IN THE UNITED STATES BANKRUPTCY COURT  FOR THE DISTRICT OF SOUTH CAROLINA

|In re:                        |  | ) |  | Chapter 11            
|----------------------------- |  | - |  | ----------------------
|                              |  | ) |  |                       
|POLYMER GROUP, INC.et al.,(1) |  | ) |  | Case No. 02-5773 (W)  
|                              |  | ) |  | (Jointly Administered)
|Debtors.                      |  | ) |  |                       

|DEBTORS' JOINT SECOND AMENDED MODIFIED PLAN OF REORGANIZATION
|-------------------------------------------------------------

James A. Stempel

George B. CauthenJonathan P. Friedland

District Court ID No. 81Roger J. Higgins

NELSON MULLINS RILEYRyan Nadick

& SCARBOROUGH, L.L.P.Ryan B. Bennett

Keenan Building, Third FloorKIRKLAND & ELLIS

1330 Lady Street200 East Randolph Drive

P.O. Box 11070 (29211)Chicago, Illinois 60601

Columbia, SC 29201Telephone: (312) 861-2000

Telephone: (803) 799-2000Facsimile: (312) 861-2200

Facsimile: (803) 256-7500Co-Counsel to Polymer Group, Inc., et al.Dated: January    , 2003


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TABLE OF CONTENTS

|ARTICLE I.  DEFINITIONS, RULES OF INTERPRETATION, COMPUTATION OF TIME AND GOVERNING LAW |                                                                                        | 1 
|--------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | --
|                                                                                        | A.  Rules of Interpretation, Computation of Time and Governing Law                     |   
|                                                                                        | B.  Defined Terms                                                                      |   
|ARTICLE II.  TREATMENT OF UNCLASSIFIED CLAIMS                                           |                                                                                        | 17
|                                                                                        | A.  DIP Facility Claims                                                                |   
|                                                                                        | B.  Administrative Expense Claims                                                      |   
|                                                                                        | C.  Compensation and Reimbursement Claims of Professionals                             |   
|                                                                                        | D.  Priority Tax Claims                                                                |   
|ARTICLE III.  CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS AND EQUITY INTERESTS    |                                                                                        | 18
|                                                                                        | A.  Summary                                                                            |   
|                                                                                        | B.  Classification and Treatment of Claims Against and Equity Interests in the Debtors |   
|ARTICLE IV.  ACCEPTANCE OR REJECTION OF THE AMENDED MODIFIED PLAN                       |                                                                                        | 21
|                                                                                        | A.  Voting Classes                                                                     |   
|                                                                                        | B.  Acceptance by Impaired Classes                                                     |   
|                                                                                        | C.  Presumed Acceptance of Amended Modified Plan                                       |   
|                                                                                        | D.  Presumed Rejection of Amended Modified Plan                                        |   
|                                                                                        | E.  Non-Consensual Confirmation                                                        |   
|ARTICLE V.  MEANS FOR IMPLEMENTATION OF THE AMENDED MODIFIED PLAN                       |                                                                                        | 22
|                                                                                        | A.  Continued Corporate Existence                                                      |   
|                                                                                        | B.  Corporate Governance, Corporate Action, and Directors and Officers                 |   
|                                                                                        | C.  Cancellation of Securities And Agreements                                          |   
|                                                                                        | D.  Issuance of New Polymer Common Stock and New Polymer Notes                         |   
|                                                                                        | E.  Revesting Of Assets; Releases of Liens                                             |   
|                                                                                        | F.  Sources of Cash for Amended Modified Plan Distribution                             |   
|                                                                                        | G.  Exit Revolving Credit Facility                                                     |   
|                                                                                        | H.  New Investment                                                                     |   
|                                                                                        | I.  Exit Letters of Credit.                                                            |   
|                                                                                        | J.  Compensation And Benefit Programs                                                  |   
|                                                                                        | K.  Restructuring Transactions                                                         |   
|                                                                                        | L.  Limited Substantive Consolidation                                                  |   
|ARTICLE VI. EXECUTORY CONTRACTS AND UNEXPIRED LEASES                                    |                                                                                        | 30
|                                                                                        | A.  Assumption and Rejection of Executory Contracts and Unexpired Leases               |   
|                                                                                        | B.  Rejection Claims; Cure of Defaults                                                 |   
|                                                                                        | C.  Indemnification and Reimbursement Obligations                                      |   
|ARTICLE VII. PROVISIONS GOVERNING DISTRIBUTIONS                                         |                                                                                        | 31
|                                                                                        | A.  Manner of Payment                                                                  |   
|                                                                                        | B.  Distributions for Claims Allowed as of the Effective Date                          |   
|                                                                                        | C.  Delivery of Distributions and Undeliverable or Unclaimed Distributions             |   
|                                                                                        | D.  Record Date and Distribution Record Date                                           |   
|                                                                                        | E.  Timing and Calculation of Amounts to be Distributed                                |   
|                                                                                        | F.  De Minimis and Fractional Distributions                                            |   
|                                                                                        | G.  Setoffs                                                                            |   
|                                                                                        | H.  Surrender of Canceled Instruments or Securities                                    |   
|                                                                                        |                                                                                        |   

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|                                                                                                 | I.  Lost, Stolen, Mutilated or Destroyed Instruments or Securities    |    | 34
|------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------- | -- | --
|                                                                                                 | J.  Preservation of Subordination Rights                              |    | 34
|ARTICLE VIII. PROCEDURES FOR TREATMENT OF DISPUTED, CONTINGENT, AND UNLIQUIDATED CLAIMS          |                                                                       | 35
|                                                                                                 | A.  Prosecution of Objections to Claims                               |    | 35
|                                                                                                 | B.  Estimation of Claims                                              |    | 35
|                                                                                                 | C.  Payments and Distributions on Disputed Claims                     |    | 35
|                                                                                                 | D.  Allowance of Claims                                               |    | 35
|ARTICLE IX.  CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THIS AMENDED MODIFIED PLAN |                                                                       | 36
|                                                                                                 | A.  Conditions Precedent to Confirmation                              |    | 36
|                                                                                                 | B.  Conditions Precedent to Consummation                              |    | 36
|                                                                                                 | C.  Conditions Precedent to Closing of New Investment                 |    | 36
|                                                                                                 | D.  Waiver of Conditions Precedent                                    |    | 37
|                                                                                                 | E.  Effect of Non-Occurrence of Consummation                          |    | 37
|ARTICLE X.  RELEASE, INJUNCTIVE AND RELATED PROVISIONS                                           |                                                                       | 37
|                                                                                                 | A.  Certain Mutual Releases                                           |    | 37
|                                                                                                 | B.  Limited Releases by Holders of Equity Interests and Claims        |    | 38
|                                                                                                 | C.  Preservation of Causes of Action                                  |    | 39
|                                                                                                 | D.  Exculpation                                                       |    | 40
|                                                                                                 | E.  Injunction                                                        |    | 40
|                                                                                                 | F.  Discharge of Claims and Termination of Equity Interests           |    | 41
|ARTICLE XI.  RETENTION OF JURISDICTION                                                           |                                                                       | 41
|ARTICLE XII.  MISCELLANEOUS PROVISIONS                                                           |                                                                       | 42
|                                                                                                 | A.  Dissolution of Committee                                          |    | 42
|                                                                                                 | B.  Payment of Statutory Fees                                         |    | 42
|                                                                                                 | C.  Fees and Expenses                                                 |    | 42
|                                                                                                 | D.  Maintenance of Director and Officer Liability Insurance           |    | 43
|                                                                                                 | E.  Discharge of Debtors                                              |    | 43
|                                                                                                 | F.  Effectuating Documents, Further Transactions and Corporate Action |    | 43
|                                                                                                 | G.  Modification of Amended Modified Plan                             |    | 43
|                                                                                                 | H.  Revocation of Amended Modified Plan                               |    | 44
|                                                                                                 | I.  Successors and Assigns                                            |    | 44
|                                                                                                 | J.  Reservation of Rights                                             |    | 44
|                                                                                                 | K.  Section 1146 Exemption                                            |    | 44
|                                                                                                 | L.  Further Assurances                                                |    | 44
|                                                                                                 | M.  Term of Existing Injunctions or Stays                             |    | 44
|                                                                                                 | N.  Post Effective Date Fees and Expenses                             |    | 45
|                                                                                                 | O.  Severability                                                      |    | 45
|                                                                                                 | P.  Conflicts                                                         |    | 45
|                                                                                                 | Q.  Notices                                                           |    | 45
|                                                                                                 | R.  Closing of Cases                                                  |    | 47

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DEBTORS' JOINT AMENDED MODIFIED PLAN OF REORGANIZATION

Pursuant to chapter 11 of the Bankruptcy Code, Polymer Group, Inc. and its Filing Subsidiaries (as defined herein), debtors and debtors in possession in
the above-captioned and numbered cases, hereby respectfully propose the following Joint Amended Modified Plan of Reorganization (the "Amended Modified Plan").

ARTICLE I.    DEFINITIONS, RULES OF INTERPRETATION,  COMPUTATION OF TIME AND GOVERNING LAW



Unless the context otherwise requires, as used in this Amended Modified Plan, the following terms shall have the respective meanings specified below:



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ARTICLE II.        TREATMENT OF UNCLASSIFIED CLAIMS



On the Effective Date, each Holder of an Allowed DIP Facility Claim shall receive in full satisfaction, settlement, release, and discharge of, and in exchange
for, such Allowed DIP Facility Claim, any and all liens against, or security interests in, property of the Debtors or the Estates, Cash equal to the unpaid portion of such Allowed DIP Facility Claim.
At such time, the DIP Facility shall be deemed terminated and the obligations thereunder of the Debtors and the Reorganized Debtor shall be terminated.



Each Holder of an Allowed Administrative Expense Claim (other than Professionals) shall receive the full unpaid amount of such Allowed Administrative Expense
Claim in Cash on the Effective Date, or upon such other terms as may be agreed upon by such Holder and the Debtors, or otherwise upon order of the Bankruptcy Court;provided,
however,that Allowed Administrative Expense Claims representing obligations incurred in the ordinary course of business or otherwise assumed by the Reorganized Debtors
pursuant to this Amended Modified Plan shall be paid in the ordinary course of business in accordance with the terms and conditions of the particular agreements governing such obligations.



All Professionals that are awarded compensation or reimbursement by the Bankruptcy Court in accordance with sections 330 or 331 of the Bankruptcy Code that are
entitled to the priorities established pursuant to sections 503(b)(2), 503(b)(3), 503(b)(4), or 503(b)(5) of the Bankruptcy Code, shall be paid in full, in Cash, the amounts allowed by the Bankruptcy
Court: (a) on or as soon as reasonably practicable following the later to occur of (i) the Effective Date; and (ii) the date upon which the Bankruptcy Court order allowing such
Claim becomes a Final Order; or (b) upon such other terms as may be mutually agreed upon between such Professional and the Reorganized Debtors. On the Effective Date, there shall be escrowed
into the Professionals' Escrow Account all estimated accrued amounts owed to Professionals through the Confirmation Date pending entry of a Final Order on each such Professional's final fee
application.



Each Holder of an Allowed Priority Tax Claim, at the sole option of the Debtors, shall be entitled to receive on account of such Allowed Priority Tax Claim, in
full satisfaction, settlement, release and discharge of and in exchange for such Allowed Priority Tax Claim, (i) equal Cash payments made on the last Business Day of every three-month period
following the Effective Date, over a period not exceeding six (6) years after the assessment of the tax on which such Claim is based, totaling the principal amount of such Claim plus simple
interest on any outstanding balance from the Effective Date calculated at the interest rate available on ninety (90) day United States Treasuries on the Effective Date; or (ii) such
other treatment agreed to by the Allowed Priority Tax Claim Holder and the Debtors.

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ARTICLE III.        CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS  AND EQUITY INTERESTS



Pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code, the categories of Claims and Equity Interests listed below classify Claims and Equity Interests
for all purposes, including voting and distribution pursuant to this Amended Modified Plan. A Claim or Equity Interest shall be deemed classified in a particular Class only to the extent that such
Claim or Equity Interest qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim or Equity Interest qualifies
within the description of such different Class. A Claim or Equity Interest is in a particular Class only to the extent that such Claim or Equity Interest is Allowed in that Class and has not been paid
or otherwise settled prior to the Effective Date.

THIS AMENDED MODIFIED PLAN SEEKS LIMITED SUBSTANTIVE CONSOLIDATION OF THE DEBTORS' ESTATES SOLELY FOR THE LIMITED PURPOSES ENUMERATED IN THIS AMENDED MODIFIED PLAN, AS FURTHER
DESCRIBED IN ARTICLE V.L HEREIN. IF SUCH LIMITED SUBSTANTIVE CONSOLIDATION IS AUTHORIZED AND ORDERED BY THE BANKRUPTCY COURT, ALL ALLOWED CLAIMS AGAINST THE DEBTORS OR THEIR ESTATES SHALL BE SATISFIED
FROM THE COMBINED CASH AND OTHER ASSETS OF ALL OF THE DEBTORS AND REORGANIZED DEBTORS.

The
classification of Claims against and Equity Interests in the Debtors pursuant to this Amended Modified Plan is as follows:

|Class |  | Claim                                                      |  | Status     |  | Voting Rights                                 
|----- |  | ---------------------------------------------------------- |  | ---------- |  | ----------------------------------------------
|1     |  | Priority Non-Tax Claims                                    |  | Unimpaired |  | Not entitled to vote                          
|2     |  | Senior Lender Claims                                       |  | Impaired   |  | Entitled to vote                              
|3     |  | Other Secured Claims                                       |  | Unimpaired |  | Not entitled to vote                          
|4     |  | General Unsecured Claims                                   |  | Impaired   |  | Entitled to vote                              
|5     |  | Critical Business Relations Claims and Intercompany Claims |  | Unimpaired |  | Not entitled to vote                          
|6     |  | Old Polymer Common Stock Interests                         |  | Impaired   |  | Entitled to vote                              
|7     |  | Intercompany Interests                                     |  | Unimpaired |  | Not entitled to vote                          
|8     |  | Other Securities Claims and Interests                      |  | Impaired   |  | Not entitled to vote (deemed to have rejected)





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ARTICLE IV.        ACCEPTANCE OR REJECTION OF THE AMENDED MODIFIED PLAN



Subject to Articles IV.C and D herein, Claim and Equity Interest Holders in each Impaired Class of Claims or Equity Interests are entitled to vote as a
class to accept or reject this Amended Modified Plan. Each Holder of an Allowed Claim or Equity Interest in Classes 2, 4 and 6 shall be entitled to vote to accept or reject this Amended Modified Plan.



An Impaired Class of Claims shall be deemed to have accepted this Amended Modified Plan if: (a) the Holders (other than any Holder designated under
section 1126(e) of the Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims actually voting in such Class have voted to accept this Amended Modified Plan;
(b) the Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code) of more than one-half in number of the Allowed Claims actually voting in such
Class have voted to accept this Amended Modified Plan. An Impaired Class of Equity Interests

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shall
be deemed to have accepted this Amended Modified Plan if the Holders (other than any Holder designated under section 1126(e) of the Bankruptcy Code) of at least two-thirds in
amount of the Allowed Equity Interests actually voting in such Class have voted to accept this Amended Modified Plan.



Classes 1, 3, 5 and 7 are Unimpaired Classes under this Amended Modified Plan, and, therefore, are presumed to have accepted this Amended Modified Plan pursuant
to section 1126(f) of the Bankruptcy Code.



Class 8 is impaired under this Amended Modified Plan and is receiving no distribution hereunder. Accordingly, Class 8 is deemed to have rejected
this Amended Modified Plan.



To the extent that any Impaired Class rejects this Amended Modified Plan or is deemed to have rejected this Amended Modified Plan, the Debtors will request
confirmation of this Amended Modified Plan as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke
or withdraw this Amended Modified Plan or any Amended Modified Plan Exhibit or Schedule, including to amend or modify it to satisfy the requirements of section 1129(b) of the Bankruptcy Code,
if necessary.

ARTICLE V.        MEANS FOR IMPLEMENTATION OF THE AMENDED MODIFIED PLAN



Subject to any Restructuring Transactions, the Reorganized Debtors shall continue to exist after the Effective Date as separate corporate entities, in accordance
with the applicable laws in the respective jurisdictions in which they are incorporated and pursuant to their respective certificates or articles of incorporation and by-laws in effect
prior to the Effective Date, except to the extent such certificates or articles of incorporation and by-laws are amended by, or pursuant to, this Amended Modified Plan.



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On the Effective Date, except as otherwise provided for in this Amended Modified Plan, (a) Senior Subordinated Note Claims, Other Securities Claims and
Interests, Old Polymer Common Stock, and any other note, bond, Indenture, or other instrument or document evidencing or creating any indebtedness or obligation of a Debtor, and (b) the
obligations of the Debtors under any agreements, Indentures or certificates of designations governing Senior Subordinated Note Claims, Other Securities Claims and Interests, Old Polymer Common Stock,
and any other note, bond, Indenture or other instrument or document evidencing or creating any indebtedness or obligation of a Debtor, as the case may be, shall be cancelled and terminated and shall
be discharged pursuant to section 1141 of the Bankruptcy Code.



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The property of each Debtor's Estate, together with any property of each Debtor that is not property of its Estate and that is not specifically disposed of
pursuant to this Amended Modified Plan, shall revest in the applicable Debtor on the Effective Date. Thereafter, each Reorganized Debtor may operate its business and may use, acquire, and dispose of
property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the Bankruptcy Court. As of the Effective Date, all property of each Reorganized Debtor shall be free and clear of
all Claims and Equity Interests, except as specifically provided in this Amended Modified Plan or the Confirmation Order. Without limiting the generality of the foregoing, each Reorganized Debtor may,
without application to or approval by the Bankruptcy Court, pay fees that it incurs after the Effective Date for reasonable professional fees and expenses.

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All Cash necessary for the Reorganized Debtors to make payments pursuant to this Amended Modified Plan shall be obtained from existing Cash balances, the New
Investment, the operations of the Debtors or Reorganized Debtors or post-Confirmation borrowing under all available facilities of the Debtors or Reorganized Debtors, including, but not
limited to, the Exit Revolving Credit Facility, to the extent permitted thereunder. The Reorganized Debtors may also make such payments using Cash received from their Subsidiaries and Affiliates in
the ordinary course of business.



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Holders
of the Convertible Notes will be entitled at any time before the final maturity of the Convertible Notes, subject to prior redemption or repurchase, to convert any Convertible
Notes or portions thereof into Class A Common Stock at the then applicable conversion price. The Convertible Notes, prior to giving effect to any anti-dilution adjustments, shall be
convertible into an aggregate number of shares of New Polymer Common Stock representing 40% of the outstanding equity of New Polymer (after giving effect to the conversion of such Convertible Notes
and the related anti-dilution provisions of the Class B Common Stock issued to Holders of Allowed Equity Interests in Old Polymer Common Stock). The Convertible Notes will have
anti-dilution provisions equivalent to customary broad-based anti-dilution protections of preferred stock with customary exclusions.

At
any time prior to the final maturity of the Convertible Notes, subject to any limitations contained in the Exit Facility, New Polymer may redeem the outstanding Convertible Notes in
whole or from time to time in part on at least thirty (30) days prior written notice if the trading price of the Class A Common Stock exceeds 130% of the conversion price of the
Convertible Notes for twenty (20) trading days in a period of thirty (30) consecutive trading days. The redemption price will equal 100% of the face amount of the Convertible Notes to be
redeemed together with accrued interest thereon.

The
Convertible Notes will be unsecured and will be subordinate in right of payment to (i) all other existing and future senior indebtedness of New Polymer; and (ii) any
Senior Subordinated Notes.

Each
Reorganized Debtor shall guarantee the Convertible Notes on a junior subordinated basis.



Under this Amended Modified Plan, GOF will issue or cause to be issued the Exit Letters of Credit to guarantee the amortization payments due from the Effective
Date through December 31, 2004, under the Restructured Facilities and the Bank Term Sheet in the event that the Reorganized Debtors are unable to make such amortization payments.

Any
drawings under the Exit Letters of Credit (or any advances made, or caused to be made, by GOF, solely in lieu of drawing on the Exit Letters of Credit to make the amortization
payments under the Restructured Facilities from the Effective Date through December 31, 2004, which amount shall not exceed $25 million) will be evidenced by the New Senior Subordinated
Notes to be issued by New Polymer to GOF.

On
the Effective Date, GOF will receive certain fees for posting the Exit Letters of Credit. See Article XII.C herein.



Except and to the extent previously assumed by a Final Order on or before the Confirmation Date, all employee compensation and benefit programs of the Debtors,
including programs subject to sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or after the Petition Date and not since terminated, shall be deemed to be, and shall be treated
as though they are, executory contracts that are assumed under Article VI.A herein.

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On or after the Effective Date, the applicable Reorganized Debtors may enter into such transactions and may take such actions as may be necessary or appropriate
to effect a corporate restructuring of their respective businesses, to otherwise simplify the overall corporate or capital structure of the Reorganized Debtors, or to reincorporate certain of the
Filing Subsidiaries under the laws of jurisdictions other than the laws of which the applicable Filing Subsidiaries are presently incorporated. Such restructuring may include one or more mergers,
consolidations, restructures, dispositions, liquidations, or dissolutions, as may be determined by the Debtors or Reorganized Debtors to be necessary or appropriate (collectively, the "Restructuring
Transactions"). The actions to effect the Restructuring Transactions may include: (a) the execution and delivery of appropriate agreements or other documents of merger, consolidation,
restructuring, disposition, liquidation, or dissolution containing terms that are consistent with the terms of this Amended Modified Plan and that satisfy the applicable requirements of applicable
state law and such other terms to which the applicable entities may agree; (b) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any
asset, property, right, liability, duty, or obligation on terms consistent with the terms of this Amended Modified Plan and having such other terms to which the applicable entities may agree;
(c) the filing of appropriate certificates or articles of merger, consolidation, or dissolution pursuant to applicable state law; and (d) all other actions that the applicable entities
determine to be necessary or appropriate, including making filings or recordings that may be required by applicable state law in connection with such transactions. In each case in which the surviving,
resulting, or acquiring corporation in any such transaction is a successor to a Reorganized Debtor, such surviving, resulting, or acquiring corporation will perform the obligations of the applicable
Reorganized Debtor pursuant to this Amended Modified Plan to pay or otherwise satisfy the Allowed Claims against such Reorganized Debtor, except as provided in any contract, instrument, or other
agreement or document effecting a disposition to such surviving, resulting, or acquiring corporation, which may provide that another Reorganized Debtor will perform such obligations.



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ARTICLE VI.        EXECUTORY CONTRACTS AND UNEXPIRED LEASES



Attached as an exhibit to the Amended Modified Disclosure Statement is a list of executory contracts and unexpired leases that the Debtors wish to reject. Such
executory contracts and unexpired leases shall be deemed rejected by the Debtors on the Effective Date, and the entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of
such rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code. The Debtors may, in the future, identify additional executory contracts and unexpired leases that they may wish to reject
and reserve the right to seek such rejection prior to the Effective Date.

Any
executory contracts or unexpired leases which (i) have not expired by their own terms on or prior to the Effective Date; (ii) have not been assumed, assumed and
assigned or rejected prior to the Effective Date; (iii) have not been rejected pursuant to the terms of this Amended Modified Plan; or (iv) are not the subject of a motion to reject
pending as of the Effective Date, shall be deemed assumed by the Debtors on the Effective Date, and the entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such
assumptions pursuant to sections 365(a) and 1123 of the Bankruptcy Code.



If the rejection of an executory contract or unexpired lease results in damages to the other party or parties to such contract or lease, any claim for such
damages, if not heretofore evidenced by a Proof of Claim that has been Filed, shall be forever barred and shall not be enforceable against the Debtors, the Reorganized Debtors, or their properties,
successors or assigns, unless a Proof of Claim is Filed and served upon counsel for the Debtors on or before thirty (30) days after the later to occur of (i) the Confirmation Date; and
(ii) the date of entry of an order by the Bankruptcy Court authorizing rejection of a particular executory contract or unexpired lease.

The
Debtors believe that no cure payments pursuant to section 365(b)(1) of the Bankruptcy Code need to be made on any of the executory contracts and unexpired leases that they are
assuming under this Amended Modified Plan because the Debtors are current on all of their obligations with respect to such contracts and leases and all prepetition obligations will have been satisfied
under the Amended Modified Plan. If, however, a counterparty to any such executory contract or unexpired lease believes that cure payments are due pursuant to section 365(b)(1) of the
Bankruptcy Code, or that there is a dispute regarding the ability of the Reorganized Debtors to provide "adequate assurance of future performance" within the meaning of the Bankruptcy Code under the
contract or lease to be assumed, or there is a dispute with regard to any other matters pertaining to the assumption or the cure payments required by section 365(b)(1) of the Bankruptcy Code,
such counterparty must File an objection to the assumption of its executory contract or unexpired lease by the Debtors not later than ten (10) days prior to the Confirmation Date. The
Bankruptcy Court shall have, and exercise, jurisdiction over any such objection, and which objection shall be resolved by a Final Order. The effective date of the assumption of an executory contract
or unexpired lease subject to any such objection shall be determined by any such Final Order.

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Pursuant to this Amended Modified Plan, the Reorganized Debtors shall assume the obligations of the Debtors, if any, to indemnify and reimburse the D&O Releasees
against and for any obligations incurred pursuant to articles or certificates of incorporation, codes of regulations, by-laws, applicable law or specific agreements, or any combination of
the foregoing.

ARTICLE VII.        PROVISIONS GOVERNING DISTRIBUTIONS



Any payment in Cash to be made by the Debtors shall be made, at the election of the Debtors, by check drawn on a domestic bank or by wire transfer from a domestic
bank.



Except as otherwise required by the Bankruptcy Code or as may be ordered by the Bankruptcy Court, distributions to be made on the Effective Date on account of
Claims that are Allowed as of the Effective Date and that are entitled to receive distributions under this Amended Modified Plan shall be made on the Effective Date or as soon as practicable
thereafter. Distributions on account of Claims that become Allowed Claims after the Effective Date shall be made pursuant to Article VII and Article VIII hereof.



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As of the close of business on the Record Date, the transfer registers for any instrument, security, or other documentation canceled pursuant to
Article V.C herein shall be closed for voting purposes. From the Confirmation Date until the Distribution Notification date, Holders of Allowed Class 4 Claims may freely trade Allowed
Class 4 Claims and the associated Subscription Rights. As of the close of business in the Distribution Notification Date, the transfer registers shall be closed for all Claims and Equity
Interests. Each Reorganized Debtor shall have no obligation to recognize the transfer of any such instrument, security, or other documentation occurring after the Distribution Notification Date, and
shall be entitled for all purposes herein to recognize and deal only with those Holders of record as of the close of business on the Distribution Notification Date, as the case may be.



Beginning on the Effective Date, the Reorganized Debtors, in their sole discretion and as frequently as reasonably practicable and efficient under the
circumstances, shall make the distributions to the Holders of Allowed Claims in accordance with this Amended Modified Plan. Beginning on the date that is the end of each calendar quarter following the
Effective Date, the Reorganized Debtors, in their discretion and as frequently and reasonably practicable and efficient under the circumstances, shall also make the distributions to Holders of
Disputed Claims whose Claims were Allowed during the preceding calendar quarter, in accordance with this Amended Modified Plan.



No Cash payment of less than ten dollars ($10.00) shall be made by the Reorganized Debtors on account of any Allowed Claim, unless a specific request therefore is
made in writing by the Holder of any such Claim. In the event a Holder of an Allowed Claim is entitled to distribution that is not a whole dollar number, the actual payment or issuance made will
reflect a rounding of such fractional portion of such distribution down or up to the nearest whole dollar, but in any case not to result in a distribution that exceeds total distribution authorized by
this Amended Modified Plan for such Holder.

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No
fractional shares of New Polymer will be issued. If any issuance of shares would otherwise call for issuance of a fraction of a share, (a) fractions 1/2 or greater shall be
rounded to the next higher whole number, and (b) fractions of less than 1/2 shall be rounded to the next lower whole number.



Except as otherwise provided herein, the Reorganized Debtors may, pursuant to sections 502(d) or 553 of the Bankruptcy Code or applicable
non-bankruptcy law, offset against any Allowed Claim, and the distributions to be made pursuant to this Amended Modified Plan on account of such Claim (before any distribution is made on
account of such Claim), the Claims, rights, and Causes of Action of any nature that the Debtors or Reorganized Debtors may hold against the Holder of such Allowed Claim; provided, however, that neither
the failure to effect such a setoff nor the allowance of any Claim hereunder shall constitute a waiver or release by the
Debtors or Reorganized Debtors of any such Claims, rights, and Causes of Action that the Debtors or Reorganized Debtors may possess against such Holder.



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Any Holder of an Allowed Claim on account of any instrument, security, or other documentation canceled pursuant to Article V.C herein that has been lost,
stolen, mutilated or destroyed shall, in lieu of surrendering any such instrument, security or other documentation: (i) deliver to the Reorganized Debtors (or, in the case of the Senior
Subordinated Notes, the applicable Senior Subordinated Notes Indenture Trustee) (A) an affidavit of loss reasonably satisfactory to the Reorganized Debtors (or, in the case of a Senior
Subordinated Note, to the applicable Senior Subordinated Notes Indenture Trustee) setting forth the unavailability of such instrument, security, or other document; and (B) such additional
security or indemnity as may reasonably be required by the Reorganized Debtors to hold the Reorganized Debtors (or, in the case of the Senior Subordinated Notes and the Dominion Notes, the applicable
Indenture trustee) harmless from any damages, liabilities or costs incurred in treating such individual as a Holder of an Allowed Claim; and (ii) satisfy any other requirements under the
applicable Senior Subordinated Note Indenture, any article or certificate of incorporation or by-law, or any other relevant document. Upon compliance with this Section of this Amended
Modified Plan by a Holder of a Claim evidenced by such instrument, security or other documentation, such Holder shall, for all purposes under this Amended Modified Plan, be deemed to have surrendered
such instrument, security or other documentation.



All subordination rights and Claims relating to subordination of the Allowed Claim of any Creditor shall remain valid, enforceable and unimpaired in accordance
with section 510 of the Bankruptcy Code or otherwise, except as otherwise provided in this Amended Modified Plan.

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ARTICLE VIII.    PROCEDURES FOR TREATMENT OF DISPUTED,  CONTINGENT, AND UNLIQUIDATED CLAIMS



After the Confirmation Date, the Debtors and the Reorganized Debtors shall have the exclusive authority to File, settle or compromise (with the consent of GOF)
withdraw or litigate to judgment, any objections to Claims. From and after the Confirmation Date, the Debtors and the Reorganized Debtors, with the consent of GOF, may settle or compromise any
Disputed Claim without approval of the Bankruptcy Court.



The Debtors or the Reorganized Debtors may, at any time, request that the Bankruptcy Court estimate any contingent or unliquidated Claim pursuant to
section 502(c) of the Bankruptcy Code regardless of whether the Debtors or Reorganized Debtors previously have objected to such Claim or whether the Bankruptcy Court has ruled on any such
objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during the litigation concerning any objection to any Claims, including without limitation, during the
pendency of any appeal relating to any such objection. Subject to the provisions of section 502(j) of the Bankruptcy Code, in the event that the Bankruptcy Court estimates any contingent or
unliquidated Claim, the amount so estimated shall constitute the Allowed amount of such Claim. If the estimated amount constitutes a maximum limitation on the amount of such Claim, the Debtors may
pursue supplementary proceedings to object to the allowance of such Claim. All of the aforementioned objection, estimation and resolution procedures are intended to be cumulative and not necessarily
exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.



Notwithstanding any provision herein to the contrary, except as otherwise agreed to by the Debtors or the Reorganized Debtors in their sole discretion, no partial
payments and no partial distributions will be made with respect to a Disputed Claim until the resolution of such dispute by settlement or Final Order. In accordance with Article VII herein, as
soon as reasonably practicable after a Disputed Claim becomes an Allowed Claim, the Holder of such Allowed Claim will receive all payments and distributions to which such Holder is then entitled under
this Amended Modified Plan. Notwithstanding the foregoing, any Person or Entity who holds both an Allowed Claim(s) and a Disputed Claim(s) will receive the appropriate payment or distribution on the
Allowed Claim(s), although, except as otherwise agreed to by the Debtors or the Reorganized Debtors in their sole discretion, no payment or distribution will be made on the Disputed Claim(s) until
such dispute is resolved by settlement or Final Order. In the event there are Disputed Claims requiring adjudication and resolution, the Debtors reserve the right to, or, if so ordered by the
Bankruptcy Court shall, establish appropriate reserves for potential payment of such Claims.



Except as expressly provided herein or any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), no Claim
shall be deemed Allowed, unless and until such Claim is deemed Allowed under the Bankruptcy Code or by the Debtors or Reorganized Debtors, or the Bankruptcy Court enters a Final Order in the Chapter
11 Cases allowing such Claim. Except as expressly provided in this Amended Modified Plan or any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation
Order), the Reorganized Debtors after

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Confirmation
will have and retain any and all rights and defenses the Debtors had with respect to any Claim as of the Petition Date, including the Causes of Action referenced in Article X.C
herein and Section III.J.3 of the Amended Modified Disclosure Statement and the Filing of any motions or other pleadings for estimation of the amount of disputed claims. All Claims of any
Person or Entity that owes money to the Debtors shall be disallowed unless and until such Person or Entity pays the full amount it owes the Debtors. Any objection to an Administrative Expense Claim,
Priority Claim, Secured Claim or Critical Business Relations Claims and Intercompany Claims must be Filed and served on or before one hundred and twenty (120) days after the Effective Date.

ARTICLE IX.    CONDITIONS PRECEDENT TO CONFIRMATION  AND CONSUMMATION OF THIS AMENDED MODIFIED PLAN



It
shall be a condition precedent to the Confirmation of this Amended Modified Plan that the following conditions shall have been satisfied or waived pursuant to the terms and conditions
contained herein:



It shall be a condition to the Consummation of this Amended Modified Plan that the following conditions shall have been satisfied or waived pursuant to the
provisions of Article IX.D herein:



It shall be a condition to the closing of the New Investment and GOF's obligations as a standby purchaser that the following conditions, among others, shall have
been satisfied or waived by GOF:



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To the extent legally permissible, each of the conditions precedent set forth in Article IX.A and Article IX.B may be waived, in whole or in part,
by the Debtors with the consent of GOF, the Prepetition Agent, the Postpetition Agent and the Committee. Any such waiver of a condition precedent shall be in writing and may be effected at any time,
without notice or leave or order of the Bankruptcy Court and without any formal action.



If the Confirmation Order is vacated, this Amended Modified Plan shall be null and void in all respects and nothing contained in this Amended Modified Plan or the
Amended Modified Disclosure Statement shall: (1) constitute a waiver or release of any Claims by or against, or any Equity Interests in, the Debtors; (2) prejudice in any manner the
rights of the Debtors; or (3) constitute an admission, acknowledgment, offer or undertaking by the Debtors in any respect.

ARTICLE X.    RELEASE, INJUNCTIVE AND RELATED PROVISIONS



Except as otherwise specifically provided herein, on and after the Effective Date, each of the Releasees, for good and valuable
consideration, including, but not limited to, the commitment, obligation and service of each of the aforementioned individuals and entities to facilitate the expeditious reorganization of the Debtors
and the implementation of the restructuring contemplated by this Amended Modified Plan, shall automatically be deemed to have released one another unconditionally and forever from any and all Claims,
obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether liquidated or

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unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that any of the foregoing Persons or
Entities would have been legally entitled to assert (in their own right, whether individually or collectively, or on behalf of the Holder of any Claim or Equity Interest or other Person or Entity),
based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date, relating in any way to the Debtors, the Reorganized
Debtors, the Chapter 11 Cases, this Amended Modified Plan, the Amended Modified Disclosure Statement, or any related agreements, instruments or other documents, except for
(i) Claims arising under this Amended Modified Plan; and (ii) any intentional acts of the D&O Releasees, GOF and the Committee and Committee Members which constitute fraud and, when the
party bringing the cause of action (or its respective employees, agents or advisors) did not have actual knowledge of such intentional acts (or the substance of such acts) as of the Effective Date;
provided, however, with respect to any intentional acts which constitute fraud, the knowledge of former and existing officers and directors of
Polymer or any of its Debtor Affiliates shall not be imputed to Polymer or New Polymer (before or after the Effective Date). With respect to any claim brought by the Reorganized Debtors in the nature
of a derivative claim or otherwise (x) if the action is initiated by Non-GOF Holders, directly or indirectly, the actual knowledge of the Committee Members or of their and the
Committee's employees, agents or advisors who have provided advice in the Chapter 11 Cases shall determine whether or not the Debtors or the Reorganized Debtors had actual knowledge of the intentional
acts as of the Effective Date; and (y) if the action is initiated by GOF, directly or indirectly, the actual knowledge of GOF or its employees, agents or advisors shall determine whether or not
the Debtors or the Reorganized Debtors had actual knowledge of the intentional acts as of the Effective Date, provided, however, that the
approval of the New Polymer Board of Directors of an action primarily initiated by the Non-GOF Holders or Non-GOF Board Members shall not change the determination of actual
knowledge. Each of GOF and each Committee Member, after inquiry of its employees, agents and advisors who have provided advice in the Chapter 11 Cases, acknowledges and agrees that either
(i) it has no actual knowledge of any intentional acts which constitute fraud, or could reasonably form the basis for a claim that such acts constitute fraud, as of the date hereof; or
(ii) to the extent that either GOF or any Committee Member may have any actual knowledge of any such intentional acts which constitute fraud, or could reasonably form the basis for a claim that
such acts constitute fraud, as of the date hereof, GOF or the applicable Committee Member, as the case may be, agrees that any claims based on such knowledge will be released on the Effective Date.
Notwithstanding the foregoing, D&O Releasees shall not be released or discharged from contractual obligations to the Debtors or Reorganized Debtors with respect to employment and other agreements
assumed pursuant to the Amended Modified Plan or otherwise.



On and after the Effective Date, each Holder of a Claim or Equity Interest who is voting on the Amended Modified Plan should make an
election on their Ballot to either agree or not agree to the Releases described in the paragraph below. Any Holder of a Claim or Interest in Class 4 or 6 that does not make an election will be
deemed to not agree to the Releases. Holders of Class 8 Claims, who are deemed to have rejected the Amended Modified Plan, shall be deemed to have not agreed to the Releases. Holders of
Class 1, 3, 5 or 7 Claims (who are deemed to have accepted the Amended Modified Plan pursuant to section 1126 of the Bankruptcy Code) also shall be deemed not to have agreed to the
Releases. This Release does not apply to (i) Holders of Class 2 Claims, (ii) GK/Ives or (iii) any Holder of an Allowed Class 4 Claim or Class 6 Equity
Interest that did not specifically agree to the Limited Release. The Limited Release applies only to those Holders of Allowed Class 4 Claims and Class 6 Equity Interests who specifically
agree to the Limited Releases.

The Release unconditionally releases the Releasees from any and all claims (as defined in section 101(5) of the Bankruptcy Code), obligations, rights,
suits, damages, causes of action, remedies and liabilities whatsoever, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person or
Entity would have been legally entitled to assert (whether individually or collectively), based in whole or in part upon any act or omission, transaction, agreement, event or other

38

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occurrence taking place on or before the Effective Date in any way relating or pertaining to the Debtors or the Reorganized Debtors, the Debtors' Chapter 11 Cases, or the negotiation, formulation and
preparation of this Amended Modified Plan or any related agreements, instruments or other documents.



The Debtors are currently investigating whether to pursue potential Causes of Action against certain Persons or Entities. The investigation has not been completed
to date, and, subject to the Releases granted in Article X hereof, the Reorganized Debtors shall retain all rights on behalf of the Debtors to commence and pursue any and all Causes of Action
(under any theory of law, including, without limitation, the Bankruptcy Code, and in any court or other tribunal including, without limitation, in an adversary proceeding Filed in the Chapter 11
Cases) discovered in such an investigation to the extent the Reorganized Debtors deem appropriate. Potential Causes of Action currently being investigated by the Debtors, which may but need not be
pursued by the Debtors prior to the Effective Date and by the Reorganized Debtors after the Effective Date to the extent warranted include, without limitation, (i) a list of potential Claims
and Causes of Action that will be set forth in the Amended Modified Plan Supplement to the extent determined as of the date thereof; and (ii) Preference Actions that will be set forth in the
Amended Modified Plan Supplement to the extent determined as of the date thereof:



In
addition, there may be numerous other Causes of Action which currently exist or may subsequently arise that are not set forth herein, in the Cause of Action Summary or in the List of
Retained Causes of Action, because the facts upon which such Causes of Action are based are not currently or fully known by the Debtors and, as a result, can not be raised during the pendency of the
Chapter 11 Cases (collectively, the "Unknown Causes of Action"). The failure to list any such Unknown Cause of Action herein, or in the Cause of Action Summary or the List of Retained Causes of
Action, is not intended to limit the rights of the Reorganized Debtors to pursue any Unknown Cause of Action to the extent the facts underlying such Unknown Cause of Action subsequently become fully
known to the Debtors.

Unless
Causes of Action against a Person or Entity are expressly waived, relinquished, released, compromised or settled in the Amended Modified Plan or any Final Order, the Debtors
expressly reserve all Causes of Action and Unknown Causes of Action, including the Causes of Action described herein and in the Causes of Action Summary and the List of Retained Causes of Action, as
well as any

39

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other
Causes of Action or Unknown Causes of Action, for later adjudication and therefore, no preclusion doctrine, including, without limitation, the doctrines of res judicata, collateral estoppel,
issue preclusion, claim preclusion, estoppel (judicial, equitable or otherwise) or laches shall apply to such Causes of Action upon or after the confirmation or consummation of the Amended Modified
Plan. In addition, the Debtors expressly reserve the right to pursue or adopt any claims alleged in any lawsuit in which the Debtors are a defendant or an interested party, including the lawsuits
described in the Amended Modified Disclosure Statement, against any Person, including, without limitation, the plaintiffs and co-defendants in such lawsuits.

Except
as otherwise provided in the Amended Modified Plan or in any contract, instrument, release, Indenture or other agreement entered into in connection with the Amended Modified Plan,
in accordance with section 1123(b)(3) of the Bankruptcy Code, any Claims, rights, and Causes of Action that the respective Debtors, Estates, or Post-Confirmation Estates may hold
against any Person or Entity, including but not limited to those Causes of Action listed in the Amended Modified Disclosure Statement, shall vest in the Reorganized Debtors, and the Reorganized
Debtors shall retain and may exclusively enforce, as the authorized representatives of the respective Estates and Post-Confirmation Estates, any and all such Claims, rights, or Causes of
Action. The Reorganized Debtors may pursue any and all such Claims, rights, or Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors. Subject to
Article VIII.A herein, the Reorganized Debtors shall have the exclusive right, authority, and discretion to institute, prosecute, abandon, settle, or compromise any and all such Claims, rights,
and Causes of Action without the consent or approval of any third party and without any further order of the Bankruptcy Court.

The
Debtors specifically waive any and all Claims, rights and Causes of Action accruing prior to the Confirmation Date that they or their respective estates may have against the Senior
Lenders, the Prepetition Agent, GOF, CSFB Global Opportunities Advisers L.L.C., MatlinPatterson Global Advisers LLC or the Committee.



The Releasees shall neither have nor incur any liability to any Person or Entity for any act taken or omitted to be taken in connection with or related to the
formulation, preparation, dissemination, implementation, administration, Confirmation or Consummation of this Amended Modified Plan, the Amended Modified Disclosure Statement or any contract,
instrument, release or other agreement or
document created or entered into in connection with this Amended Modified Plan (except for any obligations arising in the ordinary course of business), or any other act taken or omitted to be taken in
connection with the Chapter 11 Cases;provided,however, that the foregoing provisions of this
Article X.D shall have no effect on the liability of any Person or Entity that results from any such act or omission that is determined in a Final Order to have constituted gross negligence or
willful misconduct;provided,however, that exculpation for any such acts or omissions shall remain
subject to the Bankruptcy Court's potential future review, whether sua sponte or at the request of a party-in-interest.



From and after the Effective Date, the Releasees, all Persons and Entities specifically and expressly agreeing to the Limited Release and
all Persons and Entities to whom the Exculpation applies are permanently enjoined from commencing or continuing in any manner, any suit, action or other proceeding, on account of or respecting any
Claim, demand, liability, obligation, debt, right, Cause of Action, interest or remedy exculpated, released or to be released as to such Person or Entity pursuant to this
Article.

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Except as otherwise provided in the Amended Modified Plan, (a) the rights afforded in the Amended Modified Plan and the treatment of all Claims and Equity
Interests therein, shall be in exchange for and in complete satisfaction, discharge and release of Claims and Equity Interests of any nature whatsoever, including any interest accrued on such Claims
from and after the Petition Date, against the Debtors and the Debtors-in-Possession, or any of their assets or properties, (b) on the Effective Date, all such Claims
against, and Equity Interests in the Debtors shall be satisfied, discharged and released in full and (c) all Persons and Entities shall be precluded from asserting against the Reorganized
Debtors, their successors or their assets or properties any other or further Claims or Equity Interests based upon any act or omission, transaction or other activity of any kind or nature that
occurred prior to the Confirmation Date.

ARTICLE XI.  RETENTION OF JURISDICTION

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter
11 Cases after the Effective Date as is legally permissible, including without limitation, jurisdiction to:

A.    allow,
disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim, including the resolution of any request
for payment of any Administrative Expense Claim and the resolution of any and all objections to the allowance or priority of Claims;

B.    grant
or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or this Amended Modified Plan, for
periods ending on or before the Confirmation Date;

C.    resolve
any matters related to the assumption, assumption and assignment, or rejection of any executory contract or unexpired lease to which any of the Debtors is a party
or with respect to which any of the Debtors may be liable and to hear, determine and, if necessary, liquidate any Claims arising therefrom;

D.    ensure
that distributions to Holders of Allowed Claims are accomplished pursuant to the provisions of this Amended Modified Plan, including without limitation ruling on
any motion Filed pursuant to Article VIII herein and resolving any disputes concerning any distributions contemplated in or relating to Article VII herein;

E.    decide
or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications involving the Debtors that
may be pending on the Effective Date;

F.    enter
such orders as may be necessary or appropriate to implement or consummate the provisions of this Amended Modified Plan and all contracts, instruments, releases,
Indentures and other agreements or documents created in connection with this Amended Modified Plan or the Amended Modified Disclosure Statement;

G.    resolve
any cases, controversies, suits or disputes that may arise in connection with the Consummation, interpretation or enforcement of this Amended Modified Plan or any
Person's or Entity's obligations incurred in connection with this Amended Modified Plan;

H.    issue
injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person or Entity with
the Consummation or enforcement of this Amended Modified Plan, except as otherwise provided herein;

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I.    resolve
any cases, controversies, suits or disputes with respect to the releases, injunction and other provisions contained in Article X herein and enter such
orders as may be necessary or appropriate to implement such releases, injunction and other provisions;

J.    enter
and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated;

K.    determine
any other matters that may arise in connection with or relate to this Amended Modified Plan, the Confirmation Order or any contract, instrument, release,
Indenture or other agreement or document created in connection with this Amended Modified Plan or the Amended Modified Disclosure Statement; and

L.    enter
an order and/or final decree closing the Chapter 11 Cases.

ARTICLE XII.    MISCELLANEOUS PROVISIONS



On the Effective Date, the Committee shall dissolve and the Committee Members, and the Professionals retained by the Committee shall be released and discharged
from all rights and duties arising from, or related to the Chapter 11 Cases.



All fees payable pursuant to 28 U.S.C. § 1930, as determined by the Bankruptcy Court at the hearing pursuant to section 1128 of the Bankruptcy
Code, shall be paid on or before the Effective Date.



On the Effective Date, in consideration of GOF acting as Standby Purchaser for the New Investment, and in consideration of GOF's role in facilitating a consensual
resolution of the disputes among the Plan Parties and the Senior Lenders Steering Committee, New Polymer shall pay GOF a standby purchaser fee of $2 million plus a plan facilitation fee of
$2 million. GOF and New Polymer shall support payment in full of all the Committee's reasonable documented professionals' fees and expenses and those of Committee Members (for actions taken in
these Chapter 11 Cases as Committee Members), subject to approval of all such fees and expenses by the bankruptcy court, and shall support any reasonable documented request for payment by
White & Case LLP, The McNair Law Firm, P.A., and Loeb Partners for work done prior to the commencement of these cases or prior to the retention of Kasowitz, Benson, Torres & Friedman
LLP. GOF and the Committee shall support payment in full of all Polymer's reasonable documented legal fees and expenses, subject to approval of all such fees and expenses by the Bankruptcy Court.

On
the Effective Date, in accordance with the Bank Term Sheet, GOF shall receive a fee of 2% ($500,000) of the face amount for posting, or causing to be posted, the Exit Letters of
Credit. Upon any drawing under the Exit Letters of Credit (or other advances made, or caused to be made, by GOF solely in lieu of a drawing under the Exit Letters of Credit to make the amortization
payments under the Restructured Facilities from the Effective Date through December 31, 2004, which amount shall not exceed $25 million), New Polymer shall issue New Senior Subordinated
Notes in a face amount equal to such drawing (or other advance).

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New Polymer shall cause to be maintained in effect for six years from the Effective Date, the current policies of the directors' and officers' liability insurance
maintained by Polymer (provided that New Polymer may substitute therefore policies of at least the same coverage containing terms and conditions which are not materially less advantageous) with
respect to matters or events occurring on or prior to the Effective Date to the extent available;provided, however, that in no event shall New Polymer be
required to expend more than an amount per year in excess of 200% of the per annum premiums for such
insurance paid by New Polymer as of the Effective Date to maintain or procure insurance coverage pursuant hereto; and, provided further, that if the annual premiums of such insurance coverage exceed
such amount, New Polymer shall be obligated to obtain a policy with the greatest coverage available for a cost not exceeding such amount.



Except as otherwise provided herein, on the Effective Date: (1) the rights afforded herein and the treatment of all Claims and Equity Interests therein,
shall be in exchange for and in complete satisfaction, discharge and release of Claims and Equity Interests of any nature whatsoever, including any interest accrued on such Claims from and after the
Petition Date, against the Debtors and the Debtors in Possession, or any of their assets, property, or Estates; (2) this Amended Modified Plan shall bind all Holders of Claims against, and
Equity Interests in, the Debtors and Debtors in Possession, and the Debtors' liability with respect thereto shall be extinguished completely, including, without limitation, any liability of the kind
specified under section 502(g) of the Bankruptcy Code; and (3) all Persons and Entities shall be precluded from asserting against the Debtors, the Estates, and the Reorganized Debtors,
their successors and assigns, their assets and properties, any other Claims or Equity Interests based upon any documents, instruments, or any act or omission, transaction or other activity of any kind
or nature that occurred prior to the Effective Date.



Each of the Debtors and the Reorganized Debtors are authorized to execute, deliver, file or record such contracts, instruments, releases and other agreements or
documents and take such actions as may be necessary or appropriate to effectuate, implement and further evidence the terms and conditions herein and the notes and securities issued pursuant to the
terms and conditions herein, including, but not limited to, all documents related to the Exit Facility.

Prior
to, on or after the Effective Date (as appropriate), all matters provided for under this Amended Modified Plan that would otherwise require approval of the shareholders or
directors of the Debtors or the Reorganized Debtors shall be deemed to have occurred and shall be in effect prior to, on or after the Effective Date (as appropriate) pursuant to the applicable general
corporation law of each state in which the respective Debtors or Reorganized Debtors are organized without any requirement of further action by the shareholders or directors of the Debtors or the
Reorganized Debtors.



Subject to the limitations contained herein, (1) the Debtors reserve the right, in accordance with the Bankruptcy Code and the Bankruptcy Rules, to amend
or modify this Amended Modified Plan prior to the entry of the Confirmation Order and (2) after the entry of the Confirmation Order, the Debtors or the Reorganized Debtors, as the case may be,
may, upon order of the Bankruptcy Court, amend or modify this Amended Modified Plan, in accordance with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or reconcile any
inconsistency in this Amended Modified Plan

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in
such manner as may be necessary to carry out the purpose and intent of this Amended Modified Plan.



The Debtors reserve the right, at any time prior to the entry of the Confirmation Order, to revoke and withdraw this Amended Modified Plan.



The rights, benefits and obligations of any Person or Entity named or referred in this Amended Modified Plan shall be binding on, and shall inure to the benefit
of, any heir, executor, administrator, successor or assign of such Person or Entity.



Except as expressly set forth herein, this Amended Modified Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. The
filing of this Amended Modified Plan, any statement or provision contained in this Amended Modified Plan, or the taking of any action by the Debtors or Debtors-in-Possession
with respect to this Amended Modified Plan shall not be and shall not be deemed to be an admission or waiver of any rights of the Debtors or Debtors-in-Possession with respect
to the Holders of Claims or Equity Interests.



Pursuant to section 1146(c) of the Bankruptcy Code, under this Amended Modified Plan, (1) the issuance, distribution, transfer, or exchange of any
debt, Equity Security or other interest in the Debtors or Reorganized Debtors; (2) the creation, modification, consolidation or recording of any mortgage, deed or trust, or other security
interest, or the securing of additional indebtedness by such or other means (whether (a) in connection with the issuance and distribution of any debt, Equity Security, or other interest in the
Debtors or Reorganized Debtors, (b) the Exit Revolving Credit Facility, or (c) otherwise in furtherance of, or in connection with, this Amended Modified Plan); (3) the making,
assignment, or recording of any lease or sublease; or (4) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, this
Amended Modified Plan, including any deeds, bills of sale, assignments or other instrument of transfer executed in connection with any transaction arising out of, contemplated by, or in any way
related to this Amended Modified Plan, shall not be subject to any document recording tax, mortgage recording tax, stamp tax, or similar tax or government assessment, and the appropriate state or
local government official or agent shall be directed by the Bankruptcy Court to forego the collection of any such tax or government assessment and to accept for filing and recording any of the
foregoing instruments or other documents without the payment of any such tax or government assessment.



The Debtors, the Reorganized Debtors, all Holders of Allowed Claims receiving distributions under this Amended Modified Plan, and all other parties in interest
shall, from time to time, prepare, execute and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of this Amended
Modified Plan.



Unless otherwise provided in the Confirmation Order or herein, all injunctions or stays in effect in the Chapter 11 Cases, pursuant to sections 105, 362 or 525 of
the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until the Effective Date.

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From and after the Effective Date, the Reorganized Debtors shall, in the ordinary course of business and without the necessity for any approval by the Bankruptcy
Court, pay the reasonable professional fees and expenses incurred by the Reorganized Debtors related to the Consummation and to the implementation of this Amended Modified Plan.



The provisions of this Amended Modified Plan shall not be severable unless such severance is agreed to by the Debtors or Reorganized Debtors, as applicable, and
such severance would constitute a permissible modification of this Amended Modified Plan pursuant to section 1127 of the Bankruptcy Code.



To the extent any provision of the Amended Modified Disclosure Statement, and any documents executed in connection with the Confirmation Order (or any exhibits,
schedules, appendices, supplements or amendments to the foregoing) conflicts with or is in any way inconsistent with the terms of this Amended Modified Plan, the terms and provisions of this Amended
Modified Plan shall govern and control.



All notices, requests, and demands to or upon the Debtors or the Reorganized Debtors to be effective shall be in writing, including by facsimile transmission, and
unless otherwise expressly provided herein, shall be deemed to have been duly given or made when actually delivered to all of the following

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or,
in the case of notice by facsimile, when received by all of the following, addressed as follows or to such other addresses as Filed with the Bankruptcy Court.

| |  | Polymer Group, Inc.
PO Box 5069
4838 Jenkins Avenue
North Charleston, SC 29405                                                 
| |  | -------------------------------------------------------------------------------------------------------------------------------
| |  | Attention:                                                                                                                     
| |  |                                                                                                                                
| |  | Telephone:                                                                                                                     
| |  | Telecopier:                                                                                                                    
| |  | With a copy to:                                                                                                                
| |  | Kirkland & Ellis
Aon Building
200 East Randolph Drive
Chicago, Illinois 60601                                                  
| |  | Attention:                                                                                                                     
| |  |                                                                                                                                
| |  | Telephone:                                                                                                                     
| |  | Telecopier:                                                                                                                    
| |  | Nelson Mullins Riley & Scarborough, LLP
Keenan Building, Third Floor
1330 Lady Street
P.O. Box 11070 (29211)
Columbia, SC 29201
| |  | Attention:                                                                                                                     
| |  | Telephone:                                                                                                                     
| |  | Telecopier:                                                                                                                    
| |  | MatlinPatterson Global Advisers LLC
520 Madison Avenue
New York, NY 10022                                                      
| |  | Attention:                                                                                                                     
| |  |                                                                                                                                
| |  | Telecopier:                                                                                                                    
| |  | Kasowitz, Benson, Torres & Friedman, LLP
1633 Broadway
New York, NY 10019                                                      
| |  | Attention:                                                                                                                     
| |  |                                                                                                                                
| |  | Telephone:                                                                                                                     
| |  | Telecopier:                                                                                                                    

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The Reorganized Debtors shall promptly, upon the full administration of the Chapter 11 Cases, File with the Bankruptcy Court all documents required by Fed.
R. Bankr. P. 3022 and any applicable order of the Bankruptcy Court.

Respectfully
submitted,

Polymer
Group, Inc.,
Debtor and Debtor-in-Possession

|By:                                                    | 
|------------------------------------------------------ | 
|Name:                                                  | 
|Title:                                                 | 
|PGI Polymer, Inc.,
Debtor and Debtor-in-Possession    
|By:                                                    | 
|Name:                                                  | 
|Title:                                                 | 
|PGI Europe, Inc.,
Debtor and Debtor-in-Possession     
|By:                                                    | 
|Name:                                                  | 
|Title:                                                 | 
|Chicopee, Inc.,
Debtor and Debtor-in-Possession       
|By:                                                    | 
|Name:                                                  | 
|Title:                                                 | 
|FiberTech Group, Inc.,
Debtor and Debtor-in-Possession
|By:                                                    | 
|Name:                                                  | 
|Title:                                                 | 

47

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|Technetics Group, Inc.,
Debtor and Debtor-in-Possession
|-------------------------------------------------------
|By:                                                    
|Name:                                                  
|Title:                                                 
|Fibergol Corporation,
Debtor and Debtor-in-Possession  
|By:                                                    
|Name:                                                  
|Title:                                                 
|Fabrene Corp.,
Debtor and Debtor-in-Possession         
|By:                                                    
|Name:                                                  
|Title:                                                 
|Fabrene Group L.L.C.,
Debtor and Debtor-in-Possession  
|By:                                                    
|Name:                                                  
|Title:                                                 
|PNA Corp.,
Debtor and Debtor-in-Possession             
|By:                                                    
|Name:                                                  
|Title:                                                 
|FNA Polymer Corp.,
Debtor and Debtor-in-Possession     
|By:                                                    
|Name:                                                  
|Title:                                                 

48

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|FNA Acquisition, Inc.,
Debtor and Debtor-in-Possession                  
|------------------------------------------------------------------------
|By:                                                                     
|Name:                                                                   
|Title:                                                                  
|Loretex Corporation,
Debtor and Debtor-in-Possession                    
|By:                                                                     
|Name:                                                                   
|Title:                                                                  
|Dominion Textile (USA) Inc.,
Debtor and Debtor-in-Possession            
|By:                                                                     
|Name:                                                                   
|Title:                                                                  
|Poly-Bond Inc.,
Debtor and Debtor-in-Possession                         
|By:                                                                     
|Name:                                                                   
|Title:                                                                  
|PolyIonix Separation Technologies, Inc.,
Debtor and Debtor-in-Possession
|By:                                                                     
|Name:                                                                   
|Title:                                                                  
|FabPro Oriented Polymers, Inc.,
Debtor and Debtor-in-Possession         
|By:                                                                     
|Name:                                                                   
|Title:                                                                  

49

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|Pristine Brands Corporation,
Debtor and Debtor-in-Possession 
|-------------------------------------------------------------
|By:                                                          
|Name:                                                        
|Title:                                                       
|                                                             
|PGI Asset Management Company,
Debtor and Debtor-in-Possession
|By:                                                          
|Name:                                                        
|Title:                                                       
|PGI Servicing Company,
Debtor and Debtor-in-Possession       
|By:                                                          
|Name:                                                        
|Title:                                                       
|                                                             
|Bonlam (S.C.), Inc.,
Debtor and Debtor-in-Possession         
|By:                                                          
|Name:                                                        
|Title:                                                       

50

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