial Junior Indebtedness Security Document. "Initial Junior Indebtedness Representative" means Wells Fargo bank, N.A., in its capacity as Trustee under the Initial Junior Indebtedness Governing Document. "Initial Junior Indebtedness Secured Parties" means, at any time, the Initial Junior Indebtedness Collateral Agent, the Initial Junior Obligations Representative and each other holder of, or obligee in respect of, any Initial Junior Indebtedness Obligations outstanding at such time. "Initial Junior Indebtedness Security Documents" means the Initial Junior Indebtedness Collateral Agreement and the "Other Security Documents", as defined therein, and any other documents entered into after the date hereof that create Liens on any assets or properties of the Company or any of its subsidiaries to secure any Initial Junior Indebtedness Obligations. "Junior Collateral Agent" means the Initial Junior Indebtedness Collateral Agent and each Designated Junior Obligations Collateral Agent. "Junior Liens" means Liens created under Junior Obligations Security Documents securing Junior Obligations and any other Liens securing the Junior Obligations, however arising (including Liens arising out of judgments obtained by or on behalf of holders of Junior Obligations). "Junior Obligations" means the Initial Junior Indebtedness Obligations and the Designated Junior Obligations. "Junior Obligations Collateral" means the Initial Junior Indebtedness Collateral and the Designated Junior Obligations Collateral. "Junior Obligations Secured Parties" means the Initial Junior Indebtedness Secured Parties and the Designated Junior Obligations Secured Parties. "Junior Obligations Security Documents" means the Initial Junior Indebtedness Security Documents and the Designated Junior Obligations Security Documents. "Lien" means any pledge, security interest, mortgage or other lien or encumbrance created to secure any indebtedness or other obligation. "Master Guarantee and Collateral Agreement" means the Master Guarantee and Collateral Agreement dated as of March 31, 2003, among the Company, certain of its subsidiaries, the Lenders under and as defined in the Credit Agreements and the Credit Facilities Collateral Agent, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. 7 "Representative" means (a) in the case of any Credit Facility Obligations, the Administrative Agent under the applicable Credit Agreement or the Credit Facilities Collateral Agent, (b) in the case of the Initial Junior Indebtedness Obligations, the Initial Junior Indebtedness Representative and the Initial Junior Indebtedness Collateral Agent, and (c) in the case of any Designated Senior Obligations or Designated Junior Obligations, any administrative agent, trustee or similar representative designated pursuant to Article IV or the applicable Designated Senior Obligations Collateral Agent or Designated Junior Obligations Collateral Agent. "Secured Parties" means the Credit Facilities Secured Parties, the Designated Senior Obligations Secured Parties, the Initial Junior Indebtedness Secured Parties and the Designated Junior Obligations Secured Parties. "Senior Collateral Agent" means the Credit Facilities Collateral Agent and each Designated Senior Obligations Collateral Agent. "Senior Obligations" means the US Facilities Obligations and the Designated Senior Obligations. "Senior Obligations Collateral" means the US Facilities Collateral and the Designated Senior Obligations Collateral. "Senior Obligations Secured Parties" means the US Facilities Secured Parties and the Designated Senior Obligations Secured Parties. "Senior Obligations Security Documents" means the Credit Facilities Security Documents and the Designated Senior Obligations Security Documents. "Senior Liens" means Liens created under Senior Obligations Security Documents securing Senior Obligations, and Liens on the Luxembourg Finance Pledged Collateral (as defined in the Master Guarantee and Collateral Agreement) created under the Senior Obligations Security Documents to secure the European Facilities Obligations. "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which are consolidated with those of the parent in the parent's consolidated financial statements in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "US Facilities Collateral" means all "Collateral", as defined in the Master Guarantee and Collateral Agreement, securing any US Facilities Obligations, and any other assets or properties of the Company or any of its subsidiaries now or at any time hereafter subject to Liens securing any US Facilities Obligations. 8 "US Facilities Credit Agreements" means the ABL Facilities Agreement, the US Revolving Facility Agreement and the US Term Facility Agreement. "US Facilities Obligations" means (a) all "Obligations", as such term is defined in any of the US Revolving Facility Agreement, the US Term Facility Agreement or the ABL Facilities Agreement, each as amended and in effect through the date hereof, whether such Obligations are outstanding on the date hereof or hereafter incurred under commitments in effect on the date hereof (including Obligations consisting of the principal of and interest on the "Tranche B Term Loans" provided for in the First Amendment dated as of February 17, 2004, to the ABL Facilities Agreement and Obligations related to such Tranche B Term Loans), (b) additional Obligations consisting of loans, letter of credit reimbursement obligations and related interest and fees incurred under any of the US Revolving Facility Agreement, the US Term Facility Agreement or the ABL Facilities Agreement pursuant to commitments first made available to the Company or any of its subsidiaries after the date hereof (it being agreed that an increase in the amount of letters of credit or other accommodations available under, and limited to the amount of, a revolving credit or similar commitment in effect on the date hereof shall not be deemed to be new commitment) and (c) all "Collateral Agent Obligations" and "US Miscellaneous Obligations", as such terms are defined in the Master Guarantee and Collateral Agreement; provided, that any loans or letter of credit reimbursement obligations referred to in clause (b) above shall (together with any related interest or fees) be excluded from the "US Facilities Obligations" to the extent they are incurred in violation of the Initial Junior Indebtedness Governing Document or any Designated Junior Obligations Governing Document in effect at the earlier of (i) the time of such incurrence or (ii) the time at which the commitments under which such obligations are incurred were first made available. "US Facilities Secured Parties" means, at any time, each person that is a "Secured Party" under and as defined in any of the US Facilities Credit Agreements and each other holder of, or obligee in respect of, any US Facilities Obligations outstanding at such time. "US Revolving Facility Agreement" means the $750,000,000 Amended and Restated Revolving Credit Agreement dated as of March 31, 2003, among the Company, certain lenders and JPMorgan Chase Bank, as administrative agent, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. "US Subsidiary Guarantors" has the meaning assigned to such term in the Master Guarantee and Collateral Agreement. "US Term Facility Agreement" means the $645,454,545 Term Loan Agreement dated as of March 31, 2003, among the Company, certain lenders, JPMorgan Chase Bank, as administrative agent, and BNP Paribas, as syndication agent, as amended, extended, renewed, restated, supplemented or otherwise modified from time to time. 9 ARTICLE II Subordination of Junior Liens SECTION 2.01. Subordination of Junior Liens. (a) All Junior Liens in respect of any Collateral are expressly subordinated and made junior in right, priority, operation and effect to any and all Senior Liens in respect of such Collateral, notwithstanding anything contained in this Agreement, the Initial Junior Indebtedness Governing Document, any Designated Junior Obligations Governing Document, any Junior Obligations Security Document or any other agreement or instrument to the contrary, and irrespective of the time, order or method of creation, attachment or perfection of such Junior Liens and Senior Liens or any defect or deficiency or alleged defect or deficiency in any of the foregoing. (b) It is acknowledged that (i) the aggregate amount of the Senior Obligations may be increased as provided in Article III or through increases in the amounts of the facilities established by the US Facilities Credit Agreements or the Designated Senior Obligations Governing Documents (subject to the limitations set forth in the Initial Junior Indebtedness Governing Document and the Designated Junior Obligations Governing Documents), (ii) a portion of the Senior Obligations consists or may consist of Indebtedness that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed and (iii) the Senior Obligations may be extended, renewed or otherwise amended or modified, or secured with additional Collateral (the Liens on which, to the extent they secure Senior Obligations, shall become Senior Liens), from time to time, all without affecting the subordination of the Junior Liens hereunder or the provisions of this Agreement defining the relative rights of the Senior Obligations Secured Parties and the Junior Obligations Secured Parties. The lien priorities provided for herein shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, restatement or refinancing of either the Junior Obligations or the Senior Obligations, by the securing of any Senior Obligations with any additional Collateral or guarantees (the Liens on which, to the extent they secure Senior Obligations, shall become Senior Liens), by the release of any Collateral or Guarantees securing any Senior Obligations, by the failure of any person to comply with any provision of this Agreement or any agreement evidencing, governing or securing any Senior Obligation or Junior Obligation, or by any action that any Collateral Agent or Secured Party may take or fail to take in respect of any Collateral. Without limiting the foregoing, existing or future Senior Obligations of any class may be secured by Collateral subject to Junior Liens, and the Liens on such Collateral securing such Senior Obligations will constitute Senior Liens entitled to the benefit of this Agreement. (c) It is further acknowledged (i) that the Master Guarantee and Collateral Agreement contains provisions subordinating certain of the Senior Liens to other Senior Liens and (ii) that the holders of Senior Obligations of one or more classes may from time to time hereafter enter into agreements establishing the relative priorities of such classes of Senior Obligations or of the Senior Liens securing the same. It is agreed that the relative priorities of classes of Senior Obligations shall be governed by the foregoing 10 agreements or, to the extent not determined by such agreements, by applicable law, and that nothing in this Agreement shall affect such relative priorities of classes of Senior Obligations or the related Senior Liens. It is further agreed that no agreements establishing the relative priorities of Senior Obligations of one or more classes or of the Senior Liens securing such Senior Obligations shall in any way limit or affect the subordination of the Junior Liens provided for in this Agreement or the provisions of this Agreement defining the relative rights of the Senior Obligations Secured Parties and the Junior Obligations Secured Parties. (d) It is further acknowledged that the Senior Obligations are or may in the future be secured by Liens on Collateral other than the Collateral subject to the Junior Liens, including Liens on certain real properties of the Company and its subsidiaries. It is agreed that no Senior Collateral Agent will have any obligation to proceed against any such other Collateral securing the Senior Obligations or to exercise any other remedies available to them as a condition to obtaining the benefits of this Article II. (e) The Initial Junior Indebtedness Collateral Agent acknowledges receipt of copies of the Credit Agreements and the Credit Facilities Security Documents as in effect on the date hereof. The Company hereby represents, warrants and confirms that the Initial Junior Indebtedness Governing Document and the principal Initial Junior Indebtedness Security Documents (other than any account control or "lock-box" agreements) contain the provisions set forth in Annex II hereto under which the Initial Junior Indebtedness Secured Parties agree to, and subject their rights to the provisions of, this Agreement as set forth therein. SECTION 2.02. No Action With Respect to Junior Obligations Collateral Subject to Senior Liens. No Junior Collateral Agent or other Junior Obligations Secured Party shall commence or instruct any Junior Collateral Agent to commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its interest in or realize upon, or take any other action available to it in respect of, any Junior Obligations Collateral under any Junior Obligations Security Document, applicable law or otherwise, at any time when such Junior Obligations Collateral shall be subject to any Senior Lien and any Senior Obligations secured by such Senior Lien shall remain outstanding or any commitment to extend credit that would constitute Senior Obligations secured by such Senior Lien shall remain in effect, it being agreed that only the applicable Senior Collateral Agent, acting in accordance with the applicable Senior Obligations Security Documents, shall be entitled to take any such actions or exercise any such remedies. Notwithstanding the foregoing, any Junior Collateral Agent may, subject to Section 2.05, take all such actions as it shall deem necessary to continue the perfection of the Junior Liens on any Junior Obligations Collateral. SECTION 2.03. No Duties of Senior Collateral Agents. Each Junior Obligations Secured Party acknowledges and agrees that no Senior Collateral Agent or other Senior Obligations Secured Party shall have any duties or other obligations to such Junior Obligations Secured Party with respect to any Senior Obligations Collateral, other 11 than to transfer to the Junior Collateral Agents any proceeds of any such Collateral that constitutes Junior Obligations Collateral remaining in its possession following any sale, transfer or other disposition of such Collateral, the payment and satisfaction in full of the Senior Obligations secured thereby and the termination of any commitment to extend credit that would constitute Senior Obligations secured thereby, or, if any Senior Collateral Agent shall be in possession of all or any part of such Collateral after such payment and satisfaction in full and termination, such Collateral or any part thereof remaining, in each case without representation or warranty on the part of such Senior Collateral Agent or any Senior Obligations Secured Party (it being understood that nothing herein shall prohibit any Senior Collateral Agent from transferring Collateral or proceeds of Collateral to the holders of other Senior Obligations secured by such Collateral or to another Senior Collateral Agent acting on their behalf to the extent it is required to do so under the terms of any agreement). In furtherance of the foregoing, each Junior Obligations Secured Party acknowledges and agrees that until the Senior Obligations secured by any Collateral shall have been paid and satisfied in full and any commitment to extend credit that would constitute Senior Obligations secured thereby shall have been terminated, the applicable Senior Collateral Agents shall be entitled, for the benefit of the holders of such Senior Obligations, to sell, transfer or otherwise dispose of or deal with such Collateral as provided herein and in the Credit Facilities Security Documents or the Designated Senior Obligations Security Documents, as the case may be, without regard to any Junior Lien or any rights to which the holders of the Junior Obligations would otherwise be entitled as a result of such Junior Lien. Without limiting the foregoing, each Junior Obligations Secured Party agrees that no Senior Collateral Agent or other Senior Obligations Secured Party shall have any duty or obligation first to marshall or realize upon any type of Collateral (or any other collateral securing the Senior Obligations), or to sell, dispose of or otherwise liquidate all or any portion of the Collateral (or any other collateral securing the Senior Obligations), in any manner that would maximize the return to the Junior Obligations Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of proceeds actually received by the Junior Obligations Secured Parties from such realization, sale, disposition or liquidation. Each of the Junior Obligations Secured Parties waives any claim such Junior Obligations Secured Party may now or hereafter have against any Senior Collateral Agent or other Senior Obligations Secured Party (or their representatives) arising out of (i) any actions which any Senior Collateral Agent or the Senior Obligations Secured Parties take or omit to take (including, without limitation, actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the Senior Obligations from any account debtor, guarantor or any other party) in accordance with the respective Senior Obligations Security Documents or any other agreement related thereto or to the collection of the Senior Obligations or the valuation, use, protection or release of any security for the Senior Obligations, (ii) any election by any Senior Collateral Agent or Senior Obligations Secured Parties, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b) of the Bankruptcy Code and/or (iii) any borrowing of any 12 Grantor as debtor-in-possession, or any related grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code. SECTION 2.04. No Interference; Payment Over; Reinstatement. (a) Each Junior Obligations Secured Party agrees that (i) it will not take or cause to be taken any action the purpose or effect of which is, or could be, to make any Junior Lien pari passu with, or to give such Junior Obligations Secured Party any preference or priority relative to, any Senior Lien with respect to the Collateral subject to such Junior Lien or any part thereof, (ii) it will not challenge or question in any proceeding the validity or enforceability of any Senior Obligations or Senior Obligations Security Document, or the validity, attachment, perfection or priority of any Senior Lien, or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement, (iii) it will not interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of the Collateral subject to such Junior Lien by any holders of Senior Obligations secured by such Collateral or any Senior Collateral Agent acting on their behalf; provided that nothing in this clause shall prevent any Junior Obligations Secured Party from objecting to or otherwise opposing any sale, transfer or other disposition of Collateral submitted to a bankruptcy court for approval in a case under the Bankruptcy Code in which the debtor is a Grantor, (iv) it shall have no right to (A) direct any Senior Collateral Agent or any holder of Senior Obligations to exercise any right, remedy or power with respect to the Collateral subject to any Junior Lien or (B) consent to the exercise by any Senior Collateral Agent or any holder of Senior Obligations of any right, remedy or power with respect to the Collateral subject to any Junior Lien, (v) it will not institute any suit or assert in any suit, bankruptcy, insolvency or other proceeding any claim against any Senior Collateral Agent or any holder of Senior Obligations seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to, and neither any Senior Collateral Agent nor any holder of Senior Obligations shall be liable for, any action taken or omitted to be taken by such Senior Collateral Agent or any such holder of Senior Obligations with respect to any Collateral securing such Senior Obligations that is subject to any Junior Lien; provided that nothing in this clause shall prevent any Junior Obligations Secured Party from asserting or seeking to enforce any provision of this Agreement, (vi) it will not seek, and hereby waives any right, to have any Senior Obligations Collateral subject to any Junior Lien or any part thereof marshaled upon any foreclosure or other disposition of such Collateral and (vii) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement. (b) Each Junior Collateral Agent and each other Junior Obligations Secured Party hereby agrees that if it shall obtain possession of any Senior Obligations Collateral, or shall realize any proceeds or payment in respect of any such Collateral, whether pursuant to any Junior Obligations Security Document or by the exercise of any rights available to it under applicable law or in any bankruptcy, insolvency or similar proceeding or otherwise, at any time when any Senior Obligations secured or intended to be secured by such Collateral shall remain outstanding or any commitment to extend credit that would constitute Senior Obligations secured or intended to be secured by such Senior Lien shall remain in effect, then it shall hold such Collateral, proceeds or payment 13 in trust for the applicable Senior Obligations Secured Parties and transfer such Collateral, proceeds or payment, as the case may be, to the applicable Senior Collateral Agent (it being agreed that if there is more than one applicable Senior Obligations Collateral Agent, such Collateral, proceeds or payment shall be distributed in accordance with the relative priorities of the Liens of such Senior Collateral Agents on the relevant Collateral, proceeds or payment). Each Junior Obligations Secured Party agrees that if, at any time, all or part of any payment with respect to any Senior Obligations previously made shall be rescinded for any reason whatsoever, such Junior Obligations Secured Party shall promptly pay over to the applicable Senior Collateral Agent any payment received by it in respect of any Collateral subject to any Senior Lien securing such Senior Obligations and shall promptly turn any Collateral subject to any such Senior Lien then held by it over to the applicable Senior Collateral Agent, and the provisions set forth in this Agreement shall be reinstated as if such payment had not been made, until the payment and satisfaction in full of the applicable Senior Obligations. SECTION 2.05. Automatic Release of Junior Liens. Each Junior Collateral Agent and each other Junior Obligations Secured Party agrees that, in the event of a sale, transfer or other disposition of Senior Obligations Collateral subject to any Junior Lien, such Junior Lien on such Collateral shall terminate and be released automatically and without further action if the applicable Senior Liens on such Collateral are released. Each Junior Collateral Agent agrees to execute and deliver all such releases and other instruments as shall reasonably be requested by any applicable Senior Collateral Agent to evidence and confirm any release of Junior Obligations Collateral provided for in this Section. SECTION 2.06. Certain Agreements With Respect to Bankruptcy or Insolvency Proceedings. In the event a proceeding under the Bankruptcy Code or any other Federal, state or foreign bankruptcy, insolvency, receivership or similar law shall be commenced by or against any Grantor, each Junior Collateral Agent and the other Junior Obligations Secured Parties shall not, so long as any Senior Obligations are outstanding, (a) seek in respect of any part of the Collateral or proceeds thereof or any Lien which may exist thereon any relief from or modification of the automatic stay as provided in Section 362 of the Bankruptcy Code or seek or accept any form of adequate protection under either or both of Sections 362 and 363 of the Bankruptcy Code with respect thereto except replacement liens junior to the Senior Liens, the accrual (but not the current payment) of interest and the current payment of out-of-pocket expenses, including fees and disbursements of counsel and other professional advisors, incurred by the Junior Collateral Agents (which the Junior Obligations Secured Parties agree will constitute adequate protection of their claims and interests), (b) oppose or object to any adequate protection sought by or granted to any Senior Obligations Secured Party in connection with the use of cash collateral or post-petition financing under Section 362, 363 or 364 of the Bankruptcy Code, (c) oppose or object to the use of cash collateral by a Grantor, unless the Designated Lenders, or a Representative authorized by the Designated Lenders, shall have opposed or objected to such use of cash collateral, (d) oppose or object to any post-petition financing (including any debtor-in-possession financing) provided by any of the Senior Obligations Secured Parties or provided by a third party pursuant to Section 364 of the Bankruptcy Code (including on a priming basis), unless 14 the Designated Lenders, or a Representative authorized by the Designated Lenders, shall have opposed or objected to such post-petition financing, (e) oppose or object to the determination of the extent of any Liens held by any of the Senior Obligations Secured Parties or the value of any claims of Senior Obligations Secured Parties under Section 506(a) of the Bankruptcy Code, or (f) oppose or object to the payment of interest and expenses as provided under Sections 506(b) and (c) of the Bankruptcy Code to any Senior Obligations Secured Parties. SECTION 2.07. Reinstatement. In the event that any of the Senior Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including, but not limited to, an order or judgment for disgorgement of a preference under the Bankruptcy Code, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall be fully applicable thereto until all such Senior Obligations shall again have been paid in full in cash. ARTICLE III Pari Passu Status of Junior Liens and European Facilities US Liens SECTION 3.01. Equal Priority of Junior Liens and European Facilities US Liens. (a) Subject to Section 3.04, all Junior Liens and European Facilities US Liens in respect of any Collateral are expressly agreed to be equal in right, priority, operation and effect, notwithstanding anything contained in this Agreement, the Initial Junior Indebtedness Governing Document, any Designated Junior Obligations Governing Document, any Junior Obligations Security Document or any other agreement or instrument to the contrary, and irrespective of the time, order or method of creation, attachment or perfection of such Junior Liens and European Facilities US Liens or any defect or deficiency or alleged defect or deficiency in any of the foregoing. (b) It is acknowledged that (i) the aggregate amount of the Junior Obligations and European Facilities Obligations may be increased from time to time (subject to the limitations contained in the Credit Agreements, the Initial Junior Indebtedness Governing Document, the Designated Junior Obligations Governing Documents and other agreements and instruments to which the Company and its subsidiaries are party), (ii) a portion of the European Facilities Obligations and Designated Junior Obligations consists or may consist of Indebtedness that is revolving in nature, and the amount thereof that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed and (iii) the Junior Obligations and European Facilities Obligations may be extended, renewed or otherwise amended or modified, or secured with additional Collateral, from time to time, all without affecting the equal priority of the Junior Liens and European Facilities US Liens or the provisions of this Agreement defining the relative rights of the Junior Secured Parties and the European Facilities Secured Parties. Subject to Section 3.04, the equal priority of the Junior Liens and European Facilities US Liens shall not be altered or otherwise affected by any amendment, modification, supplement, extension, increase, replacement, renewal, restatement or refinancing of either the Junior Obligations or the European Facilities 15 Obligations, by the securing of any Junior Obligations or the European Facilities Obligations with any additional Collateral or guarantees, by the release of any Collateral or Guarantees securing any Junior Obligations or the European Facilities Obligations or by any action that any Collateral Agent or Secured Party may take or fail to take in respect of any Collateral. (c) It is further acknowledged (i) that the Master Guarantee and Collateral Agreement contains provisions subordinating the European Facilities US Liens to the Senior Liens securing the US Facilities Obligations and (ii) that the European Facilities Secured Parties and the holders of other Senior Obligations of one or more classes may from time to time hereafter enter into agreements establishing the relative priorities of the European Facilities Obligations and such classes of other Senior Obligations or of the Liens securing the same. It is agreed that the relative priorities of the European Facilities Obligations and the Senior Obligations shall be governed by the foregoing agreements or, to the extent not determined by such agreements, by applicable law, and that nothing in this Agreement shall affect such relative priorities of the European Facilities Obligations and the Senior Obligations of any class or of the Liens securing any of such obligations. It is further agreed that no agreements establishing the relative priorities of the European Facilities Obligations and the Senior Obligations of one or more classes or of the Liens securing such obligations shall in any way limit or affect the provisions of this Agreement defining the relative rights of the European Facilities Secured Parties and the Junior Secured Parties. (d) It is further acknowledged that the European Facilities Obligations are secured by Liens on collateral other than the Collateral subject to the Junior Liens and European Facilities US Liens, including Liens on assets and properties of European subsidiaries of the Company created by the European Facilities Security Documents (as defined in the Master Guarantee and Collateral Agreement). It is agreed that the Credit Facilities Collateral Agent and the European Facilities Secured Parties will have no obligation to proceed against any such other collateral securing the European Facilities Obligations or to exercise any other remedies available to them as a condition to obtaining the benefits of this Article III, and that any proceeds realized through the exercise of remedies afforded by the Junior Liens and European Facilities US Liens will be allocated ratably among the European Facilities Secured Parties and the Junior Secured Parties as provided in Section 3.02 based on the respective amounts of the European Facilities Obligations and Junior Obligations owed to them, notwithstanding that the European Facilities Secured Parties may have additional collateral or remedies available to them that are not available to the Junior Secured Parties. SECTION 3.02. Sharing of Proceeds. In the event that any Junior Obligations Collateral or proceeds of Junior Obligations Collateral shall be obtained by any European Facilities Secured Party through the exercise of remedies afforded by any European Facilities US Lien or otherwise (other than as a result of any distribution made pursuant to the provisions of this paragraph), the party obtaining such Collateral or proceeds shall (i) promptly notify each Junior Collateral Agent (or, in the case of a European Facilities Secured Party other than the Credit Facilities Collateral Agent, the Credit Facilities Collateral Agent, which shall promptly notify each Junior Collateral 16 Agent) and (ii) in the case of any European Facilities Secured Party other than the Credit Facilities Collateral Agent, promptly deliver such Collateral or proceeds to the Credit Facilities Collateral Agent. In the event that any European Facilities US Collateral or proceeds of European Facilities US Collateral shall be obtained by any Junior Secured Party through the exercise of remedies afforded by any Junior Lien or otherwise (other than as a result of any distribution made pursuant to the provisions of this paragraph), the party obtaining such proceeds shall (i) promptly notify each Senior Collateral Agent (or, in the case of a Junior Secured Party other than a Junior Collateral Agent, the applicable Junior Collateral Agent, which shall promptly notify each Senior Collateral Agent) and (ii) in the case of any Junior Secured Party other than a Junior Collateral Agent, promptly deliver such Collateral or proceeds to the applicable Junior Collateral Agent. Promptly following the delivery of any notice (and any Collateral or proceeds thereof) as provided in either of the two preceding sentences, the Credit Facilities Collateral Agent and the Junior Collateral Agents shall arrange for the division of the Collateral or proceeds to which such notice relates between the Credit Facilities Collateral Agent and the Junior Collateral Agents, ratably in accordance with the outstanding amounts of the European Facilities Obligations and the Junior Secured Obligations secured thereby, respectively (as such outstanding amounts shall be certified by the applicable Collateral Agents), and the Credit Facilities Collateral Agent and each Junior Collateral Agent will distribute the Collateral or proceeds received by it pursuant to such division among the European Facilities Secured Parties or the applicable Junior Secured Parties, as the case may be, and, if applicable, to the Company or the Grantors, in accordance with the Credit Facilities Security Documents or the Junior Security Documents, respectively. Notwithstanding the foregoing, (a) if any Collateral received by any European Facilities Secured Party or Junior Secured Party as provided in either of the first two sentences of this paragraph shall consist of assets other than cash, the Credit Facilities Collateral Agent and the Junior Collateral Agents may make such arrangements as they shall agree to be reasonable for the holding of such Collateral pending its liquidation or distribution, and (b) neither the Company nor any Grantor consents to any such sharing of proceeds that were obtained in violation of any Credit Facilities Security Document or Junior Obligations Security Document or are required to be returned to the Company or any Grantor under the provisions of any Credit Facilities Security Document or Junior Obligations Security Document. SECTION 3.03. Rights and Obligations Subject to Article II. Notwithstanding any other provision contained herein, the rights and obligations of the European Facilities Secured Parties and the Junior Secured Parties under this Article III shall in all respects be subject to the provisions of Article II of this Agreement. SECTION 3.04. Designation of European Facilities Obligations as Designated Senior Obligations. Notwithstanding any of the foregoing provisions of this Article III, if any European Facilities Obligations shall at any time be designated as Designated Senior Obligations in compliance with Section 4.01 (including the requirement of Section 4.01 that such designation shall not violate or result in a default under any provision of the Initial Junior Indebtedness Governing Document or any existing Designated Junior Obligations Governing Document), then (a) such European Facilities Obligations shall for all purposes of this Agreement constitute Senior 17 Obligations and the European Facilities US Liens securing such European Facilities Obligations shall for all purposes of this Agreement constitute Senior Liens, (b) the foregoing provisions of this Article III shall no longer be applicable to such European Facilities Obligations or European Facilities US Liens and (c) the provisions of Article II shall govern the relative priorities and rights of such European Facilities Obligations, the related European Facilities US Liens, the Junior Obligations and the Junior Liens. ARTICLE IV Designated Senior Obligations and Designated Junior Obligations SECTION 4.01. Designation. The Company may from time to time, subject to any limitations contained in the Credit Agreements, any existing Designated Senior Obligations Governing Documents, the Initial Junior Indebtedness Governing Document and any existing Designated Junior Obligations Governing Documents, designate additional Indebtedness and related obligations that are, or are to be, secured by Liens on any assets or properties of the Company or any of its subsidiaries as Designated Senior Obligations or Designated Junior Obligations by delivering to each Collateral Agent a notice: (i) describing the obligations being designated as Designated Senior Obligations or Designated Junior Obligations, and including a statement of the maximum aggregate outstanding principal amount of such obligations; (ii) listing the Designated Senior Obligations Governing Documents or Designated Junior Obligations Governing Documents under which such Designated Senior Obligations or Designated Junior Obligations are issued or incurred and the Designated Senior Obligations Security Documents or Designated Junior Obligations Security Documents securing such Designated Senior Obligations or Designated Junior Obligations, and attaching copies of such Designated Senior Obligations Governing Documents and Designated Senior Obligations Security Documents or such Designated Junior Obligations Governing Documents and Designated Junior Obligations Security Documents; (iii) identifying the Designated Senior Obligations Collateral Agent or Designated Junior Obligations Collateral Agent with respect to such Designated Senior Obligations or Designated Junior Obligations, and any other Representative of the holders of such Designated Senior Obligations or Designated Junior Obligations; (iv) certifying that the incurrence of such Designated Senior Obligations or Designated Junior Obligations, the creation of the Liens securing such Designated Senior Obligations or Designated Junior Obligations and the designation of such Designated Senior Obligations or Designated Junior Obligations as Designated Senior Obligations or Designated Junior Obligations hereunder do not violate or result in a default under any provision of any Credit Agreement, any existing Designated Senior Obligations Governing Document, the Initial Junior Indebtedness Governing Document or any existing Designated Junior Obligations Governing Document; 18 (v) in the case of any Designated Junior Obligations, certifying that the Designated Junior Obligations Governing Document governing such Designated Junior Obligations and each related principal Designated Junior Obligations Security Document (other than any account control or "lock-box" agreement) contains a provision substantially to the effect set forth in Annex II hereto under which the applicable Designated Junior Obligations Secured Parties agree, or are deemed to agree, to be bound by the provisions of this Agreement; and (vi) attaching a fully executed Accession Agreement under which the Designated Senior Obligations Collateral Agent or Designated Junior Obligations Collateral Agent with respect to such Designated Senior Obligations or Designated Junior Obligations shall become a party to and a Collateral Agent under this Agreement (unless such Designated Senior Obligations Collateral Agent or Designated Junior Obligations Collateral Agent shall already be a party hereto). Upon the delivery of such notice and the related attachments as provided above, the obligations designated in such notice shall become Designated Senior Obligations or Designated Junior Obligations, as the case may be, for all purposes of this Agreement. Notwithstanding any other provision contained in this Section or elsewhere in this Agreement, (A) no obligation shall constitute a Designated Senior Obligation if the incurrence of such obligation, the creation of the Liens securing such obligation or the designation of such obligation as a Designated Senior Obligation hereunder would violate or result in a default under any provision of any Credit Agreement, any existing Designated Senior Obligations Governing Document, the Initial Junior Indebtedness Governing Document or any existing Designated Junior Obligations Governing Document, and (B) no Designated Junior Obligation shall be entitled to the benefits of Article III if the incurrence of such obligation, the creation of the Liens securing such obligation or the designation of such obligation as a Designated Junior Obligation hereunder would violate or result in a default under any provision of the Initial Junior Indebtedness Governing Document or any existing Designated Junior Obligations Governing Document (it being agreed that any such Designated Junior Obligation and the related Designated Junior Obligations Secured Parties shall nevertheless be subject to Article II and bound by the obligations of Junior Obligations Secured Parties hereunder). ARTICLE V Sub-Agency for Perfection of Certain Security Interests Each Senior Collateral Agent acknowledges and agrees that if it shall at any time hold a Senior Lien (or, in the case of the Credit Facilities Collateral Agent, a European Facilities US Lien) on any Junior Obligations Collateral that can be perfected by the possession or control of such Collateral or of any account in which such Collateral is held, and if such Collateral or any such account is in fact in the possession or under the control of such Senior Collateral Agent, such Senior Collateral Agent will serve as sub-agent for each Junior Collateral Agent for the sole purpose of perfecting the Junior Lien of such Junior Collateral Agent in such Collateral and shall have possession or control of such Collateral as agent on behalf of each Junior Collateral Agent. It is agreed that the 19 obligations of the applicable Senior Collateral Agent and the rights of the Junior Collateral Agents and the other Junior Obligations Secured Parties in connection with any such sub-agency arrangement will be in all respects subject to the provisions of Article II. The Senior Collateral Agent will be deemed to make no representation as to the adequacy of the steps taken by it to perfect the Junior Lien on any such Collateral and shall have no responsibility to any Junior Collateral Agent or other Junior Obligations Secured Party for such perfection, it being understood that the sole purpose of this Article is to enable the Junior Obligations Secured Parties to obtain a perfected Junior Lien in such Collateral to the extent that such perfection results from the possession or control of such Collateral or any such account by the Senior Collateral Agent. At such time as the Senior Obligations secured by the Senior Lien of such Senior Collateral Agent (and, in the case of the Credit Facilities Collateral Agent, the European Facilities Obligations secured by the European Facilities US Liens of such Collateral Agent) shall have been paid and satisfied in full and any commitment to extend credit that would constitute such Senior Obligations (or European Facilities Obligations) shall have been terminated, such Senior Collateral Agent shall take all such actions in its power as shall reasonably be requested by the applicable Junior Collateral Agents to transfer possession of such Collateral to the Junior Collateral Agents or to transfer direct control of such Collateral or any such account to the Junior Collateral Agents; provided, that if any such Collateral or any such account shall be subject to any other Senior Lien, then such Senior Collateral Agent shall instead transfer possession of such Collateral to the Senior Collateral Agent holding such Senior Lien or take such actions in its power as shall reasonably be requested to transfer direct control of such Collateral or any such account to the Senior Collateral Agent holding such Senior Lien. Each Junior Collateral Agent agrees that if it shall obtain possession or direct control of any Collateral or any account pursuant to the foregoing provisions and such Collateral or account shall thereafter become subject to any Senior Lien, it will take all such actions in its power as shall reasonably be requested by the Senior Collateral Agent holding such Senior Lien to transfer possession of such Collateral to such Senior Collateral Agent or take such actions in its power as shall reasonably be requested to transfer direct control of such Collateral or any such account to the Senior Collateral Agent holding such Senior Lien. ARTICLE VI Existence and Amounts of Liens and Obligations Whenever any Collateral Agent shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Senior Obligations, European Facilities Obligations or Junior Obligations, or the existence of any Lien securing any such obligations, or the Collateral subject to any such Lien, it may request that such information be furnished to it in writing by the Representative of such Senior Obligations, European Facilities Obligations or Junior Obligations and shall be entitled to make such determination on the basis of the information so furnished; provided, however, that if, notwithstanding the request of such Collateral Agent, such Representative shall fail or refuse reasonably promptly to provide the requested information, such Collateral Agent shall be entitled to determine such existence or amount by such method as it may, in the exercise of its good faith judgment, 20 determine, including by reliance upon a certificate of the Company. Each Collateral Agent may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Secured Party or any affiliate thereof as a result of such determination. ARTICLE VII Consent of Grantors Each Grantor hereby consents to the provisions of this Agreement and the intercreditor arrangements provided for herein and agrees that the obligations of the Grantors under the Senior Obligations Security Documents will in no way be diminished or otherwise affected by such provisions or arrangements. ARTICLE VIII Representations and Warranties SECTION 8.01. Representations and Warranties of Each Party. Each Secured Party hereto represents and warrants to the other Secured Parties hereto as follows: (a) Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to enter into and perform its obligations under this Agreement. (b) This Agreement has been duly executed and delivered by such party and constitutes a legal, valid and binding obligation of such party, enforceable in accordance with its terms. (c) The execution, delivery and performance by such party of this Agreement (i) do not require any consent or approval of, registration or filing with or any other action by any governmental authority and (ii) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of such party or any order of any governmental authority or any indenture, agreement or other instrument binding upon such party. SECTION 8.02. Representations and Warranties of Each Collateral Agent. Each Collateral Agent represents and warrants to the other parties hereto that it has been authorized and directed by the Secured Parties for which it serves as collateral agent (or, in the case of the Credit Facilities Collateral Agent, by the Majority Lenders under and as defined in each Credit Agreement) to enter into this Agreement. 21 ARTICLE IX Miscellaneous SECTION 9.01. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: (a) if to the Credit Facilities Collateral Agent, to JPMorgan Chase Bank, Loan & Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of Debbie Meche and Cliff Trapani (Telecopy No. (713) 750-2938, with a copy to JPMorgan Chase Bank, 270 Park Avenue, New York, NY 10017, Attention of Robert Kellas (Telecopy No. (212) 270-3089); (b) if to the Initial Junior Indebtedness Collateral Agent, to Wilmington Trust Company, Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001, attention of the Corporate Trust Administration (Telecopy No. (302) 636-4145); (c) if to any Designated Senior Obligations Collateral Agent or Designated Junior Obligations Collateral Agent, to it at the address or telecopy number specified in the applicable Accession Agreement; and (d) if to the Company, to it at 1144 East Market Street, Akron, Ohio, 44316-0001, attention of the Treasurer (Telecopy No. (330) 796-6502 or (330) 796-8836). Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto (and for this purpose a notice to the Company shall be deemed to be a notice to each Grantor). All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. SECTION 9.02. Waivers; Amendment. (a) No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered 22 into by each Collateral Agent, the Company and each Grantor with respect to which such waiver, amendment or modification is to apply. SECTION 9.03. Parties in Interest. This Agreement shall be binding upon and inure to the benefit of the parties hereto (including any Designated Senior Obligations Collateral Agents or Designated Junior Obligations Collateral Agents becoming parties hereto as provided in Section 9.04) and their respective successors and assigns, as well as the other Credit Facilities Secured Parties, Initial Junior Indebtedness Secured Parties, Designated Senior Obligations Secured Parties and Designated Junior Obligations Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement. SECTION 9.04. Accession of Designated Senior Obligations Collateral Agents and Designated Junior Obligations Collateral Agents. Upon the execution and delivery by the collateral agent or similar Representative of any Designated Senior Obligations or Designated Junior Obligations of an Accession Agreement as provided in Article IV, such collateral agent or Representative shall become a party to this Agreement as the Designated Senior Obligations Collateral Agent for such Designated Senior Obligations or the Designated Junior Obligations Collateral Agent for such Designated Junior Obligations, as the case may be, and shall thenceforth have all the rights and obligations applicable to it in such capacity hereunder. SECTION 9.05. Survival of Agreement. All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement. SECTION 9.06. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. SECTION 9.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 9.08. Governing Law; Jurisdiction; Consent to Service of Process. (a) This Agreement shall be construed in accordance with and governed by the law of the State of New York. 23 (b) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party hereto may otherwise have to bring any action or proceeding relating to this Agreement in the courts of any jurisdiction. (c) Each party hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 9.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 9.10. Specific Performance. Each party hereto (a) agrees that any other party hereto may demand specific performance of this Agreement and (b) irrevocably waives any defense based on the adequacy of a remedy at law, and any other defense, that might be asserted in opposition to the awarding of specific performance in any action that may be brought by any other party hereto. 24 SECTION 9.11. Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. 25 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. JPMORGAN CHASE BANK, as Credit Facilities Collateral Agent, By /s/ Robert P. Kellas ---------------------------- Name: Robert P. Kellas Title: Vice President 26 WILMINGTON TRUST COMPANY, as Initial Junior Indebtedness Collateral Agent, By /s/ James A. Hanley -------------------------------------- Name: James A. Hanley Title: Senior Financial Services Officer 27 THE GOODYEAR TIRE & RUBBER COMPANY By /s/ D. R. Wells ---------------------------- Name: D. R. Wells Title: Vice President and Treasurer 28 ALLIED TIRE SALES, INC., By /s/ D. R. Wells ----------------------------- Name: D. R. Wells Title: Vice President BELT CONCEPTS OF AMERICA, INC., By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President COSMOFLEX, INC., By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President DAPPER TIRE CO, INC., By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President DIVESTED COMPANIES HOLDING COMPANY, By /s/ Randall M. Loyd ------------------------------ Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------ Name: Ronald J. Carr Title: Vice President 29 DIVESTED LITCHFIELD PARK PROPERTIES, INC., By /s/ Randall M. Loyd ------------------------------ Name: Randall M. Loyd Title: Vice President By /s/ Ronald J. Carr ------------------------------ Name: Ronald J. Carr Title: Vice President GOODYEAR FARMS, INC., By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President GOODYEAR INTERNATIONAL CORPORATION, By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President THE KELLY-SPRINGFIELD TIRE CORPORATION, By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President 30 WINGFOOT VENTURES EIGHT, INC., By /s/ Ronald J. Carr ------------------------------ Name: Ronald J. Carr Title: Vice President WINGFOOT COMMERCIAL TIRE SYSTEMS, LLC, By /s/ D. R. Wells ------------------------------ Name: D. R. Wells Title: Vice President GOODYEAR CANADA INC., By /s/ Linda Alexander ------------------------------ Name: Linda Alexander Title: Vice President By /s/ D. S. Hamilton ------------------------------ Name: D. S. Hamilton Title: Secretary ANNEX I [Form of] ACCESSION AGREEMENT AGREEMENT dated as of [-], among [NAME OF ACCEDING DESIGNATED OBLIGATIONS COLLATERAL AGENT] (the "Acceding Designated [Senior] [Junior] Obligations Collateral Agent") and THE GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation (the "Company"). A. Reference is made to the Lien Subordination and Intercreditor Agreement dated as of March 12, 2004 (the "Intercreditor Agreement"), among the Credit Facilities Collateral Agent, the Initial Junior Indebtedness Collateral Agent, the Company, the Subsidiary Parties and [any Designated Senior Obligations Collateral Agent or Designated Junior Obligations Collateral Agent that has heretofore become a party thereto by way of accession]. B. Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Intercreditor Agreement. C. The Company proposes to issue or incur [describe Designated [Senior] [Junior] Obligations] (the "Acceding Obligations"), and the Acceding Designated [Senior] [Junior] Obligations Collateral Agent will serve as collateral agent for the holders of the Acceding Obligations. The Acceding Obligations are being designated by the Company as Designated [Senior] [Junior] Obligations in accordance with Section 4.01 of the Intercreditor Agreement. D. The Acceding Designated [Senior] [Junior] Obligations Collateral Agent wishes to become a party to the Intercreditor Agreement and to acquire and undertake, for itself and on behalf of the holders from time to time of the [Designated [Senior] [Junior] Obligations] the rights and obligations of a Designated [Senior] [Junior] Obligations Collateral Agent thereunder. The Acceding Designated [Senior] [Junior] Obligations Collateral Agent is entering into this Agreement in accordance with the provisions of the Intercreditor Agreement in order to become a Designated [Senior] [Junior] Obligations Collateral Agent thereunder. Accordingly, the Acceding Designated [Senior] [Junior] Obligations Collateral Agent and the Company agree as follows, for the benefit of the Acceding Designated [Senior] [Junior] Obligations Collateral Agent, the Company and each other party to the Intercreditor Agreement: SECTION 1. Accession to the Intercreditor Agreement. The Acceding Designated [Senior] [Junior] Obligations Collateral Agent (a) hereby accedes and becomes a party to the Intercreditor Agreement as Designated [Senior] [Junior] Obligations Collateral Agent for the holders from time to time of the 2 Acceding Obligations, (b) agrees, for itself and on behalf of the holders from time to time of the Acceding Obligations, to all the terms and provisions of the Intercreditor Agreement and (c) shall have all the rights and obligations of a Designated [Senior] [Junior] Obligations Collateral Agent under the Intercreditor Agreement. SECTION 2. Representations, Warranties and Acknowledgement of Acceding Designated [Senior] [Junior] Obligations Collateral Agent. The Acceding Designated [Senior] [Junior] Obligations Collateral Agent represents and warrants that it has the power and authority to enter into this Agreement and has been authorized to do so by the holders of the Acceding Obligations. The Acceding Designated [Senior] [Junior] Obligations Collateral Agent confirms that it has received a copy of the Intercreditor Agreement as in effect on the date hereof. SECTION 3. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument. SECTION 4. Benefit of Agreement. THE AGREEMENTS SET FORTH HEREIN OR UNDERTAKEN PURSUANT HERETO ARE FOR THE BENEFIT OF, AND MAY BE ENFORCED BY, ANY PARTY TO THE INTERCREDITOR AGREEMENT. SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 6. Severability. In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, none of the parties hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 7. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.01 of the Intercreditor Agreement. All communications and notices hereunder to the Acceding Designated [Senior] [Junior] Obligations Collateral Agent shall be given to it at the address set forth under its signature hereto, which information supplements Section 9.01 to the Intercreditor Agreement. 3 IN WITNESS WHEREOF, the Acceding Designated [Senior] [Junior] Obligations Collateral Agent and the Company have duly executed this Agreement as of the day and year first above written. [NAME OF ACCEDING DESIGNATED OBLIGATIONS COLLATERAL AGENT], as a Designated [Senior] [Junior] Obligations Collateral Agent by ______________________________ Name: Title: For Notices Attention of: Address: Telecopy No.: THE GOODYEAR TIRE & RUBBER COMPANY By ______________________________ Name: Title: ANNEX II Provision for Designated Junior Obligations Governing Document REFERENCE IS MADE TO THE LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS OF MARCH 12, 2004, AMONG JPMORGAN CHASE BANK, AS COLLATERAL AGENT FOR THE CREDIT FACILITIES SECURED PARTIES REFERRED TO THEREIN; WILMINGTON TRUST COMPANY, AS COLLATERAL AGENT FOR THE INITIAL JUNIOR INDEBTEDNESS SECURED PARTIES REFERRED TO THEREIN; THE GOODYEAR TIRE & RUBBER COMPANY; THE SUBSIDIARIES OF THE GOODYEAR TIRE & RUBBER COMPANY NAMED THEREIN; AND THE DESIGNATED SENIOR OBLIGATIONS COLLATERAL AGENTS AND DESIGNATED JUNIOR OBLIGATIONS COLLATERAL AGENTS BECOMING PARTIES THERETO FROM TIME TO TIME (THE "INTERCREDITOR AGREEMENT"). EACH [HOLDER OF DESIGNATED JUNIOR OBLIGATIONS] (A) [HEREBY CONSENTS][WILL BE DEEMED TO HAVE CONSENTED] TO THE SUBORDINATION OF THE [LIENS SECURING THE DESIGNATED JUNIOR OBLIGATIONS] ON THE TERMS SET FORTH IN THE INTERCREDITOR AGREEMENT, (B) [HEREBY AGREES][WILL BE DEEMED TO HAVE AGREED] THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND (C) [HEREBY AUTHORIZES AND INSTRUCTS][WILL BE DEEMED TO HAVE AUTHORIZED AND INSTRUCTED] THE [DESIGNATED JUNIOR OBLIGATIONS COLLATERAL AGENT] TO ENTER INTO THE INTERCREDITOR AGREEMENT AND TO SUBJECT THE [DESIGNATED JUNIOR OBLIGATIONS] AND THE [LIENS SECURING THE DESIGNATED JUNIOR OBLIGATIONS] TO THE PROVISIONS THEREOF. THE FOREGOING PROVISIONS ARE INTENDED AS AN INDUCEMENT TO THE SENIOR OBLIGATIONS SECURED PARTIES (AS DEFINED IN THE INTERCREDITOR AGREEMENT) TO EXTEND CREDIT TO THE GOODYEAR TIRE & RUBBER COMPANY AND ITS SUBSIDIARIES, AND SUCH SENIOR OBLIGATIONS SECURED PARTIES ARE INTENDED THIRD PARTY BENEFICIARIES OF SUCH PROVISIONS AND THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. Provision for Designated Junior Obligations Security Document REFERENCE IS MADE TO THE LIEN SUBORDINATION AND INTERCREDITOR AGREEMENT DATED AS OF MARCH 12, 2004, AMONG JPMORGAN CHASE BANK, AS COLLATERAL AGENT FOR THE CREDIT FACILITIES SECURED PARTIES REFERRED TO THEREIN; WILMINGTON TRUST COMPANY, AS COLLATERAL AGENT FOR THE INITIAL JUNIOR INDEBTEDNESS SECURED PARTIES REFERRED TO THEREIN; THE GOODYEAR TIRE & Rubber Company; THE SUBSIDIARIES OF THE GOODYEAR TIRE & Rubber Company named therein; AND THE DESIGNATED SENIOR OBLIGATIONS COLLATERAL AGENTS AND DESIGNATED JUNIOR OBLIGATIONS COLLATERAL AGENTS BECOMING PARTIES THERETO FROM TIME TO TIME (THE "INTERCREDITOR AGREEMENT"). NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN, THIS AGREEMENT, THE LIENS CREATED HEREBY AND THE RIGHTS, REMEDIES, DUTIES AND OBLIGATIONS PROVIDED FOR HEREIN ARE SUBJECT IN ALL RESPECTS TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND, TO THE EXTENT PROVIDED THEREIN, THE SENIOR OBLIGATIONS SECURITY DOCUMENTS (AS DEFINED IN THE INTERCREDITOR AGREEMENT). IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THIS AGREEMENT AND THE INTERCREDITOR AGREEMENT, THE PROVISIONS OF THE INTERCREDITOR AGREEMENT SHALL CONTROL. EX-10.1 17 l07358aexv10w1.txt EX-10.1 EXECUTIVE PERFORMANCE PLAN-EFF 1/1/04 Exhibit 10.1 Executive Performance Plan of The Goodyear Tire & Rubber Company Effective January 1, 2004 I. PURPOSE This Executive Performance Plan of The Goodyear Tire & Rubber Company (the "Plan") is intended to (i) advance the interests of the Company and its shareholders by strengthening the Company's ability to attract, retain and reward key personnel and (ii) motivate key personnel to achieve business objectives established to promote the Company's long term growth, profitability and success. II. DEFINITIONS For purposes of this Plan, each of the following terms has the indicated meaning: "Committee" means the Compensation Committee of the Company's Board of Directors. "Company" means The Goodyear Tire & Rubber Company, its subsidiaries and affiliates. "Grant" means the number of Units granted by the Committee to a Participant. "Grant Agreement" means any agreement or other instrument making a Grant and setting forth the Performance Goals, Performance Measures and Performance Period related to the Grant and such other terms deemed necessary or appropriate by the Committee. "Participant" means any salaried employee of the Company selected by the Committee to receive a Grant under this Plan. "Performance Award" means the number of Units included in a Grant multiplied by the related Unit Value. "Performance Goals" means one or more targets, goals or levels of attainment required to be achieved in terms of the specified Performance Measures during the specified Performance Period, all as determined by the Committee and set forth in the related Grant Agreement. "Performance Measures" means one or more of the criteria used by the Committee to establish and measure attainment of Performance Goals for a Performance Period. "Performance Period" means one or more periods of time, which may be of varying and overlapping duration, as selected by the Committee, during which attainment of Performance Goals is measured' provided, however, that no Performance Period may be less than one year in duration. "Plan" means this Executive Performance Plan of the Company, as then amended at any time. "Unit" means one multiple of Unit Value. "Unit Value" means the amount of the cash value of each Unit granted to a Participant; Unit Value may vary by Grant or Participant and is based upon attainment of Performance Goals. III. THE COMMITTEE A) The Plan will be administered by the Committee. No member of the Committee will participate in this Plan. The Committee may take any action permitted by this Plan at any meeting at which a quorum is present and which is held upon not less than five days' notice to each member of the meeting's time, place and purpose. A majority of the members of the Committee will constitute a quorum, and any act of a majority of the members present at any meeting at which a quorum is present will be the act of the Committee. Any one or more members of the Committee may participate in a meeting by conference telephone or similar means by which each participant can hear and speak to each other participant. Participation by any such means will constitute presence in person at the meeting. The Committee may take any permitted action by written consent of a majority of its members, and such action will be as effective as if the action had been taken by unanimous vote at a meeting duly called and held. The minutes of each meeting (signed by the Committee's secretary) evidencing any permitted action, will constitute authority for the Company to act in accordance therewith. The Company will make Grants in accordance with the terms and conditions specified by the Committee, as set forth in the related Grant Agreement. B) The Committee has full power and authority to administer this Plan in accordance with its terms, including, but not limited to, the power to: (i) select Participants; (ii) make Grants; (iii) determine Unit Value; (iv) establish Performance Goals, Performance Measures and Performance Periods; (v) change the terms of any Grant previously made; (vi) guarantee a minimum Unit Value; (vii) prescribe the terms of any Grant Agreement; (viii) interpret this Plan and make any determination of fact incident to the operation of this Plan; (ix) terminate or amend this Plan without stockholder approval, unless such approval is then required by applicable law or rule, including without limitation any amendment necessary or appropriate to comply with the laws of other countries; (x) delegate to other persons the responsibility for performing administrative or ministerial acts pursuant to this Plan; (xi) engage the services of persons and firms, including without limitation banks, legal advisors, consultants and insurance companies, in connection with the administration and interpretation of this Plan and (xii) make all other determinations and take all other actions as the Committee may deem necessary or advisable for the administration of this Plan. C) Any determination, decision or action of the Committee in connection with the construction, interpretation, administration or application of this Plan, or of any Grant Agreement, shall be final, conclusive and binding upon a Participant and any person claiming through the Participant. IV. ELIGIBILITY AND TERMS The Committee will select Participants in its sole discretion, subject to the terms of this Plan. At the time each Grant is made, the Committee will establish and set forth in a Grant Agreement the amount of the Grant and the related Performance Measures, Performance Goals and -2- Performance Period. At the end of any Performance Period, the Committee will calculate each Performance Award and advise the Company of the amount of cash payment to be made to each Participant. V. PERFORMANCE GOALS, PERFORMANCE MEASURES AND PERFORMANCE PERIODS Each Grant Agreement will provide that, in order for a Participant to receive a Performance Award, the Company must achieve specified Performance Goals over the Performance Period, with attainment of Performance Goals determined using specific Performance Measures. Performance Goals and the Performance Period will be established by the Committee in its sole discretion. The Committee also will establish Performance Measures for each Performance Period. The Committee may, in its sole discretion, revise or amend Performance Goals or Performance Measures at any time prior to distribution of a Performance Award for any Grant. The Committee may, in its sole discretion, guarantee, eliminate or reduce the amount of any Performance Award that otherwise would be payable to a Participant upon attainment of the Performance Goals. VI. FORM OF GRANTS Grants may be made on any terms and conditions not inconsistent with this Plan, and the related Grant Agreement may be in such form, as the Committee, in its sole discretion, may approve. Subject to the terms of this Plan, the Committee will, in its sole discretion, determine the number of Units included in each Grant, and the Committee may impose different terms and conditions on any particular Grant. The Performance Goals, Performance Measures and Performance Period applicable to any Grant shall be set forth in the related Grant Agreement. VII. PAYMENT OF AWARDS Payment in settlement of a Performance Award will be made in cash and at such time or times as the Committee, in its sole discretion, shall determine. VIII. DEFERRAL OF PAYMENT The Committee may, whether at the time of Grant or at anytime thereafter that is prior to payment or settlement, require a Participant to defer, or permit (subject to such conditions as the Committee may from time to time establish) a Participant to elect to defer, receipt of all or any portion of any payment of cash that would otherwise be due to such Participant in payment or settlement of any Performance Award. If any such deferral is required by the Committee (or is elected by the Participant with the permission of the Committee), the Committee shall establish rules and procedures for such payment deferrals. IX. MISCELLANEOUS A) Withholding Taxes. Each Performance Award\ will be made subject to any applicable withholding for taxes. The Company may deduct from any Performance Award any and all federal, state, city, local or foreign taxes of any kind required by law to be withheld with respect to such payment and to take such other actions as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. -3- B) No Right to Employment. Neither the adoption of this Plan nor the making of any Grant will confer upon any employee any right to continued employment with the Company, nor interfere in any way with the right of the Company to terminate the employment of any employee at any time, with or without cause, subject to the terms of any employment agreement or provision of applicable law. C) Non-Transferability of Grants. No Grant, and no right or interest therein, shall (i) be assignable, alienable or transferable by any Participant, except by will or the laws of descent and distribution or (ii) be subject to any obligation, or the lien or claims of any creditor, of any Participant or (iii) be subject to any lien, encumbrance or claim of any person made in respect of or through any Participant, however arising D) Unfunded Plan. The Plan will be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by Grants or Performance Awards. Any liability of the Company to any person with respect to any Performance Award will be based solely upon any contractual obligation effected pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. E) Change in Control. Nothing in this Plan shall prevent or interfere with any recapitalization or reorganization of the Company or its merger or consolidation with any other corporation. In any such case, the recapitalized, reorganized, merged or consolidated company shall assume the obligations of the Company under this Plan or such modification hereof as, in the judgment of the Board of Directors, shall be necessary to adapt it to the changed situation and shall provide substantially equivalent benefits to each Participant. F) Engaging in Competition with Company. If a Participant terminates his or her employment with the Company for any reason whatsoever, and within eighteen (18) months after the date thereof accepts employment with any competitor of, or otherwise engages in competition with, the Company, the Committee, in its sole discretion, may require such Participant to return, or (if not received) to forfeit, to the Company the dollar amount of any Performance Award to which the Participant otherwise would be entitled with respect to the period to date commencing with the date that is six months prior to the date of the Participant's termination of employment with the Company or during such other period as the Committee may determine. G) Other Company Benefit and Compensation Programs. Payment of a Performance Award will not be deemed part of a Participant's regular, recurring compensation for purposes of any termination indemnity or severance pay law of any country and will not be included in, nor have any effect on, the determination of benefits under any pension or other employee benefit plan or similar arrangement provided by the Company, unless (i) expressly so provided by such other plan or arrangement or (ii) the Committee expressly determines that all or part of the Performance Award should be included as recurring compensation. No provision of this Plan may be deemed to prohibit the Company from establishing other special awards, incentive compensation plans, compensation programs and other similar arrangements providing for the payment of performance, incentive or other compensation to employees. Payments and benefits provided to any employee under any other plan, including, without limitation, any stock option, stock award, restricted stock, deferred compensation, savings, retirement or other benefit plan or arrangement, will be governed solely by the terms of such other plan. -4- H) Grant Agreement. As a condition to receiving a Grant, a Participant shall enter into a Grant Agreement with the Company in a form specified by the Committee, agreeing to the terms and conditions of the Grant and such related matters as the Committee shall, in its sole discretion, determine. I) Severability. If any provision of this Plan shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the remaining provisions of this Plan. J) Governing Law. The Plan shall be governed by and construed in accordance with the laws of the State of Ohio. -5- EX-10.2 18 l07358aexv10w2.txt EX-10.2 ROBERT KEEGAN EMPLOYMT AGRMT 2/3/04 Exhibit 10.2 February 3, 2004 Mr. Robert J. Keegan 3015 Round Hill Drive Akron, Ohio 44333 Dear Bob: The purpose of this agreement is to supplement and amend the existing agreement between you and The Goodyear Tire & Rubber Company ("Goodyear" or the "Company"), dated September 11, 2000 (the "2000 Agreement"). In consideration for our respective promises made herein and the continuing promises made in the 2000 Agreement, you and Goodyear agree as follows: 1. Severance Compensation. Subject to the provisions, and upon compliance with the conditions, specified in this Agreement, upon the termination of your employment with Goodyear under either of the circumstances described in subparagraphs (a) or (b) below, Goodyear will pay you, within 60 days of the termination of your employment, a lump sum (net of required withholdings) equal to (x) two times the sum of your annual base salary and your target bonus then in effect under the Goodyear Performance Recognition Plan, or any equivalent successor plan ("PRP") plus (y) the pro rata portion of your target bonus under Goodyear's PRP for the then current fiscal year, based on the number of days in that fiscal year that have elapsed up to the date of your termination. (a) Termination of your employment by Goodyear without Cause. For this purpose, "Cause" shall mean: (i) a significant violation by you of Goodyear's policies, grossly incompetent performance or other gross misconduct on your part; (ii) a material breach by you of the terms of this Agreement or the 2000 Agreement; 2 (iii) your prolonged or repeated absence from duty without consent of the Board of Directors of Goodyear for reasons other than your incapacity due to illness; (iv) your acceptance of a position with another employer which conflicts with your duties as a full-time employee of Goodyear; or (v) your conviction of a crime other than minor traffic offenses. (b) You terminate your employment with Goodyear for Good Reason; provided the termination takes place within six months of the occurrence of the Good Reason. For this purpose "Good Reason" shall mean: (i) a material breach by Goodyear of the terms of this Agreement or the 2000 Agreement; or (ii) significant reduction by Goodyear of your titles, positions, duties, and/or authority. It is understood that the severance compensation provided for in this Agreement will not be paid in the event of any of the following: -- termination of your employment because of your death or disability; -- termination by Goodyear for Cause; -- any termination by you in the absence of Good Reason, or more than six months after the Good Reason purporting to be the basis for the termination; or -- any termination following a change in control of Goodyear, in which case you would receive benefits pursuant to the terms of Goodyear's change in control severance plan for executives, as described in the 2000 Agreement. 3 Payment of the severance compensation specified in this paragraph 1 shall be (A) in lieu of any compensation or payment that may otherwise be payable to you pursuant to any severance or similar plan or arrangement of Goodyear and (B) conditioned upon your delivery of a waiver and release signed by you, in the form reasonably required by Goodyear. Upon your request, Goodyear will agree to make the payments specified in this paragraph 1 in future quarterly, semi-annual or annual installments over the two-year period following your date of termination. 2. Excise Tax. If it is determined that any severance compensation payment Goodyear makes to you under paragraph 1 of this Agreement is subject to Federal excise taxes imposed on golden parachute payments, then Goodyear will pay you an additional amount (a "gross-up" payment) reasonably calculated to cover (a) the amount of such excise tax, plus (b) the amount of any interest, penalties or additions to any tax which are imposed in connection with the imposition of such excise tax, plus (c) all income and other applicable taxes imposed on you under the laws of any Federal, state or local government or taxing authority by reason of the payments required under this paragraph 2. In the event of any disagreement between you and Goodyear with respect to the amount of payments due as a result of the imposition of any excise tax under this paragraph 2, the matter shall be referred for determination to tax counsel selected by Goodyear's independent auditors. Goodyear shall pay the fees and expenses of such tax counsel. The determination of such tax counsel of the gross-up payment shall be conclusive and binding upon all parties, unless the Internal Revenue Service ("IRS") determines that you owe a greater or lesser amount of excise tax than the amount determined by tax counsel appointed as described above. You agree to cooperate with Goodyear if Goodyear determines to appeal such IRS determination; provided that Goodyear agrees to pay the additional expenses of such an appeal, together with any advances of additional excise tax that must be paid by you in order to effect such an appeal. 3. Exclusive Remedy. It is understood that Goodyear may terminate your employment at any time and nothing in this Agreement is intended to require, or shall be construed as requiring, Goodyear to allow you to continue actively performing any of your duties. Irrespective of whether the termination of your employment is without Cause, for Good Reason or for any other reason or for no reason, you will not be entitled to any severance compensation from Goodyear under this Agreement or otherwise, except to the extent and under the conditions set 4 forth in this Agreement, which severance compensation will be your exclusive remedy. 4. Term. The term of this Agreement shall be from February 3, 2004 to February 28, 2009, unless sooner terminated by the mutual written consent of both you and Goodyear. The parties may also extend this Agreement for subsequent terms upon mutual written agreement. 5. 2000 Agreement. Except as they relate to the severance payments described in paragraph 1 of this Agreement, the provisions of the 2000 Agreement shall remain in effect, subject to the terms of Goodyear's respective compensation and benefit plans as they may be in effect from time to time. 6. Non-Compete. If your employment with Goodyear is terminated for any reason entitling you to receive the severance compensation benefits pursuant to paragraph 1 of this Agreement, then for a period of two years immediately following the date of your termination, you agree to abide by the following covenants and restrictions: (a) You shall not participate as an owner, shareholder (except for an interest of less than one percent in the shares of a pubic company), director, officer, employee, consultant or otherwise in any business that competes with Goodyear in the manufacture, distribution or sale of any Goodyear product. (b) You shall not directly or indirectly solicit or encourage any Goodyear employee to leave Goodyear or to accept a position with any other company. (c) You shall not use or disclose to anyone any confidential information regarding Goodyear. In the event of a breach or threatened breach of any term of this paragraph 6, Goodyear shall be entitled to injunctive relief and/or damages. You and Goodyear agree that breach of these provisions would cause irreparable injury to Goodyear for which there would be no adequate remedy at law, due among other reasons to the inherent difficulty of determining the precise impact of and causation for loss of customers/consumers or key employees or having confidential information disclosed. 5 7. Choice of Law. Except to the extent preempted by federal law, this Agreement and the 2000 Agreement shall be governed by and construed in accordance with the laws of Ohio, other than laws that might otherwise refer construction or interpretation of this provision to the substantive law of another jurisdiction. 8. Binding Effect. This Agreement shall be binding on and inure to the benefit of your heirs and representatives and the successors and assigns of Goodyear. 9. Survival of Agreement. Except as otherwise expressly provided in this Agreement, the rights and obligations of you and Goodyear under this Agreement shall survive the expiration of this Agreement and the termination of your employment with Goodyear. 10. Non-Alienation. No benefits payable under this Agreement shall be pledged or assigned in anticipation of payment either by voluntary or involuntary acts, or by operation of law. 11. Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and if sent by registered or certified mail to you at the last address you have filed in writing with the Company or, in the case of the Company, to its principal executive offices. 12. Severability. The agreements contained herein and within the release prescribed by paragraph 1 ("Release") shall each constitute a separate agreement independently supported by good and adequate consideration, and shall each be severable from the other provisions of the Agreement and such Release. If an arbitrator or court of competent jurisdiction determines that any term, provision or portion of this Agreement or such Release is void, illegal or unenforceable, the other terms, provisions and portions of this Agreement or such Release shall remain in full force and effect, and the terms, provisions and portions that are determined to be void, illegal or unenforceable shall either be limited so that they shall remain in effect to the extent permissible by law, or such arbitrator or court shall substitute, to the extent enforceable, provisions similar thereto or other provisions, so as to provide to Goodyear, to the fullest extent permitted by applicable law, the benefits intended by this Agreement and such Release. 6 13. Acknowledgments. In addition to any other rights or remedies, whether legal, equitable, or otherwise, that each of the parties to this Agreement may have, you acknowledge that (a) The covenants incorporated in paragraph 6 ("Covenants") are essential to the continued good will and profitability of Goodyear; (b) Your breach of any of the Covenants will result in your immediate forfeiture of all rights under this Agreement; and in the event of any such breach by you, you shall, at Goodyear's request, return all payments made pursuant to this Agreement; (c) You have broad-based skills that will serve as the basis for employment opportunities that are not prohibited by the Covenants; and (d) When your employment with Goodyear terminates, you will be able to earn a livelihood without violating any of the terms of this Agreement. In addition, you acknowledge that you have signed and are bound by the terms of The Goodyear Tire & Rubber Company Associate Confidentiality and Intellectual Property Agreement ("ACIPA") and agree that the ACIPA shall remain in full force and effect and your obligations under it are not affected by this Agreement. 14. Amendment. This Agreement and the 2000 Agreement may be amended or cancelled by mutual written agreement of you and Goodyear without the consent of any other person. If you concur with the provisions of this Agreement, please sign two copies and return one to the Company. 7 Very truly yours, THE GOODYEAR TIRE & RUBBER COMPANY By: /s/ Kathleen T. Geier ---------------------------------- K. T. Geier Senior Vice President Human Resources Attest: /s/ C. Thomas Harvie ------------------------------ C. T. Harvie Secretary AGREED: /s/ Robert J. Keegan - ------------------------- Robert J. Keegan Dated: 1/29/04 EX-10.3 19 l07358aexv10w3.txt EX-10.3 GRANT AGREE. PERFORMANCE EQTY PLN UNT GRNT Exhibit 10.3 THE GOODYEAR TIRE & RUBBER COMPANY GRANT AGREEMENT PERFORMANCE EQUITY PLAN UNIT GRANT Name Title The 2002 Performance Plan of The Goodyear Tire & Rubber Company (the "Company") was adopted effective April 15, 2002 (the "Plan"). A copy of the Plan is attached. At the __________ meeting of the Compensation Committee of the Board of Directors, you were awarded a Performance Equity Plan Unit Grant (each Unit equivalent in value to one share of Common Stock of the Company) as follows: Date of Grant: Number of Units Granted: Performance Period: The number of Performance Equity Plan Units specified above (the "Units") which you will earn at the end of the three-year Performance Period specified above (the "Performance Period") will be determined by and contingent upon the extent to which Performance Goals are achieved. The number of Units actually earned may be adjusted between 0 and 150% of the number of Units stated above, depending on the level of achievement of Performance Goals. Payment of the Units earned will be made as provided under the General Terms and Conditions. The Performance Measure, Performance Goals and Distribution Schedule for the Performance Period for your Performance Equity Plan Unit Grant are described at Annex A. The Goodyear Tire & Rubber Company Grant Agreement received and agreed to: ___________________________________ __________________ Date 1 GRANT AGREEMENT (Continued) GENERAL TERMS AND CONDITIONS 1. The Performance Equity Plan Unit Grant for the number of Units specified above is granted to you under, and governed by the terms and conditions of, the Plan and this Grant Agreement. Your execution and return of the enclosed copy of this Grant Agreement constitutes your agreement to, and acceptance of, all terms and conditions of the Plan and this Grant Agreement. You also agree that you have read and understand the provisions of the Plan, this Grant Agreement and Annex A. 2. All rights conferred upon you under the provisions of this Grant Agreement are personal to you and, no assignee, transferee or other successor in interest shall acquire any rights or interests whatsoever under this Grant Agreement, which is made exclusively for the benefit of you and the Company except by will or the laws of descent and distribution. 3. As further consideration for the Units granted to you hereunder, you must remain in the continuous employ of the Company or one or more of its subsidiaries until December 31, 2005, the end of the Performance Period. Any Units earned will be prorated in the event of your death, Retirement (defined as termination of employment at any age after 30 or more years, or at age 55 or older with at least 10 years of continuous service with the Company and its subsidiaries) or Disability (defined as termination of employment while receiving benefits under a long-term disability income plan maintained by the Company or one of its subsidiaries) prior to completion of the Performance Period. Any proration is based on the last day you worked. Nothing contained herein shall restrict the right of the Company or any of its subsidiaries to terminate your employment at any time, with or without cause. 4. You will forfeit the right to receive any distribution or payment under this Grant if you enter into a relationship either as an employee, consultant, agent or in any manner whatsoever with an entity that sells products in competition with products sold by the Company and its subsidiaries within six months after the earlier of (1) the date you receive your distribution of Units earned or (2) the date you cease to be an employee of the Company or one of its subsidiaries. 5. The number of Units earned will be paid as follows: (a) Each Unit earned will be valued at a dollar amount equal to the Fair Market Value of the Common Stock (as defined below) on December 31, ____ (the "Unit Value"). (b) The Company will pay to you an amount equal to 50% of the Unit Value multiplied by the total number of Units earned in cash and an amount equal to 50% of the total number of units earned in shares of the Common Stock of the Company (the "Common Stock") less such withholding and payroll taxes as the Company shall determine to be necessary or appropriate (withholding and payroll taxes to be deducted from the cash portion of the payment) in February of ____; provided, however, that notwithstanding the foregoing, you may elect, by 2 delivering a written notice of your election to the Company not later than March 30, ____, to defer all or a specified whole percentage of the aforesaid Units earned until the Optional Deferral Date (as defined below), in which event the amount you elect to defer (which shall be equal to the product of UE x PDE, where UE equals the number of Units earned and PDE equals the percentage, expressed as a decimal, of the Units earned you elect to defer) will be credited in February of ____ to an account maintained in the records of the Company (the "Optional Deferred Amount") and will be converted into Deferral Units. The amount of such deferral will be reduced, if necessary, to pay such tax, payroll and other withholding obligations as the Company shall determine to be necessary or appropriate. (c) Notwithstanding the foregoing, the Compensation Committee of the Board of Directors may, at its sole election, at any time and from time to time require that the payment of the entire, or any portion of the, Unit Value of any number of the Units earned shall be deferred until the Optional Deferral Date, or such later date as it shall deem appropriate, in order for the Company to conform to the requirements of Section 162(m) of the Internal Revenue Code (the "Required Deferral Amount"). Any Required Deferral Amount so deferred will be credited to an account maintained in the records of the Company and will be converted into Deferral Units, the number of which shall be determined by dividing each amount so deferred by the Fair Market Value of the Common Stock on the date of such deferral. 6. As used herein, the term: (1) "Deferral Unit" means an equivalent to a hypothetical share of the Common Stock; (2) "Fair Market Value of the Common Stock" means, in respect of any date on or as of which a determination thereof is being or to be made, the average of the high and low per share sale prices of the Common Stock on the New York Stock Exchange Composite Transactions Tape on such date or, if the Common Stock was not traded on such date, the next preceding day on which the Common Stock was traded on the New York Stock Exchange; (3) "Dividend Equivalent" means, with respect to each dividend payment date for the Common Stock, an amount equal to the cash dividend per share of Common Stock which is payable on such dividend payment date; (4) "Optional Deferral Date" means the first business day of the twelfth month following the month during which you cease to be employed by the Company, or one of its subsidiary companies, for any reason (whether Retirement, Disability, death, voluntary termination or otherwise; (5) "Optional Deferral Unit" means each Deferral Unit resulting from any Optional Deferred Amount, including Dividend Equivalents credited in respect thereof; and (6) "Required Deferral Unit" means each Deferral Unit resulting from any Required Deferred Amount, including Dividend Equivalents credited in respect thereof. All computations relating to Deferral Units, fractions of shares of Common Stock and Dividend Equivalents will be rounded, if necessary, to the fourth decimal place. 7. Each Deferral Unit will be credited with one Dividend Equivalent on each date on which cash dividends are paid on shares of the Common Stock (and each fraction of a Deferral Unit shall be credited with a like fraction of a Dividend Equivalent). Dividend Equivalents (and fractions thereof, if any) will be automatically translated into Deferral Units by dividing the dollar amount of such Dividend Equivalents by the Fair Market Value of the Common Stock on the date the relevant Dividend Equivalents are accrued to your account. The number of Deferral Units (and any fractions thereof) resulting will be credited to your account (in lieu of the dollar 3 amount of such Dividend Equivalent) and shall continually be denominated in Deferral Units until converted for payment as provided in this Grant Agreement. 8. If you have duly elected to receive payment of all or a specified percentage of your Deferral Units on the Optional Deferral Date (or if payment of any of the Deferral Units has been deferred until the Optional Deferral Date pursuant to the conversion thereof into Required Deferral Units), you may elect, at the time and in the manner specified below, to receive such Deferral Units in (1) a lump sum on the fifth business day following the Optional Deferral Date, or (2) in a series of not less than five (5) or more than ten (10) annual installments commencing on the fifth business day following the Optional Deferral Date, or (3) a specified percentage of your Deferral Units on the fifth business day following the Optional Deferral Date and the balance of your Deferral Units in installments as specified in clause (2) of this sentence. 9. On the Optional Deferral Date (to the extent you have not elected to receive payment in installments), the whole Deferral Units then in your account (which have not been designated for payment in installments) will be converted at your election (which election shall be made in writing on or before the last day of the seventh month prior to the month during which the Optional Deferral Date occurs), into (1) a like number of shares of the Common Stock, or (2) a dollar amount determined by multiplying the number of whole Deferral Units credited to your account by the Fair Market Value of the Common Stock on the Optional Deferral Date, or (3) a combination of shares of the Common Stock and cash in accordance with your election (which shall be expressed as a percentage of the Deferral Units to be paid in shares of the Common Stock). In accordance with your election, within five business days following the Optional Deferral Date you will be paid (a) such number of shares of the Common Stock, (b) such amount of cash, or (c) the elected combination of shares of Common Stock and cash, the amounts of which shall be determined in accordance with the preceding sentence. If you did not make an election as to the form of payment on or before the required date, you will receive payment in shares of the Common Stock. Any fraction of a Deferral Unit will be paid to you on the relevant date in cash, the amount of which shall be calculated in the manner specified above. 10. If you desire to receive payment of your Deferral Units or a portion thereof in annual installments, you may elect (by delivering to the Company a written notice of your election, which shall specify the number of annual installments, not later than December 31 of the calendar year which is two calendar years prior to the year during which the Optional Deferral Date occurs) to receive all, or a specified whole percentage of, the Deferral Units in your account (which would otherwise be scheduled for distribution on the Optional Deferral Date) in not less than five (5) or more than ten (10) annual installments, payable commencing on the fifth business day following the Optional Deferral Date and thereafter on the fifth business day following each anniversary thereof until paid in full. You may also elect (in writing on or before the last day of the seventh month prior to the month during which the Optional Deferral Date occurs) to receive payment in shares of the Common Stock, cash or any combination of Common Stock and cash (expressed as a percentage of the Deferral Units to be paid in shares of the Common Stock. Each installment shall be in an amount equal to the total number of Deferral Units credited to your account on the Optional Deferral Date, or on the anniversary thereof which is the fifth business day prior to the date such installment is due and payable, as the case may be, divided by the number of annual installments remaining (including the annual installment then being calculated for payment) to be paid. In respect of each installment, the number of Deferral Units payable shall, in accordance with your election, be converted into (1) a like number of shares of the Common Stock, (2) a dollar amount determined by multiplying the number of whole Deferral 4 Units credited to your account by the Fair Market Value of the Common Stock on the relevant anniversary of the Optional Deferral Date (or the Optional Deferral Date in the case of the first installment), or (3) the elected combination of shares of the Common Stock and cash, the amounts of which shall be determined in the manner specified above. Any fraction of Deferral Unit will be paid to you on the relevant date in cash, the amount of which shall be calculated in the manner specified above. 11. You will be required to satisfy all Federal, state and local tax and payroll withholding obligations, and any other withholding obligations, arising in respect of any distribution of shares of the Common Stock or cash to you. To the extent there is sufficient cash available, such withholding obligations will be deducted from your distribution. To the extent the amount of cash to be distributed is not sufficient to satisfy all withholding obligations, you may elect in writing on or before the last day of the seventh month prior to the month during which the Optional Deferral Date occurs to pay such withholding obligations as a condition of your receipt of any distribution of shares of the Common Stock or to have the number of shares of the Common Stock reduced by the number of shares equivalent to the required tax withholding obligation based on the Fair Market Value of the Common Stock on the relevant anniversary of the Optional Deferral Date if payment is in installments or on the Optional Deferral Date in the case of the first installment or payment in the form of a lump sum. 12. In the event of your death at any time prior to the Optional Deferral Date, your account balance will be paid in cash in a lump sum on the fifth business day following the Optional Deferral Date. In the event of your death at any time following the Optional Deferral Date and prior to the distribution of your account, the entire balance of your account shall be paid in cash on the anniversary of the Optional Deferral Date next following your date of death. 13. In the event of any stock dividend, stock split, recapitalization, merger, split-up, spin-off or other change affecting the Common Stock of the Company, the Deferral Units in your account shall be adjusted in the same manner and proportion as the change to the Common Stock. 14. Any notice to you under this Grant Agreement shall be sufficient if in writing and if delivered to you or mailed by registered mail directed to you at the address on record in the Executive Compensation Department. Any notice to the Company under this Grant Agreement shall be sufficient in writing and if delivered to the Executive Compensation Department of the Company in Akron, Ohio, or mailed by registered mail directed to the Company for the attention of the Executive Compensation Department at 1144 East Market Street, Akron, Ohio 44316-0001. Either you or the Company may, by written notice, change the address. 5 ANNEX A PERFORMANCE MEASURE The Performance Measure for 50% of the units granted is Total Shareholder Return (TSR). Unit distributions may range from 0 to 150% of 50% of the units granted based on the average annual TSR performance for the three-year performance period relative to the selected peer companies (the "S&P Auto & Components Industry"). TSR will be calculated for each year of the performance period as the stock price appreciation plus dividends divided by the stock price at the beginning of the year. The stock price used for the calculation will be the closing average for the ten business days prior to the beginning and the end of each year of the performance period. The Performance Measure for 50% of the units granted is Return on Invested Capital (ROIC). Unit distributions may range from 0 to 150% of 50% of the units granted based on the annual average ROIC performance for the three-year performance period. ROIC will be calculated as the Company's EBIT divided by its Total Investment with Total Investment consisting of debt plus equity. 6 EX-10.4 20 l07358aexv10w4.txt EX-10.4 STOCK OPTION GRANT AGREEMENT Exhibit 10.4 Part I The Goodyear Tire & Rubber Company Stock Option Grant Agreement Name Title The Directors of The Goodyear Tire & Rubber Company (the "Company") desire to encourage and facilitate ownership of the Common Stock of the Company (the "Common Stock") by key employees and to provide for additional compensation based on appreciation of the Common Stock, thereby providing incentive to promote continued growth and success of the Company's business. Accordingly, the 2002 Performance Plan of The Goodyear Tire & Rubber Company (the "Plan") was adopted effective April 15, 2002. A copy of the Plan is attached. Granted to: SSN: Grant Date: Options Granted: Option Type: Non-Qualified Option Price per Share: $ Expiration Date: Vesting Schedule: 25% on ________ 25% on ________ 25% on ________ 25% on ________ __________________________________ The Goodyear Tire & Rubber Company By my signature below, I hereby acknowledge receipt of this Option granted on the date shown above, which has been issued to me under the terms and conditions of the Plan. I further acknowledge receipt of the copy of the Plan and agree to conform to all of the terms and conditions of the Option and the Plan. Signature:__________________________________ Date:______________________ Name NQ Grant Agreement (Cont'd) PART I - NON-QUALIFIED STOCK OPTIONS 1. These Non-Qualified Stock Options for the number of shares of Common Stock indicated on the preceding page (the "Non-Qualified Stock Options") are granted to you under and are governed by the terms and conditions of the Plan and this Grant Agreement. Your execution and return of the enclosed copy of page one of this Grant Agreement acknowledging receipt of the Non-Qualified Stock Options granted herewith constitutes your agreement to and acceptance of all terms and conditions of the Plan and this Grant Agreement. You also agree that you have read and understand this Grant Agreement. 2. You may exercise the Non-Qualified Stock Options granted pursuant to this Grant Agreement through (1) a cash payment in the amount of the full option exercise price of the shares being purchased (a "cash exercise"), (2) a payment in full shares of Common Stock having a Fair Market Value (as defined in the Plan) on the date of exercise equal to the full option exercise price of the shares being purchased (a "share swap exercise"), or (3) a combination of the cash exercise and share swap exercise methods. Any exercise of these Non-Qualified Stock Options shall be by notice stating the number of shares of Common Stock to be purchased and the exercise method, accompanied with the payment, or proper proof of ownership if the share swap exercise method is used. You shall be required to meet the tax withholding obligations arising from any exercise of Non-Qualified Stock Options. 3. As further consideration for the Non-Qualified Stock Options granted to you hereunder, you must remain in the continuous employ of the Company or one or more of its subsidiaries from the Date of Grant to the date or dates the Non-Qualified Stock Options become exercisable as set forth on page one of this Grant Agreement before you will be entitled to exercise the Non-Qualified Stock Options granted. The Non-Qualified Stock Options you have been granted shall not in any event be exercisable after your termination of employment except for Retirement (defined as termination of employment at any age after 30 or more years, or at age 55 or older with at least 10 years of continuous service with the Company and its subsidiaries), death, or Disability (defined as termination of employment while receiving benefits under a long-term disability income plan maintained by the Company or one of its subsidiaries). PART II - NON-QUALIFIED STOCK INVESTMENT OPTIONS 4. A Non-Qualified Stock Investment Option will be automatically granted to you, immediately upon any satisfaction by you of the conditions specified below, on the following terms and conditions: Date of Grant: The date of your exercise, at any time prior to January 1, 2011, of a Non-Qualified Stock Option granted herein by tendering shares of Common Stock in payment of all or a portion of the exercise price of such Non-Qualified Stock Option. Number of Common Shares The number of shares of Common Stock you tendered Subject to Option: in the exercise of such Non-Qualified Stock Option plus the number of shares, if any, withheld by the Company to satisfy required tax withholdings. Option Price Per Share: The Fair Market Value (as defined in the Plan) of the Common Stock on the date you exercised such Non-Qualified Stock Option by tendering shares of Common Stock. Exercise Period: 100% exercisable at any time during the period beginning on the first anniversary of its date of grant and ending on December 2, ____. Page 2 of 4 NQ Grant Agreement (Cont'd) PART II - NON-QUALIFIED STOCK INVESTMENT OPTIONS (Cont'd) 5. The Non-Qualified Stock Investment Options are granted under and are governed by the terms and conditions of the Plan and this Grant Agreement. The number of shares of Common Stock subject to each grant is determined by the number of shares of Common Stock you tender to the Company in your exercise of a Non-Qualified Stock Option granted pursuant to this Agreement. The Option price per share of the Non-Qualified Stock Investment Option shall be the Fair Market Value (as defined in the Plan) of the Common Stock on the date you exercise a Non-Qualified Stock Option as aforesaid. In order to accept this Non-Qualified Stock Investment Option Grant, you must tender shares of Common Stock in the exercise of a Non-Qualified Stock Option prior to January 1, _____. 6. You may exercise the Non-Qualified Stock Investment Options granted pursuant to this Grant Agreement through (1) a cash payment in the amount of the full option exercise price of the shares being purchased (a "cash exercise"), (2) a payment in full shares of Common Stock having a Fair Market Value (as defined in the Plan) on the date of exercise equal to the full option exercise price of the shares of Common Stock being purchased (a "share swap exercise"), or (3) a combination of the cash exercise and share swap exercise methods. Any exercise of these Non-Qualified Stock Investment Options shall be by notice stating the number of shares of Common Stock to be purchased and the exercise method, accompanied with the payment, or proper proof of ownership if the share swap exercise method is used. You shall be required to meet the tax withholding obligations arising from any exercise of Non-Qualified Stock Investment Options. 7. As further consideration for each Non-Qualified Stock Investment Option granted to you hereunder, you must remain in the continuous employ of the Company or one or more of its subsidiaries for twelve months following the Date of Grant in respect thereof (as defined at paragraph 4 above) before you will be entitled to exercise such Non-Qualified Stock Investment Option. The Non-Qualified Stock Investment Options you have been granted shall not in any event be exercisable after your termination of employment except for Retirement, death, or Disability. III - GENERAL PROVISIONS 8. The Options terminate automatically and shall not be exercisable by you from and after the date on which you cease to be an employee of the Company or one of its subsidiaries for any reason other than your death, Retirement or Disability. In the event of your death, Retirement or Disability while an employee of the Company or one of its subsidiaries (and having been an employee continuously since the Date of Grant) during the exercise period on any date which is more than six (6) months after the Date of Grant of the Non-Qualified Stock Options specified on the first page of this Grant Agreement or more than six (6) months after the Date of Grant of Non-Qualified Stock Investment Options specified at paragraph 4 of this Grant Agreement, the Options shall become immediately exercisable and, except as provided below in the event of your death, shall be exercisable by you for the remainder of the term of the Option grant. In the event of your death, the Options may be exercised up to three years after date of death by the person or persons to whom your rights in the options passed by your will or according to the laws of descent and distribution. Nothing contained herein shall restrict the right of the Company or any of its subsidiaries to terminate your employment at any time, with or without cause. Page 3 of 4 NQ Grant Agreement (Cont'd) PART III - GENERAL PROVISIONS (Cont'd) 9. The Options shall not in any event be exercisable after the expiration of ten years from the Date of Grant specified on the first page of this Grant Agreement and, to the extent not exercised, shall automatically terminate at the end of such ten-year period. 10. Certificates for the shares of Common Stock purchased will be deliverable to you or your agent, duly accredited to the satisfaction of the Company, at the principal office of the Company in Akron, Ohio, or at such other place acceptable to the Company as may be designated by you. 11. In the event you Retire or otherwise terminate your employment with the Company or a subsidiary and within 18 months after such termination date you accept employment with a competitor of, or otherwise engage in competition with, the Company, the Committee, in its sole discretion, may require you to return, or (if not received) to forfeit, to the Company the economic value of the Options granted hereunder which you have realized or obtained by your exercise at any time on or after the date which is six months prior to the date of your termination of employment with the Company. Additionally, if you have retired from the Company, all Options granted to you hereunder which you have not exercised prior to your competitive engagement shall be automatically cancelled. 12. Each Option granted is not transferable by you otherwise than by will or the laws of descent and distribution, and is exercisable during your lifetime only by you. 13. All rights conferred upon you under the provision of this Grant Agreement are personal and, except under the provisions of paragraph 12 of this Grant Agreement, no assignee, transferee or other successor in interest shall acquire any rights or interests whatsoever under this Grant Agreement, which is made exclusively for the benefit of you and the Company. 14. Any notice to you under this Grant Agreement shall be sufficient if in writing and if delivered to you or mailed to you at the address on record in the Executive Compensation Department. Any notice to the Company under this agreement shall be sufficient if in writing and if delivered to the Executive Compensation Department of the Company in Akron, Ohio, or mailed by registered mail directed to the Company for the attention of the Executive Compensation Department at 1144 East Market Street, Akron, Ohio 44316-0001. Either you or the Company may, by written notice, change the address. This agreement shall be construed and shall take effect in accordance with the laws of the State of Ohio. 15. Each Option may be exercised only at the times and to the extent, and is subject to all of the terms and conditions, set forth in this Grant Agreement, and in the Plan, including any rule or regulation adopted by the Committee. Page 4 of 4 Part II The Goodyear Tire & Rubber Company Stock Option Grant Agreement Name Title The Directors of The Goodyear Tire & Rubber Company (the "Company") desire to encourage and facilitate ownership of the Common Stock of the Company (the "Common Stock") by key employees and to provide for additional compensation based on appreciation of the Common Stock, thereby providing incentive to promote continued growth and success of the Company's business. Accordingly, the 2002 Performance Plan of The Goodyear Tire & Rubber Company (the "Plan") was adopted effective April 15, 2002. A copy of the Plan is attached. Granted to: SSN: Grant Date: Options Granted: Option Type: Non-Qualified/SAR Option Price per Share: $ Expiration Date: Vesting Schedule: 25% ________ 25% ________ 25% ________ 25% ________ __________________________________ The Goodyear Tire & Rubber Company By my signature below, I hereby acknowledge receipt of this Option granted on the date shown above, which has been issued to me under the terms and conditions of the Plan. I further acknowledge receipt of the copy of the Plan and agree to conform to all of the terms and conditions of the Option and the Plan. Signature:__________________________________ Date:______________________ NQ/SAR Grant Agreement (Cont'd) 1. These Non-Qualified Stock Options for the number of shares of Common Stock indicated on the preceding page (the "Options") and the Stock Appreciation Rights granted in tandem with the Options (the "SARs") are granted to you under and are governed by the terms and conditions of the Plan and this Grant Agreement. Your execution and return of the enclosed copy of page 1 of this Grant Agreement acknowledging receipt of the Options and SARs granted herewith constitutes your agreement to and acceptance of all terms and conditions of the Plan and this Grant Agreement, including a recognition of the Company's right to specify whether or not you may exercise either the Options or the SARs at the time you notify the Company of your intent to exercise. You also agree that you have read and understand this Grant Agreement. 2. If the Company approves the exercise of an Option, you may exercise the Non-Qualified Stock Options granted pursuant to this Grant Agreement through (1) a cash payment in the amount of the full option exercise price of the shares being purchased (a "cash exercise"), (2) a payment in full shares of Common Stock having a Fair Market Value (as defined in the Plan) on the date of exercise equal to the full option exercise price of the shares being purchased (a "share swap exercise"), or (3) a combination of the cash exercise and share swap exercise methods. Any exercise of these Non-Qualified Stock Options shall be by notice stating the number of shares of the Common Stock to be purchased and the exercise method, accompanied with the payment, or proper proof of ownership if the share swap exercise method is used. You shall be required to meet the tax withholding obligations arising from any exercise of Non-Qualified Stock Options. 3. If the Company approves the exercise of the SARs, written notice must be given to the Company stating the number of shares in the Options in respect of which the SARs are being exercised. In due course, you will receive payment in cash in an amount equal to the difference between the Fair Market Value (as defined in the Plan) of one share of the Common Stock on the date of exercise of the SARs and the Option Exercise Price per Share specified in respect of the Options times the number of shares in respect of which the SARs shall have been exercised. Such payment shall be subject to reduction for withholding taxes. 4. As further consideration for the Non-Qualified Stock Options and SARs granted to you hereunder, you must remain in the continuous employ of the Company or one or more of its subsidiaries from the Date of Grant to the date or dates the Non-Qualified Stock Options and SARs become exercisable as set forth on page one of this Grant Agreement before you will be entitled to exercise the Non-Qualified Stock Options and SARs granted. The Non-Qualified Stock Options and SARs you have been granted shall not in any event be exercisable after your termination of employment except for Retirement (defined as termination of employment at any age after 30 or more years, or at age 55 or older with at least 10 years of continuous service with the Company and its subsidiaries), death, or Disability (defined as termination of employment while receiving benefits under a long-term disability income plan provided by a government or sponsored by the Company or one of its subsidiaries). Page 2 of 4 NQ/SAR Grant Agreement (Cont'd) 5. The Options and SARs terminate automatically and shall not be exercisable by you from and after the date on which you cease to be an employee of the Company or one of its subsidiaries for any reason other than your death, Retirement or Disability. In the event of your death, Retirement or Disability while an employee of the Company or one of its subsidiaries (and having been an employee continuously since the Date of Grant) during the exercise period on any date which is more than six (6) months after the Date of Grant specified on the first page of this Grant Agreement, the Options and SARs shall become immediately exercisable and, except as provided below in the event of your death, shall be exercisable by you for the remainder of the term of the Option/SAR grant. In the event of your death, the Options and SARs may be exercised up to three years after date of death by the person or persons to whom your rights in the options passed by your will or according to the laws of descent and distribution. Nothing contained herein shall restrict the right of the Company or any of its subsidiaries to terminate your employment at any time, with or without cause. 6. The Options and SARs you have been granted shall not in any event be exercisable after the expiration of ten years from the Date of Grant specified on the first page of this Grant Agreement and, to the extent not exercised, shall automatically terminate at the end of such ten-year period. 7. Certificates for shares of the Common Stock purchased will be deliverable to you or your agent, duly accredited to the satisfaction of the Company, at the principal office of the Company in Akron, Ohio, or at such other place acceptable to the Company as may be designated by you. 8. In the event you Retire or otherwise terminate your employment with the Company or a subsidiary and within 18 months after such termination date you accept employment with a competitor of, or otherwise engage in competition with, the Company, the Committee, in its sole discretion, may require you to return, or (if not received) to forfeit, to the Company the economic value of the Options or SARs which you have realized or obtained by your exercise of the Options or SARs granted hereunder at any time on or after the date which is six months prior to the date of your termination of employment with the Company. Additionally, if you have retired from the Company, all Options or SARs which are granted to you hereunder and which you have not exercised prior to your competitive engagement shall be automatically cancelled. 9. Each Option and SAR are not transferable by you otherwise than by will or the laws of descent and distribution, and are exercisable during your lifetime only by you. 10. All rights conferred upon you under the provisions of this Grant Agreement are personal and, except under the provisions of paragraph 9 of this Grant Agreement, no assignee, transferee or other successor in interest shall acquire any rights or interests whatsoever under this Grant Agreement, which is made exclusively for the benefit of you and the Company. Page 3 of 4 NQ/SAR Grant Agreement (Cont'd) 11. Any notice to you under this Grant Agreement shall be sufficient if in writing and if delivered to you or mailed to you at the address on record in the Executive Compensation Department. Any notice to the Company under this agreement shall be sufficient if in writing and if delivered to the Executive Compensation Department of the Company in Akron, Ohio, or mailed by registered mail directed to the Company for the attention of the Executive Compensation Department at 1144 East Market Street, Akron, Ohio 44316-0001. Either you or the Company may, by written notice, change the address. This Grant Agreement shall be construed and shall take effect in accordance with the laws of the State of Ohio. 12. Each Option and/or SAR may be exercised only at the times and to the extent, and is subject to all of the terms and conditions, set forth in this Grant Agreement, and in the Plan, including any rule or regulation adopted by the Committee. 13. Your purchase of shares of Common Stock pursuant to the Options shall automatically reduce by a like number the shares subject to the SARs and, conversely, your exercise of any SARs shall automatically reduce by a like number the shares of the Common Stock available for purchase by you under the Options. 14. In agreeing to accept this grant, you clearly acknowledge that The Goodyear Tire & Rubber Company assumes no responsibility for any regulatory or tax consequences that arise from either the grant or exercise of the Options or the SARs, whether under U.S. or foreign law, rules, regulations or treaties. 15. Prior to the exercise of an Option or SAR, written notice must be given to the Company of your intent to exercise. The Company will then advise you whether or not you may exercise a Stock Option or an SAR and upon receiving such advice you may then exercise the Stock Option or the SAR. Page 4 of 4 EX-12 21 l07358aexv12.htm EX-12 COMPUTATION OF EARNINGS TO FIXED CHARGES EX-12 COMPUTATION OF EARNINGS TO FIXED CHARGES


Ohio (State or other jurisdiction of incorporation or organization)		34-0253240 (I.R.S. Employer Identification No.)

1144 East Market Street, Akron, Ohio (Address of principal executive offices)		44316-0001 (Zip Code)


PART I.
ITEM 1. BUSINESS.
ITEM 2. PROPERTIES.
ITEM 3. LEGAL PROCEEDINGS.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
PART II.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
ITEM 9A. CONTROLS AND PROCEDURES.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
ITEM 11. EXECUTIVE COMPENSATION.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
PART IV.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
SIGNATURES
INDEX TO FINANCIAL STATEMENT SCHEDULES
EX-4.1 AMENDMENT #1 TO RIGHTS AGREEMENT - 3/1/04
EX-4.2 1ST AMEND-AMEND&RESTD REV CRED AGRE 2/19/04
EX-4.3 2ND AMEND-AMEND&RESTD REV CRED AGRE 4/16/04
EX-4.4 1ST AMENDMENT - TERM LOAN AGREEMENT 2/19/04
EX-4.5 1STAMEND-TERMLOANAGREE-DUNLOPTIRES 2/19/04
EX-4.6 2NDAMEND-TERMLOANAGREE-DUNLOPTIRES 4/16/04
EX-4.7 1STAMEND-TERMLOANAGREE-JPMORGAN 2/19/04
EX-4.8 AMENDED RESTD TERM LOAN AGRMT&REV CRED AGRE
EX-4.9 1STAMENDRESTATETERMAGR&REVCREAGR 4/16/04
EX-4.10 MASTERGUARANTEEDANDCOLLATERALAGREE 3/31/03
EX-4.11 INDENTURE - DATED MARCH 12, 2004
EX-4.12 NOTE PURCHASE AGRMT-DATED MARCH 12, 2004
EX-4.13 REGISTRATION RIGHTS AGRMT-DATED 3/12/04
EX-4.14 COLLATERAL AGREEMENT - MARCH 12, 2004
EX-4.15 LIENSUBORDINATIONINTERCREDITORAGRE 3/12/04
EX-10.1 EXECUTIVE PERFORMANCE PLAN-EFF 1/1/04
EX-10.2 ROBERT KEEGAN EMPLOYMT AGRMT 2/3/04
EX-10.3 GRANT AGREE. PERFORMANCE EQTY PLN UNT GRNT
EX-10.4 STOCK OPTION GRANT AGREEMENT
EX-12 COMPUTATION OF EARNINGS TO FIXED CHARGES
EX-21.1 SUBSIDIARIES OF THE REGISTRANT
CONSENT OF INDEPENDENT ACCOUNTANTS
EX-24.1 POWER OF ATTORNEY
EX-31.1 CEO CERTIFICATION
EX-31.2 CFO CERTIFICATION
EX-32.1 906 CERT.
EX-99.1 INFORMATION REGRDG THE DIRECTORS OF THE CO
EX-99.2 EXECUTIVE COMPENSATION INFORMATION
EX-99.3 BENEFICIAL OWNERSHIP OF COMMON STOCK
EX-99.4 PRINCIPAL ACCOUNTANT FEES AND SERVICES



	Year Ended December 31,


				Restated

Sales of New Tires By	2003			2002			2001

North American Tire		86.3	%		86.2	%		87.1	%
European Union Tire		89.2	%		85.6	%		83.4	%
EEAME Tire		94.1	%		91.8	%		91.6	%
Latin American Tire		91.1	%		90.6	%		90.5	%
Asia Tire		97.7	%		97.2	%		97.1	%



		Year Ended December 31,

		2003		2002		2001
(In millions of tires)
Replacement tire units			150.6		147.7		155.2
OE tire units			62.9		66.6		64.1

	Goodyear worldwide tire units		213.5		214.3		219.3



		Year Ended December 31,

		2003		2002		2001
(In millions of tires)
Replacement tire units			68.6		69.8		79.7
OE tire units			32.6		34.1		32.3

	Total tire units		101.2		103.9		112.0


Title Of Each Class		Name Of Each Exchange On Which Registered

Common Stock, Without Par Value		New York Stock Exchange

Preferred Stock Purchase Rights		New York Stock Exchange


Item			Page
Number			Number

PART I
	1	Business		1
	2	Properties		14
	3	Legal Proceedings		15
	4	Submission of Matters to a Vote of Security Holders		21
PART II
	5	Market for Registrant’s Common Equity and Related Stockholder Matters		25
	6	Selected Financial Data		26
	7	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
	7A	Quantitative and Qualitative Disclosures About Market Risk		56
	8	Financial Statements and Supplementary Data		58
	9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		128
	9A	Controls and Procedures		128
PART III
	10	Directors and Executive Officers of the Registrant		131
	11	Executive Compensation		132
	12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		132
	13	Certain Relationships and Related Transactions		133
	14	Principal Accountant Fees and Services		133
PART IV
	15	Exhibits, Financial Statement Schedules, and Reports on Form 8-K		133
Signatures				134
Index to Financial Statement Schedules				FS-1
Index of Exhibits				X-1


In the United States and Canada —		In Latin America —
• seven hose products plants		• two air springs plants
• three conveyor belting plants		• five hose products plants
• two molded rubber products plants		• three power transmission products plants
• two power transmission products plants		• two conveyor belting plants
• five mix centers		• one molded rubber products plant

In Europe —		In Asia —
• two air springs plants		• one conveyor belting plant
• one power transmission products plant		• one hose products plant

In Africa —
• one conveyor belting and power transmission products plant


ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.


Name	Position(s) Held	Age

Robert J. Keegan	Chairman of the Board, Chief Executive Officer and President	56
Mr. Keegan joined Goodyear on October 1, 2000. He was elected President and Chief Operating Officer and a Director of the Company on October 3, 2000, and President and Chief Executive Officer of the Company effective January 1, 2003. Effective June 30, 2003, he became Chairman. He is the principal executive officer of the Company. Prior to joining Goodyear, Mr. Keegan held various marketing, finance and managerial positions at Eastman Kodak Company from 1972 through September 2000, including Vice President from July 1997 to October 1998, Senior Vice President from October 1998 to July 2000 and Executive Vice President from July 2000 to September 2000. Mr. Keegan is a Class II director.


ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.


ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.



	North						Western
	America						Europe
	Estimated						Estimated
	Market Share						Market Share

	2003			2002			2003			2002

Original Equipment		41.6	%		41.3	%		23.6	%		25.5	%
Replacement		25.6			26.2			23.8			23.2



	December 31,


				Restated

	2003			2002			2001
(In millions)
Consolidated Debt	$	5,077.4		$	3,643.0		$	3,568.3
Debt to Debt and Equity		100.3	%		93.4	%		57.6	%


	2003
(In millions)
Net Loss	$	(802.1	)
Consolidated Interest Expense		314.6
Income Tax		112.2
Depreciation and Amortization Expense		693.3

EBITDA		318.0

Credit Agreement Adjustments:
Other (Income) and Expense		284.5
Foreign Currency Exchange		40.2
Equity in (Earnings) Losses of Affiliates		12.1
Minority Interest in Net Income (Loss) of Subsidiaries		35.0
Non-cash Extraordinary Gains		—
Non-cash Non-recurring Items		54.7
Rationalizations		291.5
Less Excess Cash Rationalization Charges		(12.9	)

Consolidated EBITDA	$	1,023.1


ITEM 1.	BUSINESS.


ITEM 2.	PROPERTIES.


	S&P	Moody’s

Senior Secured Asset-Backed Facilities	BB+	B1
U.S./European Facilities	B+/BB-	B1/B1
$650 million Asset-backed Tranche	B+	B2
$650 million Senior Secured Notes due 2011	*	B3
Corporate Rating	BB-	B1 (implied)
Senior Unsecured Debt	B	B3



	Payment Due by Period as of December 31, 2003

(In millions)													After 5
Contractual Obligations	Total		1 Year		2 Years		3 Years		4 Years		5 Years		Years

Long Term Debt (1)	$	5,029.3	$	246.9	$	2,004.7	$	1,542.8	$	302.5	$	103.0	$	829.4
Capital Lease Obligations (2)		74.2		8.3		7.0		6.3		5.8		5.8		41.0
Operating Leases (3)		1,462.4		287.2		236.8		188.9		145.4		106.3		497.8
Binding Commitments (4)		520.1		482.2		14.7		8.0		2.3		1.8		11.1

Total Contractual Cash Obligations	$	7,086.0	$	1,024.6	$	2,263.2	$	1,746.0	$	456.0	$	216.9	$	1,379.3



	Amount of Commitment Expiration per Period

													After 5
	Total		1 Year		2 Years		3 Years		4 Years		5 Years		Years
(In millions)
Off-Balance-Sheet Arrangements (1)	$	74.4	$	56.2	$	0.7	$	0.1	$	4.9	$	3.7	$	8.8


ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


		Page

Report of Independent Auditors			59
Consolidated Financial Statements of The Goodyear Tire & Rubber Company:
	Consolidated Statement of Operations for each of the three fiscal years in the period ended December 31, 2003		60
	Consolidated Balance Sheet at December 31, 2003 and December 31, 2002		61
	Consolidated Statement of Shareholders’ Equity for each of the three fiscal years in the period ended December 31, 2003		62
	Consolidated Statement of Cash Flows for each of the three fiscal years in the period ended December 31, 2003		63
	Notes to Financial Statements		64

Supplementary Data (unaudited)			124
Financial Statement Schedules:
	The following consolidated financial statement schedules of The Goodyear Tire & Rubber Company are filed as part of this Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements of The Goodyear Tire & Rubber Company:
	Schedule I Condensed Financial Information of Registrant		FS-2
	Schedule II Valuation and Qualifying Accounts		FS-7


														Accumulated
					Common Stock									Other			Total
									Capital		Retained			Comprehensive			Shareholders’
					Shares		Amount		Surplus		Earnings			Income (Loss)			Equity

(Dollars in millions, except per share)
Balance at December 31, 2000 as originally reported						157,603,962	$	157.6	$	1,092.4	$	3,558.8		$	(1,305.8	)	$	3,503.0
	(after deducting 38,074,706 treasury shares)
Effect of restatement on periods ending on or prior to December 31, 2000												(52.9	)		4.2			(48.7	)

Balance at December 31, 2000 as restated						157,603,962		157.6		1,092.4		3,505.9			(1,301.6	)		3,454.3
	Comprehensive income (loss):
		Net loss										(254.1	)
		Foreign currency translation (net of tax benefit of $6.3)													(186.3	)
			Reclassification adjustment for amounts recognized in income												7.2
		Minimum pension liability (net of tax of $205.6)													(367.9	)
		Unrealized investment loss (net of tax of $4.1)													(6.6	)
		Transition adjustment from adoption of SFAS 133													5.4
		Deferred derivative loss (net of tax of $18.1)													(29.5	)
			Reclassification adjustment for amounts recognized in income (net of tax of $5.7)												9.2
				Total comprehensive loss														(822.6	)
		Cash dividends — $1.02 per share										(162.5	)					(162.5	)
		Common stock issued from treasury:
			Domestic pension funding			4,300,000		4.3		95.7								100.0
			Conversion of 1.2% Convertible Note Payable			1,140,866		1.1		55.1								56.2
			Stock compensation plans			120,870		0.2		2.2								2.4

Balance at December 31, 2001 as restated						163,165,698		163.2		1,245.4		3,089.3			(1,870.1	)		2,627.8
	(after deducting 32,512,970 treasury shares)
	Comprehensive income (loss):
		Net loss										(1,227.0	)
		Foreign currency translation (net of tax benefit of $0)													57.8
		Minimum pension liability (net of tax of $42.4)													(1,283.6	)
		Unrealized investment gain (net of tax of $0)													7.3
		Deferred derivative gain (net of tax of $0)													60.6
			Reclassification adjustment for amounts recognized in income (net of tax of $0)												(64.5	)
				Total comprehensive loss														(2,449.4	)
		Cash dividends — $0.48 per share										(79.8	)					(79.8	)
		Common stock issued from treasury:
			Domestic pension funding			11,300,000		11.3		126.6								137.9
			Common stock issued for acquisitions			693,740		0.7		15.2								15.9
			Stock compensation plans			147,995		0.1		2.9								3.0

Balance at December 31, 2002 as restated						175,307,433		175.3		1,390.1		1,782.5			(3,092.5	)		255.4
	(after deducting 20,371,235 treasury shares)
	Comprehensive income (loss):
		Net loss										(802.1	)
		Foreign currency translation (net of tax benefit of $0)													373.0
		Minimum pension liability (net of tax of $2.2)													128.5
		Unrealized investment gain (net of tax of $0)													4.1
			Reclassification adjustment for amounts recognized in income (net of tax of $8.7)												8.8
		Deferred derivative gain (net of tax of $0)													46.3
			Reclassification adjustment for amounts recognized in income (net of tax of $1.9)												(27.2	)
				Total comprehensive loss														(268.6	)
		Common stock issued from treasury:
			Stock compensation plans			18,996				0.1								0.1

Balance at December 31, 2003						175,326,429	$	175.3	$	1,390.2	$	980.4		$	(2,559.0	)	$	(13.1	)

	(after deducting 20,352,239 treasury shares)



	Nine Months			Year Ended
	Ended			December 31,
	September 30, 2003
	(Unaudited)			2002			2001			Pre-2001			Total
(In millions, all amounts before tax)
Income (Expense)
Accruals and deferred expenses — Europe and Asia	$	4.5		$	0.5		$	(8.3	)	$	(2.0	)	$	(5.3	)
Deferred income — Europe		—			(2.9	)		(1.0	)		—			(3.9	)
Workers’ compensation		(4.1	)		(5.6	)		(2.3	)		(5.7	)		(17.7	)
Accruals and deferred expenses — Chile		—			4.5			(1.6	)		(3.5	)		(0.6	)
Land valuation — Chile		—			—			—			(1.5	)		(1.5	)

	$	0.4		$	(3.5	)	$	(13.2	)	$	(12.7	)	$	(29.0	)



		Years Ended December 31,

		2002			2001			Pre-2001			Total
(In millions, except per share)
Net loss as originally reported		$	(1,105.8	)	$	(203.6	)
Adjustments (pretax):
	Accounting Irregularities		(3.5	)		(13.2	)	$	(12.7	)	$	(29.4	)
	Account Reconciliations		(6.8	)		(12.8	)		(82.5	)		(102.1	)
	Out-of-Period		15.2			(14.5	)		(2.1	)		(1.4	)
	Discount Rate Adjustments		(14.9	)		(5.5	)		14.5			(5.9	)
	Chemical Products Segment		14.2			(18.9	)		(3.6	)		(8.3	)

Total adjustments (pretax)			4.2			(64.9	)		(86.4	)		(147.1	)
	Tax effect of restatement adjustments		(2.9	)		17.9			32.3			47.3
	Tax adjustments		(122.5	)		(3.5	)		1.2			(124.8	)

Total taxes			(125.4	)		14.4			33.5			(77.5	)

Total net adjustments			(121.2	)		(50.5	)	$	(52.9	)	$	(224.6	)

Net loss as restated		$	(1,227.0	)	$	(254.1	)

Per Share of Common Stock:
Net loss — Basic as originally reported		$	(6.62	)	$	(1.27	)
Effect of net adjustments			(0.73	)		(0.32	)

Net loss — Basic as restated		$	(7.35	)	$	(1.59	)

Net loss — Diluted as originally reported		$	(6.62	)	$	(1.27	)
Effect of net adjustments			(0.73	)		(0.32	)

Net loss — Diluted as restated		$	(7.35	)	$	(1.59	)



	Year Ended December 31, 2002						Year Ended December 31, 2001

	As Originally						As Originally
	Reported			As Restated			Reported			As Restated
(In millions, except per share)
Net Sales	$	13,850.0		$	13,856.2		$	14,147.2		$	14,162.5
Cost of Goods Sold		11,313.9			11,303.9			11,619.5			11,685.3
Selling, Administrative and General Expense		2,223.9			2,203.2			2,248.8			2,220.5
Rationalizations		8.6			5.5			206.8			210.3
Interest Expense		241.3			241.7			292.4			297.1
Other (Income) and Expense		25.8			56.8			11.8			40.8
Foreign Currency Exchange		(10.2	)		(9.7	)		0.1			10.0
Equity in Earnings of Affiliates		8.8			13.2			40.6			39.7
Minority Interest		55.8			55.3			0.2			(3.3	)

Loss before Income Taxes		(17.9	)		(13.7	)		(273.0	)		(337.9	)
U.S. and Foreign Taxes on Income (Loss)		1,087.9			1,213.3			(69.4	)		(83.8	)

Net Loss	$	(1,105.8	)	$	(1,227.0	)	$	(203.6	)	$	(254.1	)

Net Loss per share — Basic	$	(6.62	)	$	(7.35	)	$	(1.27	)	$	(1.59	)
Average Shares Outstanding		167.0			167.0			160.0			160.0
Net Loss per share — Diluted	$	(6.62	)	$	(7.35	)	$	(1.27	)	$	(1.59	)
Average Shares Outstanding		167.0			167.0			160.0			160.0



			December 31, 2002

			As Originally Reported		As Restated
(Dollars in millions)
Assets
Current Assets:
	Cash and cash equivalents		$	923.0	$	918.1
	Short term securities			24.3		24.3
	Accounts and notes receivable			1,459.7		1,438.1
	Inventories			2,371.6		2,346.2
	Prepaid expenses and other current assets			448.1		453.7

		Total Current Assets		5,226.7		5,180.4
Long Term Accounts and Notes Receivable				236.3		242.8
Investments in and Advances to Affiliates				141.7		139.2
Other Assets				254.9		253.0
Goodwill				607.4		602.6
Other Intangible Assets				161.3		161.4
Deferred Income Tax				207.5		187.0
Prepaid and Deferred Pension Costs				913.4		913.4
Deferred Charges				205.1		202.7
Properties and Plants				5,192.3		5,156.2

		Total Assets	$	13,146.6	$	13,038.7


Note 3.	Costs Associated with Rationalization Programs


	Associate-			Other Than Associate-
	related Costs			related Costs			Total
(In millions)
Accrual balance at December 31, 2000	$	104.5		$	32.9		$	137.4
2001 charges		127.3			87.1			214.4
Charge to goodwill		5.7			—			5.7
Incurred		(159.5	)		(66.0	)		(225.5	)
Reversed to goodwill		(5.0	)		(0.5	)		(5.5	)
Reversed to the income statement		(3.9	)		(0.2	)		(4.1	)

Accrual balance at December 31, 2001		69.1			53.3			122.4
2002 charges		19.5			7.0			26.5
Incurred		(49.5	)		(11.7	)		(61.2	)
Reversed to goodwill		(0.5	)		—			(0.5	)
Reversed to the income statement		(13.3	)		(4.7	)		(18.0	)

Accrual balance at December 31, 2002		25.3			43.9			69.2
2003 charges		295.3			11.9			307.2
Incurred		(200.4	)		(15.5	)		(215.9	)
Reversed to goodwill		—			(2.9	)		(2.9	)
Reversed to the income statement		(11.7	)		(4.0	)		(15.7	)

Accrual balance at December 31, 2003	$	108.5		$	33.4		$	141.9


	Total Charge
	Expected to be		Total Charge		Total Amount		Total Amount
	Recorded		Recorded in 2003		Incurred in 2003		Reversed in 2003
(In millions)
North American Tire	$	220.0	$	200.7	$	144.6	$	8.8
European Union Tire		63.0		59.3		15.1		1.0
Latin American Tire		12.0		10.4		5.5		0.4
Engineered Products		32.0		29.4		18.7		—
Corporate		8.0		7.4		3.9		0.2

	$	335.0	$	307.2	$	187.8	$	10.4


Note 7.	Goodwill and Other Intangible Assets (continued)



									Restated


		December 31, 2003							December 31, 2002

		Gross					Net		Gross					Net
		Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
		Amount		Amortization			Amount		Amount		Amortization			Amount
(In millions)
Goodwill		$	745.6	$	(123.1	)	$	622.5	$	721.2	$	(118.6	)	$	602.6

Intangible assets with indefinite lives		$	114.4	$	(7.3	)	$	107.1	$	114.4	$	(7.3	)	$	107.1
Trademarks and Patents			44.6		(16.8	)		27.8		35.2		(11.6	)		23.6
Other intangible assets			35.8		(8.9	)		26.9		35.0		(4.3	)		30.7

	Total other intangible assets	$	194.8	$	(33.0	)	$	161.8	$	184.6	$	(23.2	)	$	161.4


	Restated		Purchase Price			Translation &
	Balance at		Adjustment			Other			Balance at
	December 31, 2002		Reversals			Adjustments			December 31, 2003
(In millions)
North American Tire	$	98.5	$	—		$	0.5		$	99.0
European Union Tire		305.3		(2.9	)		11.2			313.6
Eastern Europe, Africa and Middle East Tire		115.9		—			10.4			126.3
Latin American Tire		1.2		—			(0.3	)		0.9
Asia Tire		63.7		—			0.1			63.8
Engineered Products		18.0		—			0.9			18.9
Chemical Products		—		—			—			—

	$	602.6	$	(2.9	)	$	22.8		$	622.5


																	2009 and
		2004			2005			2006			2007			2008			Beyond			Total
(In millions)
Capital Leases
	Minimum lease payments	$	8.3		$	7.0		$	6.3		$	5.8		$	5.8		$	41.0		$	74.2
	Imputed interest																				(24.9	)
	Executory costs																				(1.2	)

	Present value																			$	48.1

Operating Leases
	Minimum lease payments	$	287.2		$	236.8		$	188.9		$	145.4		$	106.3		$	497.8		$	1,462.4
	Minimum sublease rentals		(43.8	)		(33.7	)		(25.0	)		(18.0	)		(12.2	)		(13.6	)		(146.3	)

		$	243.4		$	203.1		$	163.9		$	127.4		$	94.1		$	484.2		$	1,316.1

	Imputed interest																				(503.8	)

	Present value																			$	812.3


			December 31, 2002			Settled			December 31, 2003
(Dollars in millions)
Fixed rate contracts:
	Notional principal amount		$	325.0			—		$	325.0
	Pay fixed rate			5.00	%		—			5.00	%
	Receive variable LIBOR			1.40			—			1.17
	Average years to maturity			1.25						0.25
	Fair value: asset (liability)		$	(14.2	)				$	(3.1	)
	Carrying amount:
		Current liability		(11.6	)					(3.1	)
		Long term liability		(2.6	)					—
Floating rate contracts:
	Notional principal amount		$	250.0		$	50.0		$	200.0
	Pay variable LIBOR			3.18	%		3.35	%		2.96	%
	Receive fixed rate			6.63			6.63			6.63
	Average years to maturity			3.95						2.95
	Fair value: asset (liability)		$	20.3					$	13.0
	Carrying amount:
		Current asset		8.4						7.4
		Long term asset		11.9						5.6


Contract maturity:
	Swiss franc swap	3/06	3/06
	Euro swap	6/05	6/05
	All other	1/04 – 7/19	1/03 – 12/18


Note 12.	Stock Compensation Plans and Dilutive Securities