Document:

Exhibit
10.6

 

PP
HOLDING CORPORATION II

 

STOCKHOLDERS’
AGREEMENT

 

This STOCKHOLDERS’
AGREEMENT (this “Agreement”) is dated as of May 13, 2004 and is entered
into by and among PP Holding Corporation II, a Delaware corporation (the “Company”),
Warburg Pincus Private Equity VIII, L.P., a Delaware limited partnership (“Warburg
Pincus VIII”), Warburg Pincus International Partners, L.P., a Delaware
limited partnership (“Warburg Pincus International” and together with
Warburg Pincus VIII, collectively “Warburg Pincus”), PP Holding, LLC, a
Delaware limited liability company (“PP Holding, LLC”), and the other
institutional investors whose names and addresses are set forth from time to
time on Schedule I hereto (such institutional investors, together
with any Persons who become parties to this Agreement pursuant to the terms of
Section 7 hereof, are hereinafter collectively referred to as the “Other
Investors”; the Other Investors, Warburg Pincus and PP Holding, LLC are
hereinafter collectively referred to as the “Institutional Investors”). 
Schedule I hereto shall be updated from time to time to include
each Other Investor who becomes a party to this Agreement after the date hereof
pursuant to the terms hereof.  Capitalized terms used herein without
definition elsewhere in this Agreement are defined in Section 10 hereof.

 

RECITALS

 

WHEREAS, on
January 30, 2004, PP Acquisition Corporation (“PP Acquisition”), a
Delaware corporation and a wholly owned subsidiary of PP Holding Corporation, a
Delaware corporation (“PP Holding”), entered into a Stock Purchase
Agreement (the “Purchase Agreement”) with Polypore Inc., a Delaware
corporation (“Polypore”), and certain stockholders of Polypore party
thereto, pursuant to which, upon satisfaction of the terms and subject to the conditions
set forth in the Purchase Agreement, PP Acquisition agreed to purchase 100% of
the capital stock of Polypore;

 

WHEREAS, PP Holding is a
wholly owned subsidiary of the Company;

 

WHEREAS, on or shortly
following the Closing Date, PP Acquisition will be merged with and into
Polypore, resulting in Polypore being a direct wholly owned subsidiary of PP
Holding and an indirect wholly owned subsidiary of the Company;

 

WHEREAS, in connection
with the consummation of the transactions contemplated by the Purchase
Agreement, the Institutional Investors have entered into a Securities Purchase
Agreement with the Company (the “Subscription Agreement”), pursuant to
which the Company has issued and sold to each Institutional Investor and each
Institutional Investor has purchased from the Company, among other things, that
number of shares of common stock, par value $0.01 per share (“Common Stock”),
as set forth opposite the name of such Institutional Investor on Schedule I
thereto; and

 

WHEREAS, the
Institutional Investors and the Company desire to promote their mutual
interests by agreeing to certain matters relating to the operations of the
Company and certain other matters set forth herein.

 

 

NOW, THEREFORE, in
consideration of the mutual covenants and obligations set forth in this
Agreement, and to implement the foregoing, the parties hereto agree as follows:

 

1.                                      
Additional
Offerings.

 

1.1.                             
Additional
Offerings; Generally.  If at any time after the date hereof, the Company
proposes to issue equity securities of any kind (the term “equity securities”
shall include for these purposes any warrants, options or other rights to
acquire equity securities and debt securities convertible into equity
securities, but shall not include the issuance of any securities (i) to the
public in a firm commitment underwriting pursuant to a registration statement
in compliance with the Securities Act (a “Registration Statement”), (ii)
pursuant to the acquisition of another Person by the Company or any Subsidiary
thereof (as consideration for the acquisition and not for the purpose of
financing an acquisition), whether by purchase of stock, merger, consolidation,
purchase of all or substantially all of the assets of such Person or otherwise,
(iii) pursuant to the 2004 Stock Option Plan or another employee stock option
plan, stock bonus plan, stock purchase plan or other management equity program
approved by the Board of Directors of the Company (the “Board”), or (iv)
in the form of warrants issued to lessors of property and/or equipment or to
financial institutions or related entities in connection with commercial credit
or financing or other similar arrangements which are approved by the Board),
then, as to each Institutional Investor who owns at least twenty percent (20%)
of the aggregate number of shares of Common Stock owned by such Institutional
Investor on the Closing Date, measured as of the date of the proposed issuance
(each such Institutional Investor who is referred to above is hereinafter
referred to, for purposes of this Section 1, as a “Participating
Stockholder” and collectively, such Persons are referred to in this
Section 1 as the “Participating Stockholders”), the Company shall:

 

(a)                                 
give written notice
(the “Subscription Right Notice”) setting forth in reasonable detail (i)
the designation and all of the terms and provisions of the equity securities
proposed to be issued (the “Proposed Securities”), including, where applicable,
the voting powers, preferences and relative participating, optional or other
special rights, and the qualification, limitations or restrictions thereof and
interest rate and maturity; (ii) the price and other terms of the proposed sale
of such equity securities; and (iii) the amount of such equity securities
proposed to be issued; and

 

(b)                                
offer to issue to
each Participating Stockholder a portion of the Proposed Securities equal to a
percentage determined by dividing (x) the number of shares of Common Stock
owned by such Participating Stockholder plus the number of shares of Common
Stock issuable to such Participating Stockholder, assuming conversion in full
of any convertible securities then held by such Participating Stockholder, by
(y) the total number of shares of Common Stock then outstanding, including for
purposes of this calculation, all shares of Common Stock issuable upon
conversion in full of any then outstanding convertible securities.

 

1.2.                             
Exercise of
Purchase Rights. 
Each Participating Stockholder must exercise its purchase rights hereunder
within twenty (20) business days after receipt of the Subscription Right
Notice.  If all of the Proposed Securities offered to the Participating
Stockholders are not fully subscribed by such Participating Stockholders, the
remaining Proposed Securities will be

 

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reoffered to the Participating Stockholders purchasing
their full allotment upon the terms set forth in this Section 1, until all
such Proposed Securities are fully subscribed for or until all such
Participating Stockholders have subscribed for all such Proposed Securities
which they desire to purchase, except that such Participating Stockholders must
exercise their purchase rights within ten (10) business days after receipt of
all such reoffers.  To the extent that the Company offers two or more
securities in units, the Participating Stockholders must purchase such units as
a whole and will not be given the opportunity to purchase only one of the
securities making up such unit.

 

1.3.                             
Sale of
Unpurchased Securities.  Upon the expiration of the offering periods described above,
the Company will be free to sell such Proposed Securities that the Participating
Stockholders have not elected to purchase during the ninety (90) calendar day
period immediately following such expiration on terms and conditions no more
favorable to the purchasers thereof than those offered to the Participating
Stockholders.  Any Proposed Securities offered or sold by the Company
after such ninety (90) calendar day period must be reoffered to the
Participating Stockholders pursuant to this Section 1.

 

1.4.                             
Future Additional
Offerings. 
The election by a Participating Stockholder not to exercise its subscription
rights under this Section 1 in any one instance shall not affect its right
(other than in respect of a reduction in its percentage holdings) as to any
subsequent proposed issuance.  Any sale of such equity securities by the
Company without first giving the Participating Stockholders the rights
described in this Section 1 shall be void and of no force and effect.

 

2.                                      
Election of
Directors.

 

2.1.                             
Board Make-up.  As of the date hereof (after
giving effect to the transactions contemplated by the Purchase Agreement), the
Board shall consist of David Barr, Michael Graff, Kevin Kruse and Frank
Nasisi.  From and after the date hereof, and until the time that the
Company completes its Initial Public Offering (as defined below), the
Institutional Investors and the Company shall take all action within their
respective power, including, but not limited to, the voting of
all shares of Common Stock owned by them, required to cause the Board to
consist of (a) so long as PP Holding, LLC owns at least fifty (50%) of the
aggregate number of shares of Common Stock owned by it on the Closing Date, at
least one (1) representative designated by PP Holding, LLC (the “LLC
Director”) and (b) that number of representatives designated by Warburg
Pincus such that the number of representatives designated by Warburg Pincus and
PP Holding, LLC would constitute a majority of the members of the Board (the directors
appointed to the Board by Warburg Pincus pursuant to this clause (b) are
hereinafter collectively referred to as the “Warburg Directors”). 
As of the date hereof, Messrs. Barr, Graff and Kruse shall be the Warburg
Directors and Messr. Kruse shall be the LLC Director.

 

2.2.                             
Post Initial
Public Offering Board Seats.  From the date on which the Company completes
an underwritten public offering for shares of Common Stock pursuant to a
registration under the Securities Act (an “Initial Public Offering”),
and for as long as Warburg Pincus, together with any Affiliates thereof,
beneficially owns (within the meaning of Rule 13d-3 under the Exchange Act) at
least twenty-five percent (25%) of the outstanding shares of Common Stock, the
Company will nominate and use its best efforts to have elected to the Board
that

 

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number of individuals designated by Warburg Pincus
that is equal to the greater of (i) the product obtained by multiplying (x) the
number of members of the then existing Board by (y) the percentage of the
outstanding shares of Common Stock that is beneficially owned by Warburg Pincus
and its Affiliates (computed in accordance with Rule 13d-3 under the Exchange
Act), as of the date of the nomination of directors to the Board (the “Warburg
Pincus Ownership Percentage”) and (ii) three (3); provided, in the
case of clause (i) immediately above, the product of (x) and (y) therein shall
be rounded up to the next whole number.  From the date on which the
Company completes such Initial Public Offering and for as long as Warburg
Pincus, together with any Affiliates thereof, beneficially owns (within the
meaning of Rule 13d-3 under the Exchange Act) at least ten percent (10%) but
less than twenty-five percent (25%) of the outstanding shares of Common Stock,
the Company will nominate and use its best efforts to have elected to the Board
that number of individuals designated by Warburg Pincus that is equal to the
greater of (i) the product obtained by multiplying (x) the number of members of
the then existing Board by (y) the Warburg Pincus Ownership Percentage and (ii)
two (2); provided, in the case of clause (i) immediately above, the
product of (x) and (y) therein shall be rounded up to the next whole
number.  From the date on which the Company completes such Initial Public
Offering and for as long as Warburg Pincus, together with any Affiliates
thereof, beneficially owns (within the meaning of Rule 13d-3 under the Exchange
Act) at least five percent (5%) but less than ten percent (10%) of the
outstanding shares of Common Stock, the Company will nominate and use its best
efforts to have elected to the Board that number of individuals designated by
Warburg Pincus that is equal to the greater of (i) the product obtained by multiplying
(x) the number of members of the then existing Board by (y) the Warburg Pincus
Ownership Percentage and (ii) one (1); provided, in the case of clause
(i) immediately above, the product of (x) and (y) therein shall be rounded up
to the next whole number.

 

2.3.                             
Replacement
Directors. 
Prior to the Initial Public Offering, in the event that the LLC Director or any
Warburg Director (each, a “Withdrawing Director”) designated in the
manner set forth in Section 2.1 hereof is unable to serve, or once having
commenced to serve, is removed or withdraws from the Board, such Withdrawing
Director’s replacement (the “Substitute Director”) will be designated by
the stockholder of the Company that has the right to designate such director in
accordance with Section 2.1 above.  The Institutional Investors and
the Company agree to take all action within their respective power, including,
but not limited to, the voting of all shares of Common Stock owned by
them (i) to cause the election of such Substitute Director promptly following
his or her nomination pursuant to this Section 2.3 or (ii) upon the
written request of the stockholder of the Company that has the right to
designate such director to the Board in accordance with Section 2.1 above,
to remove, with or without cause, the LLC Director or any Warburg Director, as
the case may be.

 

2.4.                             
Committees;
Subsidiaries.

 

(a)                                 
Subject to applicable
law and any rules or regulations of any stock exchange on which the Common
Stock is listed, in the event the Board shall at any time create a committee of
the Board, the Company shall use its best efforts to cause Warburg Pincus to
have proportional representation on any such committee so created, measured by
reference to the number of members of the Board that Warburg Pincus is entitled
to designate thereto pursuant to Section 2.1 hereof; provided, however,
the foregoing shall not apply to any committee formed for the purpose of
considering a transaction between the Company and Warburg Pincus.

 

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(b)                                
From and after the
date hereof until the date of the closing of the Initial Public Offering, the
Institutional Investors and the Company shall take all action within their
respective power to cause Warburg Pincus to have proportional representation on
the board of directors of each Subsidiary of the Company, measured by reference
to the number of members of the Board that Warburg Pincus is entitled to designate
thereto pursuant to Section 2.1 hereof.

 

3.                                      
Information Rights.  From and after the later of (i)
the date that Polypore is not required to file periodic reports pursuant to the
Exchange Act or (ii) the date that Polypore is not required to file periodic
reports pursuant to the Indenture, or if Polypore fails to file such required
periodic reports with the Securities and Exchange Commission (the “SEC”),
in each case, for any reason whatsoever, the Company shall provide to each
Institutional Investor, by electronic means or otherwise, essentially the same
information that would be contained in Annual Reports on Form 10-K and in
Quarterly Reports on Form 10-Q, if Polypore were required to file, or did not
fail to file, such periodic reports, it being understood and agreed that such
information shall (a) be provided to the Institutional Investors no later than
the date on which Polypore would have been required to file such report with
the SEC and (b) include, without limitation, annual audited financial
statements and unaudited quarterly financial statements, each prepared in
accordance with generally accepted accounting principles.  Without
limiting the foregoing, from and after the date hereof, on reasonable prior
written notice, the Company shall make its representatives reasonably available
to the Institutional Investors to discuss the business, results of operations
and other matters pertaining to Polypore.  Any and all information
provided to any Institutional Investor pursuant to the terms of this Agreement
(other than any information that is generally available to the public through
no breach of the terms of this Agreement) shall be treated as confidential
information by such Institiutional Investor and such Institutional Investor
shall use its reasonable best efforts to ensure that such information is not
disclosed or otherwise divulged to any third party (other than such
Institutional Investor’s counsel, accountants and other professional advisors
in connection with services being performed by any such professional for such
Institutional Investor).

 

4.                                      
Legends.  A copy of this Agreement shall be
filed with the Secretary of the Company and kept with the records of the
Company.  Each certificate or other instrument representing shares of
Common Stock owned by any Institutional Investor shall bear upon its face
substantially the following legends, as appropriate:

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR ANY STATE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS UNLESS, IN THE OPINION OF COUNSEL TO
THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL MUST BE, AND THE FORM AND
SUBSTANCE OF WHICH OPINION ARE, REASONABLY SATISFACTORY TO PP HOLDING
CORPORATION II (THE “COMPANY”), SUCH OFFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS
OTHERWISE IN COMPLIANCE WITH THE ACT, SUCH LAWS AND THE STOCKHOLDERS’ AGREEMENT
DATED AS OF MAY 13, 2004, BY AND AMONG THE COMPANY,

 

5

 

WARBURG PINCUS PRIVATE EQUITY VIII, L.P., WARBURG
PINCUS INTERNATIONAL PARTNERS, L.P. AND THOSE OTHER PARTIES NAMED THEREIN.

 

In addition, certificates representing shares of
Common Stock shall bear any legends required by the applicable laws of any
states.  All Institutional Investors shall be bound by the requirements of
such legends.

 

5.                                      
Termination of
Rights and Obligations Under Certain Sections.  All rights and obligations pursuant to
Sections 1, 2.1, 2.3, 2.4(b) and 3 of this Agreement shall terminate either (i)
upon the closing of a public offering pursuant to a Registration Statement (a “Registration”)
that covers (together with prior Registrations) (a) not less than 50% of the
outstanding shares of Common Stock on a fully-diluted basis or (b) shares of
Common Stock that, after the closing of such public offering, will be traded on
the New York Stock Exchange, the American Stock Exchange or the NASDAQ National
Market, Inc. or (ii) upon a Change in Control.  Without limiting the
foregoing, this Agreement or any portion thereof shall terminate upon the
written consent of the Company and the Majority Institutional Investors.

 

6.                                      
Amendment,
Modification, Supplement and Waiver.  This Agreement may be amended, modified or
supplemented, and the enforcement of any provision hereof may be waived, with,
and only with, the prior written consent of the Company and the Majority
Institutional Investors.

 

7.                                      
Parties.

 

7.1.                             
Assignment
Generally. 
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, legal representatives,
successors and assigns.

 

7.2.                             
Termination.  Any party to, or Person who is
subject to, this Agreement which ceases to own any shares of Common Stock or
any interest therein shall cease to be a party to, or Person who is subject to,
this Agreement and thereafter shall have no rights or obligations hereunder.

 

7.3.                             
Agreements to Be
Bound. 
Notwithstanding anything to the contrary contained in this Agreement, as a
condition precedent to the effectiveness of any Transfer of shares of Common
Stock by any Institutional Investor, the transferee thereof shall be required
to agree in writing to be bound by the terms and conditions of this Agreement
pursuant to an instrument of assumption reasonably satisfactory in substance
and form to the Company.  Upon the execution of the instrument of
assumption by such transferee, such transferee shall be deemed to be an Other
Investor and all shares of Common Stock so Transferred shall be deemed to be
shares of Common Stock for all purposes of this Agreement.  Subject to the
foregoing, any Person who acquires shares of Common Stock from an Institutional
Investor in accordance with the terms hereof, shall be entitled to participate
in the pre-emptive rights contemplated by Section 1 hereof to the extent,
and only to the extent, that on the date that the Company makes a determination
of those Institutional Investors entitled to participate in an issuance of
Proposed Securities pursuant to Section 1 hereof, such Person owns at
least twenty percent (20%) of the aggregate number of shares of Common Stock
initially acquired by such Person in accordance with the terms hereof.

 

6

 

8.                                      
Recapitalizations,
Exchanges, etc. Affecting the Shares.  Except as otherwise provided herein, the
provisions of this Agreement shall apply to the fullest extent set forth herein
with respect to (a) the shares of Common Stock and (b) any and all shares of
capital stock of the Company or any successor or assign of the Company (whether
by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution for the shares of Common Stock,
by reason of any stock dividend, split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise.  Except
as otherwise expressly provided herein, this Agreement is not intended to
confer, and does not confer, upon any Person, except for the parties hereto,
any rights or remedies hereunder.

 

9.                                      
Miscellaneous.

 

9.1.                             
Further Assurances.  Each party hereto or Person
subject hereto shall do and perform or cause to be done and performed all such
further acts and things and shall execute and deliver all such other
agreements, certificates, instruments and documents as any other party hereto
or Person subject hereto may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

 

9.2.                             
Governing Law.  This Agreement and the rights and
obligations of the parties hereunder and the Persons subject hereto shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Delaware, without giving effect to the choice of law principles
thereof.

 

9.3.                             
Invalidity of
Provision. 
The invalidity or unenforceability of any provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder
of this Agreement in that jurisdiction or the validity or enforceability of
this Agreement, including that provision, in any other jurisdiction.

 

9.4.                             
Notices.  All notices, requests, demands,
waivers and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given if
(a) delivered personally, (b) mailed, certified or registered mail with postage
prepaid, (c) sent by next-day or overnight mail or delivery or (d) sent by
telecopy (including facsimile) or telegram, as follows:

 

(i)                                    
If to the Company,
Warburg Pincus or PP Holding, LLC at the address or facsimile number listed on Schedule II
hereto or as such party shall designate to the Company in writing in accordance
with the terms hereof, with a copy to the party listed opposite the name of the
Company, Warburg Pincus or PP Holding, LLC, as applicable, on Schedule II.

 

(ii)                                 
If to an Other
Investor, to such Other Investor at the address or facsimile number listed on Schedule I
hereto or as such Other Investor shall designate to the Company in writing in
accordance with the terms hereof, with a copy to the party listed opposite the
name of such Other Investor, if any, on Schedule I.

 

or to such other Person or address as any party shall
specify by notice in writing to the Company, with a copy to PP Holding, LLC and
Warburg Pincus their respective addresses indicated on

 

7

 

Schedule II.  Any notice so addressed shall be
deemed to be given: if delivered personally or by telecopy (including
facsimile) or telegram, on the date of such delivery, if a business day,
otherwise on the first business day thereafter; if mailed by certified or
registered mail with postage prepaid, on the third business day after the date
of such mailing, and if sent by next-day or overnight mail or delivery, on the
first business day following the date of such mailing or delivery.

 

9.5.                             
Headings;
Execution in Counterpart.  The headings and captions contained herein are for convenience
only and shall not control or affect the meaning or construction of any
provision hereof.  This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and which together shall
constitute one and the same instrument.

 

9.6.                             
Entire Agreement.  This Agreement embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein.  There are no restrictions, promises,
representations, warranties, covenants or undertakings relating to the shares
of Common Stock, other than those expressly set forth or referred to herein. 
This Agreement supersedes all prior agreements and understandings among the
parties with respect to such subject matter, and it is the understanding of all
parties hereto that any such prior agreement is hereby terminated, null and
void as of the Closing Date.

 

9.7.                             
Injunctive Relief.  The shares of Common Stock cannot
readily be purchased or sold in the open market, and for that reason, among
others, the Company and the Institutional Investors will be irreparably damaged
in the event this Agreement is not specifically enforced.  Each of the
parties therefore agrees that in the event of a breach of any provision of this
Agreement, the aggrieved party may elect to institute and prosecute proceedings
in any court of competent jurisdiction to enforce specific performance or to
enjoin the continuing breach of this Agreement.  Such remedies shall,
however, be cumulative and not exclusive, and shall be in addition to any other
remedy which the Company or the Institutional Investors may have.  Each
party hereto hereby irrevocably submits to the non-exclusive jurisdiction of
the state and federal courts in New York for the purposes of any suit, action
or other proceeding arising out of or based upon this Agreement or the subject
matter hereof.  Each party hereto hereby consents to service of process by
mail made in accordance with Section 9.4.

 

10.                                
Defined Terms.  As used in this Agreement, the
following terms shall have the meanings ascribed to them below:

 

“Affiliate” shall
mean, with respect to any Person, a Person directly or indirectly, through one
or more intermediaries, controlling, controlled by, or under common control
with, such Person.

 

“Change in Control”
means either (i) a change in ownership or control of the Company effected
through a transaction or series of transactions (other than an offering of
Common Stock to the general public through a registration statement filed with
the SEC) whereby any “person” or related “group” of “persons” (as such terms
are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the
Company, any of its Subsidiaries, an employee benefit plan maintained by the
Company or any of its Subsidiaries, a Principal Stockholder or a “person” that,

 

8

 

prior to such transaction, is an Affiliate of the
Company or a Principal Stockholder) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of
securities of the Company possessing more than fifty percent (50%) of the total
combined voting power of the Company’s securities outstanding immediately after
such acquisition or (ii) the sale or conveyance of all or substantially all the
assets of the Company.

 

“Closing Date” 
shall mean the date on which the transactions contemplated by the Purchase
Agreement close.

 

“Exchange Act” 
shall mean the Securities Exchange Act of 1934, as amended (or any successor
act), and the rules and regulations promulgated thereunder.

 

“Indenture” 
shall mean that certain Indenture, dated as of the date hereof, by and among PP
Acquisition, the other parties named therein and The Bank of New York, as
Trustee, pursuant to which PP Acquisition shall issue and sell up to U.S.
$405,915,000 of aggregate principal amount of senior subordinated notes due
2012 (which notes consist of senior subordinated dollar notes due 2012 and
senior subordinated euro notes due 2012).

 

“Majority
Institutional Investors”  as of any date of determination shall mean
those Institutional Investors who beneficially own (within the meaning of Rule
13d-3 under the Exchange Act) fifty percent (50%) or more of the total combined
voting power of all shares of Common Stock then held by the Institutional
Investors.

 

“Person” 
shall mean an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.

 

“Principal Stockholder”
means either Warburg Pincus VIII or Warburg Pincus International or any of
their respective Affiliates.

 

“Subsidiary” or “Subsidiaries”
means any limited liability companies, partnerships, corporations or other
legal entities in which the Company holds a controlling interest or has the
right to direct the management of such entity.

 

“Transfer” 
shall mean any direct or indirect sale, assignment, mortgage, transfer, pledge,
hypothecation or other disposal.

 

[SIGNATURE PAGE
FOLLOWS]

 

9

 

IN WITNESS WHEREOF, the
parties hereto have executed this Stockholders’ Agreement as of the date first
above written.

 

	
   

  	
  PP
  HOLDING CORPORATION II

  
	
   

  	
   

  
	
   

  	
   

  
	
    

  	
  By:

  	
  /s/  Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name:  Lynn Amos

  
	
   

  	
   

  	
  Title:  Chief Financial Officer, Treasurer and
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARBURG
  PINCUS PRIVATE EQUITY VIII, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg Pincus &
  Co., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  David Barr

  
	
   

  	
   

  	
  Name:  David Barr

  
	
   

  	
   

  	
  Title:  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARBURG
  PINCUS INTERNATIONAL PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg Pincus &
  Co., its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  David Barr

  
	
   

  	
   

  	
  Name:  David Barr

  
	
   

  	
   

  	
  Title:  Partner

  

 

 

IN WITNESS WHEREOF, the
parties hereto have executed this Stockholders’ Agreement as of the date first
above written.

 

	
   

  	
  PP
  HOLDING CORPORATION II

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Lynn Amos

  
	
   

  	
   

  	
  Name:  Lynn Amos

  
	
   

  	
   

  	
  Title:  Chief Financial Officer, Treasurer and
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PP
  HOLDING, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg Pincus Private
  Equity VIII, L.P., and Warburg Pincus International Partners, L.P., its
  Managing Members

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Warburg Pincus &
  Co., the General Partner for each of Warburg Pincus Private Equity VIII,
  L.P., and Warburg Pincus International Partners, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  David Barr

  
	
   

  	
   

  	
  Name:  David Barr

  
	
   

  	
   

  	
  Title:  PartnerExhibit
10.7

 

INDENTURE dated as of May 13, 2004 among PP
Acquisition Corporation, a Delaware corporation which will be merged with and
into Polypore, Inc., a Delaware corporation, with Polypore, Inc. continuing as
the surviving corporation (the “Company”), the Guarantors (as herein defined)
and The Bank of New York, a New York banking corporation, as trustee (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 (a) (i) $225,000,000 aggregate principal amount of
the Company’s 83⁄4% Senior Subordinated Notes due May 15, 2012 (the “Initial
Dollar Notes”) in the form of Exhibit A hereto and (ii) €150,000,000 aggregate
principal amount of the Company’s 83⁄4% Senior Subordinated Notes due May 15,
2012 (the “Initial Euro Notes” and together with the Initial Dollar Notes, the
“Initial Notes”) in the form of Exhibit B hereto issued on the date hereof, (b)
any Additional Notes (as defined herein) that may be issued after the date hereof
and (c) if and when issued as provided in the Registration Agreement (as
defined in Appendix A hereto (the “Appendix”)) or otherwise registered under
the Securities Act (as defined in the Appendix) and issued, the Company’s U.S.
Dollar 83⁄4% Senior Subordinated Notes due May 15, 2012 (the “Exchange Dollar
Notes”) and the Company’s Euro 83⁄4% Senior Subordinated Notes due May 15, 2012
(the “Exchange Euro Notes” and together with the Exchange Dollar Notes, the
“Exchange Notes” and, together with the Initial Notes, the “Notes”)) issued in
the Registered Exchange Offer (as defined in the Appendix) in exchange for any
Initial Notes or otherwise registered under the Securities Act and issued in
the form of Exhibit C or D hereto.  Subject to the conditions and compliance
with the covenants set forth herein, the Company may issue an unlimited
aggregate principal amount of Additional Notes.

 

ARTICLE 1

 

DEFINITIONS AND INCORPORATION BY REFERENCE

 

               
SECTION 1.01.  Definitions.

 

“Acquired Indebtedness”
means Indebtedness (i) of a Person or any of its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary of the Company or at the time
it merges or consolidates with or into the Company or any of its Subsidiaries
or (ii) that is assumed in connection with the acquisition of assets from such
Person and in each case not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of the Company or such acquisition, merger or consolidation.  Acquired
Indebtedness shall be deemed to have been incurred, with respect to clause (i)
of the preceding sentence, on the date such Person becomes a Restricted
Subsidiary and, with respect to clause (ii) of the preceding sentence, on the
date of consummation of such acquisition of assets.

 

“Additional Interest”
means all additional interest then owing pursuant to Section 2 of the
Registration Rights Agreement.

 

“Additional Notes” means,
subject to the Company’s compliance with Section 4.03, 83⁄4%  Senior
Subordinated Notes Due 2012 issued from time to time after the Issue Date under
the terms of this Indenture (other than pursuant to Section 2.06, 2.07,
2.09 or 3.06 of this Indenture

 

 

and other than Exchange Notes issued pursuant to an
exchange offer for other Notes outstanding under this Indenture).

 

“Affiliate” means, with
respect to any specified Person, any other Person who directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, such specified Person. The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative of the foregoing.
Notwithstanding the foregoing, no Person (other than the Company or any
Subsidiary of the Company) in whom a Securitization Entity makes an Investment
in connection with a Qualified Securitization Transaction shall be deemed to be
an Affiliate of the Company or any of its Subsidiaries solely by reason of such
investment.

 

“Applicable Currency
Equivalent” means, with respect to any monetary amount in a currency other than
U.S. Dollars, in the case of the Dollar Notes, or Euros, in the case of the
Euro Notes, at any time for the determination thereof, the amount of U.S.
Dollars or Euros, as applicable, obtained by converting such foreign currency
involved in such computation into U.S. Dollars or Euros, as applicable, at the
spot rate for the purchase of U.S. Dollars or Euros, as applicable, with the
applicable foreign currency as quoted by Reuters at approximately 10:00 A.M.
(New York time) on the date not more than two Business Days prior to such
determination.

 

“Applicable Premium”
means, with respect to any Note on any applicable redemption date, the greater
of:

 

(1)                                 
1% of the then
outstanding principal amount of the Note; and

 

(2)                                 
the excess of:

 

(a)                                 
the present value at
such redemption date of (i) the redemption price of the Note, as applicable, at
May 15, 2008 such redemption price being set forth in Section 3.07 plus
(ii) all required interest payments due on the Note, as applicable, through May
15, 2008 (excluding accrued but unpaid interest), computed using a discount
rate equal to the Treasury Rate with respect to the Dollar Notes and a discount
rate equal to the German Bund Rate with respect to the Euro Notes as of such
redemption date plus 50 basis points; over

 

(b)                                
the then outstanding
principal amount of the Note.

 

“Asset Acquisition” means
(a) an Investment by the Company or any Restricted Subsidiary of the Company in
any other Person pursuant to which such Person shall become a Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other
than a Restricted Subsidiary of the Company) other than in the ordinary course
of business.

 

2

 

“Asset Sale” means any
direct or indirect sale, issuance, conveyance, transfer, lease (other than
operating leases entered into in the ordinary course of business), assignment,
disposition or other transfer for value by the Company or any of its Restricted
Subsidiaries (including, without limitation, any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of
the Company of:  (a) any Capital Stock of any Restricted Subsidiary of the
Company, or (b) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales or other
dispositions shall not include: (i) a transaction or series of related
transactions for which the Company or its Restricted Subsidiaries receive
aggregate consideration of less than $2.5 million; (ii) the sale, lease,
conveyance, disposition or other transfer of all or substantially all of the
assets of the Company as permitted by Section 5.01 hereof or any
disposition that constitutes a Change of Control; (iii) the sale or discount,
in each case without recourse, of accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection
thereof; (iv) disposals or replacements of obsolete or worn-out equipment in
the ordinary course of business of the Company and its Restricted Subsidiaries;
(v) the sale, lease, conveyance, disposition or other transfer by the Company
or any Restricted Subsidiary of assets or property to one or more Restricted
Subsidiaries in connection with Investments permitted by Section 4.07
hereof or pursuant to any Permitted Investment; (vi) sales of accounts
receivable, equipment and related assets (including, without limitation,
contract rights) of the type specified in the definition of “Qualified
Securitization Transaction” to a Securitization Entity for the fair market
value thereof, including cash in an amount at least equal to 75% of the fair
market value thereof as determined in accordance with GAAP (for the purposes of
this clause (vi), Purchase Money Notes shall be deemed to be cash); (vii)
dispositions of cash or Cash Equivalents; (viii) the creation of a Lien (but
not the sale or other disposition of the property subject to such Lien); (ix) a
disposition of inventory in the ordinary course of business; (x) the licensing
or sublicensing of intellectual property or other general intangibles and
licenses, leases or subleases of other property; and (xi) foreclosure on assets.

 

“Bank Indebtedness” means
all Obligations pursuant to the Credit Facility.

 

“Bankruptcy Law” means
Title 11, U.S. Code or any similar federal or state law for the relief of
debtors.

 

“Board of Directors”
means, as to any Person, the board of directors of such Person or any duly
authorized committee thereof.

 

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

 

“Business Day” means any
day other than a Legal Holiday.

 

“Capital Stock” means (i)
with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated and whether
or not voting) of corporate stock, including each class of Common Stock and
Preferred Stock, of such

 

3

 

Person and (ii) with respect to any Person that is not
a corporation, any and all partnership or other equity interests of such
Person.

 

“Capitalized Lease
Obligations” means, as to any Person, the obligations of such Person under a
lease that are required to be classified and accounted for as capital lease
obligations under GAAP and, for purposes of this definition, the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP.

 

“Cash Equivalents” means:
(i) marketable direct obligations issued by, or unconditionally guaranteed by,
the United States Government or issued by any agency thereof and 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; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the three highest ratings obtainable from either
S&P or Moody’s; (iii) commercial paper maturing no more than one year from
the date of creation thereof and, at the time of acquisition, having a rating
of at least A-1 from S&P or at least P-1 from Moody’s or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of investments; (iv) certificates
of deposit, time deposits, eurodollar time deposits, overnight bank deposits or
bankers’ acceptances maturing within one year from the date of acquisition
thereof issued by any bank organized under the laws of the United States of
America or any state thereof or the District of Columbia or any U.S. branch of
a foreign bank or by a bank organized under the laws of any foreign country
recognized by the United States of America the long-term debt of which is rated
at least “A” or the equivalent thereof by S&P, or “A” or the equivalent
thereof by Moody’s, in each case having at the date of acquisition thereof
combined capital and surplus of not less than $500.0 million (or the foreign
currency equivalent thereof); (v) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(iv) above; (vi) investments in any investment company or money market funds
which invest substantially all their assets in securities of the types
described in clauses (i) through (v) above; and (vii) other short term
investments used by Foreign Subsidiaries in accordance with normal investment
practices for cash management in investments of a type analogous to the
foregoing.

 

“Change of Control” means
the occurrence of one or more of the following events: (i) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company or
Holdings to any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a “Group”), other than to the Company
(in the case of the assets of Holdings), the Permitted Holders or their Related
Parties or any Permitted Group; (ii) the approval by the holders of Capital
Stock of the Company of any plan or proposal for the liquidation or dissolution
of the Company (whether or not otherwise in compliance with the provisions of
this Indenture); (iii) any Person or Group (other than the Permitted Holders or
their Related Parties or any Permitted Group) shall become the beneficial
owner, directly or indirectly, of shares representing more than 40% of the
total ordinary voting power represented by the issued and outstanding Capital
Stock of the Company or Holdings at a time when the Permitted Holders and their
Related Parties in the aggregate own a lesser

 

4

 

percentage of the total ordinary voting power
represented by such issued and outstanding Capital Stock; or (iv) the first day
on which a majority of the members of the Board of Directors of the Company or
Holdings are not Continuing Directors.

 

“Common Stock” of any
Person means any and all shares, interests or other participations in, and
other equivalents (however designated and whether voting or non-voting) of such
Person’s common stock, whether outstanding on the Issue Date or issued after
the Issue Date, and includes, without limitation, all series and classes of
such common stock.

 

“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.

 

“Consolidated EBITDA”
means, with respect to any Person, for any period, the sum (without
duplication) of such Person’s: (i) Consolidated Net Income; and (ii) to the
extent Consolidated Net Income has been reduced thereby:  (A) all income
taxes and foreign withholding taxes of such Person and its Restricted
Subsidiaries paid or accrued in accordance with GAAP for such period; (B)
Consolidated Interest Expense; (C) Consolidated Non-cash Charges less any
non-cash items increasing Consolidated Net Income for such period (other than
normal accruals in the ordinary course of business), all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in
accordance with GAAP; (D) any cash charges resulting from the Transactions that
are incurred prior to the six month anniversary of the Issue Date; (E)
restructuring costs and acquisition integration costs and fees, including cash
severance payments made in connection with acquisitions; and (F) the salary and
bonus payment made prior to the Issue Date to certain stockholders as described
in Footnote 2 to the section ”Summary historical and pro forma
consolidated financial data” on page 15 of the Offering Memorandum. 
Notwithstanding the preceding sentence: (x) amounts under clauses (ii)(A)-(F)
relating to a Restricted Subsidiary of a Person will be added to Consolidated
Net Income to compute Consolidated EBITDA of such Person only if (and in the
same proportions) that net income (loss) of such Restricted Subsidiary was included
in calculating Consolidated Net Income of such Person; and (y) to the extent
the amounts set forth in clauses (ii)(A)-(F) are in excess of those necessary
to offset a net loss of such Restricted Subsidiary, such excess will be added
to Consolidated Net Income to compute Consolidated EBITDA only if (and in the
same proportion that) net income of such Restricted Subsidiary would be
included in calculating Consolidated Net Income of such Person if such
Restricted Subsidiary had generated net income instead of net loss.

 

“Consolidated Fixed
Charge Coverage Ratio” means, with respect to any Person, the ratio of
Consolidated EBITDA of such Person during the four full fiscal quarters (the
“Four-Quarter Period”) ending prior to the date of the transaction giving rise
to the need to calculate the Consolidated Fixed Charge Coverage Ratio for which
internal financial statements are available (the “Transaction Date”) to
Consolidated Fixed Charges of such Person for the Four-Quarter Period. In
addition to and without limitation of the foregoing, for purposes of this
definition, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall be
calculated after giving effect on a pro forma basis for the period of such
calculation to: (i) the incurrence or repayment of any Indebtedness or the
issuance of any Designated Preferred Stock of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to

 

5

 

make such calculation and any incurrence or repayment
of other Indebtedness or the issuancer or redemption of other Preferred Stock
(and the application of the proceeds thereof), other than the incurrence or
repayment of Indebtedness in the ordinary course of business for working
capital purposes pursuant to revolving credit facilities, occurring during the
Four-Quarter Period or at any time subsequent to the last day of the
Four-Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment or issuance or redemption, as the case may be (and the
application of the proceeds thereof), had occurred on the first day of the
Four-Quarter Period; and (ii) any Asset Sales or other dispositions or Asset
Acquisitions (including, without limitation, any Asset Acquisition giving rise
to the need to make such calculation as a result of such Person or one of its
Restricted Subsidiaries (including any Person who becomes a Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise
being liable for Acquired Indebtedness and also including any Consolidated
EBITDA attributable to the assets which are the subject of the Asset
Acquisition or Asset Sale or other disposition and without regard to clause
(iv) of the definition of Consolidated Net Income) occurring during the
Four-Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale
or other disposition or Asset Acquisition (including the incurrence or
assumption of any such Acquired Indebtedness) occurred on the first day of the
Four-Quarter Period.  If such Person or any of its Restricted Subsidiaries
directly or indirectly guarantees Indebtedness of a third Person, the preceding
sentence shall give effect to the incurrence of such guaranteed Indebtedness as
if such Person or any Restricted Subsidiary of such Person had directly
incurred or otherwise assumed such other Indebtedness that was so guaranteed.

 

Furthermore, in
calculating “Consolidated Fixed Charges” for purposes of determining the
denominator (but not the numerator) of this “Consolidated Fixed Charge Coverage
Ratio”:  (i) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (ii) notwithstanding clause (i) of this paragraph, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreements; (iii) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by a responsible financial or
accounting officer of the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP; (iv) for purposes of
making the computation referred to above, interest on any Indebtedness under a
revolving credit facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the applicable
period; and (v) interest on Indebtedness that may optionally be determined at
an interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate
chosen as the Company may designate.

 

For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income 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 or accounting officer of the Company
(including pro forma expense and cost reductions). In addition, any such

 

6

 

pro forma calculation, to reflect operating expense
reductions reasonably expected to result from any acquisition or merger, may
include adjustments as appropriate, in the reasonable determination of the
Company as set forth in an Officers’ Certificate, that either (a) would be
permitted pursuant to Rule 11-02 of Regulation S-X of the Securities Act or (b)
have been realized or for which substantially all the steps necessary for
realization have been taken or at the time of determination are reasonably
expected to be taken within 12 months following any such acquisition,
including, but not limited to, the execution or termination of any contracts, the
termination of any personnel or the closing of any facility, as applicable, provided that such adjustments shall
be calculated on an annualized basis and will be set forth in an Officers’
Certificate signed by the Company’s chief financial officer and another officer
which states in detail (i) the amount of such adjustment or adjustments, and
(ii) that such adjustment or adjustments are based on the reasonable good faith
beliefs of the officers executing such Officers’ Certificate at the time of
such execution.

 

“Consolidated Fixed
Charges” means, with respect to any Person for any period, the sum of, without
duplication:  (i) Consolidated Interest Expense; plus (ii) the product of
(x) the amount of all cash dividend payments on any series of Disqualified
Capital Stock of such Person times (y) a fraction, the numerator of which is
one and the denominator of which is one minus the then current effective
consolidated Federal, state and local income tax rate of such Person, expressed
as a decimal (as estimated in good faith by the chief financial officer of the
Company, which estimate shall be conclusive); plus (iii) the product of (x) the
amount of all dividend payments on any series of Preferred Stock of a
Restricted Subsidiary times (y) a fraction, the numerator of which is one and
the denominator of which is one minus the then current effective consolidated
Federal, state and local income tax rate of such Person, expressed as a decimal
(as estimated in good faith by the chief financial officer of the Company,
which estimate shall be conclusive); provided
that with respect to any series of Preferred Stock that did not pay cash
dividends during such period but that is eligible to pay cash dividends during
any period prior to the maturity date of the Notes, cash dividends shall be
deemed to have been paid with respect to such series of Preferred Stock during
such period for purposes of this clause (iii).

 

“Consolidated Interest
Expense” means, with respect to any Person for any period, the sum of, without
duplication: (i) the aggregate of all cash and non-cash interest expense with
respect to all outstanding Indebtedness of such Person and its Restricted
Subsidiaries, including the net costs associated with Interest Swap
Obligations, for such period determined on a consolidated basis in conformity
with GAAP, but excluding amortization or write-off of debt issuance costs; (ii)
the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period; (iii) the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP; (iv)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing; and (v) interest actually paid by
the Company or any such Restricted Subsidiary under any Guarantee of
Indebtedness or other obligation of any other Person.

 

“Consolidated Leverage
Ratio” with respect to any Person as of any date of determination means, the
ratio of (x) consolidated Indebtedness of such Person as of the end of the most
recent fiscal quarter for which internal financial statements are available to
(y) the

 

7

 

aggregate amount of Consolidated EBITDA of such Person
for the period of the most recent four consecutive quarters for which internal
financial statements are available, in each case with such pro forma
adjustments to consolidated Indebtedness and Consolidated EBITDA as are
appropriate and consistent with the pro forma provisions set forth in the
definition of Consolidated Fixed Charge Coverage Ratio.

 

“Consolidated Net Income”
means, for any period, the aggregate net income (or loss) of the Company and
its Restricted Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP and without any deduction in respect of Preferred Stock
dividends; provided  that
there shall be excluded therefrom to the extent otherwise included, without
duplication:  (i) gains and losses from Asset Sales (without regard to the
$2.5 million limitation set forth in the definition thereof) and the related
tax effects according to GAAP; (ii) gains and losses due solely to fluctuations
in currency values and the related tax effects according to GAAP; (iii) all
extraordinary, unusual or non-recurring charges, gains and losses (including,
without limitation, all restructuring costs, acquisition integration costs and
fees, including cash severance payments made in connection with acquisitions,
and any expense or charge related to the repurchase of Capital Stock or
warrants or options to purchase Capital Stock), and the related tax effects
according to GAAP; (iv) the net income (or loss) of any Person acquired in a
pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of the Company or is merged or consolidated with or into
the Company or any Restricted Subsidiary of the Company; (v) the net income
(but not loss) of any Restricted Subsidiary of the Company to the extent that
the declaration of dividends or similar distributions by that Restricted
Subsidiary of the Company of that income is prohibited by contract, operation
of law or otherwise provided,
however, that a Foreign
Subsidiary may agree to restrict its ability to declare dividends or similar
distributions without excluding the net income of such Foreign Subsidiary from
Consolidated Net Income if (a) the agreement that restricts such ability
relates to Permitted Indebtedness described in clause (xv) of that definition,
(b) the proceeds thereof are used, directly or indirectly through intercompany
transfers, to permanently repay Senior Debt or the Notes of the Company, and
(c) the net income of such Foreign Subsidiary, together with the net income of
each other Foreign Subsidiary subject to a similar restriction, does not exceed
10% of Consolidated Net Income; (vi) the net loss of any Person, other than a
Restricted Subsidiary of the Company; (vii) the net income of any Person, other
than a Restricted Subsidiary of the Company, except to the extent of cash
dividends or distributions paid to the Company or a Restricted Subsidiary of
the Company by such Person; (viii) in the case of a successor to the referent
Person by consolidation or merger or as a transferee of the referent Person’s
assets, any earnings of the successor corporation prior to such consolidation,
merger or transfer of assets; (ix) any non-cash compensation charges and
deferred compensation charges, including any arising from existing stock
options resulting from any merger or recapitalization transaction, including
the Transactions; provided, however,
that Consolidated Net Income for any period shall be reduced by any cash
payments made during such period by such Person in connection with any such
deferred compensation, whether or not such reduction is in accordance with
GAAP; (x) inventory purchase accounting  adjustments and amortization and
impairment charges resulting from other purchase accounting adjustments with
respect to the Transactions and other acquisition transactions and; (xi)
unrealized gains and losses due solely to fluctuations in currency values and
related tax effects according to GAAP.

 

8

 

“Consolidated Non-cash
Charges” means, with respect to any Person, for any period, the aggregate
depreciation, amortization and other non-cash charges, impairment and expenses
of such Person and its Restricted Subsidiaries reducing Consolidated Net Income
of such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges that
require an accrual of or a reserve for cash payments for any future period
other than accruals or reserves associated with mandatory repurchases of equity
securities). For clarification purposes, purchase accounting adjustments with
respect to inventory will be included in Consolidated Non-cash Charges.

 

“Continuing Directors”
means, as of any date of determination, any member of the Board of Directors of
the Company who: (i) was a member of such Board of Directors on the Issue Date;
or (ii) was nominated for election or elected to such Board of Directors by any
of the Permitted Holders or with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.

 

“Corporate Trust Office
of the Trustee” shall be at the address of the Trustee specified in
Section 13.02 hereof or such other address as to which the Trustee may
give notice to the Company.

 

“Credit Facilities” means
one or more debt facilities (including, without limitation, the Credit
Facility) or commercial paper facilities with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables)
and/or letters of credit or banker’s acceptances.

 

“Credit Facility” means
the Credit Agreement dated as of the Issue Date among the Company, Holdings,
the lenders party thereto in their capacities as lenders thereunder, JPMorgan
Chase Bank, as administrative agent, Bear Stearns Corporate Lending Inc., as
syndication agent and General Electric Capital Corporation, UBS Securities LLC
and Lehman Commercial Paper Inc., as co-documentation agents, together with the
related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding Restricted
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.

 

“Currency Agreement”
means any foreign exchange contract, currency swap agreement, futures contract,
option contract or other similar agreement or arrangement designed to protect
the Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.

 

“Default” means an event
or condition the occurrence of which is, or with the lapse of time or the
giving of notice or both, pursuant to the Default provisions, would be, an
Event of Default.

 

9

 

“Designated Noncash
Consideration” means the fair market value of any noncash consideration
received by the Company or one of its Restricted Subsidiaries in connection
with an Asset Sale that is designated as Designated Noncash Consideration
pursuant to an Officers’ Certificate executed by the principal executive
officer and the principal financial officer of the Company or such Restricted
Subsidiary at the time of such Asset Sale.  Any particular item of
Designated Noncash Consideration will cease to be considered to be outstanding
once it has been sold for cash or Cash Equivalents. At the time of receipt of
any Designated Noncash Consideration, the Company shall deliver an Officers’
Certificate to the Trustee which shall state the fair market value of such
Designated Noncash Consideration and shall state the basis of such valuation,
which shall be a report of a nationally recognized investment banking,
appraisal or accounting firm with respect to the receipt in one or a series of
related transactions of Designated Noncash Consideration with a fair market
value in excess of $10.0 million.

 

“Designated Preferred
Stock” means Preferred Stock that is so designated as Designated Preferred
Stock, pursuant to an Officers’ Certificate executed by the principal executive
officer and the principal financial officer of the Company, on the issuance date
thereof, the cash proceeds of which are excluded from the calculation set forth
in clause (iii)(w) of the first paragraph of Section 4.07 hereof.

 

“Designated Senior Debt”
means (i) the Bank Indebtedness and (ii) any other Indebtedness constituting
Senior Debt which, at the time of determination, has an aggregate principal
amount of, or under which, at the date of determination, the holders thereof
are committed to lend up to, at least $25.0 million and is specifically
designated in the instrument evidencing or governing such Senior Debt as
“Designated Senior Debt” by the Company.

 

“Disqualified Capital
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 at the option of the holder) or upon the happening of any
event: (i) matures or is mandatorily redeemable (other than redeemable only for
Capital Stock of such Person which is not itself Disqualified Stock) pursuant
to a sinking fund obligation or otherwise; (ii) is convertible or exchangeable
at the option of the holder for Indebtedness or Disqualified Capital Stock
(excluding Capital Stock which is convertible or exchangeable solely at the
option of the Company or a Restricted Subsidiary); or (iii) is mandatorily
redeemable or must be purchased upon the occurrence of certain events or
otherwise, in whole or in part; in each case on or prior to (a) the final
maturity date of the Notes or (b) the date on which there are no Notes outstanding;
provided, however,
that any Capital Stock that would not constitute Disqualified Capital Stock but
for provisions thereof giving holders thereof the right to require such Person
to purchase or redeem such Capital Stock upon the occurrence of an “asset sale”
or “change of control” occurring prior to the final maturity date of the Notes
shall not constitute Disqualified Capital Stock if:  (A) the “asset sale”
or “change of control” provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the terms applicable to the
Notes and described in Sections 4.10 and 4.15 hereof, respectively; and (B) any
such requirement only becomes operative after compliance with such terms
applicable to the Notes, including the purchase of any Notes tendered pursuant
thereto. The amount of any Disqualified Capital Stock that does not have a
fixed redemption, repayment or repurchase price will be calculated in
accordance with the terms of such Disqualified Capital Stock as if such Disqualified
Capital Stock were redeemed, repaid or repurchased on any date on which the
amount of such

 

10

 

Disqualified Stock is to be determined pursuant to the
Indenture; provided, however,
that if such Disqualified Capital 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
Capital Stock as reflected in the most recent internal financial statements of
such Person.

 

“Domestic Subsidiary”
means any direct or indirect Restricted Subsidiary of the Company that is
incorporated under the laws of the United States of America, any State thereof
or the District of Columbia.

 

“Equity Interests” means
Capital Stock and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).

 

“Equity Offering” means
any offering of Qualified Capital Stock of Holdings or the Company; provided  that: (i) in the event of an
offering by Holdings, Holdings contributes to the capital of the Company the
portion of the net cash proceeds of such offering necessary to pay the
aggregate redemption price (plus accrued interest to the redemption date) of
the Notes to be redeemed pursuant to Section 3.07(c) hereof; and (ii) in
the event such equity offering is not in the form of a public offering
registered under the Securities Act, the proceeds received by the Company
directly or indirectly from such offering are not less than $10.0 million.

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, or any successor statute or
statutes thereto.

 

“Exchange Dollar Notes”
has the meaning set forth in the preamble hereto.

 

“Exchange Euro Notes” has
the meaning set forth in the preamble hereto.

 

“Exchange Notes” has the
meaning set forth in the preamble hereto.

 

“Excluded Contributions”
means net cash proceeds, or property other than cash that would constitute
Marketable Securities or Permitted Business, in each case received by the
Company and its Restricted Subsidiaries from:

 

(i)                                    
contributions to its
common equity capital; and

 

(ii)                                 
the sale (other than
to a Subsidiary or to any management equity plan or stock option plan or any
other management or employee benefit plan or agreement of the Company or any
Subsidiary) of Capital Stock (other than Disqualified Stock and Designated Preferred
Stock),

 

in each case designated as Excluded Contributions
pursuant to an Officers’ Certificate on the date such capital contributions are
made or the date such Equity Interests are sold, as the case may be, which are
excluded from the calculation set forth in clause (4)(iii) of Section 4.07
hereof.

 

“EU Government
Obligations” means securities that are:

 

11

 

(i)                                    
direct obligations of
any member state of the European Union (as it exists on the Issue Date) or
issued by any agency or instrumentality thereof for the timely payment of which
its full faith and credit is pledged, or

 

(ii)                                 
obligations of a
Person controlled or supervised by and acting as an agency or instrumentality
of any member state of the European Union (as it exists on the Issue Date) the
timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by such member state of the European Union,

 

which, in each case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such EU Government Obligations or a specific
payment of principal of or interest on any such EU Government Obligations held
by such custodian for the account of the holder of such depository receipt; provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by
the custodian in respect of the EU Government Obligations or the specific
payment of principal of or interest on the EU Government Obligations evidenced
by such depository receipt.

 

“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. Fair market value shall be
determined by the Board of Directors of the Company acting in good faith, which
determination shall be conclusive.

 

“Foreign Subsidiary” means
any Subsidiary of the Company that is not a Domestic Subsidiary.

 

“Four-Quarter Period” has
the meaning specified in the definition of Consolidated Fixed Charge Coverage
Ratio.

 

“GAAP” means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession of the United States of
America, as in effect as of the Issue Date.  All ratios and computations
based on GAAP contained in this Indenture will be computed in conformity with
GAAP, except as expressly provided in this Indenture.

 

“German Bund Rate” means,
as of the applicable redemption date, the yield to maturity as of such
redemption date of German Bundesanleihe securities with a constant maturity (as
compiled and published in the most recent financial statistics that have become
publicly available at least two business days prior to such redemption date
(or, if such financial statistics are no longer published, any publicly
available source of similar market data)) most nearly equal to the period from
such redemption date to May 15, 2008; provided,
however, that if the period from such redemption date to May 15,
2008 is less than one year, the weekly average yield on

 

12

 

actually traded German Bundesanleihe securities
adjusted to a constant maturity of one year will be used.

 

“Government Obligations”
means, in the case of the Dollar Notes, U.S. Government Obligations and, in the
case of the Euro Notes, EU Government Obligations.

 

“Group” has the meaning
specified in the definition of Change of Control.

 

“Guarantee” means (i) the
guarantee of the Notes by the Domestic Subsidiaries of the Company in
accordance with the terms of this Indenture; and (ii) the guarantee of the
Notes by any Subsidiary required under the terms of Section 4.17 hereof.

 

“Guarantor” means any
Subsidiary that issues a Guarantee; provided,
however, that upon the release and discharge of such Subsidiary from
its Guarantee in accordance with Section 11.07 hereof, such Subsidiary
shall cease to be a Guarantor.

 

“Hedging Agreement” means
any agreement with respect to the hedging of price risk associated with the
purchase of commodities used in the business of the Company and its Restricted
Subsidiaries, so long as any such agreement has been entered into in the
ordinary course of business and bona fide hedging purposes (as determined in
good faith by the Board of Directors or senior management of the Company).

 

“Holder” means a Person
in whose name a Note is registered.

 

“Holdings” means PP
Holdings Corporation, a Delaware corporation.

 

“Indebtedness” means with
respect to any Person, without duplication: (i) all Obligations of such Person
for borrowed money; (ii) all Obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (iii) all Capitalized Lease
Obligations of such Person; (iv) all Obligations of such Person issued or
assumed as the deferred and unpaid purchase price of property, all conditional
sale obligations and all Obligations under any title retention agreement (but
excluding trade accounts payable and other accrued liabilities arising in the
ordinary course of business); (v) all Obligations for the reimbursement of any
obligor on any letter of credit, banker’s acceptance or similar credit
transaction (including reimbursement obligations with respect thereto except to
the extent such reimbursement obligation relates to a trade payable and such
obligation is satisfied within 30 days of incurrence); (vi) guarantees and
other contingent obligations in respect of Indebtedness of other Persons
referred to in clauses (i) through (v) above and clause (viii) below; (vii) all
Obligations of any other Person of the type referred to in clauses (i) through
(vi) which are secured by any Lien on any property or asset of such Person
whether or not such Indebtedness is assumed by such Person, the amount of such
Obligation being deemed to be the lesser of the fair market value of such
property or asset at such date of determination and the amount of the
Obligation so secured; (viii) all Obligations under Currency Agreements and
Interest Swap Obligations of such Person (the amount of any such obligations to
be equal at any time to the termination value, as determined in good faith by
the Company’s Board of Directors, which determination will be conclusive, of
such agreement or arrangement giving rise to such obligation that would be
payable by such Person at such time); and (ix) all Disqualified Capital Stock
issued by such Person with the amount of Indebtedness represented by such
Disqualified Capital Stock being equal to the greater of its

 

13

 

voluntary or involuntary liquidation preference and
its maximum fixed repurchase price or, with respect to any Subsidiary that is
not a Guarantor, any Preferred Stock (but excluding, in each case, accrued
dividends, if any).

 

Notwithstanding the
foregoing, in connection with the purchase by the Company or any Restricted
Subsidiary of any business, the term “Indebtedness” will exclude post-closing
payment adjustments to which the seller may become entitled to the extent such
payment 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 60 days thereafter.  For clarification purposes, the liability of the
Company or any Restricted Subsidiary to make periodic payments to licensors in
consideration for the license of patents and technical information under
license agreements in existence on the Issue Date and any amount payable in
respect of a settlement of disputes with respect to such payments thereunder
shall not constitute Indebtedness.

 

For purposes hereof, the
“maximum fixed repurchase price” of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such
fair market value shall be determined reasonably and in good faith by the Board
of Directors of the issuer of such Disqualified Capital Stock. For the purposes
of calculating the amount of Indebtedness of a Securitization Entity
outstanding as of any date, the face or notional amount of any interest in
receivables or equipment that is outstanding as of such date shall be deemed to
be Indebtedness but any such interests held by Affiliates of such Securitization
Entity shall be excluded for purposes of such calculation.

 

“Indenture” means this
Indenture, as amended or supplemented from time to time.

 

“Initial Dollar Notes”
has the meaning set forth in the preamble hereto.

 

“Initial Euro Notes” has
the meaning set forth in the preamble hereto.

 

“Initial Notes” has the
meaning set forth in the preamble hereto.

 

“Intellectual Property”
means, collectively, the 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 proprietary or confidential information, systems or
procedures).

 

“Interest Swap
Obligations” means the obligations of any Person pursuant to any arrangement
with any other Person, whereby directly or indirectly, such Person is entitled
to receive from time to time periodic payments calculated by applying either a
floating or a fixed rate of interest on a stated notional amount in exchange
for periodic payments made by such other Person calculated by applying a fixed
or a floating rate of interest on the same notional amount and shall include,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements.

 

14

 

“Investment” means, with
respect to any Person, any direct or indirect advance, loan or other extension
of credit (including, without limitation, a guarantee or similar arrangement
but excluding any debt or extension of credit represented by a bank deposit
other than a time deposit) 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 by such Person of
any Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by, any Person. “Investment” shall exclude extensions of
trade credit by the Company and its Restricted Subsidiaries in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the
case may be. If the Company or any Restricted Subsidiary of the Company sells
or otherwise disposes of any Common Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Restricted Subsidiary is no longer a Restricted Subsidiary of
the Company (or, in the case of a Restricted Subsidiary that is not a
Wholly-Owned Restricted Subsidiary of the Company, such Restricted Subsidiary
has a minority interest that is held by an Affiliate of the Company that is not
a Restricted Subsidiary of the Company), the Company shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the
fair market value of the Common Stock of such Restricted Subsidiary, not sold
or disposed of. Except as otherwise provided herein, the amount of an
Investment shall be its fair market value at the time the Investment is made
and without giving effect to subsequent changes in its fair market value. 
For purposes of Section 4.07 hereof:

 

(i)                                    
“Investment” will
include the portion (proportionate to the Company’s equity interest in a
Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company will
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 (as conclusively determined by the Board of
Directors of the Company in good faith) of such Subsidiary at the time that
such Subsidiary is so re-designated a Restricted Subsidiary; and

 

(ii)                                 
any property
transferred to or from an Unrestricted Subsidiary will be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors of the Company.

 

“Issue Date” means the
date hereof.

 

“Legal Holiday” means a
Saturday, a Sunday or a day on which banking institutions in the City of New
York, the city in which the principal corporate trust office of the Trustee is
located or at a place of payment are authorized by law, regulation or executive
order to remain closed. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue on such payment for the
intervening period.

 

15

 

“Lien” means any lien,
mortgage, deed of trust, pledge, security interest, charge or encumbrance of
any kind (including any conditional sale or other title retention agreement,
any lease in the nature thereof and any agreement to give any security
interest).

 

“Marketable Securities”
means publicly traded debt or equity securities that are listed for trading on
a national securities exchange or NASDAQ and that were issued by a corporation
whose debt securities are rated in one of the three highest rating categories
by either S&P or Moody’s.

 

“Moody’s” means Moody’s
Investors Service, Inc. or any successor thereto.

 

“Net Cash Proceeds”
means, with respect to any Asset Sale, the proceeds in the form of cash or Cash
Equivalents including payments in respect of deferred payment obligations when
received in the form of cash or Cash Equivalents (other than the portion of any
such deferred payment constituting interest) received by the Company or any of
its Restricted Subsidiaries from such Asset Sale net of: (i) reasonable
out-of-pocket expenses and fees relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales commissions
and title and recording tax expenses); (ii) all Federal, state, provincial,
foreign and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale; (iii) appropriate amounts to be provided by the
Company or any Restricted Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with such Asset Sale
and retained by the Company or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with such
Asset Sale; (iv) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Sale; and (v) all payments made on any Indebtedness which is secured by
any assets subject to such Asset Sale, 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 Sale, or by applicable law, be repaid out of the proceeds from such Asset
Sale.

 

“Notes” means,
collectively, the Initial Notes and the Exchange Notes treated as a single
class of securities, as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this Indenture.

 

“Obligations” means all
obligations for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

 

“Offering Memorandum”
means the offering memorandum relating to the offering of the Initial Notes
dated May 6, 2004.

 

“Officer” means, with
respect to any Person (other than the Trustee), the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.

 

16

 

“Officers’ Certificate”
means a certificate signed on behalf of the Company by two Officers of the
Company, one of whom must be the principal executive officer, the principal
financial officer, the treasurer or the principal accounting officer of the
Company, that meets the requirements of Sections 13.04 and 13.05 hereof.

 

“Opinion of Counsel”
means an opinion from legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company or any
Subsidiary of the Company.

 

“Permitted Acquisition
Payments” means, without duplication, any payments made in connection with the
Transactions pursuant to the Stock Purchase Agreement and any other agreements
or documents related to the Transactions and set forth as Schedule I to
this Indenture in effect on the Issue Date (without giving effect to subsequent
amendments, waivers or other modifications to such agreements or documents) or
as otherwise described in the Offering Memorandum.

 

“Permitted Business”
means any business (including stock or assets) that derives a majority of its
revenues from the business engaged in by the Company and its Restricted
Subsidiaries on the Issue Date and/or activities that are reasonably similar,
ancillary or related to, or a reasonable extension, development or expansion
of, the businesses in which the Company and its Restricted Subsidiaries are
engaged on the Issue Date.

 

“Permitted Group” means
any group of investors party to the Stockholders’ Agreement, as the same may be
amended, modified or supplemented from time to time, provided that the Permitted Holders
and their Related Parties continue to be the “beneficial owners” (as such term
is used in Section 13(d) of the Exchange Act), directly or indirectly, of
more than 50% of the voting power of the issued and outstanding Capital Stock
of the Company or Holdings (as applicable) that is “beneficially owned” (as
defined above) by such group of Investors.

 

“Permitted Holders” means
Warburg Pincus Private Equity VIII, L.P., Warburg Pincus International
Partners, L.P., its Affiliates and any general or limited partners of Warburg
Pincus Private Equity VIII, L.P. or Warburg Pincus International Partners, L.P.
on the Issue Date.

 

“Permitted Indebtedness”
means, without duplication, each of the following:

 

(i)  Indebtedness
under the Notes (other than any Additional Notes) and the incurrence by the
Company of Indebtedness represented by the Exchange Notes issued in exchange
for the Notes (or in exchange for any Additional Notes issued in accordance
with the terms of the Indenture) and the Guarantees thereof;

 

(ii)  Indebtedness
of the Company or the Guarantors incurred pursuant to one or more Credit
Facilities in an aggregate principal amount at any time outstanding not to
exceed $660.0 million less:  (A) the aggregate amount of Indebtedness of
Securitization Entities at the time outstanding, (B) the amount of all
mandatory principal payments actually made by the Company or any such
Restricted Subsidiary since the Issue Date with the Net Cash Proceeds of an
Asset Sale in respect of term loans under a credit facility (excluding any such
payments to the extent refinanced at the time of payment), and (C) any
repayments of revolving credit borrowings under a credit facility with the Net
Cash Proceeds of an Asset Sale that are accompanied by a

 

17

 

corresponding commitment reduction thereunder; provided that the amount of
Indebtedness permitted to be incurred pursuant to the Credit Facilities in
accordance with this clause (ii) shall be in addition to any Indebtedness
permitted to be incurred pursuant to the Credit Facilities in reliance on, and
in accordance with, clauses (vii), (xiii), (xiv) and (xv) below;

 

(iii)  other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue
Date (and in the case of any line of credit, the unused capacity of such line
of credit as of the Issue Date), reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or permanent
reductions thereon;

 

(iv)  Interest Swap
Obligations of the Company or any of its Restricted Subsidiaries covering
Indebtedness of the Company or any of its Restricted Subsidiaries; provided, however, that any
Indebtedness to which any such Interest Swap Obligations correspond is
otherwise permitted to be incurred under this Indenture; and provided, further, that such
Interest Swap Obligations are entered into, in the judgment of the Company, to
protect the Company or any of its Restricted Subsidiaries from fluctuation in
interest rates on its outstanding Indebtedness;

 

(v)  Indebtedness of
the Company or any Restricted Subsidiary under Hedging Agreements and Currency
Agreements;

 

(vi)  intercompany
Indebtedness between or among the Company and any such Restricted Subsidiaries
(other than a Securitization Entity); provided,
however, that: (a) if the Company is the obligor on such
Indebtedness and the payee is a Restricted Subsidiary that is not a Guarantor,
such Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes; and (b)(1) any subsequent
issuance or transfer of Capital Stock or any other event which results in any
such Indebtedness being beneficially held by a Person other than the Company or
a Restricted Subsidiary (other than a Securitization Entity) thereof; and (2)
any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Restricted Subsidiary (other than a Securitization
Entity) thereof (other than by way of granting a Lien permitted under this
Indenture or in connection with the exercise of remedies by a secured creditor)
shall be deemed, in each case, to constitute an incurrence of such Indebtedness
by the Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vi);

 

(vii)  Indebtedness
(including Capitalized Lease Obligations) incurred by the Company or any of its
Guarantors to finance the purchase, lease or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any person owning such assets) in an aggregate principal
amount outstanding not to exceed the greater of (a) $20.0 million and (b) 1.5%
of Total Assets;

 

(viii)  Refinancing
Indebtedness (other than Refinancing Indebtedness with respect to Indebtedness
incurred pursuant to clause (ii) of this definition);

 

(ix)  guarantees by
the Company and its Restricted Subsidiaries of each other’s Indebtedness; provided, however, that such
Indebtedness is permitted to be incurred under this Indenture; provided, further, that in the
event such Indebtedness (other than Acquired

 

18

 

Indebtedness) is incurred pursuant to the Consolidated
Fixed Charge Coverage Ratio, such guarantees are by the Company or a Guarantor
only;

 

(x)  Indebtedness
arising from agreements of the Company or a Restricted Subsidiary of the
Company providing for indemnification, adjustment of purchase price, earn-out
or other similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or Capital Stock of a Restricted
Subsidiary of the Company, other than guarantees of Indebtedness incurred by
any Person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition; provided, however, that the
maximum assumable liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds actually received by the Company and its
Restricted Subsidiaries in connection with such disposition;

 

(xi)  obligations in
respect of performance and surety bonds and completion guarantees provided by
the Company or any Restricted Subsidiary of the Company in the ordinary course
of business;

 

(xii)  Indebtedness
of a Securitization Entity incurred in a Qualified Securitization Transaction
that is non-recourse to the Company or any Subsidiary of the Company (except
for Standard Securitization Undertakings);

 

(xiii)  Indebtedness
incurred by the Company or any of the Guarantors in connection with the
acquisition of a Permitted Business; provided
that on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence thereof and the use of proceeds therefrom, the Consolidated
Fixed Charge Coverage Ratio of the Company is greater than the Consolidated
Fixed Charge Coverage Ratio of the Company immediately prior to the incurrence
of such Indebtedness;

 

(xiv)  additional
Indebtedness of the Company and the Guarantors in an aggregate principal amount
which does not exceed $50.0 million at any one time outstanding which amount
may, but need not, be incurred in whole or in part under a credit facility (it
being understood that any Indebtedness or Preferred Stock incurred pursuant to
this clause (xiv) shall cease to be deemed incurred or outstanding for purposes
of this clause (xiv) but shall be deemed incurred under Section 4.09
hereof from and after the first date on which the Company or such Restricted
Subsidiary could have incurred such Indebtedness or Preferred Stock thereunder
without reliance on this clause (xiv));

 

(xv)  additional
Indebtedness of the Foreign Subsidiaries in an aggregate principal amount which
does not exceed the greater of (a) $50.0 million and (b) 3.6% of the Total
Assets of the Foreign Subsidiaries at any one time outstanding (which amount
may, but need not, be incurred in whole or in part under a credit facility);

 

(xvi)  Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business; provided, however,
that such Indebtedness is extinguished within five business days of incurrence;

 

19

 

(xvii)  Indebtedness
of the Company or any of its Restricted Subsidiaries represented by letters of
credit for the account of the Company or such Restricted Subsidiary, as the
case may be, issued in the ordinary course of business of the Company or such
Restricted Subsidiary, including, without limitation, in order to provide
security for workers’ compensation claims or payment obligations in connection
with self-insurance or similar requirements in the ordinary course of business
and other Indebtedness with respect to workers’ compensation claims,
self-insurance obligations, performance, surety and similar bonds and
completion guarantees provided by the Company or any Restricted Subsidiary of
the Company in the ordinary course of business; and

 

(xviii) Indebtedness
consisting of promissory notes issued by the Company or any Guarantor to
current or former officers, directors and employees, their respective estates,
spouses or former spouses to finance the purchase or redemption of Equity
Interests of Holdings permitted by Section 4.07 hereof.

 

No Foreign Subsidiary may
Incur any Indebtedness (other than pursuant to clause (vi) of the definition of
Permitted Indebtedness) if the proceeds are used to refinance Indebtedness of
the Company; provided, however, that proceeds of Indebtedness
incurred pursuant to clause (xv) of the definition of Permitted Indebtedness
may be used to permanently repay Senior Debt or the Notes of the Company.

 

For purposes of
determining compliance with Section 4.09 hereof, in the event that an item
of Indebtedness meets the criteria of more than one of the categories of
Permitted Indebtedness described in clauses (i) through (xviii) above or is
entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage
Ratio provisions of Section 4.09 hereof, the Company shall, in its sole
discretion, divide and classify (or later redivide and reclassify) such item of
Indebtedness in any manner that complies with Section 4.09 hereof. Accrual
of interest, accretion or amortization of original issue discount, the payment
of interest on any Indebtedness in the form of additional Indebtedness with the
same terms, and the payment of dividends on Disqualified Capital Stock in the
form of additional shares of the same class of Disqualified Capital Stock will
not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Capital Stock for purposes of Section 4.09 hereof.

 

“Permitted Investments”
means: (i) Investments by the Company or any Restricted Subsidiary of the
Company in any Restricted Subsidiary of the Company (other than a
Securitization Entity or Restricted Subsidiary of the Company in which an
Affiliate of the Company that is not a Restricted Subsidiary of the Company
holds a minority interest) (whether existing on the Issue Date or created
thereafter) or any other Person (including by means of any transfer of cash or
other property) if as a result of such Investment such other Person shall
become a Restricted Subsidiary of the Company (other than a Securitization
Entity or Restricted Subsidiary of the Company in which an Affiliate of the
Company that is not a Restricted Subsidiary of the Company holds a minority
interest) or that will merge with or consolidate into the Company or a
Restricted Subsidiary of the Company and Investments in the Company by the
Company or any Restricted Subsidiary of the Company; (ii) investments in cash
and Cash Equivalents; (iii) loans and advances allowed by law (including
payroll, travel and similar advances) to employees of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed $10.0
million at any one time outstanding; (iv) Currency Agreements,

 

20

 

Hedging Agreements and Interest Swap Obligations
entered into in the ordinary course of business and otherwise in compliance
with this Indenture; (v) Investments in securities of trade creditors or
customers received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers or in good faith settlement of delinquent obligations of such trade
creditors or customers; (vi) Investments made by the Company or its Restricted Subsidiaries
as a result of consideration received in connection with an Asset Sale made in
compliance with Section 4.10 hereof; (vii) Investments existing on the
Issue Date; (viii) accounts receivable created or acquired in the ordinary
course of business; (ix) guarantees by the Company or a Restricted Subsidiary
of the Company permitted to be incurred under this Indenture; (x) additional
Investments having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (x) that are at that time
outstanding, not to exceed the greater of (A) $50.0 million and (B) 3.5% of the
Company’s Total Assets provided
that any investments in joint ventures pursuant to this clause (x) will not
exceed the greater of (A) $25.0 million and (B) 1.75% of the Company’s Total
Assets; (xi) any Investment by the Company or a Restricted Subsidiary of the
Company in a Securitization Entity or any Investment by a Securitization Entity
in any other Person in connection with a Qualified Securitization Transaction; provided that any Investment in a
Securitization Entity is in the form of a Purchase Money Note or an equity
interest or interests in receivables and related assets generated by the
Company or a Restricted Subsidiary and transferred to any Person in connection
with a Qualified Securitization Transaction or any such Person owning such
receivables; (xii) Investments the payment for which consists exclusively of
Qualified Capital Stock of the Company; (xiii) any Investment in any Person to the
extent it consists 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; and (xiv) Investments
in Unrestricted Subsidiaries not to exceed $5.0 million at any one time
outstanding.

 

“Permitted Junior
Securities” means unsecured debt or equity securities of the Company or any
Guarantor or any successor corporation issued pursuant to a plan of
reorganization or readjustment of the Company or any Guarantor, as applicable,
that are subordinated to the payment of all then outstanding Senior Debt of the
Company or any Guarantor, as applicable, at least to the same extent that the
Notes are subordinated to the payment of all Senior Debt of the Company or any
Guarantor, as applicable, on the Issue Date, so long as to the extent that any
Senior Debt of the Company or any Guarantor, as applicable, outstanding on the
date of consummation of any such plan of reorganization or readjustment is not
paid in full in cash on such date, the holders of any such Senior Debt not so
paid in full in cash have consented to the terms of such plan of reorganization
or readjustment.

 

“Permitted Subsidiary
Preferred Stock” means any series of Preferred Stock of a Foreign Restricted
Subsidiary that constitutes Qualified Capital Stock, the liquidation value of
all series of which, when combined with the aggregate amount of outstanding
Indebtedness of the Foreign Restricted Subsidiaries incurred pursuant to clause
(xv) of the definition of Permitted Indebtedness, does not exceed $5.0 million.

 

“Person” means an
individual, partnership, corporation, limited liability company, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.

 

21

 

“PP Acquisition
Corporation” means PP Acquisition Corporation, a Delaware corporation.

 

“Preferred Stock” of any
Person means any Capital Stock of such Person that has preferential rights to
any other Capital Stock of such Person with respect to dividends or redemptions
or upon liquidation or dissolution of such Person, over shares of Capital Stock
of any other class of such Person.

 

“Productive Assets” means
assets (including Capital Stock) that are used or usable by the Company and its
Restricted Subsidiaries in Permitted Businesses.

 

“Purchase Money Note”
means a promissory note of a Securitization Entity evidencing the deferred
purchase price of receivables (and related assets) and/or a line of credit,
which may be irrevocable, from the Company or any Restricted Subsidiary of the
Company in connection with a Qualified Securitization Transaction to a
Securitization Entity, which note shall be repaid from cash available to the
Securitization Entity other than amounts required to be established as reserves
pursuant to agreements, amounts paid to investors in respect of interest and
principal and amounts paid in connection with the purchase of newly generated
receivables or newly acquired equipment.

 

“Qualified Capital Stock”
means any Capital Stock that is not Disqualified Capital Stock.

 

“Qualified Securitization
Transaction” means any transaction or series of transactions that may be
entered into by the Company or any of its Restricted Subsidiaries pursuant to
which the Company or any of its Subsidiaries may sell, convey or otherwise
transfer to: (i) a Securitization Entity (in the case of a transfer by the
Company or any of its Restricted Subsidiaries); and (ii) any other Person (in
the case of a transfer by a Securitization Entity), or may grant a security
interest in any accounts receivable or equipment (whether now existing or
arising or acquired in the future) of the Company or any of its Restricted
Subsidiaries, and any assets related thereto including, without limitation, all
collateral securing such accounts receivable and equipment, all contracts and
contract rights and all guarantees or other obligations in respect of such
accounts receivable and equipment, proceeds of such accounts receivable and
equipment and other assets (including contract rights) which are customarily
transferred or in respect of which security interests are customarily granted
in connection with assets securitization transactions involving accounts
receivable and equipment.

 

“Refinance” means, in
respect of any security or Indebtedness, to refinance, extend, renew, refund,
repay, prepay, redeem, defease or retire, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. “Refinanced” and “Refinancing” shall have correlative
meanings.

 

“Refinancing
Indebtedness” means any Refinancing, modification, replacement, restatement,
refunding, deferral, extension, substitution, supplement, reissuance or resale
of existing or future Indebtedness (other than intercompany Indebtedness),
including any additional Indebtedness incurred to pay interest or premiums
required by the instruments governing such existing or future Indebtedness as
in effect at the time of issuance thereof (“Required Premiums”) and fees in
connection therewith; provided
that any such event shall not: (i) directly

 

22

 

or indirectly result in an increase in the aggregate
principal amount of Permitted Indebtedness, except to the extent such increase
is a result of a simultaneous incurrence of additional Indebtedness: (A) to pay
Required Premiums and related fees; or (B) otherwise permitted to be incurred
under this Indenture; and (ii) create Indebtedness with a Weighted Average Life
to Maturity at the time such Indebtedness is incurred that is less than the
Weighted Average Life to Maturity at such time of the Indebtedness being
refinanced, modified, replaced, renewed, restated, refunded, deferred,
extended, substituted, supplemented, reissued or resold; and (iii) if the
Indebtedness being refinanced is subordinated in right of payment to the Notes
or the Guarantee, such Refinancing Indebtedness is subordinated in right of
payment to the Notes or the Guarantee on terms at least as favorable to the
holders as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.

 

“Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the Issue Date,
among the Company, the Guarantors and the initial purchasers set forth therein.

 

“Related Party” with
respect to any Permitted Holder means: (i)(A) any controlling stockholder or a
majority owned Subsidiary of such Permitted Holder or, in the case of an
individual, any spouse, sibling, parent or child of such Permitted Holder; or
(B) the estate of any Permitted Holder during any period in which such estate
holds Capital Stock of the Company for the benefit of any Person referred to in
clause (i)(A); or (ii) any trust, corporation, partnership, limited liability
company or other entity, the beneficiaries, stockholders, partners, owners or
Persons beneficially owning an interest of more than 50% of which consist of,
or the sole managing partner or managing member of which is, one or more
Permitted Holders and/or such other Persons referred to in the immediately
preceding clause (i).

 

“Representative” means
the indenture trustee or other trustee, agent or representative in respect of
any Designated Senior Debt; provided
that when used in connection with the Credit Facility, the term
“Representative” shall refer to the administrative agent under the Credit
Facility; provided  further, that if, and for so long as,
any Designated Senior Debt lacks such a representative, then the Representative
for such Designated Senior Debt shall at all times constitute the holders of a
majority in outstanding principal amount of such Designated Senior Debt in
respect of any Designated Senior Debt.

 

“Responsible Officer,”
when used with respect to the Trustee, means any officer within the Corporate
Trust Administration of the Trustee (or any successor group of the Trustee)
located at the Corporate Trust Office of the Trustee who has direct
responsibility for the administration of this Indenture and for the purposes of
Sections 7.01(c)(ii) and 7.05(b) also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.

 

“Restricted Subsidiary”
of any Person means any Subsidiary of such Person which at the time of
determination is not an Unrestricted Subsidiary.

 

“S&P” means Standard
& Poor’s Ratings Group or any successor thereto.

 

“Sale and Leaseback
Transaction” means any direct or indirect arrangement with any Person or to
which any such Person is a party providing for the leasing to the Company or a

 

23

 

Restricted Subsidiary of any property, whether owned
by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such
Property.

 

“SEC” means the U.S.
Securities and Exchange Commission.

 

“Secured Debt” means any
Indebtedness secured by a Lien.

 

“Securities Act” means
the Securities Act of 1933, as amended.

 

“Securitization Entity”
means a Wholly-Owned Subsidiary of the Company (or another Person in which the
Company or any Restricted Subsidiary of the Company makes an Investment and to
which the Company or any Restricted Subsidiary of the Company transfers
accounts receivable or equipment and related assets) which engages in no
activities other than in connection with the financing of accounts receivable
or equipment and which is designated by the Board of Directors of the Company
(as provided below) as a Securitization Entity:  (i) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which: (A)
is guaranteed by the Company or any Restricted 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 Restricted 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 Restricted
Subsidiary of the Company, directly or indirectly, contingently or otherwise,
to the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings; (ii) with which neither the Company nor any Restricted Subsidiary
of the Company has any material contract, agreement, arrangement or
understanding (except in connection with a Purchase Money Note or Qualified
Securitization Transaction) other than on terms no less favorable to the
Company or such Restricted Subsidiary than those that might be obtained at the
time from Persons that are not Affiliates of the Company, other than fees
payable in the ordinary course of business in connection with servicing
receivables of such entity; and (iii) to which neither the Company nor any
Restricted Subsidiary of the Company has any obligations 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 of the Company shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the Board Resolution of the Company
giving effect to such designation and an Officers’ Certificate certifying that
such designation complied with the foregoing conditions.

 

“Senior Debt” means the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for
in the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of the Company or any
Guarantor, whether outstanding on the Issue Date or thereafter created,
incurred or assumed, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall be subordinate or pari passu in right of payment to the
Notes or the Guarantees, as the case may be.  Without limiting the
generality

 

24

 

of the foregoing, “Senior Debt” shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for
in the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of:  (x) all monetary obligations of every nature of the Company or any
Guarantor under the Credit Facility, including, without limitation, obligations
(including guarantees thereof) to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities; (y) all
Interest Swap Obligations (and guarantees thereof); and (z) all obligations
(and guarantees thereof) under Currency Agreements and Hedging Agreements, in
each case whether outstanding on the Issue Date or thereafter incurred.

 

Notwithstanding the foregoing,
“Senior Debt” shall not include (i) any Indebtedness of the Company or a
Guarantor to the Company or to a Subsidiary of the Company; (ii) any
Indebtedness of the Company or any Guarantor to, or guaranteed by the Company
or any Guarantor on behalf of, any shareholder, director, officer or employee
of the Company or any Subsidiary of the Company (including, without limitation,
amounts owed for compensation) other than a shareholder who is also a lender
(or an Affiliate of a lender) under the Credit Facilities (including the Credit
Facility); (iii) any amounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities but excluding secured purchase money
obligations and capitalized lease obligations); (iv) Indebtedness represented
by Disqualified Capital Stock; (v) any liability for Federal, state, local or
other taxes owed or owing by the Company or any of the Guarantors; (vi) that
portion of any Indebtedness incurred in violation of Section 4.09 hereof
(but, as to any such obligation, no such violation shall be deemed to exist for
purposes of this clause (vi) if the holder(s) of such obligation or their
representative and the Trustee shall have received an Officers’ Certificate of
the Company to the effect that the incurrence of such Indebtedness does not (or
in the case of revolving credit indebtedness, that the incurrence of the entire
committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Indenture); (vii)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse to
the Company or any of the Guarantors, as applicable; and (viii) any
Indebtedness which is, by its express terms, subordinated or junior in right of
payment to any other Indebtedness, guarantee or obligation of the Company or
any of the Guarantors, including without limitation any Senior Subordinated
Debt.

 

“Senior Subordinated
Debt” means with respect to a Person, the Notes (in the case of the Company), a
Guarantee (in the case of a Guarantor) and any other Indebtedness of such
Person that specifically provides that such Indebtedness is to rank pari passu with the Notes or such
Guarantee, as the case may be, in right of payment and is not subordinated by
its terms in right of payment to any Indebtedness or other obligation of such
Person which is not Senior Debt of such Person.

 

“Significant Subsidiary,”
with respect to any Person, means any Restricted Subsidiary of such Person that
satisfies the criteria for a “significant subsidiary” set forth in Rule 1-02(w)
of Regulation S-X under the Securities Act.

 

25

 

“Standard Securitization
Undertakings” means representations, warranties, covenants and indemnities
entered into by the Company or any Restricted Subsidiary of the Company which
are reasonably customary, as determined in good faith by the Board of Directors
of the Company, in an accounts receivable or equipment transaction.

 

“Stock Purchase
Agreement” means the stock purchase agreement dated as of January 30,
2004, between PP Acquisition Corporation, Polypore, Inc. and the sellers named
therein, as such agreement may be further amended so long as such amendments
are not adverse to the Holders of the Notes.

 

“Stockholders’ Agreement”
means the Stockholders’ Agreement, dated as of the Issue Date, among PP Holding
II and certain stockholders of PP Holding II as parties thereto, as in effect
on the Issue Date and as further amended and modified from time to time,
entered into in connection with the Transactions.

 

“Subordinated Obligation”
means any Indebtedness of the Company (whether outstanding on the Issue Date or
thereafter incurred) which is subordinate or junior in right of payment to the
Notes pursuant to a written agreement or pursuant to the terms thereof.

 

“Subsidiary” with respect
to any Person, means: (i) any corporation, association or other business entity
(other than a partnership, joint venture, limited liability company or similar
entity) of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors, managers or trustee
thereof (or persons performing similar functions) under ordinary circumstances
shall at the time be owned, directly or indirectly, by (1) such Person, (2)
such Person and one or more Subsidiary of such Person or (3) one or more
Subsidiaries of such Person; or (ii) any partnership, joint venture, limited
liability company or similar entity of which at least a majority of the capital
accounts, distribution rights, total equity and voting interest or general or
limited partnership interests, as applicable, under ordinary circumstances is
at the time, directly or indirectly, owned by (1) such Person, (2) such Person
and one or more Subsidiary of such Person or (3) one or more Subsidiaries of
such Person.

 

 “TIA” means the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on
the date on which this Indenture is qualified under the TIA.

 

“Total Assets” means, as
of any date, the total consolidated assets of the Company and its Restricted
Subsidiaries, as set forth on the Company’s most recently available internal
consolidated balance sheet as of such date.

 

“Transaction Date” has
the meaning set forth in the definition of Consolidated Fixed Charge Coverage
Ratio.

 

“Transactions” means the
merger of PP Acquisition Corporation with and into Polypore, Inc. and the
transactions related thereto occurring on the Issue Date, the offering of the
Notes being offered hereby and issued on the Issue Date and borrowings made on
the Issue Date pursuant to the Credit Facility.

 

“Treasury Rate” means, as
of the applicable redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as compiled

 

26

 

and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
business days prior to such redemption date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from such redemption date to May 15, 2008; provided, however, that if the period from
such redemption date to May 15, 2008 is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year will be used.

 

“Trustee” means the party
named as such above until a successor replaces it in accordance with the
applicable provisions of this Indenture and thereafter means the successor
serving hereunder.

 

“U.S. Dollar Equivalent”
means, with respect to any monetary amount in a currency other than U.S.
dollars, at any time for the 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 quoted by Reuters at approximately 10:00 A.M.
(New York City time) on such date of determination (or if no such quote is
available on such date, on the immediately preceding business day for which
such a quote is available).

 

“U.S. Government
Obligations” means securities that are:

 

(i) direct obligations of the United States of America
for the timely payment of which its full faith and credit is pledged, or

 

(ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America,

 

which, in each case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such U.S. Government Obligations or a specific
payment of principal of or interest on any such U.S. Government Obligations
held by such custodian for the account of the holder of such depository
receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S. Government
Obligations evidenced by such depository receipt.

 

“U.S. Subsidiary” means
any Subsidiary of the Company that is incorporated under the laws of the United
States of America or any State thereof or the District of Columbia.

 

“Unrestricted Subsidiary”
of any Person means: (i) any Subsidiary of such Person that at the time of
determination shall be or continue to be designated an Unrestricted Subsidiary
by the Board of Directors of such Person in the manner provided below; and (ii)
any Subsidiary of an Unrestricted Subsidiary.

 

27

 

The Board of Directors of
the Company may designate any Subsidiary (including any newly acquired or newly
formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation
or Investment therein) to be an Unrestricted Subsidiary unless such Subsidiary
owns any Capital Stock of or Indebtedness of or has any Investment in, 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 or
another Unrestricted Subsidiary; provided
that: (i) the Company certifies to the Trustee that such designation complies
with Section 4.07 hereof; and (ii) each Subsidiary to be so designated and
each of its Subsidiaries: (A) has not at the time of designation, any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any of its Restricted Subsidiaries, unless such recourse is
Indebtedness or a Lien that is permitted under this Indenture after giving
effect to such designation; and (B) either alone or in the aggregate with all
other Unrestricted Subsidiaries does not operate, directly or indirectly, all
or substantially all of the business of the Company and its Subsidiaries.

 

The Board of Directors of
the Company may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary only if (x) immediately after giving effect to such designation, the
Company is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.09 hereof and (y)
immediately before and immediately after giving effect to such designation, no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by promptly filing with the Trustee a
copy of the Board Resolution giving effect to such designation and an Officers’
Certificate certifying that such designation complied with the foregoing
provisions.  If, at any time, any Unrestricted Subsidiary would fail to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this
Indenture and any Indebtedness of such Subsidiary shall be deemed to be
incurred as of such date.

 

Actions taken by an
Unrestricted Subsidiary shall not be deemed to have been taken, directly or
indirectly, by the Company or any Restricted Subsidiary.

 

“Voting Stock” of a
corporation means all classes of Capital Stock of such corporation then
outstanding and normally entitled to vote in the election of directors.

 

“Weighted Average Life to
Maturity” means, when applied to any Indebtedness at any date, the number of
years obtained by dividing:  (i) the then outstanding aggregate principal
amount of such Indebtedness into (ii) the sum of the total of the products
obtained by multiplying:  (A) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof; by (B) the number of years
(calculated to the nearest one-twelfth) which will elapse between such date and
the making of such payment.

 

“Wholly-Owned Restricted
Subsidiary” of any Person means any Wholly-Owned Subsidiary of such Person
which at the time of determination is a Restricted Subsidiary.

 

“Wholly-Owned Subsidiary”
of any Person means any Subsidiary of such Person of which all the outstanding
voting securities (other than in the case of a Restricted Subsidiary that

 

28

 

is incorporated in a jurisdiction other than a State
in the United States of America or the District of Columbia, directors’
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned by such Person or any
Wholly-Owned Subsidiary of such Person.

 

               
SECTION 1.02.  Other Definitions.

 

	
  Term

  	
   

  	
  Defined
  in Section

  
	
   

  	
   

  	
   

  
	
  “Acceleration Notice”

  	
   

  	
  6.02

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  
	
  “Appendix”

  	
   

  	
  2.01

  
	
  “Authentication Order”

  	
   

  	
  2.02

  
	
  “Base Currency”

  	
   

  	
  13.13

  
	
  “Blockage Notice”

  	
   

  	
  10.03, 12.03

  
	
  “Change of Control
  Offer”

  	
   

  	
  4.15

  
	
  “Change of Control
  Payment Date”

  	
   

  	
  4.15

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  
	
  “Dollar Paying Agent”

  	
   

  	
  2.03

  
	
  “Euro Paying Agent”

  	
   

  	
  2.03

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Guaranteed
  Obligations”

  	
   

  	
  11.01

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Initial Lien”

  	
   

  	
  4.12

  
	
  “Judgment Currency”

  	
   

  	
  13.13

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  
	
  “Luxembourg Paying
  Agent”

  	
   

  	
  2.03

  
	
  “Net Proceeds Offer”

  	
   

  	
  4.10

  
	
  “Net Proceeds Offer
  Amount”

  	
   

  	
  4.10

  
	
  “Net Proceeds Offer
  Payment Date”

  	
   

  	
  4.10

  
	
  “Net Proceeds Offer
  Trigger Date”

  	
   

  	
  4.10

  
	
  “Offer Period”

  	
   

  	
  3.09

  
	
  “pay the Notes”

  	
   

  	
  10.03

  
	
  “pay its Guarantee”

  	
   

  	
  12.03

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “Payment Blockage
  Period”

  	
   

  	
  10.03, 12.03

  
	
  “Payment Default”

  	
   

  	
  10.03, 12.03

  
	
  “protected purchaser”

  	
   

  	
  2.07

  
	
  “Purchase Date”

  	
   

  	
  3.09

  
	
  “rate(s) of exchange”

  	
   

  	
  13.13

  
	
  “Reference Date”

  	
   

  	
  4.07

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted Payment”

  	
   

  	
  4.07

  
	
  “Surviving Entity”

  	
   

  	
  5.01

  

 

 

29

 

               
SECTION 1.03.  Trust Indenture Act Definitions.

 

Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in
and made a part of this Indenture.

 

The following TIA terms
used in this Indenture have the following meanings:

 

“indenture securities”
means the Notes;

 

“indenture security
Holder” means a Holder of a Note;

 

“indenture to be qualified”
means this Indenture;

 

“indenture trustee” or
“institutional trustee” means the Trustee; and

 

“obligor” on the Notes
and the Guarantees means the Company and the Guarantors, respectively, and any
successor obligor upon the Notes and the Guarantees, respectively.

 

All other terms used in
this Indenture that are defined by the TIA, defined by TIA reference to another
statute or defined by SEC rule under the TIA have the meanings so assigned to
them.

 

               
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)                                 
words in the singular include
the plural, and in the plural include the singular;

 

(5)                                 
provisions apply to successive
events and transactions;

 

(6)                                 
“$” and “U.S. Dollars” each
refer to United States dollars, or such other money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts;

 

(7)                                 
“€” and “Euros” each refer to
the lawful currency of the member states of the European Union that adopt the
single currency in accordance with the Treaty establishing the European
Communities;

 

(8)                                 
references to sections of or
rules under the Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC from time to
time; and

 

30

 

(9)                                 
references in this Indenture, in
any context, to any interest or other amount payable on or with respect to the
Notes shall be deemed to include any Additional Interest that is payable
pursuant to the Registration Rights Agreement.

 

ARTICLE 2

THE NOTES

 

               
SECTION 2.01.  Form and Dating.

 

Provisions relating to
the Initial Notes and the Exchange Notes are set forth in the Rule
144A/Regulation S Appendix attached hereto (the “Appendix”) which is hereby
incorporated in and expressly made part of this Indenture.  The Initial
Dollar Notes, the Initial Euro Notes and the Trustee’s certificate of
authentication with respect thereto shall be substantially in the forms of
Exhibit A and Exhibit B to the Appendix, which is hereby incorporated in and expressly
made a part of this Indenture.  The Exchange Dollar Notes, the Exchange
Euro Notes and the Trustee’s certificate of authentication with respect thereto
shall be substantially in the forms of Exhibit C and Exhibit D to the Appendix,
which is hereby incorporated in and expressly made a part of this
Indenture.  The Notes 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 Note shall be dated the date of its authentication.  The
terms of the Notes set forth in the Appendix and Exhibits A through D to the
Appendix are part of the terms of this Indenture.

 

               
SECTION 2.02.  Execution and Authentication.

 

On the Issue Date, the
Trustee shall authenticate and deliver (i) $225.0 million of 83⁄4% Senior
Subordinated Notes Due 2012 and (ii) €150.0 million of 83⁄4% Senior Subordinated
Notes due 2012 and, at any time and from time to time thereafter, the Trustee
shall authenticate and deliver Notes for original issue in an aggregate
principal amount specified in such order, in each case upon a written order of
the Company signed by two Officers or by an Officer and an Assistant Secretary
of the Company (each an “Authentication Order”).  Such order shall specify
the amount of the Notes to be authenticated and the date on which the original
issue of Notes is to be authenticated, whether the Notes are to be Initial
Notes, Additional Notes or Exchange Notes, or such other information as the
Trustee shall reasonably request and, in the case of an issuance of Additional
Notes pursuant to Section 2.14 after the Issue Date, shall certify that
such issuance is in compliance with Section 4.09.

 

The Notes shall be issued
only in registered form, without coupons and only in denominations of $1,000
(in the case of Dollar Notes) and €1,000 (in the case of Euro Notes) and any
integral multiple thereof.

 

Two Officers shall sign
the Notes for the Company by manual or facsimile signature.

 

If an Officer whose
signature is on a Note no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless.

 

31

 

A Note shall not be valid
until an authorized signatory of the Trustee manually signs the certificate of
authentication on the Note.  The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.

 

The Trustee may appoint
one or more authenticating agents reasonably acceptable to the Company to
authenticate the Notes.  Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes 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 the Registrar, or any Paying Agent or agent for service of notices and
demands.

 

The Trustee is hereby
authorized to enter into a letter of representations with the Depository or the
Common Depository (as defined in the Appendix), as the case may be, in the form
provided by the Company and to act in accordance with such letter.

 

               
SECTION 2.03.  Registrar and Paying Agent.

 

(a)  The Company
shall maintain (i) an office or agency where Notes may be presented for
registration of transfer or for exchange (the “Registrar”) (ii) an office or
agency in the Borough of Manhattan, the City of New York, the State of New York
where Dollar Notes may be presented for payment (the “Dollar Paying Agent”),
(iii) an office or agency in London, England where Euro Notes may be presented
for payment (the “Euro Paying Agent”) and (iv) so long as the Euro Notes are
listed on the Luxembourg Stock Exchange and if required by the rules of the
Luxembourg Stock Exchange, an office or agency in Luxembourg where Euro Notes
may be presented for payment (the “Luxembourg Paying Agent”).  The
Registrar shall keep a register of the Notes and of their registration of
transfer and exchange.  The Company may have one or more co-registrars and
one or more additional paying agents.  The term “Registrar” includes any
co-registrars.  The Company shall maintain a co-registrar in London,
England and, so long as the Euro Notes are listed on the Luxembourg Stock
Exchange and if required by the rules of the Luxembourg Stock Exchange, in
Luxembourg where Euro Notes may be presented for registration of transfer or
for exchange.  The term “Paying Agent” includes the Dollar Paying Agent,
the Euro Paying Agent, the Luxembourg Paying Agent (if any) and any additional
paying agents.  The Company initially appoints the Trustee as (i)
Registrar and Dollar Paying Agent in connection with the Notes and (ii) the
Notes Custodian with respect to the Global Notes.  The Company initially
appoints The Bank of New York as co-registrar and Euro Paying Agent.

 

(b)                                
The Company shall
enter into an appropriate agency agreement with the Registrar or any Paying
Agent not a party to this Indenture, which shall incorporate the terms of the
TIA; provided that any
such agency agreement with the Luxembourg Paying Agent need not incorporate the
provisions of the TIA.  The agency agreement shall implement the
provisions of this Indenture that relate to such agent.  The Company shall
notify the Trustee in writing of the name and address of any such agent. 
If the Company fails to appoint or 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 or transfer agent.

 

32

 

The Registrar and Paying
Agent shall be entitled to the rights and immunities of the Trustee hereunder.

 

               
SECTION 2.04.  Paying Agent to Hold Money in Trust.

 

Prior to each due date of
the principal, premium, if any, and interest on any Note, the Company shall
deposit with each Paying Agent (or if the Company or a Wholly-Owned Subsidiary
is acting as Paying Agent, segregate and hold in trust for the benefit of the
Persons entitled thereto) a sum sufficient to pay such principal, premium 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, premium, if any, or interest on
the Notes and shall notify the Trustee in writing of any default by the Company
in making any such payment.  While any such default continues, the Trustee
may require a Paying Agent to pay all money held by it to the Trustee.  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 (if other than the Company or a
Subsidiary of the Company) shall have no further liability for the money
delivered to the Trustee.  Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent
for the Notes.

 

               
SECTION 2.05.  Holder Lists.

 

The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Holders and shall otherwise
comply with TIA § 312(a).  If the Trustee is not the Registrar, the
Company shall furnish, or cause the Registrar to furnish, to the Trustee, 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 and the Company shall otherwise comply with TIA §312(a).

 

               
SECTION 2..06.  Transfer and Exchange.

 

(a)                                 
The Notes shall be
issued in registered form and shall be transferable only upon the surrender of
a Note being transferred for registration of transfer and in compliance with
the Appendix.  When a Note is presented to the Registrar with a request to
register a transfer, such Registrar shall register the transfer as requested if
the requirements of this Indenture and Section 8-401(a) of the Uniform
Commercial Code are met.  When Notes are presented to the Registrar with a
request to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met.

 

No service charge shall
be made for any registration of transfer or exchange or redemption of the
Notes, but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge
payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10,
4.15 or 9.05 hereof).

 

33

 

(b)                                
The Registrar shall
not be required to register the transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part.

 

(c)                                 
All Notes issued upon
any registration of transfer or exchange of Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such registration
of transfer or exchange.

 

(d)                                
The Company shall not
be required (A) to issue, to register the transfer of or to exchange any Notes
during a period beginning at the opening of business 15 days before the day of
the mailing of notice of redemption under Section 3.03 hereof and ending
at the close of business on such day, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (c) to register the transfer
of or to exchange a Note between a record date and the next succeeding Interest
Payment Date.

 

(e)                                 
Any holder of a
beneficial interest in a Global Note shall, by acceptance of such beneficial
interest, agree that transfers of beneficial interests in such Global Note may
be effected only through a book-entry system maintained by (a) the holder of
such Global Note (or its agent or the person on whose behalf the Global Note is
held) or (b) any Holder of a beneficial interest in such Global Note, and that
ownership of beneficial interest in such Global Note shall be required to be
reflected in a book entry.

 

(f)                                   
Prior to due
presentment for the registration of a transfer of any Note, the Trustee, any
Paying Agent, the Registrar and the Company may deem and treat the Person in
whose name any Note is registered as the absolute owner of such Note for the
purpose of receiving payment of principal of, premium, if any, and interest on
such Notes and for all other purposes, and none of the Trustee, any Paying
Agent, the Registrar or the Company shall be affected by notice to the
contrary.

 

(g)                                
None of the Company,
the Trustee, any agent of the Company or the Trustee (including any Paying
Agent or Registrar) will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a global Note or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.

 

(h)                                
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 Note
(including any transfers between or among depositary participants or beneficial
owners of interest 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.

 

 

34

 

               
SECTION 2.07.  Replacement Notes.

 

If a mutilated Note is
surrendered to the Registrar or if the Holder of a Note claims that the Note
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Note if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder
(a) satisfies the Company or the Trustee within a reasonable time after such
Holder has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification,
(b) makes such request to the Company or the Trustee prior to the Note being
acquired by a protected purchaser as defined in Section 8-303 of the
Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other
reasonable requirements of the Trustee.  If required by the Trustee or the
Company, such Holder shall furnish an indemnity or a security bond sufficient in
the judgment of the Trustee to protect the Company, the Trustee, the Paying
Agent and the Registrar from any loss which any of them may suffer if a Note is
replaced.  The Company and the Trustee may charge the Holder for their
expenses in replacing a Note.

 

Every replacement Note is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionally with all other Notes duly
issued hereunder.

 

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 Notes.

 

               
SECTION 2.08.  Outstanding Notes.

 

Notes outstanding at any
time are all Notes authenticated by the Trustee except for those canceled by
it, those reductions in the interest in a Global Note effected by the Trustee
in accordance with the provisions of this Indenture, those delivered to it for
cancellation and those described in this Section as not outstanding. 
Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.

 

If a Note is replaced
pursuant to Section 2.07 hereof (other than a mutilated Note surrendered
for replacement), it ceases to be outstanding unless the Trustee and the
Company receive proof satisfactory to them that the replaced Note is held by a
protected purchaser.  A mutilated Note ceases to be outstanding upon
surrender of such Note and replacement thereof pursuant to Section 2.07.

 

If the principal amount
of any Note is considered paid under Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases to accrue.

 

If the Paying Agent
(other than the Company, a Subsidiary or an Affiliate of any thereof)
segregates and holds in trust, in accordance with this Indenture, on a
redemption date or maturity date money sufficient to pay all principal,
premium, if any, and interest payable on that date with respect to the Notes
(or portions thereof) to be redeemed or maturing, as the case may be, and no
Paying Agent is prohibited from paying such money to the Holders on that date
pursuant to the terms of this Indenture, then on and after that date such Notes
(or portions thereof) shall cease to be outstanding and interest on them shall
cease to accrue.

 

35

 

               
SECTION 2.09.  Treasury Notes.

 

In determining whether
the Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
the Trustee knows are so owned shall be so disregarded.

 

               
SECTION 2.10.  Temporary Notes.

 

In the event that
Definitive Notes are to be issued under the terms of this Indenture, until such
Definitive Notes are ready for delivery, the Company may prepare and the
Trustee, upon receipt of an Authentication Order, shall authenticate temporary
Notes.  Temporary Notes shall be substantially in the form of Definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes and as shall be reasonably acceptable to the Trustee. 
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Notes and deliver them in exchange for temporary Notes
upon surrender of such temporary Notes at the office or agency of the Company,
without charge to the Holder.  Until such exchange, temporary Notes shall
be entitled to the same rights, benefits and privileges as Definitive Notes and
to all of the benefits of this Indenture.

 

               
SECTION 2.11.  Cancellation.

 

The Company at any time
may deliver Notes to the Trustee for cancellation.  The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
registration of transfer, exchange or payment.  The Trustee and no one
else shall cancel (subject to the record retention requirements of the Exchange
Act) all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation in accordance with its customary procedures and, if
requested in writing, deliver a certificate of such destruction to the Company
unless the Company directs the Trustee in writing to deliver canceled Notes to
the Company.  The Company may not issue new Notes to replace Notes that it
has redeemed, paid or that have been delivered to the Trustee for
cancellation.  The Trustee shall not authenticate Notes in place of
canceled Notes other than pursuant to the terms of this Indenture.

 

               
SECTION 2.12.  Defaulted Interest.

 

If the Company defaults
in a payment of interest on the Dollar Notes or the Euro Notes, the Company
shall pay defaulted interest then borne by the Dollar Notes or the Euro Notes,
as the case may be (plus interest on such defaulted interest at the applicable
interest rate on the Notes 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 affected Holder a notice that states the special record date, the related
payment date and the amount of defaulted interest to be paid.

 

36

 

               
SECTION 2.13.  CUSIP, ISIN or Common Code Numbers.

 

The Company in issuing
the Notes may use “CUSIP”, “ISIN”, “Common Code” or other similar
identification numbers (if then generally in use) and, if so, the Trustee shall
use “CUSIP”, “ISIN”, “Common Code” or such other similar identification numbers
in notices of redemption or repurchase 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 Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or the omission of such numbers.  The Company shall promptly
notify the Trustee of any change in the “CUSIP”, “ISIN”, “Common Code” or such
other similar identification numbers.

 

               
SECTION 2.14.  Issuance of Additional Notes.

 

The Company shall be
entitled, subject to its compliance with Section 4.09, to issue Additional
Notes under this Indenture which shall have identical terms as the Initial
Notes issued on the Issue Date, other than with respect to the date of issuance
and issue price.  The Initial Notes issued on the Issue Date, any
Additional Notes and all Exchange Notes issued in exchange therefor shall be
treated as a single class for all purposes under this Indenture.

 

With respect to any
Additional Notes, the Company shall set forth in a Board Resolution and an
Officers’ Certificate of the Company, a copy of each which shall be delivered
to the Trustee, the following information:

 

(1)                                 
the aggregate principal amount
of such Additional Notes to be authenticated and delivered pursuant to this
Indenture;

 

(2)                                 
the issue price, the issue date
and the “CUSIP”, “ISIN”, “Common Code” or other similar identification numbers
of such Additional Notes; provided,
however, that no Additional Notes may be issued at a price that
would cause such Additional Notes to have “original issue discount” within the
meaning of Section 1273 of the Code; and

 

(3)                                 
whether such Additional Notes
shall be Transfer Restricted Notes and issued in the form of Initial Notes as
set forth in the Appendix to this Indenture or shall be issued in the form of
Exchange Notes as set forth in Exhibit C or Exhibit D, as the case may be, to
the Appendix.

 

SECTION 2.15.  Calculation
of Amounts.  (a)  The aggregate principal amount of the Notes, at
any date of determination, shall be the sum of (1) the principal amount of the
Dollar Notes at such date of determination plus (2) the U.S. Dollar Equivalent,
at such date of determination, of the principal amount of the Euro Notes at
such date of determination.  With respect to any matter requiring consent,
waiver, approval or other action of the Holders of a specified percentage of
the principal amount of all the Notes (and not solely the Dollar Notes or the
Euro Notes as provided for in the proviso to the third sentence of
Section 9.02(d)), such percentage shall be calculated, on the relevant
date of determination, by dividing (x) the principal amount, as of such date of
determination, of Notes, the Holders of which have so consented by (y) the
aggregate principal

 

37

 

amount, as of such date of determination, of the Notes
then outstanding, in each case, as determined in accordance with the preceding
sentence, Section 2.08 of this Indenture.  Any such calculation made
pursuant to this Section 2.15(a) shall be made by the Company and
delivered to the Trustee pursuant to an Officers’ Certificate.

 

(b)                                
The maximum amount of
Indebtedness, Investments and other threshold amounts that the Company and its
Restricted Subsidiaries may incur shall not be deemed to be exceeded, with
respect to any outstanding Indebtedness, Investments and other threshold
amounts solely as a result of fluctuations in the exchange rate of
currencies.  When calculating capacity for the incurrence of additional
Indebtedness, Investments and other threshold amounts by the Company and its
Restricted Subsidiaries, the exchange rate of currencies shall be measured as
of the date of such calculation.

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

               
SECTION 3.01.  Notices to Trustee.

 

If the Company elects to
redeem the Dollar Notes and/or the Euro Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall notify the Trustee
in writing of (i) the Section of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Dollar Notes and/or Euro Notes to be redeemed, (iv) the redemption price and
(v) the “CUSIP”, “ISIN”, “Common Code” or other similar identification numbers
of the Notes to be redeemed.  The Company shall give notice to the Trustee
provided for in this paragraph at least 40 days but not more than 60 days
before a redemption date if the redemption is pursuant to Section 3.07
hereof, unless a shorter period is acceptable to the Trustee.  Such notice
shall be accompanied by an Officers’ Certificate and Opinion of Counsel from
the Company to the effect that such redemption will comply with the conditions
herein.  If fewer than all the Dollar Notes and/or Euro Notes are to be
redeemed, the record date relating to such redemption shall be selected by the
Company and given to the Trustee, which record date shall be not fewer than 15
days after the date of notice to the Trustee.  Any such notice may be
canceled 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 Notes to Be Redeemed.

 

If less than all of the
Notes are to be redeemed or purchased in an offer to purchase at any time, the
Trustee shall select the Notes to be redeemed or purchased among the Holders of
the Notes in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, on a pro rata basis, by lot or in accordance with any other
method the Trustee considers fair and appropriate.  In the event of
partial redemption by lot, the particular Notes to be redeemed shall be selected,
unless otherwise provided herein, not less than 30 nor more than 60 days prior
to the redemption date by the Trustee from the outstanding Notes not previously
called for redemption.

 

38

 

The Trustee shall promptly
notify the Company in writing of the Notes selected for redemption and, in the
case of any Note selected for partial redemption, the principal amount to be
redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or
whole multiples of $1,000 (in the case of Dollar Notes) and in amounts of
€1,000 or whole multiples of €1,000 (in the case of Euro Notes). The provisions
of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption.

 

               
SECTION 3.03.  Notice of Redemption.

 

Subject to the provisions
of Section 3.09 hereof, at least 30 days but not more than 60 days before
a redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address.

 

The notice shall identify
the Dollar Notes and/or Euro Notes to be redeemed, including “CUSIP”, “ISIN”,
“Common Code” or other similar identification numbers, if any, and shall state:

 

(a)                                 
the redemption date;

 

(b)                                
the redemption price
and the amount of accrued interest to the redemption date;

 

(c)                                 
if any Note is being
redeemed in part, the portion of the principal amount of such Note to be
redeemed and that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;

 

(d)                                
the name and address
of the Paying Agent;

 

(e)                                 
that Notes called for
redemption must be surrendered to the Paying Agent to collect the redemption
price, plus accrued interest;

 

(f)                                   
that, unless the
Company defaults in making such redemption payment or any Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture,
interest on Notes (or portion thereof) called for redemption ceases to accrue
on and after the redemption date;

 

(g)                                
the paragraph of the
Notes and/or Section of this Indenture pursuant to which the Notes called
for redemption are being redeemed; and

 

(h)                                
that no
representation is made as to the correctness or accuracy of the “CUSIP”,
“ISIN”, “Common Code” or other similar identification number, if any, listed in
such notice or printed on the Notes.

 

At the Company’s request,
the Trustee shall give the notice of redemption in the Company’s name and at
the Company’s expense; provided,
however, that the Company shall have delivered to the Trustee, at
least 45 days prior to the redemption date, an Officers’ Certificate requesting
that the Trustee give such notice and setting forth the information to be
stated in such notice as provided in the preceding paragraph.

 

39

 

               
SECTION 3.04.  Effect of Notice of Redemption.

 

Once notice of redemption
is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price stated in the notice. A notice of redemption may not be
conditional.  Upon surrender to any Paying Agent, such Notes shall be paid
at the redemption price stated in the notice, plus accrued interest, to the
redemption date; provided, however,
that if the redemption date is after a regular record date and on or prior to
the interest payment date, the accrued interest shall be payable to the Holder
of the redeemed Notes registered on the relevant record 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.

 

(a)                                 
With respect to any
Dollar Notes, prior to 10:00 a.m., New York City time, on the redemption date,
the Company shall deposit with the Dollar Paying Agent (or, if the Company or a
Wholly-Owned Subsidiary is a Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest, on all
Dollar Notes or portions thereof to be redeemed on that date other than Dollar
Notes or portions of Dollar Notes called for redemption that have been
delivered by the Company to the Trustee for cancellation.  On and after
the redemption date, interest shall cease to accrue on Dollar Notes or portions
thereof called for redemption so long as the Company has deposited with the
Dollar Paying Agent funds sufficient to pay the principal of, plus accrued and
unpaid interest on, the Dollar Notes to be redeemed, unless a Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture.

 

(b)                                
With respect to the
Euro Notes, prior to 10:00 a.m., London time, on the redemption date, the
Company shall deposit with the Euro Paying Agent (or, if the Company or a
Wholly-Owned Subsidiary is a Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest, on all
Euro Notes or portions thereof to be redeemed on that date other than Euro
Notes or portions of Euro Notes called for redemption that have been delivered
by the Company to the Trustee for cancellation.  On and after the
redemption date, interest shall cease to accrue on Euro Notes or portions
thereof called for redemption so long as the Company has deposited with the Euro
Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid
interest on, the Euro Notes to be redeemed, unless the Euro Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture.

 

               
SECTION 3.06.  Notes Redeemed in Part.

 

Upon surrender of a Note
that is redeemed in part, the Company shall issue and, upon the Company’s
written request, the Trustee shall authenticate for the Holder at the expense
of the Company a new Note equal in principal amount to the unredeemed portion
of the Note surrendered.

 

 

40

 

               
SECTION 3.07.  Optional Redemption; Special Redemption.

 

(a)                                 
Optional
Redemption. 
Except as provided in Section 3.07(b), (c) and (d) hereof, the Dollar
Notes and the Euro Notes, in each case, shall not be redeemable at the
Company’s option prior to May 15, 2008. Thereafter, the Dollar Notes and the
Euro Notes, in each case, shall be subject to redemption at any time at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days’ notice, at the redemption prices (expressed as percentages of
principal amount thereof) set forth below plus accrued and unpaid interest to the
applicable redemption date, if redeemed during the twelve month period
commencing on May 15 of the year set forth below:

 

Dollar
Notes

 

	
  Year

  	
   

  	
  Percentage
  of

  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.375

  	
  %

  
	
  2009

  	
   

  	
  102.188

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

Euro
Notes

 

	
  Year

  	
   

  	
  Percentage
  of

  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.375

  	
  %

  
	
  2009

  	
   

  	
  102.188

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                
In addition, prior to
May 15, 2008, the Company may redeem the Dollar Notes and the Euro Notes, in
each case, at its option, in whole at any time or in part from time to time,
upon not less than 30 nor more than 60 days’ prior notice mailed by first-class
mail to each Holder’s registered address, at a redemption price equal to 100% of
the principal amount of the Dollar Notes and the Euro Notes, as the case may
be, redeemed plus the Applicable Premium as of, and accrued and unpaid interest
to, the applicable redemption date (subject to the right of the Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date).

 

(c)                                 
Notwithstanding the
foregoing, prior to May 15, 2007, the Company may at its option on one or more
occasions redeem (x) the Dollar Notes (which includes Additional Dollar Notes,
if any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Dollar Notes (which includes Additional Dollar Notes,
if any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 108.75%, and/or (y) the Euro Notes (which includes
Additional Euro Notes, if any) in an aggregate principal amount not to exceed
35% of the aggregate principal amount of the Euro Notes (which includes
Additional Euro Notes, if any) originally issued at a redemption price
(expressed as a percentage of principal amount) of 108.75%, in each case, plus
accrued and unpaid interest to the redemption date, with the net cash proceeds
from one or more Equity Offerings; provided,
however, that (1)

 

41

 

(A) at least 65% of such aggregate principal amount of
Dollar Notes (which includes Additional Dollar Notes, if any) and (B) at least
65% of such aggregate principal amount of Euro Notes (which includes Additional
Euro Notes, if any), remains outstanding immediately after the occurrence of
each such redemption (other than Notes held, directly or indirectly, by the
Company or its Affiliates); and (2) each such redemption occurs within 60 days
after the date of the related Equity Offering.

 

(d)                                
Special Redemption.  Notwithstanding the foregoing, in
the event that the Transactions have not been consummated on or prior to May
20, 2004, then the Company shall mandatorily redeem all the Notes on or prior
to May 21, 2004, at a redemption price in cash equal to 100% of the issue price
of the Notes plus accrued and unpaid interest to the date of redemption. 
Notice of such redemption shall be given to the Trustee no later than the close
of business on May 20, 2004.

 

(e)                                 
Any redemption
pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

 

               
SECTION 3.08.  Mandatory Redemption; Open Market Purchases.

 

The Company shall not be
required to make any mandatory redemption or sinking fund payments with respect
to the Notes.  The Company may at any time and from time to time purchase
Notes in the open market or otherwise.

 

               
SECTION 3.09.  Offer to Purchase by Application of Net Proceeds Offer
Amount.

 

In the event that,
pursuant to Section 4.10 hereof, the Company shall be required to commence
a Net Proceeds Offer (as defined in Section 4.10 hereof), it shall follow
the procedures specified below.

 

The Net Proceeds Offer
shall remain open for a period of 20 Business Days following its commencement
or such longer period as may be required by applicable law (the “Offer
Period”). No later than five Business Days after the termination of the Offer
Period (the “Purchase Date”), the Company shall purchase the Net Proceeds Offer
Amount or, if less than the Net Proceeds Offer Amount has been tendered, all
Notes tendered in response to the Net Proceeds Offer.  Payment for any
Notes so purchased shall be made in the same manner as interest payments are
made.

 

If the Purchase Date is
on or after an interest record date and on or before the related interest
payment date, any accrued and unpaid interest shall be paid to the Person in
whose name a Note is registered at the close of business on such record date,
and no additional interest shall be payable to Holders who tender Notes
pursuant to the Net Proceeds Offer.

 

Upon the commencement of
a Net Proceeds Offer, the Company shall send, by first class mail, a notice to
the Trustee and each of the Holders, with a copy to the Trustee. The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Notes pursuant to the Net Proceeds Offer. The Net Proceeds Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Net Proceeds Offer, shall state:

 

42

 

(a)                                 
that the Net Proceeds
Offer is being made pursuant to this Section 3.09 and Section 4.10
hereof and the length of time the Net Proceeds Offer shall remain open and, if
the Net Proceeds Offer is also made to holders of other Senior Subordinated
Debt of the Company or a Restricted Subsidiary of the Company pursuant to
Section 4.10 hereof, the notice shall identify such Senior Subordinated
Debt and state that the Net Proceeds Offer is also made to holders of such
Senior Subordinated Debt;

 

(b)                                
the Net Proceeds Offer
Amount, the purchase price and the Purchase Date;

 

(c)                                 
that any Note not
tendered or accepted for payment shall continue to accrue interest;

 

(d)                                
that, unless the
Company defaults in making such payment, any Note accepted for payment pursuant
to the Net Proceeds Offer shall cease to accrue interest after the Purchase
Date;

 

(e)                                 
that Holders electing
to have a portion of a Note purchased pursuant to a Net Proceeds Offer may only
elect to have such Note purchased in integral multiples of $1,000 (in the case
of Dollar Notes) and in integral multiples of €1,000 (in the case of Euro
Notes);

 

(f)                                   
that Holders electing
to have a Note purchased pursuant to any Net Proceeds Offer shall be required
to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a depositary, if appointed by the Company, or a
Paying Agent at the address specified in the notice at least three days before
the Purchase Date;

 

(g)                                
that Holders shall be
entitled to withdraw their election if the Company, the depositary or the
Paying Agent, as the case may be, receives, not later than the expiration of
the Offer Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;

 

(h)                                
that, if the
aggregate principal amount of Notes surrendered by Holders and other Senior
Subordinated Debt surrendered by the holders thereof exceeds the Offer Amount,
the Company shall select the Notes and other Senior Subordinated Debt of the
Company or a Restricted Subsidiary of the Company to be purchased on a pro rata
basis (based on the amounts of Notes and such other Senior Subordinated Debt
tendered and with such adjustments as may be deemed appropriate by the Company
so that only Notes or other Senior Subordinated Debt in denominations of $1,000
or integral multiples thereof (in the case of Dollar Notes), and denominations
of €1,000 or integral multiples thereof (in the case of Euro Notes), shall be
purchased); and

 

(i)                                    
that Holders whose
Notes were purchased only in part shall be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).

 

On or before the Purchase
Date, the Company shall, to the extent lawful, accept for payment, on a pro
rata basis to the extent necessary, the Net Proceeds Offer Amount of Notes

 

43

 

and other Senior Subordinated Debt of the Company or a
Restricted Subsidiary of the Company or portions thereof tendered pursuant to
the Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has been
tendered, all Notes and other Senior Subordinated Debt of the Company or a
Restricted Subsidiary of the Company or portions thereof tendered, and shall
deliver to the Trustee an Officers’ Certificate stating that such Notes or such
other Senior Subordinated Debt or portions thereof were accepted for payment by
the Company in accordance with the terms of this Section 3.09.  The
Company, the Depository, the Common Depository or the Paying Agent, as the case
may be, shall promptly (but in any case not later than five days after the
Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon written request from the Company shall authenticate and mail or deliver
such new Note to such Holder, in a principal amount equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly mailed
or delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Net Proceeds Offer on the Purchase Date.

 

Other than as
specifically provided in this Section 3.09, any purchase pursuant to this
Section 3.09 shall be made pursuant to the provisions of Sections 3.01
through 3.06 hereof.

 

To the extent that the
provisions of any securities laws or regulations conflict with this
Section 3.09 or Section 4.10 hereof, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 3.09 or Section 4.10
hereof.

 

ARTICLE 4

COVENANTS

 

               
SECTION 4.01.  Payment of Notes.

 

The Company shall pay or
cause to be paid the principal amount, premium, if any, and interest on the
Notes on the dates and in the manner provided in the Notes. Principal amount,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. New York time, in the case of Dollar Notes and as of 10:00 a.m.
London time, in the case of Euro Notes on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal amount, premium, if any, and interest then due. The Company shall
pay all Additional Interest, if any, in the same manner on the same dates and
in the amounts set forth in the Registration Rights Agreement.

 

The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue principal at a rate equal to the then applicable interest rate on
the Notes to the extent lawful; it shall pay interest (including postpetition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace period) at the same rate to
the extent lawful.

 

 

44

 

               
SECTION 4.02.  Maintenance of Office or Agency.

 

(a)                                 
The Company shall
maintain in the Borough of Manhattan, the City of New York, in London, England
and, so long as the Euro Notes are listed on the Luxembourg Stock Exchange and
the rules of such stock exchange so require, in Luxembourg, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee or any
Registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency.  If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee.

 

(b)                                
The Company may also
from time to time designate one or more other offices or agencies where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, in London, England and, so long as
the Euro Notes are listed on the Luxembourg Stock Exchange and the rules of
such stock exchange so require, in Luxembourg, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.

 

(c)                                 
The Company hereby
designates the Corporate Trust Office of the Trustee or its Agent, in the
Borough of Manhattan, The City of New York, and in London, England and the
office of the Luxembourg Paying Agent in Luxembourg, in each case, as such
office or agency of the Company in accordance with Section 2.03 hereof.

 

               
SECTION 4.03.  Reports.

 

(a)                                 
Whether or not
required by the rules and regulations of the SEC, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes, if not filed
electronically with the SEC (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such forms, including a
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” that describes the financial condition and results of operations of
the Company and its consolidated Subsidiaries (showing in reasonable detail,
either on the face of the financial statements or in the footnotes thereto and
in Management’s Discussion and Analysis of Financial Condition and Results of
Operations, the financial condition and results of operations of the Company
and its consolidated Subsidiaries) and, with respect to the annual information
only, a report thereon by the Company’s certified independent accountants and
(ii) all current reports that would be required to be filed with the SEC on Form
8-K if the Company were required to file such reports, in each case, within the
time periods specified in the SEC’s rules and regulations.  In addition,
following the consummation of the Registered Exchange Offer or the
effectiveness of the Shelf Registration Statement (as defined in the Appendix),
whether or not required by the rules and regulations of the SEC, the Company
shall file a copy of all such information and reports with the SEC for public
availability within the time periods specified in the SEC’s rules and
regulations (unless the SEC will not accept

 

45

 

such a filing) and make such information available to
securities analysts and prospective investors upon request. 
Notwithstanding the foregoing, such requirements shall be deemed satisfied
prior to the commencement of the Registered Exchange Offer or the effectiveness
of the Shelf Registration Statement by the filing when required with the SEC of
the Exchange Offer Registration Statement (as defined in the Registration
Rights Agreement) and/or Shelf Registration Statement, and any amendments
thereto, with such financial information that satisfies Regulation S-X of the
Securities Act.  The Company shall at all times comply with TIA § 314(a).

 

(b)                                
For so long as any
Notes remain outstanding, the Company and the Guarantors shall furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

 

(c)                                 
Should the Company
deliver to the Trustee any such information, reports or certificates or any
annual reports, information, documents and other reports pursuant to TIA
§ 314(a), delivery of such information, reports or certificates or any
annual reports, information, documents and other reports to the Trustee is for
informational purposes only and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).

 

               
SECTION 4.04.  Compliance Certificate.

 

(a)                                 
The Company and each
Guarantor (to the extent that such Guarantor is so required under the TIA)
shall deliver to the Trustee, within 90 days after the end of each fiscal year,
an Officers’ Certificate stating that a review of the activities of the Company
and its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event
of Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or requirement of notice provided under this
Indenture.  The Company also shall comply with Section 314(a)(4) of
the TIA.

 

(b)                                
The Company shall, so
long as any of the Notes are outstanding, deliver to the Trustee, forthwith
upon any Officer becoming aware of any Default or Event of Default, an

 

46

 

Officers’ Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.

 

               
SECTION 4.05.  [Intentionally Omitted].

 

               
SECTION 4.06.  Stay, Extension and Usury Laws.

 

The Company and each of
the Guarantors covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company and each of the
Guarantors (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

 

               
SECTION 4.07.  Restricted Payments.

 

The Company shall not,
and shall not cause or permit any of its Restricted Subsidiaries to, directly
or indirectly:

 

(1)                                 
declare or pay any dividend or
make any distribution on or in respect of shares of the Company’s or any
Restated Subsidiary’s Capital Stock to holders of such Capital Stock, including
any payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries (other than dividends or
distributions payable in Qualified Capital Stock of the Company or in options,
warrants or other rights to purchase such Qualified Capital Stock dividends or
distributions payable to the Company or a Restricted Subsidiary and other than
pro rata dividends or other distributions made by a Subsidiary that is not a Wholly-Owned
Subsidiary to minority stockholders (or owners of an equivalent interest in the
case of a Subsidiary that is an entity other than a corporation));

 

(2)                                 
purchase, redeem or otherwise
acquire or retire for value any (i) Capital Stock of the Company (ii) Capital
Stock of any direct or indirect parent of the Company held by Persons other
than the Company, (iii) Capital Stock of a Restricted Subsidiary of the Company
held by any Affiliate of the Company (other than a Restricted Subsidiary of the
Company) or (iv) warrants, rights or options to purchase or acquire shares of
any class of such Capital Stock;

 

(3)                                 
make any principal payment on,
purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for
value, prior to any scheduled final maturity, scheduled repayment or scheduled
sinking fund payment, any Indebtedness of the Company, or of any Guarantor,
that is subordinate or junior in right of payment to the Notes or any
Guarantee, as applicable (other than the purchase, defeasance or other
acquisition of such Indebtedness purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case
due within one year of such purchase, defeasance or other acquisition); or

 

(4)                                 
make any Investment (other than
Permitted Investments) (each of the foregoing actions set forth in clauses (1),
(2), (3) and (4) being referred to as a “Restricted Payment”);

 

47

 

if at
the time of such Restricted Payment or immediately after giving effect thereto:

 

(i)                                    
a
Default or an Event of Default shall have occurred and be continuing (or would
result therefrom); or

 

(ii)                                 
the
Company is not able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.09 hereof; or

 

(iii)                              
the
aggregate amount of Restricted Payments (including such proposed Restricted
Payment) declared or made subsequent to the Issue Date (other than Restricted
Payments made pursuant to clauses (2), (3), (4), (5), (6), (7), (8), (9), (10),
(11), (12), (13), (15) and (16) of the following paragraph) shall exceed the
sum of, without duplication:

 

(v) 50% of the cumulative Consolidated Net Income (or
if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss)
of the Company earned subsequent to April 3, 2004 and on or prior to the
date the Restricted Payment occurs (the “Reference Date”) (treating such period
as a single accounting period); provided,
however, that if, at the time of a proposed Restricted Payment under
this paragraph of this Section 4.07, the Consolidated Leverage Ratio of
the Company is less than 4.5 to 1, for purposes of calculating the availability
of amounts hereunder for such Restricted Payment only, the reference to 50% in
this clause (v) shall be deemed to be 75%; plus

 

(w) 100% of the aggregate net cash proceeds (including
the fair market value of property other than cash that would constitute
Marketable Securities or a Permitted Business) received by the Company from any
Person (other than (1) a Subsidiary of the Company and (2) Excluded
Contributions) from the issuance and sale subsequent to the Issue Date and on
or prior to the Reference Date of Qualified Capital Stock of the Company; plus

 

(x) without duplication of any amounts included in
clause (iii)(w) above, 100% of the aggregate net cash proceeds of any equity
contribution received subsequent to the Issue Date by the Company from a holder
of the Company’s Capital Stock (other than Excluded Contributions) (excluding,
in the case of clauses (iii)(w) and this (iii)(x), any net cash proceeds from
an Equity Offering to the extent used to redeem the Notes in compliance with
the provisions set forth under Section 3.07(c) hereof); plus

 

(y) the amount by which Indebtedness of the Company is
reduced on the Company’s balance sheet upon the conversion or exchange
subsequent to the Issue Date of any Indebtedness of the Company for Qualified
Capital Stock of the Company (less the amount of any cash, or the fair value of
any other property, distributed by the Company upon such conversion or
exchange); provided, however,
that the foregoing amount shall not exceed the net cash proceeds received by
the Company or any Restricted Subsidiary from the sale of such

 

48

 

Indebtedness (excluding net cash proceeds from sales
to a Subsidiary of the Company or to an employee stock ownership plan or a
trust established by the Company or any of its Subsidiaries for the benefit of
their employees); plus

 

(z) an amount equal to the sum of (I) 100% of the
aggregate net proceeds (including the fair market value of property other than
cash that would constitute Marketable Securities or a Permitted Business)
received by the Company or any Restricted Subsidiary (A) from any sale or other
disposition of any Investment (other than a Permitted Investment) in any Person
(including an Unrestricted Subsidiary) made by the Company and its Restricted
Subsidiaries and (B) representing the return of capital or principal (excluding
dividends and distributions otherwise included in Consolidated Net Income) with
respect to such Investment, and (II) the portion (proportionate to the
Company’s equity interest in an Unrestricted Subsidiary) of the fair market
value of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary; provided, however, that, in the
case of item (II), the foregoing sum shall not exceed, in the case of any
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 Unrestricted Subsidiary and; provided  further, that no
amount will be included under this clause (z) to the extent it is already
included in Consolidated Net Income.

 

Notwithstanding the
foregoing, the provisions set forth in the immediately preceding paragraph
shall not prohibit:

 

(1)                                 
the payment of any dividend or
the consummation of any irrevocable redemption within 60 days after the date of
declaration of such dividend or notice of such redemption if the dividend or
payment of the redemption price, as the case may be, would have been permitted
on the date of declaration or notice;

 

(2)                                 
any Restricted Payment made out
of the net cash proceeds of the substantially concurrent sale of, or made by
exchange for, Qualified Capital Stock of the Company (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) or a substantially concurrent cash capital
contribution received by the Company from its shareholders; provided, however, that the net
cash proceeds from such sale or such cash capital contribution (to the extent
so used for such Restricted Payment) shall be excluded from the calculation of
amounts under clauses (iii)(w) and (iii)(x) of the immediately preceding
paragraph;

 

(3)                                 
the acquisition of any
Indebtedness of the Company or a Guarantor that is subordinate or junior in
right of payment to the Notes or the applicable Guarantee through the
application of net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Company) of Refinancing Indebtedness that is
subordinate or junior in right of payment to the Notes or the applicable
Guarantee;

 

49

 

(4)                                 
if no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof, the declaration and payment of dividends to holders of any class or
series of Designated Preferred Stock (other than Disqualified Capital Stock),
issued after the Issue Date; provided
that, at the time of the issuance of such stock, the Company, after giving
effect to such issuance on a pro forma basis, would have had a Consolidated
Fixed Charge Coverage Ratio of at least 2.0 to 1.0;

 

(5)                                 
payments to Holdings for the
purpose of permitting, and in an amount equal to the amount required to permit,
Holdings to redeem or repurchase Holdings’ common equity or options in respect
thereof, in each case in connection with the repurchase provisions of employee
stock option or stock purchase agreements or other agreements to compensate
management employees or upon the death, disability, retirement, severance or
termination of employment of management employees; provided that all such redemptions or
repurchases pursuant to this clause (5) shall not exceed in any fiscal year the
sum of (A) $5.0 million plus (B) any amounts not utilized in any preceding
fiscal year following the Issue Date that were otherwise available under this
clause for such purchases (which aggregate amount shall be increased by the
amount of any net cash proceeds received from the sale since the Issue Date of
Capital Stock (other than Disqualified Capital Stock) to members of the Company’s
management team that have not otherwise been applied to the payment of
Restricted Payments pursuant to the terms of clause (iii) of the immediately
preceding paragraph or clause (2) of this paragraph and by the cash proceeds of
any “key-man” life insurance policies which are used to make such redemptions
or repurchases) plus (C) the amount of any cash bonuses otherwise payable to
members of management, directors or consultants of the Company or any of its
Subsidiaries or any of its direct or indirect parent corporations in connection
with the Transactions that are foregone in return for the receipt of Equity
Interests of the Company or any direct or indirect parent corporation of the
Company pursuant to a deferred compensation plan of such corporation; provided, further, that the
cancellation of Indebtedness owing to the Company from members of management of
the Company or any of its Restricted Subsidiaries in connection with any
repurchase of Capital Stock of Holdings (or warrants or options or rights to
acquire such Capital Stock) will not be deemed to constitute a Restricted
Payment under this Indenture;

 

(6)                                 
the making of distributions,
loans or advances Holdings to be used by Holdings solely (A) to pay its
franchise taxes and other fees required to maintain its corporate existence and
(B) to pay for operating expenses incurred by Holdings or any indirect parent
of the Company in the ordinary course of its business; provided, however, that, in the
case of clause (B), such distributions, loans or advances shall not, in the
aggregate, exceed $5.0 million per annum;

 

(7)                                 
payments to Holdings, without
duplication, in respect of Federal, state and local taxes directly attributable
to (or arising as a result of) the operations of the Company and its
consolidated Subsidiaries and actually used by Holdings to pay such taxes; provided, however, that the
amount of such payments in any fiscal year do not exceed the amount that the
Company and its consolidated Subsidiaries would be required to pay in respect
of Federal, state and local taxes for such fiscal year were the Company to pay
such taxes as a stand-alone taxpayer;

 

50

 

(8)                                 
repurchases of Capital Stock
deemed to occur upon the exercise of stock options, warrants or other
convertible securities if such Capital Stock represents a portion of the
exercise price thereof;

 

(9)                                 
additional Restricted Payments
in an aggregate amount not to exceed $30.0 million;

 

(10)                           
Permitted Acquisition Payments;

 

(11)                           
payments of dividends on
Disqualified Capital Stock issued in compliance with Section 4.09 hereof;

 

(12)                           
if no Default or Event of
Default shall have occurred and be continuing, Restricted Payments made with
Net Cash Proceeds from Asset Sales remaining after application thereof as
required by Section 4.10 hereof (including after the making by the Company
of any Net Proceeds Offer required to be made by the Company pursuant to such
Section and the application of the Net Proceeds Offer Amount to purchase
Notes tendered therein);

 

(13)                           
upon occurrence of a Change of
Control and within 60 days after the completion of the Change of Control Offer
pursuant to Section 4.15 hereof (including the purchase of all Notes
tendered), any purchase or redemption of Obligations of the Company that are
subordinate or junior in right of payment to the Notes required pursuant to the
terms thereof as a result of such Change of Control at a purchase or redemption
price not to exceed 101% of the outstanding principal amount thereof, plus
accrued and unpaid interest thereon, if any; provided, however, that (A) at the time of such
purchase or redemption, no Default or Event of Default shall have occurred and
be continuing (or would result therefrom), (B) the Company would be able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.09 hereof after giving pro
forma effect to such Restricted Payment and (C) such purchase or redemption is
not made, directly or indirectly, from the proceeds of (or made in anticipation
of) any issuance of Indebtedness by the Company or any Subsidiary;

 

(14)                           
so long as no Default has
occurred and is continuing or would be caused thereby, the payment of dividends
on the Company’s Common Stock (or dividends, distributions or advances to
Holdings or any other direct or indirect parent of the Company to allow
Holdings or such other direct or indirect parent to pay dividends on its Common
Stock), following the first public offering of the Company’s Common Stock (or
of Holdings’ or such other direct or indirect parent’s Common Stock, as the
case may be) after the date of the Indenture, of, whichever is earlier, (i) in
the case of the first public offering of the Company’s Common Stock, up to 6%
per annum of the Net Cash Proceeds received by the Company in such public
offering or (ii) in the case of the first public offering of Holdings’ or such
other direct or indirect parent’s Common Stock, up to 6% per annum of the
amount contributed by Holdings (or contributed directly or indirectly by such
other direct or indirect parent, as the case may be) to the Company from the
Net Cash Proceeds received by Holdings or such other direct or indirect parent
in such public offering;

 

(15)                           
Investments that are made with
Excluded Contributions; and

 

51

(16)                           
payments to Holdings of fees and
expenses payable other than to Affiliates of Holdings related to any
unsuccessful equity or debt offering not prohibited by this Indenture.

 

In determining the
aggregate amount of Restricted Payments made subsequent to the Issue Date in
accordance with clause (iii) of the first paragraph of this Section 4.07,
(a) amounts expended pursuant to clauses (1) and (14) of the immediately
preceding paragraph shall be included in such calculation, and (b) amounts
expended pursuant to clauses (2), (3), (4), (5), (6), (7), (8), (9), (10),
(11), (12), (13), (15) and (16) of the immediately preceding paragraph shall be
excluded from such calculation.

 

The Board of Directors of
the Company may designate any Restricted Subsidiary of the Company to be an
Unrestricted Subsidiary as specified in the definition of “Unrestricted
Subsidiary”.  For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the
extent repaid in cash) in the Subsidiary so designated shall be deemed to be
Restricted Payments at the time of the designation and shall reduce the amount
available for Restricted Payments under the first paragraph of this
Section 4.07.  All of those outstanding Investments shall be deemed
to constitute Investments in an amount equal to the fair market value of the
Investments at the time of such designation.  Such designation shall only
be permitted if the Restricted Payment would be permitted at the time and if
the Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.

 

               
SECTION 4.08.  Dividend and Other Payment Restrictions Affecting
Subsidiaries.

 

The Company shall not,
and shall not cause or permit any of its Restricted Subsidiaries to, directly
or indirectly, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary of the Company to: (a) pay dividends or make any other
distributions on or in respect of its Capital Stock (it being understood that
the priority of any Preferred Stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on Common
Stock shall not be deemed a restriction on the ability to make distributions on
Capital Stock); (b) make loans or advances or pay any Indebtedness or other
obligation owed to the Company or any Guarantor (it being understood that the
subordination of loans or advances made to the Company or any Guarantor to
other Indebtedness incurred by the Company or any Guarantor  shall not be
deemed a restriction on the ability to make loans or advances); or (c) transfer
any of its property or assets to the Company or any Guarantor, except, with
respect to clauses (a), (b) and (c), for such encumbrances or restrictions
existing under or by reason of: (1) applicable law; (2) this Indenture; (3)
non-assignment provisions of any contract or any lease of any Restricted
Subsidiary of the Company entered into in the ordinary course of business; (4)
any instrument governing Acquired Indebtedness, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person or the properties or assets of the Person so
acquired; (5) the Credit Facility as entered into on the Issue Date or any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof; provided that any restrictions imposed pursuant to any
such amendment, modification, restatement, renewal, increase, supplement,
refunding, replacement or refinancing are ordinary and customary with respect
to syndicated bank loans (under the relevant circumstances), as determined in
good faith by the Company’s Board of Directors, which determination will be
conclusive; (6) agreements existing on the Issue Date to the extent and in

 

52

 

the manner such agreements are in effect on the Issue
Date; (7) restrictions on the transfer of assets subject to any Lien permitted
under this Indenture imposed by the holder of such Lien; (8) restrictions
imposed by any agreement to sell assets or Capital Stock of a Restricted Subsidiary
permitted under this Indenture to any Person pending the closing of such sale;
(9) any agreement or instrument governing Capital Stock of any Person that is
acquired; (10) any Purchase Money Note or other Indebtedness or other
contractual requirements of a Securitization Entity in connection with a
Qualified Securitization Transaction, as determined in good faith by the
Company’s Board of Directors, which determination will be conclusive; provided that such restrictions apply
only to such Securitization Entity; (11) other Indebtedness outstanding on the
Issue Date or permitted to be issued or incurred under this Indenture; provided that any such restrictions
are ordinary and customary with respect to the type of Indebtedness being
incurred (under the circumstances), as determined in good faith by the
Company’s Board of Directors, which determination will be conclusive; (12)
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business; and (13) any
encumbrances or restrictions imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in
clauses (1) through (4) and (6) through (12) above; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the Company’s
Board of Directors (evidenced by a Board Resolution) whose judgment shall be
conclusively binding, not materially more restrictive with respect to such
dividend and other payment restrictions than those contained in the dividend or
other payment restrictions prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing.

 

               
SECTION 4.09.  Incurrence of Indebtedness.

 

The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur, issue, assume, guarantee, acquire, become liable, contingently
or otherwise, with respect to, or otherwise become responsible for payment of
(collectively, “incur”) any Indebtedness (other than Permitted Indebtedness); provided, however, that if no
Default or Event of Default shall have occurred and be continuing at the time
of or as a consequence of the incurrence of any such Indebtedness, the Company
and the Guarantors may incur Indebtedness (including, Acquired Indebtedness),
and Restricted Subsidiaries of the Company that are not Guarantors may incur
Acquired Indebtedness in an aggregate amount not to exceed $20.0 million at any
time outstanding, in each case if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof, the Consolidated
Fixed Charge Coverage Ratio of the Company would have been greater than 2.0 to
1.0.  The maximum amount of Indebtedness that the Company and its
Restricted Subsidiaries may incur pursuant to this covenant shall not be deemed
to be exceeded, with respect to any outstanding Indebtedness, solely as a
result of fluctuations in the exchange rate of currencies.  When
calculating capacity for the incurrence of additional Indebtedness by the
Company and its Restricted Subsidiaries pursuant to this covenant the exchange
rate of currencies shall be measured as of the date of such calculation.

 

53

 

               
SECTION 4.10.  Asset Sales.

 

The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, consummate an Asset
Sale unless: (i) the Company or the applicable Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets sold or otherwise disposed of (as
determined in good faith by the Company’s Board of Directors), which
determination will be conclusive; (ii) at least 75% of the consideration
received by the Company or the Restricted Subsidiary, as the case may be, from
such Asset Sale shall be in the form of cash or Cash Equivalents; provided, however, that the
amount of: (a) any liabilities (as shown on the Company’s or such Restricted
Subsidiary’s most recent balance sheet) of the Company or such Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Notes) that
are assumed by the transferee of any such assets; (b) any notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are converted by the Company or such Restricted Subsidiary into
cash within 180 days of the receipt thereof (to the extent of the cash
received); and (c) any Designated Noncash Consideration received by the Company
or any of its Restricted Subsidiaries in such Asset Sale having an aggregate
fair market value, taken together with all other Designated Noncash
Consideration received pursuant to this clause (c) that is at that time
outstanding, not to exceed 5% of Total Assets at the time of the receipt of such
Designated Noncash Consideration (with the fair market value of each item of
Designated Noncash Consideration being measured at the time received and
without giving effect to subsequent changes in value), shall, in each of (a),
(b) and (c) above, be deemed to be cash for the purposes of this provision or
for purposes of the second paragraph of this Section 4.10; and (iii) upon
the consummation of an Asset Sale, the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset
Sale within 365 days of receipt thereof either (A) to prepay any Senior Debt,
or Indebtedness of a Restricted Subsidiary that is not a Guarantor and, in the
case of any such Indebtedness under any revolving credit facility, effect a corresponding
reduction in the availability under such revolving credit facility (or effect a
permanent reduction in the availability under such revolving credit facility
regardless of the fact that no prepayment is required in order to do so (in
which case no prepayment should be required)), (B) to reinvest in Productive
Assets (provided that this
requirement shall be deemed satisfied if the Company or such Restricted
Subsidiary by the end of such 365-day period has entered into a binding
agreement under which it is contractually committed to reinvest in Productive
Assets and such investment is consummated within 120 days from the date on
which such binding agreement is entered into and, with respect to the amount of
such investment, the reference to the 366th day after an Asset Sale in the
second following sentence shall be deemed to be a reference to the 121st day
after the date on which such binding agreement is entered into (but only if
such 121st day occurs later than such 366th day)), or (C) a combination of
prepayment and investment permitted by the foregoing clauses (iii)(A) and
(iii)(B).  Pending the final application of any such Net Cash Proceeds,
the Company or such Restricted Subsidiary may temporarily reduce Indebtedness
under a revolving credit facility, if any, or otherwise invest such Net Cash
Proceeds in Cash Equivalents. On the 366th day after an Asset Sale or such
earlier date, if any, as the Board of Directors of the Company or of such
Restricted Subsidiary determines by Board Resolution not to apply the Net Cash
Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B)
and (iii)(C) of the next preceding sentence (each, a “Net Proceeds Offer
Trigger Date”), such aggregate amount of Net Cash Proceeds which have not been applied
on or before such Net Proceeds Offer Trigger Date as permitted in clauses
(iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each a “Net
Proceeds Offer Amount”) shall be applied by the Company

 

54

 

or such Restricted Subsidiary to make an offer to
purchase (the “Net Proceeds Offer”) on a date (the “Net Proceeds Offer Payment
Date”) not less than 30 nor more than 60 days following the applicable Net
Proceeds Offer Trigger Date, from all Holders and holders of any other Senior
Subordinated Debt of the Company or a Restricted Subsidiary requiring the
making of such an offer, on a pro rata basis, the maximum amount of Notes and
such other Senior Subordinated Debt that may be purchased with the Net Proceeds
Offer Amount at a price equal to 100% of their principal amount (or, in the
event such other Senior Subordinated Debt was issued with significant original
issue discount, 100% of the accreted value thereof), plus accrued and unpaid
interest thereon, if any, to the date of purchase (or, in respect of such other
Senior Subordinated Debt, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Debt); provided, however, that if at any time any non-cash
consideration (including any Designated Noncash Consideration) received by the
Company or any Restricted Subsidiary of the Company, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise disposed
of for cash (other than interest received with respect to any such non-cash
consideration), then such conversion or disposition shall be deemed to
constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be
applied in accordance with this Section 4.10. Notwithstanding the foregoing,
if a Net Proceeds Offer Amount is less than $15.0 million, the application of
the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net
Proceeds Offer may be deferred until such time as such Net Proceeds Offer
Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising
subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net
Proceeds Offer Amount from all Asset Sales by the Company and its Restricted
Subsidiaries aggregates at least $15.0 million, at which time the Company or
such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all
Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds
Offer (the first date the aggregate of all such deferred Net Proceeds Offer
Amounts is equal to $15.0 million or more shall be deemed to be a Net Proceeds
Offer Trigger Date).

 

Notwithstanding the
immediately preceding paragraph, the Company and its Restricted Subsidiaries
shall be permitted to consummate an Asset Sale without complying with such
paragraph to the extent that: (i) at least 75% of the consideration for such
Asset Sale constitutes Productive Assets, cash, Cash Equivalents and/or
Marketable Securities; and (ii) such Asset Sale is for fair market value; provided that any consideration
consisting of cash, Cash Equivalents and/or Marketable Securities received by
the Company or any of its Restricted Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net Cash
Proceeds subject to the provisions of the preceding paragraph.

 

Notice of each Net
Proceeds Offer will be mailed to the record Holders as shown on the register of
Holders within 30 days following the Net Proceeds Offer Trigger Date, with a
copy to the Trustee, and shall comply with the procedures set forth in
Section 3.09 hereof.  To the extent that the aggregate amount of
Notes and other Senior Subordinated Debt tendered pursuant to a Net Proceeds
Offer is less than the Net Proceeds Offer Amount, the Company may use any
remaining Net Proceeds Offer Amount for general corporate purposes or for any
other purpose not prohibited by this Indenture. Upon completion of any such Net
Proceeds Offer, the Net Proceeds Offer Amount shall be reset at zero.

 

The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations

 

55

 

are applicable in connection with the repurchase of
Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of this
Section 4.10, the Company shall comply with the applicable securities laws
and regulations and shall not be deemed to have breached its obligations under
this Section 4.10 by virtue thereof.

 

               
SECTION 4.11.  Transactions with Affiliates.

 

(a)                                 
The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or permit to occur any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates involving aggregate consideration in excess
of $3.0 million (an “Affiliate Transaction”), other than Affiliate Transactions
on terms that are not materially less favorable than those that might reasonably
have been obtained in a comparable transaction at such time on an arm’s-length
basis from a Person that is not an Affiliate of the Company; provided, however, that for a
transaction or series of related transactions with an aggregate value of $10.0 million
or more, at the Company’s option, either: (i) a majority of the disinterested
members of the Board of Directors of the Company shall determine in good faith
that such Affiliate Transaction is on terms that are not materially less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm’s-length basis from a Person that is not an
Affiliate of the Company, or (ii) the Board of Directors of the Company or any
such Restricted Subsidiary party to such Affiliate Transaction shall have
received an opinion from a nationally recognized investment banking, appraisal
or accounting firm that such Affiliate Transaction is either fair, from a
financial standpoint, to the Company and its Restricted Subsidiaries or is on
terms not materially less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm’s-length basis from
a Person that is not an Affiliate of the Company; and provided, further, that for an
Affiliate Transaction with an aggregate value of $20.0 million or more the
Board of Directors of the Company or any such Restricted Subsidiary party to
such Affiliate Transaction shall have received a written opinion from a
nationally recognized investment banking, appraisal or accounting firm that
such Affiliate Transaction is either fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries or is on terns not materially less
favorable than those that might reasonably have been obtained in a comparable
transaction at such time on an arm’s-length basis from a Person that is not an
Affiliate of the Company.

 

(b)                                
The restrictions set
forth in Section 4.11(a) hereof shall not apply to: (i) reasonable fees and
compensation paid to, and indemnity provided on behalf of, officers, directors,
employees or consultants of the Company or any Restricted Subsidiary of the
Company as determined in good faith by the Company’s Board of Directors or
senior management; (ii) transactions exclusively between or among the Company
and any of its Restricted Subsidiaries or any entity that becomes a Restricted
Subsidiary as a result of such transaction (other than a Securitization Entity)
or exclusively between or among such Restricted Subsidiaries or any entity that
becomes a Restricted Subsidiary as a result of such transaction, provided that such transactions are
not otherwise prohibited by this Indenture; (iii) any agreement as in effect as
of the Issue Date or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) or by any replacement

 

56

 

agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue Date as
determined in good faith by the Board of Directors of Company; (iv) Restricted
Payments or Permitted Investments permitted by this Indenture; (v) transactions
effected as part of a Qualified Securitization Transaction; (vi) the payment of
customary annual management, consulting and advisory fees and related expenses
to the Permitted Holders and their Affiliates made pursuant to any financial advisory,
financing, underwriting or placement agreement or in respect of other
investment banking activities, including, without limitation, in connection
with acquisitions or divestitures which are approved by the Board of Directors
of the Company or such Restricted Subsidiary in good faith; (vii) payments or
loans allowed by law to employees or consultants that are approved by the Board
of Directors of the Company in good faith; (viii) sales of Qualified Capital
Stock; (ix) the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of its obligations under the terms of, any
stockholders’ agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Issue Date
and any similar agreements which it may enter into thereafter; provided, however, that the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the Issue Date
shall only be permitted by this clause (ix) to the extent that the terms of any
such amendment or new agreement are not disadvantageous to the Holders of Notes
in any material respect; (x) transactions permitted by, and complying with, the
provisions of Article 5 and Section 11.06 hereof; (xi) any issuance
of securities or other payments, awards, 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 of the Company;
(xii) transactions in which the Company or any Restricted Subsidiary delivers
to the Trustee a letter from a nationally recognized investment banking,
appraisal or accounting firm stating that such transaction is fair to the
Company or such Restricted Subsidiary from a financial point of view; and
(xiii) 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 that are fair to
the Company or the Restricted Subsidiaries, in the reasonable determination of
the members of the Board of Directors of the Company, which determinations shall
be conclusive, or are on terms at least as favorable as might reasonably have
been obtained at such time from an unaffiliated party.

 

               
SECTION 4.12.  Liens.

 

The Company shall not,
and shall not cause or permit any Guarantor to, incur any Secured Debt that is
not senior debt of such Person, unless contemporaneously therewith such Person
makes effective provision to secure the Notes or the relevant Guarantee, as
applicable, equally and ratably with such Secured Debt for so long as such Secured
Debt is secured by a Lien (the “Initial Lien”).  Any Lien created for the
benefit of the Holders of the Notes pursuant to the preceding sentence shall
provide by its terms that such Lien shall be automatically and unconditionally
released and discharged upon the release and discharge of the Lien securing the
other Secured Debt and that holders of such other Secured Debt may exclusively
control the disposition of property subject to the Initial Lien.

 

57

 

               
SECTION 4.13.  Conduct of Business.

 

The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, engage in any
businesses a majority of whose revenues are not derived from businesses that
are the same or reasonably similar, ancillary or related to, or a reasonable
extension, development or expansion of, the businesses in which the Company and
its Restricted Subsidiaries are engaged on the Issue Date (which shall include,
without limitation, business or operations of the Company’s suppliers and
customers).  Holdings shall not engage in any business other than managing
its investment in the Company and any business incidental thereto (including
issuing securities to finance such investment).

 

               
SECTION 4.14.  Corporate Existence.

 

Subject to Article 5
and Section 11.06 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Restricted Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Restricted
Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the
loss thereof would not have an adverse effect on the ability of the Company to
perform its obligations under the Notes or this Indenture.

 

               
SECTION 4.15.  Offer to Repurchase upon Change of Control.

 

(a)                                 
If a Change of
Control occurs, each Holder shall have the right to require the Company to
purchase all or a portion of such Holder’s Notes pursuant to the offer
described below (the “Change of Control Offer”), at a purchase price equal to
101% of the principal amount thereof plus accrued interest to the date of
purchase.  Within 30 days following the date upon which the Change of
Control occurred, the Company must send, by first class mail, a notice to the
Trustee and each Holder and, so long as the Notes are listed on the Luxembourg
Stock Exchange, publish such notice in a Luxembourg newspaper of general
circulation, which notice shall govern the terms of the Change of Control
Offer. Such notice shall state, among other things, the purchase date, which
must be no earlier than 30 days nor later than 60 days from the date such
notice is mailed, other than as may be required by law (the “Change of Control
Payment Date”). Holders electing to have a Dollar Note or Euro Note purchased
pursuant to a Change of Control Offer shall be required to surrender the Dollar
Note or Euro Note, as the case may be, with the form entitled “Option of Holder
to Elect Purchase” on the reverse of the Dollar Note or Euro Note, as the case
may be, completed, to the Dollar Paying Agent or Euro Paying Agent as the case
may be, at the address specified in the notice prior to the close of business
on the third Business Day prior to the Change of Control Payment Date.

 

(b)                                
On the Change of
Control Payment Date, the Company shall, to the extent lawful, (1) accept for
payment all Notes or portions thereof properly tendered pursuant to the Change
of Control Offer, (2) deposit with the Dollar Paying Agent or Euro Paying
Agent, as the case may be, an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof

 

58

 

so tendered and (3) deliver or cause to be delivered
to the applicable Trustee the Notes so accepted together with an Officers’
Certificate stating the aggregate principal amount of Dollar Notes or Euro
Notes or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to each Holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail or
deliver (or cause to be transferred by book entry) to each Holder a new Note
equal in principal amount to any unpurchased portion of the Notes surrendered,
if any; provided that each
such new Note will be in a principal amount of $1,000 or an integral multiple
thereof (in the case of Dollar Notes) or in a principal amount of €1,000 or an
integral multiple thereof (in the case of Euro Notes).  The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

 

Prior to the mailing of
the notice referred to in Section 4.15(a) above, but in any event within
30 days following any Change of Control, the Company shall: (i) repay in full
all Indebtedness under the Credit Facility and all other Senior Debt the terms
of which require repayment upon a Change of Control; or (ii) obtain the
requisite consents under the Credit Facility and all such other Senior Debt to
permit the repurchase of the Notes as provided below. The Company’s failure to
comply with the covenant described in the immediately preceding sentence shall
constitute an Event of Default described in clause (c) and not in clause (b)
under Section 6.01 hereof.

 

(c)                                 
The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act to the extent
such laws and regulations are applicable in connection with the repurchase of
Notes pursuant to a Change of Control Offer. To the extent that the Company
complies with the provisions of any such securities laws or regulations, the
Company shall not be deemed to have breached its obligations under this
Section 4.15.

 

(d)                                
Notwithstanding
anything to the contrary in this Section 4.15, 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 4.15 hereof and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.

 

               
SECTION 4.16.  No Senior Subordinated Debt.

 

The Company shall not,
and shall not permit any Guarantor to, incur or suffer to exist Indebtedness
that is senior in right of payment to the Notes or such Guarantor’s Guarantee,
as the case may be, and subordinate in right of payment to any other
Indebtedness of the Company or such Guarantor, as the case may be; provided that the foregoing does not
prohibit subordination of Liens among holders of Senior Debt.

 

               
SECTION 4.17.  Future Guarantees by Domestic Subsidiaries.

 

At any time at which (i)
the Company’s Credit Facilities require a guarantee of any of the Domestic
Subsidiaries or (ii) the Domestic Subsidiaries have aggregate Indebtedness
outstanding of $75.0 million or more owed to Persons other than the Company or
any Restricted Subsidiary, the Company shall cause each of its Domestic
Subsidiaries to execute and deliver a supplemental

 

59

 

indenture to the Indenture, providing for a senior
subordinated guarantee of payment of the Notes by such Domestic Subsidiary; provided, however, that such
Domestic Subsidiary need not execute and deliver such a supplemental indenture
for so long as such Domestic Subsidiary has Total Assets of $10,000 or less,
total Indebtedness of $10,000 or less and does not own any of the material
Intellectual Property of the Company and its Subsidiaries.

 

               
SECTION 4.18.  Limitation on Preferred Stock of Restricted Subsidiaries.

 

The Company shall not
permit any of its Restricted Subsidiaries to issue any Preferred Stock (other
than to the Company or to a Restricted Subsidiary of the Company) or permit any
Person (other than the Company or a Restricted Subsidiary of the Company) to
own any Preferred Stock of any Restricted Subsidiary of the Company, other than
Permitted Subsidiary Preferred Stock. The provisions of this Section 4.18
will not apply to (w) any of the Guarantors for so long as such Restricted
Subsidiary remains a Guarantor, (x) any transaction as a result of which
neither the Company nor any of its Restricted Subsidiaries will own any Capital
Stock of the Restricted Subsidiary whose Preferred Stock is being issued or
sold and (y) Preferred Stock (including Disqualified Capital Stock) that is
issued in compliance with Section 4.09 hereof.

 

ARTICLE 5

SUCCESSORS

 

               
SECTION 5.01.  Merger, Consolidation, or Sale of Assets.

 

The Company shall not, in
a single transaction or series of related transactions, consolidate or merge
with or into any Person, or sell, assign, transfer, lease, convey or otherwise
dispose of (or cause or permit any Restricted Subsidiary of the Company to
sell, assign, transfer, lease, convey or otherwise dispose of) all or
substantially all of the Company’s assets (determined on a consolidated basis
for the Company and the Company’s Restricted Subsidiaries) to any Person unless
(i) either: (a) the Company shall be the surviving or continuing corporation;
or (b) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, transfer, lease, conveyance or other disposition the properties and
assets of the Company and of the Company’s Restricted Subsidiaries
substantially as an entirety (the “Surviving Entity”): (x) shall be a
corporation organized and validly existing under the laws of the United States
of America or any State thereof or the District of Columbia; and (y) shall
expressly assume, by supplemental indenture (in form and substance satisfactory
to the Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, premium, if any, and interest on all of the Notes
and the performance of every covenant and all obligations of the Company under
the Notes, this Indenture and the Registration Rights Agreement to be performed
or observed on the part of the Company; (ii) except in the case of a merger of
the Company with or into a Wholly-Owned Restricted Subsidiary of the Company
and except in the case of a merger entered into solely for the purpose of
reincorporating the Company in another jurisdiction, immediately after giving
effect to such transaction and the assumption contemplated by clause (i)(b)(y)
above (including giving effect to any Indebtedness and Acquired Indebtedness
incurred in connection with or in respect of such transaction), the Company or
such Surviving Entity, as the case may be, shall be able to incur at least
$1.00 of

 

60

 

additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.09 hereof, (iii) except in the case of
a merger of the Company with or into a Wholly-Owned Restricted Subsidiary of
the Company and except in the case of a merger entered into solely for the
purpose of reincorporating the Company in another jurisdiction, immediately
after giving effect to such transaction and the assumption contemplated by
clause (i)(b)(y) above (including, without limitation, giving effect to any
Indebtedness and Acquired Indebtedness incurred and any Lien granted in
connection with or in respect of the transaction), no Default or Event of
Default shall have occurred or be continuing; and (iv) the Company or the
Surviving Entity shall have delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.

 

For purposes of the
foregoing, the transfer (by lease, assignment, sale or otherwise, in a single
transaction or series of transactions) of all or substantially all of the
properties or assets of one or more Subsidiaries of the Company the Capital
Stock of which constitutes all or substantially all of the properties and
assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company. However,
transfer of assets (i) between or among the Company and its Restricted
Subsidiaries, (ii) between and among Foreign Subsidiaries that are Restricted
Subsidiaries or (iii) from Foreign Subsidiaries to the Company or a Guarantor
will not be subject to this Section 5.01.

 

Notwithstanding anything
in this Section 5.01 to the contrary, the merger of PP Acquisition
Corporation with and into Polypore, Inc. on the Issue Date shall be permitted
under this Indenture without complying with the requirements of this
Section 5.01.

 

               
SECTION 5.02.  Successor Corporation Substituted.

 

Upon any consolidation,
combination or merger, or any transfer of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, in which the
Company is not the continuing corporation, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
lease or transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of the Company under this Indenture and the
Notes with the same effect as if such surviving entity had been named as such
and that, in the event of a conveyance or transfer (but not a lease), the
conveyor or transferor (but not a lessor) shall be released from the provisions
of this Indenture.

 

61

 

ARTICLE 6

DEFAULTS AND REMEDIES

 

               
SECTION 6.01.  Events of Default.

 

“Event of Defaults” are:

 

(a)                                 
the failure to pay
interest or any Additional Interest (as required by the Registration Rights
Agreement) on any Notes when the same becomes due and payable if the default
continues for a period of 30 days (whether or not such payment shall be
prohibited by Article 10 or Article 12 hereof);

 

(b)                                
the failure to pay
the principal of or premium, if any, on any Notes when such principal or
premium, if any, becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer on the date
specified for such payment in the applicable offer to purchase) (whether or not
such payment shall be prohibited by Article 10 or Article 12 hereof);

 

(c)                                 
a default in the
observance or performance of any other covenant or agreement contained in this
Indenture which default continues for a period of 30 days after the Company
receives written notice specifying the default (and demanding that such default
be remedied) from the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Notes (except in the case of a default with respect to
Section 5.01 or Section 11.06 hereof, which will constitute an Event
of Default with such notice requirement but without such passage of time
requirement);

 

(d)                                
the failure to pay at
final stated maturity (giving effect to any applicable grace periods and any
extensions thereof) the principal amount of any Indebtedness of the Company or
any Significant Subsidiary of the Company (other than a Securitization Entity),
or the acceleration of the final stated maturity of any such Indebtedness, if
the aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness, whether such Indebtedness now
exists, or is created after the date of this Indenture, in default for failure
to pay principal at final maturity or which has been accelerated, aggregates $20.0
million or more at any time;

 

(e)                                 
one or more judgments
in an aggregate amount in excess of $20.0 million (which are not covered by
insurance or indemnity as to which the insurer or a creditworthy indemnitor has
not disclaimed coverage) shall have been rendered against the Company or any of
its Significant Subsidiaries or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary and such judgments remain undischarged, unpaid or unstayed for a
period of 60 days after such judgment or judgments become final and
non-appealable;

 

(f)                                   
the Company or any of
its Significant Subsidiaries or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:

 

(i)                                    
commences
a voluntary case;

 

(ii)                                 
consents
to the entry of an order for relief against it in an involuntary case;

 

62

 

(iii)                              
consents
to the appointment of a custodian of it or for all or substantially all of its
property; or

 

(iv)                             
makes
a general assignment for the benefit of its creditors;

 

(g)                                
a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(i)                                    
is
for relief against the Company or any of its Significant Subsidiaries or group
of Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary;

 

(ii)                                 
appoints
a custodian of the Company or any of its Significant Subsidiaries or for all or
substantially all of the property of the Company or any of its Significant
Subsidiaries or group of Restricted Subsidiaries that, taken together (as of
the latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary; or

 

(iii)                              
orders
the liquidation of the Company or any of its Significant Subsidiaries or group
of Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect
for 60 consecutive days; or

 

(h)                                
any Guarantee of a
Significant Subsidiary, or group of Restricted Subsidiaries that, taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries) would constitute a Significant
Subsidiary, ceases to be in full force and effect (except as contemplated by
the terms of this Indenture) or is declared null and void in a judicial
proceeding or any Guarantor that is a Significant Subsidiary or group of
Guarantors that taken together (as of the latest audited consolidated financial
statements of the Company and its Restricted Subsidiaries) would constitute a
Significant Subsidiary denies or disaffirms its obligations under this Indenture
or its Guarantee.

 

               
SECTION 6.02.  Acceleration.

 

If any Event of Default
(other than an Event of Default specified in clause (f) or (g) of
Section 6.01 hereof with respect to the Company) shall occur and be
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare the principal of and accrued interest on
all the Notes to be due and payable immediately by notice in writing to the
Company and the Trustee specifying the respective Event of Default and that it
is a “notice of acceleration” (the “Acceleration Notice”), and the same: (i)
shall become immediately due and payable or (ii) if there are any amounts
outstanding under the Credit Facility, shall become immediately due and payable
upon the first to occur of an acceleration under the Credit  Facility and
five Business Days after receipt by the Company and the Representative under
the Credit Facility of such Acceleration Notice but only if such Event of
Default is then continuing. If an Event of Default specified in clause (f) or
(g) of Section 6.01 hereof with respect to the 

 

63

 

Company occurs and is continuing, then all unpaid
principal of, and premium, if any, and accrued and unpaid interest on all the
outstanding Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.

 

At any time after a
declaration of acceleration with respect to the Notes as described in the
preceding paragraph, the Holders of a majority in principal amount of the Notes
may rescind and cancel such declaration and its consequences: (i) if the
rescission would not conflict with any judgment or decree; (ii) if all existing
Events of Default have been cured or waived except nonpayment of principal of,
premium, if any, and interest on the Notes that has become due solely because
of the acceleration; (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; (iv) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances; and
(v) in the event of the cure or waiver of an Event of Default of the type
described in clause (f) or (g) of Section 6.01 hereof, the Trustee shall
have received an Officers’ Certificate and an Opinion of Counsel that such
Event of Default has been cured or waived. 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, premium, if any, and interest on the Notes or
to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain
a proceeding even if it does not possess any of the Notes or does not produce
any of them in the proceeding. A delay or omission by the Trustee or any Holder
of a Note in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. All remedies are cumulative to the extent permitted by
law.

 

               
SECTION 6.04.  Waiver of Past Defaults.

 

Holders of not less than
a majority in aggregate principal amount of the then outstanding Notes by
notice to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and interest on the Notes (including in connection with an offer to
purchase). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

 

               
SECTION 6.05.  Control by Majority.

 

Holders of a majority in
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the

 

64

 

Trustee or exercising any trust or power conferred on
it. However, the Trustee may refuse to follow any direction that conflicts with
law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders of Notes or that may involve the Trustee in
personal liability.

 

               
SECTION 6.06.  Limitation on Suits.

 

Except to enforce the
right to receive payment of principal, premium, if any, or interest when due, a
Holder of a Note may pursue a remedy with respect to this Indenture or the
Notes only if:

 

(a)                                 
the Holder of a Note
gives to the Trustee written notice stating that Event of Default is
continuing;

 

(b)                                
the Holders of at
least 25% in principal amount of the then outstanding Notes make a written
request to the Trustee to pursue the remedy;

 

(c)                                 
such Holder of a Note
or Holders of Notes offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;

 

(d)                                
the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer and, if requested, the provision of indemnity; and

 

(e)                                 
during such 60-day
period the Holders of a majority in principal amount of the then outstanding
Notes do not give the Trustee a direction inconsistent with the request.

 

A Holder of a Note may
not use this Indenture to prejudice the rights of another Holder of a Note or
to obtain a preference or priority over another Holder of a Note.

 

               
SECTION 6.07.  Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other
provision of this Indenture, the right of any Holder of a Note to receive
payment of principal, premium and interest on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), 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 (a) or (b) hereof occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of an
express trust against the Company for the whole amount of principal amount of,
premium and interest remaining unpaid on the Notes and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

 

65

 

               
SECTION 6.09.  Trustee May File Proofs of Claim.

 

The Trustee is authorized
to 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 (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07
hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.

 

               
SECTION 6.10.  Priorities.

 

Any money collected by
the Trustee pursuant to this Article and any other money or property
distributable in respect of the Company’s obligations under this Indenture
after an Event of Default shall be applied in the following order:

 

FIRST: to the Trustee
(including a predecessor Trustee), its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee (including a
predecessor Trustee) and the costs and expenses of collection;

 

SECOND:  to holders
of Senior Debt of the Company to the extent required by Article 10 hereof
and to holders of Senior Debt of the Guarantors to the extent required by
Article 12 hereof;

 

THIRD: to Holders of
Notes for amounts due and unpaid on the Notes for principal amount, premium, if
any, and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal amount,
premium, if any, and interest, respectively; and

 

FOURTH: to the Company or
to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a
record date and payment date for any payment to Holders of Notes pursuant to
this Section 6.10.

 

66

 

               
SECTION 6.11.  Undertaking for Costs.

 

In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good 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 of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.

 

ARTICLE 7

TRUSTEE

 

               
SECTION 7.01.  Duties of Trustee.

 

(a)                                 
If an Event of
Default has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.

 

(b)                                
Except during the
continuance of an Event of Default:

 

(i)                                    
the
duties of the Trustee shall be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and

 

(ii)                                 
in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions which are specifically required to be delivered to the
Trustee by any provision of this Indenture to determine whether or not they
conform to the requirements of this Indenture.

 

(c)                                 
The Trustee may not
be relieved from liabilities for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:

 

(i)                                    
this
paragraph does not limit the effect of paragraphs (b) or (e) of this Section;

 

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

 

67

 

(iii)                              
the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 6.05 hereof.

 

(d)                                
Whether or not
therein expressly so provided, every provision of this Indenture that in any
way relates to the Trustee is subject to paragraphs (a), (b), (c), (e) and (f)
of this Section.

 

(e)                                 
No provision of this
Indenture shall require the Trustee to expend or risk its own funds or incur
any liability.  The Trustee shall be under no obligation to exercise any
of its rights and powers under this Indenture at the request of any Holders,
unless such Holder shall have offered to the Trustee security and indemnify satisfactory
to it against any loss, liability or expense.

 

(f)                                   
The Trustee shall not
be liable for interest on any money received by it except as the Trustee may
agree in writing with the Company. Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.

 

               
SECTION 7.02.  Rights of Trustee.

 

(a)                                 
The Trustee may
conclusively rely upon 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 or both. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such Officers’ Certificate
or Opinion of Counsel. The Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(c)                                 
The Trustee may act
through its attorneys and 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 that it
believes to be authorized or within the rights or powers conferred upon it by
this Indenture.

 

(e)                                 
Unless otherwise
specifically provided in this Indenture, any demand, request, direction or
notice from the Company shall be sufficient if signed by an Officer of the
Company.

 

(f)                                   
The Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.

 

68

 

(g)                                
Notwithstanding
Section 6.05 hereof, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of Indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.

 

(h)                                
The rights,
privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each agent, custodian and other Person employed to act hereunder.

 

(i)                                    
The permissive right
of the Trustee to take or refrain from taking any actions enumerated in this
Indenture shall not be construed as a duty.

 

               
SECTION 7.03.  Individual Rights of Trustee.

 

The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee.  However, in the event
that the Trustee acquires any conflicting interest it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
or resign.  The Registrar or any Paying Agent may do the same with like
rights and duties.  The Trustee is also subject to Sections 7.10 and 7.11
hereof.

 

               
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 Notes, it shall not be accountable for the Company’s use
of the proceeds from the Notes or any money paid to the Company or upon the
Company’s direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.

 

               
SECTION 7.05.  Notice of Defaults.

 

(a)                                 
The Trustee shall not
be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a Default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Notes and this Indenture.

 

(b)                                
Within the earlier of
90 days after the occurrence of a Default or an Event of Default or 30 days
after it is actually known to a Responsible Officer, the Trustee shall mail to
Holders of Notes, as their names and addresses appear in the security register
for the Notes, a

 

69

 

notice of the Default or Event of Default known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of the
Holders of the Notes.

 

               
SECTION 7.06.  Reports by Trustee to Holders of the Notes.

 

As promptly as practical
but within 60 days after each April 30 beginning with April 30, 2005,
and for so long as Notes remain outstanding, the Trustee shall mail to the
Holders of the Notes a brief report dated as of such reporting date that complies
with TIA § 313(a) (but if no event described in TIA § 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA § 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA
§ 313(c).

 

A copy of each report at
the time of its mailing to the Holders of Notes shall be mailed to the Company
and filed with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA § 313(d). The Company shall promptly notify the
Trustee when the Notes are listed on any stock exchange and any delisting
thereof.

 

               
SECTION 7.07.  Compensation and Indemnity.

 

The Company shall pay to
the Trustee from time to time such compensation for its services as the parties
shall agree from time to time.  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 to
the compensation for its services.  Such expenses shall include the
reasonable compensation and out-of-pocket expenses of the Trustee’s agents and
counsel.  The Company and each Guarantor, jointly and severally shall
indemnify the Trustee against any and all loss, liability, claim, damage or
expense (including reasonable attorneys’ fees and expenses) incurred by or in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture or a Guarantee against the Company or a Guarantor
(including this Section 7.07) and defending itself against or
investigating any claim (whether asserted by the Company, any Guarantor, any
Holder or any other Person).  The Trustee shall notify the Company of any
claim for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided, however,
that any failure so to notify the Company shall not relieve the Company or any
Guarantor of its indemnity obligations hereunder.  The Company shall
defend the claim and the indemnified party shall provide reasonable cooperation
at the Company’s expense in the defense.  Such indemnified parties may
have separate counsel and the Company and the Guarantors, as applicable shall
pay the fees and expenses of such counsel.  The Company need not reimburse
any expense or indemnify against any loss, liability or expense incurred by an
indemnified party through such party’s own willful misconduct, negligence or
bad faith.

 

70

 

The obligations of the
Company and the Guarantors under this Section 7.07 shall survive the
resignation or removal of the Trustee, the satisfaction and discharge of this
Indenture and the termination of this Indenture.

 

To secure the Company’s
and the Guarantors’ payment obligations in this Section, the Trustee shall have
a Lien prior to the Notes on all money or property held or collected by the
Trustee, other than money or property held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the resignation or
removal of the Trustee, the satisfaction and discharge and the termination of
this Indenture.

 

In addition, and without
prejudice to the rights provided to the Trustee under any of the provisions of
this Indenture, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.

 

“Trustee” for purposes of
this Section shall include any predecessor Trustee and the Trustee in each
of its capacities hereunder and each agent, custodian and other person employed
to act hereunder; provided, however,
that the negligence, wilful misconduct or bad faith of any Trustee hereunder
shall not affect the rights of any other Trustee hereunder.

 

The Trustee shall comply
with the provisions of TIA § 313(b)(2) to the extent applicable.

 

               
SECTION 7.08.  Replacement of Trustee.

 

A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective
only upon the successor Trustee’s acceptance of appointment as provided in this
Section.

 

The Trustee may resign in
writing at any time and be discharged from the trust hereby created by so
notifying the Company. The Holders of Notes of a majority in principal amount
of the then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Company in writing and may appoint a successor trustee. The
Company may remove the Trustee if:

 

(a)                                 
the Trustee fails to
comply with Section 7.10 hereof,

 

(b)                                
the Trustee is
adjudged a bankrupt or an insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law;

 

(c)                                 
a custodian or public
officer takes charge of the Trustee or its property; or

 

(d)                                
the Trustee becomes
incapable of acting.

 

If the Trustee resigns or
is removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount
of the then outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.

 

71

 

If a successor Trustee
does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company, or the Holders of Notes of at least
10% in principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee, after
written request by any Holder of a Note who has been a bona fide holder of a
Note for at least six months, fails to comply with Section 7.10, such
Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

 

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 of the Notes. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided all sums owing to the Trustee hereunder have been
paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company’s obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.

 

               
SECTION 7.09.  Successor Trustee by Merger, etc.

 

If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business or assets to, another Person, the resulting,
surviving, transferee or successor Person without any further act shall be the
successor Trustee.

 

               
SECTION 7.10.  Eligibility; Disqualification.

 

There shall at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any State thereof, that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a combined
capital and surplus of at least $100.0 million as set forth in its most recent
published annual report of condition.

 

This Indenture shall
always have a Trustee who satisfies the requirements of TIA § 310(a). The
Trustee is subject to TIA § 310(b).

 

               
SECTION 7.11.  Preferential Collection of Claims Against Company.

 

The Trustee is subject to
TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b). A Trustee who has resigned or been removed shall be subject to
TIA § 311 (a) to the extent indicated therein.

 

72

 

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION

 

               
SECTION 8.01.  Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Company may, at the
option of its Board of Directors evidenced by a resolution set forth in an
Officers’ Certificate, at any time, elect to have either Section 8.02 or
8.03 hereof applied to all outstanding Dollar Notes and/or Euro Notes upon
compliance with the conditions set forth below in this Article 8.

 

               
SECTION 8.02.  Legal Defeasance and Discharge.

 

Upon the Company’s
exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Company shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Dollar Notes
and/or Euro Notes on the date the conditions set forth below are satisfied
(hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Dollar Notes and/or Euro Notes,
which shall thereafter be deemed to be “outstanding” only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to
in (a) and (b) below, and to have satisfied all its other obligations under
such Notes and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04
hereof, and as more fully set forth in such Section, payments in respect of the
principal amount of, premium, if any, and interest on such Notes when such
payments are due, (b) the Company’s obligations with respect to such Notes
under Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company’s
obligations in connection therewith and (d) the provisions of this
Article 8 with respect to Legal Defeasance. Subject to compliance with
this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.

 

               
SECTION 8.03.  Covenant Defeasance.

 

Upon the Company’s exercise
under Section 8.01 hereof of the option applicable to this
Section 8.03, the Company shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof with respect to the
outstanding Dollar Notes and/or Euro Notes on and after the date the conditions
set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant
Defeasance”), and the Dollar Notes and/or Euro Notes shall thereafter be deemed
not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Dollar Notes and/or Euro
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected

 

73

 

thereby. In addition, upon the Company’s exercise
under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set
forth in Section 8.04 hereof, Sections 6.01(d) and 6.01(e) hereof shall
not constitute Events of Default.

 

               
SECTION 8.04.  Conditions to Legal or Covenant Defeasance.

 

The following shall be
the conditions to the application of either Section 8.02 or 8.03 hereof to
the outstanding Notes:

 

In order to exercise
either Legal Defeasance or Covenant Defeasance:

 

(a)                                 
the Company must
irrevocably deposit with the Trustee, in trust, for the benefit of the Holders,
cash in United States dollars or euros, as applicable, non-callable Government
Obligations, or a combination of United States dollars or euros, as applicable,
and Government Obligations, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants, to
pay the principal amount at maturity of, premium, if any, and interest on the
outstanding Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be;

 

(b)                                
in the case of an
election under Section 8.02 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States of America reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such Legal Defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred;

 

(c)                                 
in the case of an
election under Section 8.03 hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States of America reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such Covenant Defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;

 

(d)                                
no Default or Event
of Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit and the grant of any Lien to securing such
borrowing) or insofar as Section 6.01 (f) or 6.01(g) hereof is concerned,
at any time in the period ending on the 91st day after the date of deposit;

 

(e)                                 
such Legal Defeasance
or Covenant Defeasance shall not result in a breach or violation of, or
constitute a default under this Indenture (other than a Default or an Event of
Default resulting from the borrowing of funds to be applied to such deposit and
the grant of any Lien securing such borrowing) or any other material agreement
or instrument to which the

 

74

 

Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound;

 

(f)                                   
the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that (A) the
trust funds will not be subject to any rights of holders of Senior Debt
including, without limitation, those arising under this Indenture, and (B)
after the 91st day following the deposit, the trust funds will not be subject
to the effect of the preference provisions of Section 547 of the United
States Federal Bankruptcy Code;

 

(g)                                
the Company shall
have delivered to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Company with the intent of preferring the Holders over any
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;

 

(h)                                
the Company shall
have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for or relating to
the Legal Defeasance or the Covenant Defeasance have been complied with; and

 

(i)                                    
the Company shall
have paid or duly provided for payment of all amounts then due to the Trustee
pursuant to Section 7.07 hereof.

 

Notwithstanding the
foregoing, the Opinion of Counsel required by clause (b) above with respect to
a Legal Defeasance need not be delivered if all Notes not therefor delivered to
the Trustee for cancellation (A) have become due and payable, or (B) will
become due and payable on the maturity date within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.

 

               
SECTION 8.05.  Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.

 

Subject to
Section 8.06 hereof, all money and non-callable Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
“Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal amount, premium, if any, and
interest, but such money need not be segregated from other funds except to the extent
required by law.

 

The Company shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the cash or non-callable Government Obligations deposited
pursuant to Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.

 

75

 

Anything in this
Article 8 to the contrary notwithstanding, the Trustee shall deliver or
pay to the Company from time to time upon the request of the Company any money
or non-callable Government Obligations held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.

 

               
SECTION 8.06.  Satisfaction and Discharge.

 

This Indenture shall be
discharged and shall cease to be of further effect (except as to surviving
rights or registration of transfer or exchange of the Dollar Notes and/or Euro
Notes, as expressly provided for in this Indenture) as to all outstanding
Dollar Notes and/or Euro Notes when (i) either (a) all the Notes theretofore
authenticated and delivered (except lost, stolen or destroyed Notes which have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or; (b) all Notes not theretofore
delivered to the Trustee for cancellation have become due and payable, pursuant
to an optional redemption notice or otherwise, and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may be;
(ii) the Company has paid all other sums payable under this Indenture by the
Company; and (iii) the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.

 

               
SECTION 8.07.  Repayment to Company.

 

Each of the Trustee and
each Paying Agent shall promptly turn over to the Company upon request any
money or Government Obligations held by it as provided in this
Article which, in the written opinion of nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall
only be required if Government Obligations have been so deposited), are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent discharge or defeasance in accordance with this Article.

 

Subject to any applicable
abandoned property law, the Trustee and each Paying Agent shall pay to the
Company upon written 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, and the Trustee and each Paying Agent shall have no further
liability with respect to such monies.

 

76

 

               
SECTION 8.08.  Reinstatement.

 

If the Trustee or Paying
Agent is unable to apply any United States dollars, euros or noncallable
Government Obligations in accordance with Section 8.02 or 8.03 hereof, as
the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be; provided
however, that, if the
Company makes any payment of principal of, premium, if any, or interest on any
Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

 

               
SECTION 8.09.  Survival.

 

The Trustee’s rights
under this Article 8 shall survive termination of this Indenture.

 

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

 

               
SECTION 9.01.  Without Consent of Holders of Notes.

 

Notwithstanding
Section 9.02 of this Indenture, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture, the Guarantees or the Notes
without the consent of any Holder of a Note:

 

(a)                                 
to cure any
ambiguity, defect or inconsistency;

 

(b)                                
to provide for
uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the Code,
or in a manner such that the uncertificated Notes are described in
Section 163(f)(2)(B) of the Code) or to alter the provisions of
Article 2 or the Appendix hereof relating to the form of the Notes
(including the related definitions) in a manner that does not adversely affect
any Holder;

 

(c)                                 
to provide for the
assumption of the Company’s or a Guarantor’s obligations to the Holders of the
Notes by a successor to the Company or a Guarantor pursuant to Article 5
or Section 11.06 hereof,

 

(d)                                
to make any change
that would provide any additional rights or benefits to the Holders of the
Notes or that does not adversely affect the legal rights hereunder of any
Holder of the Notes;

 

(e)                                 
to comply with
requirements of the SEC in order to effect or maintain the qualification of
this Indenture under the TIA;

 

(f)                                   
to provide for the
issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in this Indenture;

 

77

 

(g)                                
to release any
Guarantor from its Guarantee in accordance with this Indenture;

 

(h)                                
to allow any
Guarantor to execute a supplemental indenture and/or a Guarantee with respect
to the Notes; or

 

(i)                                    
make any change in
Article 10 and Article 12 of this Indenture that would limit or
terminate the benefits available to any holder of Senior Debt of the Company or
a holder of Guarantor Senior Debt (or any Representative thereof) under such
Article 10 and Article 12.

 

Upon the request of the
Company accompanied by a resolution of its Board of Directors authorizing the
execution of any such amended or supplemental Indenture, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee
shall join with the Company and the Guarantors in the execution of any amended
or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.

 

               
SECTION 9.02.  With Consent of Holders of Notes.

 

(a)                                 
Except as provided
below in this Section 9.02, this Indenture (including Sections 3.09, 4.10
and 4.15 hereof), the Guarantees and the Notes may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except
a payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture, the Guarantees or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes voting as a single class (including consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes).  Section 2.08 hereof shall determine which Notes are
considered to be “outstanding” for purposes of this Section 9.02.

 

(b)                                
Upon the request of
the Company accompanied by a resolution of its Board of Directors authorizing
the execution of any such amended or supplemental Indenture, and upon the
filing with the Trustee of evidence satisfactory to the Trustee of the consent
of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with
the Company in the execution of such amended or supplemental Indenture unless
such amended or supplemental Indenture directly affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to, enter into
such amended or supplemental Indenture.

 

(c)                                 
It shall not be
necessary for the consent of the Holders of Notes under this Section 9.02
to approve the particular form of any proposed amendment or waiver, but it
shall be sufficient if such consent approves the substance thereof.

 

78

 

(d)                                
After an amendment,
supplement or waiver under this Section becomes effective, the Company
shall mail to the Holders of Notes affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver. Subject
to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate
principal amount of the Notes then outstanding voting as a single class may
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes provided,
however, that if any amendment, waiver or other modification will
only affect the Dollar Notes or the Euro Notes, only the consent of the Holders
of a majority in principal amount of the then outstanding Dollar Notes or Euro
Notes, as the case may be (and not the consent of a majority of all Notes)
shall be required. However, without the consent of each Holder affected, an
amendment or waiver under this Section 9.02 may not (with respect to any
Notes held by a non-consenting Holder):

 

(1)                                 
reduce the principal amount of
Notes whose Holders must consent to an amendment, supplement or waiver;

 

(2)                                 
reduce the principal of or
change or have the effect of changing the fixed maturity of any Note, or change
the date on which any Notes may be subject to redemption or reduce the
redemption price therefor;

 

(3)                                 
reduce the rate of or change or
have the effect of changing the time for payment of interest, including
defaulted interest, on any Note;

 

(4)                                 
make any Note payable in money
other than that stated in the Notes;

 

(5)                                 
make any change in the
provisions of this Indenture protecting the right of each Holder to receive
payment of principal of or interest on any Note on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders of a
majority in principal amount of Notes to waive Defaults or Events of Default;

 

(6)                                 
after the Company’s obligation
to purchase Notes arises thereunder, amend, change or modify in any material
respect the obligation of the Company to make and consummate a Change of
Control Offer in the event of a Change of Control or modify any of the
provisions or definitions with respect thereto after a Change of Control has
occurred;

 

(7)                                 
modify or change any provision
of this Indenture, including the Guarantees or the related definitions,
affecting the subordination or ranking of the Notes or the Guarantees in a
manner which adversely affects the Holders; or

 

(8)                                 
make any change in the foregoing
amendment and waiver provisions.

 

An amendment under this
Section may not make any change that adversely affects the rights under
Article 10 or 12 hereof or any supplemental indenture to this Indenture
providing for a Guarantee of the Notes by a Restricted Subsidiary of the
Company of any holder of Senior Debt of the Company or of a Guarantor then
outstanding (including any such change of this paragraph of this
Section 9.02) unless the holders of such Senior Debt (or their
Representative) consent to such change.

 

79

 

               
SECTION 9.03.  Compliance with Trust Indenture Act.

 

From the date on which
this Indenture is qualified under the TIA, every amendment or supplement to
this Indenture or the Notes shall be set forth in a amended or supplemental
Indenture that complies with the TIA as then in effect.

 

               
SECTION 9.04.  Revocation and Effect of Consents.

 

Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note
is a continuing consent by the Holder of a Note and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder’s Note, even if notation of the consent is not made on any Note.
However, any such Holder of a Note or subsequent Holder of a Note may revoke
the consent as to its Note if the Trustee receives written notice of revocation
before the date the waiver, supplement or amendment becomes effective. An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.

 

               
SECTION 9.05.  Notation on or Exchange of Notes.

 

The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.

 

Failure to make the
appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.

 

               
SECTION 9.06.  Trustee to Sign Amendments, etc.

 

The Trustee shall sign
any amendment, supplement or waiver authorized pursuant to this Article 9
if the amendment, supplement or waiver does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. The Company may not sign an
amendment or supplemental Indenture until the Board of Directors approves it.
In executing any amended or supplemental indenture, the Trustee shall be
entitled to receive and (subject to Section 7.01 hereof) shall be fully
protected in relying upon, in addition to the documents required by
Section 13.04 hereof, an Officer’s Certificate and an Opinion of Counsel
stating that the execution of such amendment, supplement or waiver is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver is the legal, valid and binding obligation of the Company and the
Guarantors, enforceable against them in accordance with its terms, subject to
customary exceptions, and complies with the provisions hereof (including
Section 9.03 hereof).

 

               
SECTION 9.07.  Additional Voting Terms; Calculation of Principal Amount.

 

Except as provided in the
proviso to the third sentence of Section 9.02(d), all Notes issued under
this Indenture shall vote and consent together on all matters (as to which any
of such Notes may vote) as one class and no series of Notes will have the right
to vote or consent as a separate class on any matter.  Determinations as
to whether Holders of the requisite aggregate

 

80

 

principal amount of Notes have concurred in any
direction, waiver or consent shall be made in accordance with this
Article 9 and Section 2.15.

 

ARTICLE 10

SUBORDINATION

 

               
SECTION 10.01.  Agreement to Subordinate.

 

The Company agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment of all existing and
future Senior Debt of the Company and that the subordination is for the benefit
of and enforceable by the holders of such Senior Debt.  The Notes shall in
all respects rank pari passu with all other Senior Subordinated Debt of the
Company and only Indebtedness of the Company which is Senior Debt of the Company
shall rank senior to the Notes in accordance with the provisions set forth
herein.  All provisions of this Article 10 shall be subject to
Section 10.12.

 

               
SECTION 10.02.  Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or
distribution of the assets of the Company to creditors upon (i) a total or
partial liquidation or a total or partial dissolution of the Company; (ii) in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property or (iii) an assignment for the benefit
of creditors or marshaling of the Company’s assets and liabilities:

 

(1)                                 
holders of Senior Debt of the
Company shall be entitled to receive payment in full in cash of such Senior Debt
(including interest accruing after, or which would accrue but for, the
commencement of any proceeding at the rate specified in the applicable Senior
Debt, whether or not a claim for such interest would be allowed) before Holders
shall be entitled to receive any payment;

 

(2)                                 
until the Senior Debt of the
Company is paid in full in cash, any payment or distribution to which Holders
would be entitled but for this Article 10 shall be made to holders of such
Senior Debt as their interests may appear, except that Holders of the Notes may
receive and retain Permitted Junior Securities; and

 

(3)                                 
if a distribution is made to
Holders of the Note that, due to the subordination provisions, should not have
been made to them, such Holders of the Notes are required to hold it in trust
for the holders of Senior Debt of the Company and pay it over to them as their
interest may appear.

 

               
SECTION 10.03.  Default on Senior Debt of the Company.

 

The Company shall not pay
the principal of, premium, if any, or interest on the Notes or make any deposit
pursuant to Section 8.04 and may not purchase, redeem or otherwise retire
any Notes (collectively, “pay the Notes”) if either of the following (a
“Payment Default”) occurs (1)

 

81

 

any Designated Senior Debt of the Company is not paid
in full in cash when due; or (2) any other default on Designated Senior Debt of
the Company occurs and the maturity of such Designated Senior Debt is
accelerated in accordance with its terms unless, in either case, the Payment
Default has been cured or waived and any such acceleration has been rescinded
or such Designated Senior Debt has been paid in full in cash; provided, however, that the
Company shall be entitled to pay the Notes without regard to the foregoing if
the Company and the Trustee receive written notice approving such payment from
the Representative of all Designated Senior Debt with respect to which the Payment
Default has occurred and is continuing. During the continuance of any default
(other than a Payment Default) with respect to any Designated Senior Debt of
the Company pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be necessary to
effect such acceleration) or the expiration of any applicable grace periods,
the Company shall not pay the Notes for a period (a “Payment Blockage Period”)
commencing upon the receipt by the Trustee of (with a copy to the Company)
written notice (a “Blockage Notice”) of such default from the Representative of
such Designated Senior Debt specifying an election to effect a Payment Blockage
Period and ending 179 days thereafter. The Payment Blockage Period shall end
earlier if such Payment Blockage Period is terminated (1) by written notice to
the Trustee and the Company from the Person or Persons who gave such Blockage
Notice; (2) because the default giving rise to such Blockage Notice is cured,
waived or otherwise no longer continuing; or (3) because such Designated Senior
Debt has been discharged or repaid in full in cash.  Notwithstanding the
provisions described in the immediately preceding two sentences (but subject to
the provisions contained in the first sentence of this Section), unless the
holders of such Designated Senior Debt or the Representative of such Designated
Senior Debt shall have accelerated the maturity of such Designated Senior Debt,
the Company shall be entitled to resume payments on the Notes after termination
of such Payment Blockage Period.  The Notes shall not be subject to more
than one Payment Blockage Period in any consecutive 360-day period,
irrespective of the number of defaults with respect to Designated Senior Debt
of the Company during such period; provided,
however, that if any Blockage Notice within such 360-day period is
given to the Trustee by or on behalf of any holders of Designated Senior Debt
of the Company (other than the Bank Indebtedness), the Representative of the Bank
Indebtedness shall be entitled to give another Blockage Notice within such
period; provided  further, however, that in no event shall the total number
of days during which any Payment Blockage Period or Periods is in effect exceed
179 days in the aggregate during any 360-day consecutive period, and there must
be 181 days during any 360-day consecutive period during which no Payment
Blockage Period is in effect.  For purposes of this Section, no default or
event of default which existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Designated
Senior Debt of the Company initiating such Payment Blockage Period shall be, or
be made, the basis of the commencement of a subsequent Payment Blockage Period
by the Representative of such Designated Senior Debt, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.

 

               
SECTION 10.04.  Acceleration of Payment of Notes.

 

If payment of the Notes
is accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify the holders of the Designated Senior Debt of the Company (or
their Representatives) of the acceleration.

 

82

 

               
SECTION 10.05.  When Distribution Must Be Paid Over.

 

If a distribution is made
to Holders that because of this Article 10 should not have been made to
them, the Holders who receive the distribution shall hold it in trust for
holders of Senior Debt of the Company and pay it over to them as their
interests may appear.  If any Designated Senior Debt of the Company is
outstanding, the Company shall not pay the Notes until five Business Days after
the Representatives of all the issues of Designated Senior Debt of the Company
receive notice of such acceleration and, thereafter, shall be entitled to pay
the Notes only if this Article 10 otherwise permits payment at that time.

 

               
SECTION 10.06.  Subrogation.

 

After all Senior Debt of
the Company is paid in full and until the Notes are paid in full, Holders shall
be subrogated to the rights of holders of such Senior Debt to receive
distributions applicable to such Senior Debt.  A distribution made under
this Article 10 to holders of such Senior Debt which otherwise would have
been made to Holders is not, as between the Company and Holders, a payment by
the Company on such Senior Debt.

 

               
SECTION 10.07.  Relative Rights.

 

This Article 10
defines the relative rights of Holders and holders of Senior Debt of the
Company.  Nothing in this Indenture shall:

 

(1)                                 
impair, as between the Company
and Holders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Notes in accordance with
their terms; or

 

(2)                                 
prevent the Trustee or any
Holder from exercising its available remedies upon a Default, subject to the
rights of holders of Senior Debt of the Company to receive distributions
otherwise payable to Holders.

 

               
SECTION 10.08.  Subordination May Not Be Impaired by Company.

 

No right of any holder of
Senior Debt of the Company to enforce the subordination of the Indebtedness
evidenced by the Notes shall be impaired by any act or failure to act by the
Company or by its failure to comply with this Indenture.

 

               
SECTION 10.09.  Rights of Trustee and Paying Agent.

 

Notwithstanding
Section 10.03 or any other provision of this Indenture or the Notes, the
Trustee or Paying Agent shall continue to make payments on the Notes and shall
not be charged with knowledge of the existence of facts that under this
Article 10 would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a Responsible Officer
of the Trustee receives written notice satisfactory to it that such payments
may not be made under this Article 10 and, prior to the receipt of any
such written notice, the Trustee, shall be entitled in all respects
conclusively to presume that no such fact exists.  Unless the Trustee
shall have received the notice provided for in the preceding sentence, the
Trustee

 

83

 

shall have full power and authority to receive such
payment and to apply the same to the purpose for which it was received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such date.  The foregoing shall not apply to any Affiliate of
the Company acting as Paying Agent.  The Company, a Representative or a
holder of Senior Debt of the Company shall be entitled to give such notice; provided, however, that, if an
issue of Senior Debt of the Company has a Representative, only the
Representative shall be entitled to give the notice.

 

The Trustee in its
individual or any other capacity shall be entitled to hold Senior Debt of the
Company with the same rights it would have if it were not Trustee.  The
Registrar and the Paying Agent shall be entitled to do the same with like
rights.  The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Debt of the Company which may at any
time be held by it, to the same extent as any other holder of such Senior Debt;
and nothing in Article 7 shall deprive the Trustee of any of its rights as
such holder.  Notwithstanding anything in this Article 10 to the
contrary, all amounts owed to the Trustee (including amounts owed pursuant to
Sections 6.10 and 7.07 hereof) in each of its capacities hereunder shall not be
subordinated to any Senior Debt of the Company or otherwise.

 

               
SECTION 10.10.  Distribution or Notice to Representative.

 

Whenever any Person is to
make a distribution or give a notice to holders of Senior Debt of the Company,
such Person shall be entitled to make such distribution or give such notice to
their Representative (if any).

 

               
SECTION 10.11.  Not To Prevent Events of Default or Limit Right To
Accelerate.

 

The failure to make a
payment pursuant to the Notes by reason of any provision in this
Article 10 shall not be construed as preventing the occurrence of a
Default.  Nothing in this Article 10 shall have any effect on the
right of the Holders or the Trustee to accelerate the maturity of the Notes.

 

               
SECTION 10.12.  Trust Moneys Not Subordinated.

 

Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of
Government Obligations held in trust under Article 8 hereof by the Trustee
for the payment of principal of and interest on the Notes shall not be
subordinated to the prior payment of any Senior Debt of the Company or subject
to the restrictions set forth in this Article 10 if the provisions of this
Article 10 were not violated at the time funds were deposited in trust
with the Trustee pursuant to Article 8 hereof, and none of the Holders
shall be obligated to pay over any such amount to the Company or any holder of
Senior Debt of the Company or any other creditor of the Company.

 

               
SECTION 10.13.  Trustee Entitled To Rely.

 

Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Holders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in
Section 10.02 hereof are pending, (2) upon a

 

84

 

certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Holders or (3) upon the Representatives of Senior Debt of the Company for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Article 10.  In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder
of Senior Debt of the Company to participate in any payment or distribution
pursuant to this Article 10, the Trustee shall be entitled to request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article 10, and,
if such evidence is not furnished, the Trustee shall be entitled to defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.  The provisions of Sections 7.01 and 7.02
hereof shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 10.

 

               
SECTION 10.14.  Trustee To Effectuate Subordination.

 

Each Holder by accepting
a Note authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
between the Holders and the holders of Senior Debt of the Company as provided
in this Article 10 and appoints the Trustee as attorney-in-fact for any
and all such purposes.

 

               
SECTION 10.15.  Trustee Not Fiduciary for Holders of Senior Debt of the
Company.

 

The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt of the Company and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders or the Company or any other Person, money or assets to
which any holders of Senior Debt of the Company shall be entitled by virtue of
this Article 10 or otherwise.

 

               
SECTION 10.16.  Reliance by Holders of Senior Debt of the Company on
Subordination Provisions.

 

Each Holder by accepting
a Note acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of any
Senior Debt of the Company, whether such Senior Debt was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Debt and such holder of such Senior Debt shall
be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior Debt.

 

85

 

ARTICLE 11

GUARANTEES

 

               
SECTION 11.01.  Guarantees.

 

Each Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Notes when due, whether at
maturity, by acceleration, by redemption or otherwise, of all obligations of
the Company under this Indenture (including obligations to the Trustee) and the
Notes, whether for payment of principal of, premium, if any, or interest on in
respect of the Notes and all other monetary obligations of the Company under
this Indenture and the Notes and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Notes whether for fees, expenses, indemnification or
otherwise under this Indenture and the Notes (all the foregoing being
hereinafter collectively called the “Guaranteed Obligations”). Each Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice or further assent from each such Guarantor and
that each such Guarantor will remain bound under this Article 11
notwithstanding any extension or renewal of any Guaranteed Obligation.

 

Each Guarantor waives
presentation to, demand of, payment from and protest to the Company of any of
the Guaranteed Obligations and also waives notice of protest for
nonpayment.  Each Guarantor waives notice of any default under the Notes
or the Guaranteed Obligations.  The obligations of each Guarantor
hereunder shall not be affected by (a) the failure of any Holder or the Trustee
to assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Notes or any other
agreement or otherwise; (b) any extension or renewal of this Indenture, the
Notes or any other agreement; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Notes or
any other agreement; (d) the release of any security held by any Holder or the
Trustee for the Guaranteed Obligations or any Guarantor; (e) the failure of any
Holder or the Trustee to exercise any right or remedy against any other
guarantor of the Obligations; or (f) except as set forth in Section 11.07,
any change in the ownership of such Guarantor.

 

Each Guarantor hereby
waives any right to which it may be entitled to have its obligations hereunder
divided among the Guarantors, such that such Guarantor’s obligations would be
less than the full amount claimed.  Each Guarantor hereby waives any right
to which it may be entitled to have the assets of the Company first be used and
depleted as payment of the Company’s or such Guarantor’s obligations hereunder
prior to any amounts being claimed from or paid by such Guarantor
hereunder.  Each Guarantor hereby waives any right to which it may be
entitled to require that the Company be sued prior to an action being initiated
against such Guarantor.

 

Each Guarantor further
agrees that its Guarantee herein constitutes a guarantee of payment,
performance and compliance when due (and not a guarantee of collection) and
waives any right to require that any resort be had by any Holder or the Trustee
to any security held for payment of the Guaranteed Obligations.

 

Each Guarantee is, to the
extent and in the manner set forth in Article 12 hereof, subordinated and
subject in right of payment to the prior payment in full of the principal of
and premium, if any, and interest on all Senior Debt of the Guarantor giving
such Guarantee and each Guarantee is made subject to such provisions of this
Indenture.

 

86

 

Except as expressly set
forth in Sections 11.02 and 11.07 hereof, the obligations of each 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 of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Guaranteed Obligations or otherwise.  Without
limiting the generality of the foregoing, the obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of such Guarantor or would otherwise
operate as a discharge of such Guarantor as a matter of law or equity.

 

Each Guarantor further
agrees that its Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.

 

In furtherance of the
foregoing and not in limitation of any other right which any Holder or the
Trustee has at law or in equity against any Guarantor by virtue hereof, upon
the failure of the Company to pay the principal of or interest on any
Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Guaranteed Obligation, each Guarantor hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause
to be paid, in cash, to the Holders or the Trustee an amount equal to the sum
of (1) the unpaid principal amount of such Guaranteed Obligations, (2) accrued
and unpaid interest on such Guaranteed Obligations (but only to the extent not
prohibited by applicable law) and (3) all other monetary obligations of the
Company to the Holders and the Trustee.

 

Each Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Holders in respect of any Guaranteed Obligations guaranteed hereby until payment
in full of all Guaranteed Obligations and all obligations to which the
Guaranteed Obligations are subordinated as provided in Article 12. 
Each Guarantor further agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations may be accelerated as provided in Article 6 for the purposes
of such Guarantor’s Guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purposes of this Section.

 

Each Guarantor also
agrees to pay any and all costs and expenses (including reasonable attorneys’
fees and expenses) incurred by the Trustee or any Holder in enforcing any
rights under this Section.

 

87

 

Upon request of the
Trustee (which request the Trustee shall under no circumstances be obligated to
make), each Guarantor shall 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.

 

               
SECTION 11.02.  Limitation on Liability.

 

Any term or provision of
this Indenture to the contrary notwithstanding, the maximum aggregate amount of
the Obligations guaranteed hereunder by any Guarantor shall not exceed the
maximum amount that can be hereby guaranteed without rendering this Indenture,
as it relates to such Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.

 

               
SECTION 11.03.  Successors and Assigns.

 

This Article 11
shall be binding upon each Guarantor and its successors and assigns and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Notes shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions of this
Indenture.

 

               
SECTION 11.04.  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 11 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 11 at law, in equity, by statute or
otherwise.

 

               
SECTION 11.05.  Modification.

 

No modification,
amendment or waiver of any provision of this Article 11, nor the consent
to any departure by any 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 Guarantor in any
case shall entitle such Guarantor to any other or further notice or demand in
the same, similar or other circumstances.

 

               
SECTION 11.06.  Guarantors May Consolidate, etc., on Certain Terms.

 

Each Guarantor shall not,
and the Company shall not permit any such Guarantor to, consolidate or merge
with or into, or sell, assign, transfer, lease, convey or otherwise dispose of,
in a single transaction or series of related transactions, all or substantially
all of its assets to any Person unless:

 

88

 

(1)                                 
(except in the case of such
Guarantor 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 through the sale of all or
substantially all of its assets (such sale constituting the disposition of such
Guarantor in its entirety), if in connection therewith the Company provides an
Officers’ Certificate to the Trustee to the effect that the Company will comply
with its obligations under Section 4.10 hereof in respect of such
disposition) the resulting, surviving or transferee Person (if not such
Guarantor) shall be a Person organized and validly existing under the laws of
the jurisdiction under which such Guarantor was organized or under the laws of
the United States of America, any State thereof or the District of Columbia,
and such Person shall expressly assume, by a supplemental indenture (in form
and substance satisfactory to the Trustee), executed and delivered to the
Trustee, all the obligations of such Guarantor, if any, under its Guarantee;

 

(2)                                 
except in the case of a merger
of such Guarantor with or into the Company or another Restricted Subsidiary of
the Company that is a Guarantor and except in the case of a merger entered into
solely for the purpose of reincorporating such Guarantor in another
jurisdiction, immediately after giving effect to such transaction and the
assumption contemplated by the immediately preceding clause (a)(1) (including,
without limitation, giving effect to any Indebtedness and Acquired Indebtedness
incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred and be
continuing; and

 

(3)                                 
the Company shall have delivered
to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease, conveyance
or other disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with the applicable
provisions of this Indenture and that all conditions precedent in the Indenture
relating to such transaction have been satisfied.

 

In case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Guarantee of the Notes
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Guarantor, such successor Person shall
succeed to and be substituted for the Guarantor with the same effect as if it
had been named herein as a Guarantor. Such successor Person thereupon may cause
to be signed any or all of the Guarantees of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Guarantees so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Guarantees theretofore and
thereafter issued in accordance with the terms of this Indenture as though all
of such Guarantees had been issued at the date of the execution hereof.

 

               
SECTION 11.07.  Release of Guarantor.

 

(b)  Upon the sale
(including any sale pursuant to any exercise of remedies by a holder of Senior
Debt of the Company or of such Guarantor) or other disposition (including by
way of consolidation or merger) of a Guarantor that is a Restricted Subsidiary
of the Company or the sale or disposition of all or substantially all the
assets of such Guarantor (in each case other than

 

89

 

a sale or disposition to the Company or an Affiliate
of the Company and if in connection therewith the Company provides an Officers’
Certificate to the Trustee to the effect that the Company will comply with its
obligations under Section 4.10 hereof in respect of such disposition),

 

(c)                                 
upon designation of a
Guarantor as an Unrestricted Subsidiary pursuant to the terms of this
Indenture, or

 

(d)                                
at such time, and for
so long as, (i) the Company’s Credit Facilities do not require any guarantees
of the Domestic Subsidiaries and (ii) all of the Domestic Subsidiaries have
less than $75.0 million of Indebtedness then outstanding owed to Persons other
than the Company or any Restricted Subsidiary, such Guarantor shall be deemed
released from all obligations under this Article 11 without any further
action required on the part of the Trustee or any Holder.

 

If the Company exercises
its Legal Defeasance option or its Covenant Defeasance option in accordance
with the provisions of Article 8 hereof or if its obligations under this
Indenture are discharged in accordance with Section 8.06 hereof, each
Guarantor shall be released from all obligations under this Article 11
without any further action required on the part of the Trustee or any Holder.

 

At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument
evidencing the release of a Guarantor pursuant to this Section 11.07.

 

               
SECTION 11.08.  Contribution.

 

Each Guarantor that makes
a payment under its Guarantee shall be entitled upon payment in full of all
Guaranteed Obligations to a contribution from each other Guarantor in an amount
equal to such other Guarantor’s pro rata portion of such payment based on the
respective net assets of all the Guarantors at the time of such payment
determined in accordance with GAAP.

 

               
SECTION 11.09.  Execution of Supplemental Indenture for Future
Guarantors.

 

Each Subsidiary and other
Person which is required to become a Guarantor pursuant to Section 4.17 shall
promptly execute and deliver to the Trustee a supplemental indenture in the
form of Exhibit F hereto pursuant to which such Subsidiary or other Person
shall become a Guarantor under this Article 11 and shall guarantee the
Guaranteed Obligations.  Concurrently with the execution and delivery of
such supplemental indenture, the Company shall deliver to the Trustee an
Opinion of Counsel and an Officers’ Certificate to the effect that such
supplemental indenture has been duly authorized, executed and delivered by such
Subsidiary or other Person and that, subject to the application of bankruptcy,
insolvency, moratorium, fraudulent conveyance or transfer and other similar
laws relating to creditors’ rights generally and to the principles of equity,
whether considered in a proceeding at law or in equity, the Guarantee of such
Guarantor is a legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms and/or to such
other matters as the Trustee may reasonably request.

 

90

ARTICLE 12

SUBORDINATION OF GUARANTEES

 

               
SECTION 12.01.  Agreement To Subordinate.

 

Each Guarantor agrees,
and each Holder by accepting a Note agrees, that the Indebtedness evidenced by
such Guarantor’s Guarantee is subordinated in right of payment, to the extent
and in the manner provided in this Article 12, to the prior payment of all
existing and future Senior Debt of such Guarantor and that the subordination is
for the benefit of and enforceable by the holders of such Senior Debt. 
The Guaranteed Obligations of a Guarantor shall in all respects rank pari passu
with all other Senior Subordinated Debt of such Guarantor and only Senior Debt
such Guarantor (including such Guarantor’s Guarantee of Senior Debt of the
Company) shall rank senior to the Guaranteed Obligations of such Guarantor in
accordance with the provisions set forth herein.

 

               
SECTION 12.02.  Liquidation, Dissolution, Bankruptcy.

 

Upon any payment or
distribution of the assets of any Guarantor to creditors upon (i) a total or
partial liquidation or a total or partial dissolution of such Guarantor; (ii)
in a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Guarantor or its property; or (iii) an assignment for the benefit
of creditors or marshaling of such Guarantor’s assets and liabilities:

 

(1)                                 
holders of Senior Debt of such
Guarantor shall be entitled to receive payment in full in cash of such Senior
Debt (including interest accruing after, or which would accrue but for, the
commencement of any proceeding at the rate specified in the applicable Senior
Debt, whether or not a claim for such interest would be allowed) before Holders
shall be entitled to receive any payment pursuant to the Guarantee of such
Guarantor;

 

(2)                                 
until the Senior Debt of any
Guarantor is paid in full in cash, any payment or distribution to which Holders
would be entitled but for this Article 12 shall be made to holders of such
Senior Debt as their interests may appear, except that Holders of the Notes may
receive and retain Permitted Junior Securities; and

 

(3)                                 
if a distribution is made to
Holders of the Note that, due to the subordination provisions, should not have
been made to them, such Holders of the Notes are required to hold it in trust
for the holders of Senior Debt of such Guarantor and pay it over to them as
their interest may appear.

 

               
SECTION 12.03.  Default on Senior Debt of Guarantor.

 

No Guarantor shall make
any payment on its Guarantee or purchase, redeem or otherwise retire or defease
any Notes or other Guaranteed Obligations (collectively, “pay its Guarantee”)
if either of the following (a “Payment Default”) occurs (1) any Designated
Senior Debt of such Guarantor is not paid in full in cash when due; or (2) any
other default on Designated Senior Debt of such Guarantor occurs and the
maturity of such Designated Senior Debt is accelerated in

 

91

 

accordance with its terms; unless, in either case, the
Payment Default has been cured or waived and any such acceleration has been
rescinded or such Designated Senior Debt has been paid in full in cash; provided, however, that any
Guarantor shall be entitled to pay its Guarantee without regard to the
foregoing if such Guarantor and the Trustee receive written notice approving
such payment from the Representative of all Designated Senior Debt with respect
to which the Payment Default has occurred and is continuing.  During the
continuance of any default (other than a Payment Default) with respect to any
Designated Senior Debt of such Guarantor pursuant to which the maturity thereof
may be accelerated immediately without further notice (except such notice as
may be necessary to effect such acceleration) or the expiration of any
applicable grace periods, such Guarantor shall not pay its Guarantee for a
period (a “Payment Blockage Period”) commencing upon the receipt by the Trustee
of (with a copy to such Guarantor) written notice (a “Blockage Notice”) of such
default from the Representative of such Designated Senior Debt specifying an
election to effect a Payment Blockage Period and ending 179 days
thereafter.  The Payment Blockage Period shall end earlier if such Payment
Blockage Period is terminated (1) by written notice to the Trustee and such
Guarantor from the Person or Persons who gave such Blockage Notice; (2) because
the default giving rise to such Blockage Notice is cured, waived or otherwise
no longer continuing; or (3) because such Designated Senior Debt has been
discharged or repaid in full in cash. Notwithstanding the provisions described
in the immediately preceding two sentences (but subject to the provisions
contained in the first sentence of this Section), unless the holders of such
Designated Senior Debt giving such Payment Notice or the Representative of such
Designated Senior Debt shall have accelerated the maturity of such Designated
Senior Debt, any Guarantor shall be entitled to resume payments pursuant to its
Guarantee after termination of such Payment Blockage Period.  No Guarantor
shall be subject to more than one Blockage Period in any consecutive
360-day  period, irrespective of the number of defaults with respect to
Designated Senior Debt of such Guarantor during such period; provided, however, that if any
Blockage Notice within such 360-day period is given to the Trustee by or on
behalf of any holders of Designated Senior Debt of such Guarantor (other than
the Bank Indebtedness), the Representative of the Bank Indebtedness shall be
entitled to give another Blockage Notice within such period; provided  further,  however,
that in no event shall the total number of days during which any Payment
Blockage Period or Periods is in effect exceed 179 days in the aggregate during
any 360-day consecutive period, and there must be 181 days during any 360-day
consecutive period during which no Payment Blockage Period is in effect. 
For purposes of this Section, no default or event of default which existed or
was continuing on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Debt of such Guarantor initiating such
Payment Blockage Period shall be, or be made, the basis of the commencement of
a subsequent Payment Blockage Period by the Representative of such Designated
Senior Debt, whether or not within a period of 360 consecutive days, unless
such default or event of default shall have been cured or waived for a period
of not less than 90 consecutive days.

 

               
SECTION 12.04.  Demand for Payment.

 

If a demand for payment
is made on a Guarantor pursuant to Article 11 hereof, the Trustee shall
promptly notify the holders of the Designated Senior Debt of such Guarantor (or
their Representatives) of such demand.

 

92

 

               
SECTION 12.05.  When Distribution Must Be Paid Over.

 

If a distribution is made
to Holders that because of this Article 12 should not have been made to
them, the Holders who receive the distribution shall hold it in trust for
holders of Senior Debt of the applicable Guarantor and pay it over to them or
their Representatives as their interests may appear.  If any Designated
Senior Debt of a Guarantor is outstanding, such Guarantor shall not make a
payment on its Guarantee until five Business Days after the Representatives of
all the issuers of Designated Senior Debt of such Guarantor receive notice of
such acceleration and, thereafter, shall be entitled to pay the Notes only if
this Article 12 otherwise permits payment at that time.

 

               
SECTION 12.06.  Subrogation.

 

After all Senior Debt of
a Guarantor is paid in full and until the Notes are paid in full, Holders shall
be subrogated to the rights of holders of such Senior Debt to receive
distributions applicable to Senior Debt of such Guarantor.  A distribution
made under this Article 12 to holders of such Senior Debt which otherwise
would have been made to Holders is not, as between the relevant Guarantor and
Holders, a payment by such Guarantor on such Senior Debt.

 

               
SECTION 12.07.  Relative Rights.

 

This Article 12
defines the relative rights of Holders and holders of Senior Debt of a
Guarantor.  Nothing in this Indenture shall:

 

(1)                                 
impair, as between a Guarantor
and Holders, the obligation of such Guarantor, which is absolute and
unconditional, to pay its Guarantee to the extent set forth in Article 11;
or

 

(2)                                 
prevent the Trustee or any
Holder from exercising its available remedies upon a default by such Guarantor
under its Guarantee, subject to the rights of holders of Senior Debt of such
Guarantor to receive distributions otherwise payable to Holders.

 

               
SECTION 12.08.  Subordination May Not Be Impaired by Company.

 

No right of any holder of
Senior Debt of any Guarantor to enforce the subordination of the Guarantee of
such Guarantor shall be impaired by any act or failure to act by such Guarantor
or by its failure to comply with this Indenture.

 

               
SECTION 12.09.  Rights of Trustee and Paying Agent.

 

Notwithstanding
Section 12.03 or any other provision of this Indenture or the Notes, the
Trustee or Paying Agent shall continue to make payments on any Guarantee and
shall not be charged with knowledge of the existence of facts that would
prohibit the making of any such payments unless, not less than two Business
Days prior to the date of such payment, a Responsible Officer of the Trustee
receives written notice satisfactory to it that such payments may not be made
under this Article 12 and, prior to the receipt of any such written
notice, the Trustee, shall be entitled in all respects conclusively to presume
that no such fact exists.  Unless the Trustee shall have received the
notice provided for in the preceding sentence, the Trustee shall have full
power and authority to receive such payment and to apply the same to the
purpose for which it was received, and shall not be affected by any notice to
the contrary which may be

 

93

 

received by it on or after such date.  The
foregoing shall not apply to any Affiliate of the Company acting as Paying
Agent.  The Company, the relevant Guarantor, a Representative or a holder
of Senior Debt of such Guarantor shall be entitled to give such notice; provided, however, that, if an issue of Senior
Debt of any Guarantor has a Representative, only the Representative shall be
entitled to give the notice.

 

The Trustee in its
individual or any other capacity shall be entitled to hold Senior Debt of any
Guarantor with the same rights it would have if it were not the Trustee. 
The Registrar and the Paying Agent may do the same with like rights.  The
Trustee shall be entitled to all the rights set forth in this Article 12
with respect to any Senior Debt of any Guarantor which may at any time be held
by it, to the same extent as any other holder of such Senior Debt; and nothing
in Article 7 shall deprive the Trustee of any of its rights as such
holder.  Notwithstanding anything in this Article 12 to the contrary,
all amounts owed to the Trustee (including amounts owed pursuant to Sections
6.10 and 7.07 hereof) in each of its capacities hereunder shall not be
subordinated to any Senior Debt of a Guarantor or otherwise.

 

               
SECTION 12.10.  Distribution or Notice to Representative.

 

Whenever any Person is to
make a distribution or give a notice to holders of Senior Debt of any
Guarantor, such Person shall be entitled to make such distribution or give such
notice to their Representative (if any).

 

               
SECTION 12.11.  Article 12 Not To Prevent Events of Default or
Limit Right To Demand Payment.

 

The failure to make a
payment pursuant to a Guarantee by reason of any provision in this
Article 12 shall not be construed as preventing the occurrence of a
Default.  Nothing in this Article 12 shall have any effect on the
right of the Holders or the Trustee to make a demand for payment on any Guarantor
pursuant to its Guarantee.

 

               
SECTION 12.12.  Trustee Entitled To Rely.

 

Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Holders
shall be entitled to rely (1) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in
Section 12.02 are pending, (2) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Holders or (3) upon the Representatives for the holders of
Senior Debt of any Guarantor for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Debt and other indebtedness of such Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 12.  In the event
that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Debt of any Guarantor
to participate in any payment or distribution pursuant to this Article 12,
the Trustee shall be entitled to request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Debt of such
Guarantor held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 12, and, if such evidence is not
furnished, the Trustee shall be entitled to defer any payment to such Person
pending

 

94

 

judicial determination as to the right of such Person
to receive such payment.  The provisions of Sections 7.01 and 7.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 12.

 

               
SECTION 12.13.  Trustee To Effectuate Subordination.

 

Each Holder by accepting
a Note authorizes and directs the Trustee on his behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
between the Holders and the holders of Senior Debt of any Guarantor as provided
in this Article 12 and appoints the Trustee as attorney-in-fact for any
and all such purposes.

 

               
SECTION 12.14.  Trustee Not Fiduciary for Holders of Senior Debt of
Guarantor.

 

The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt of any Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Holders or the Company or any other Person, money or assets to
which any holders of such Senior Debt shall be entitled by virtue of this
Article 12 or otherwise.

 

               
SECTION 12.15.  Reliance by Holders of Senior Debt of Guarantors on
Subordination Provisions.

 

Each Holder by accepting
a Note acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of any
Senior Debt of any Guarantor, whether such Senior Debt was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Debt and such holder of Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior Debt.

 

ARTICLE 13

MISCELLANEOUS

 

               
SECTION 13.01.  Trust Indenture Act Controls.

 

If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA
§ 318(c), the imposed duties shall control.

 

               
SECTION 13.02.  Notices.

 

Any notice or
communication by the Company, any Guarantor or the Trustee to the others is
duly given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others’ address:

 

95

 

If to the Company and/or
any Guarantor:

 

Polypore, Inc.

13800 South Lakes Drive

Charlotte, NC  28273

Facsimile No.: (704) 587-8722

Attention: Lynn K. Amos

 

With copies to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Facsimile No.: (212) 728-9228

Attention: William E. Hiller

 

If to the Trustee:

 

The Bank of New York

101 Barclay Street, Fl 21 West

New York, New York 10284

Facsimile No.: (212) 815-5802 

Attention:  Global Finance Unit

 

The Company, any Guarantor or the Trustee, by notice
to the others may designate additional or different addresses for subsequent
notices or communications.

 

All notices and
communications (other than those sent to Holders or the Trustee) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery. All notices
and communications sent to the Trustee shall be deemed to have been duly given
when actually received.

 

Any notice or
communication to a Holder shall be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing
next day delivery to its address shown on the register kept by the Registrar.
Any notice or communication shall also be so mailed to any Person described in
TIA § 313(c), to the extent required by the TIA. 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.  So long as the Euro Notes are
listed on the Luxembourg Stock Exchange and it is required by the rules of the
Luxembourg Stock Exchange, such notice to the Holders of the Euro Notes will be
published in English in a leading newspaper having general circulation in
Luxembourg (which is expected to be the Luxemburger
Wort) or, if such publication is not practicable, in one other
leading English language daily newspaper with general circulation in Europe,
such newspaper being published on each business day in morning editions,
whether or not it shall be published in Saturday, Sunday or holiday editions.

 

96

 

If a notice or
communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.

 

If the Company mails a
notice or communication to Holders, it shall mail a copy to the Trustee, each
Paying Agent and the Registrar at the same time.

 

               
SECTION 13.03.  Communication by Holders of Notes with Other Holders of
Notes.

 

Holders may communicate
pursuant to TIA § 312(b) with other Holders with respect to their rights
under this Indenture or the Notes. The Company, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 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 any action under this
Indenture, the Company shall furnish to the Trustee:

 

(a)                                 
an Officers’
Certificate in form reasonably satisfactory to the Trustee (which shall include
the statements set forth in Section 13.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and

 

(b)                                
an Opinion of Counsel
in form reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 13.05 hereof) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been 
complied with.

 

               
SECTION 13.05.  Statements Required in Certificate or Opinion.

 

Each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture (other than a certificate provided pursuant to TIA
§ 314(a)(4)) shall comply with the provisions of TIA § 314(e) and
shall include:

 

(a)                                 
a statement that the
Person making such certificate or opinion has read such covenant or condition;

 

(b)                                
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;

 

(c)                                 
a statement that, in
the opinion of such Person, he or she has or they have 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

 

(d)                                
a statement as to
whether or not, in the opinion of such Person, such condition or covenant has
been complied with.

 

97

 

               
SECTION 13.06.  Rules by Trustee and Agents.

 

The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.

 

               
SECTION 13.07.  Governing Law.

 

THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE
NOTES AND THE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

 

               
SECTION 13.08.  No Adverse Interpretation of Other Agreements.

 

This Indenture may not be
used to interpret any other indenture, loan or debt agreement of the Company or
its Subsidiaries or of any other Person. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

 

               
SECTION 13.09.  Successors.

 

All agreements of the
Company and the Guarantors in this Indenture and the Notes shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.

 

               
SECTION 13.10.  Severability.

 

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

 

               
SECTION 13.11.  Counterpart 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.

 

               
SECTION 13.12.  Table of Contents, Headings, etc.

 

The Table of Contents,
Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.

 

               
SECTION 13.13.  Currency of Account; Conversion of Currency; Foreign
Exchange Restrictions.

 

(a)                                 
U.S. Dollars are the
sole currency of account and payment for all sums payable by the Company and
the Guarantors under or in connection with the Dollar Notes, the Guarantees of
the Dollar Notes or this Indenture to the extent it relates to the Dollar
Notes, including damages related thereto, and Euros are the sole currency of
account and payment for all sums payable by the Company and the Guarantors
under or in connection with the Euro Notes, the Guarantees of

 

98

 

the Euro Notes or this Indenture to the extent it
relates to the Euro Notes, including damages related thereto.  Any amount
received or recovered in a currency other than U.S. Dollars by a Holder of
Dollar Notes or Euro by a Holder of Euro Notes (whether as a result of, or of
the enforcement of, a judgment or order of a court of any jurisdiction, in the
winding-up or dissolution of the Company or otherwise) in respect of any sum
expressed to be due to it from the Company shall only constitute a discharge to
the Company to the extent of the U.S. Dollar or Euro amount, as the case may
be, which the recipient is able to purchase with the amount so received or
recovered in that other currency on the date of that receipt or recovery (or,
if it is not practicable to make that purchase on that date, on the first date
on which it is practicable to do so).  If that U.S. Dollar or Euro amount
is less than the U.S. Dollar or Euro amount expressed to be due to the
recipient under the applicable Notes, the Company shall indemnify it against
any loss sustained by it as a result as set forth in
Section 13.13(b).  In any event, the Company and the Guarantors shall
indemnify the recipient against the cost of making any such purchase.  For
the purposes of this Section 13.13, it will be sufficient for the Holder
of a Note to certify in a satisfactory manner (indicating sources of
information used) that it would have suffered a loss had an actual purchase of
U.S. Dollars or Euros, as the case may be, been made with the amount so
received in that other currency on the date of receipt or recovery (or, if a
purchase of U.S. Dollars or Euros, as applicable, on such date had not been
practicable, on the first date on which it would have been practicable, it
being required that the need for a change of date be certified in the manner
mentioned above).  The indemnities set forth in this Section 13.13
constitute separate and independent obligations from other obligations of the
Company and the Guarantors, shall give rise to a separate and independent cause
of action, shall apply irrespective of any indulgence granted by any Holder of
the Notes and shall continue in full force and effect despite any other
judgment, order, claim or proof for a liquidated amount in respect of any sum
due under the Notes.

 

(b)                                
The Company and the
Guarantors, jointly and severally, covenant and agree that the following
provisions shall apply to conversion of currency in the case of the Notes, the
Guarantees and this Indenture:

 

(1)                                 
(A)                             
If for the purpose of obtaining
judgment in, or enforcing the judgment of, any court in any country, it becomes
necessary to convert into a currency (the “Judgment Currency”) an amount due in
any other currency (the “Base Currency”), then the conversion shall be made at
the rate of exchange prevailing on the Business Day before the day on which the
judgment is given or the order of enforcement is made, as the case may be
(unless a court shall otherwise determine).

 

(B)                               
If there is a change
in the rate of exchange prevailing between the Business Day before the day on
which the judgment is given or an order of enforcement is made, as the case may
be (or such other date as a court shall determine), and the date of receipt of
the amount due, the Company and the Guarantors will pay such additional (or, as
the case may be, such lesser) amount, if any, as may be necessary so that the
amount paid in the Judgment Currency when converted at the rate of exchange
prevailing on the date of receipt will produce the amount in the Base Currency
originally due.

 

(2)                                 
In the event of the winding-up
of the Company or any Guarantor at any time while any amount or damages owing
under the Notes, the Guarantees and this Indenture, or any

 

99

 

judgment
or order rendered in respect thereof, shall remain outstanding, the Company and
the Guarantors shall indemnify and hold the Holders and the Trustee harmless
against any deficiency arising or resulting from any variation in rates of
exchange between (i) the date as of which the Applicable Currency Equivalent of
the amount due or contingently due under the Notes, the Guarantees and this
Indenture (other than under this subsection (b)(2)) is calculated for the
purposes of such winding-up and (ii) the final date for the filing of proofs of
claim in such winding-up.  For the purpose of this subsection (b)(2),
the final date for the filing of proofs of claim in the winding-up of the
Company or any Guarantor shall be the date fixed by the liquidator or otherwise
in accordance with the relevant provisions of applicable law as being the
latest practicable date as at which liabilities of the Company or such
Guarantor may be ascertained for such winding-up prior to payment by the
liquidator or otherwise in respect thereto.

 

(c)                                 
The obligations
contained in subsections (a), (b)(1)(B) and (b)(2) of this Section 13.13
shall constitute separate and independent obligations from the other
obligations of the Company and the Guarantors under this Indenture, shall give
rise to separate and independent causes of action against the Company and the
Guarantors, shall apply irrespective of any waiver or extension granted by any
Holder or the Trustee or either of them from time to time and shall continue in
full force and effect notwithstanding any judgment or order or the filing of
any proof of claim in the winding-up of the Company or any Guarantor for a
liquidated sum in respect of amounts due hereunder (other than under
subsection (b)(2) above) or under any such judgment or order.  Any
such deficiency as aforesaid shall be deemed to constitute a loss suffered by
the Holders or the Trustee, as the case may be, and no proof or evidence of any
actual loss shall be required by the Company or any Guarantor or the liquidator
or otherwise or any of them.  In the case of subsection (b)(2) above,
the amount of such deficiency shall not be deemed to be reduced by any
variation in rates of exchange occurring between the said final date and the
date of any liquidating distribution.

 

(d)                                
The term “rate(s) of
exchange” shall mean the rate of exchange quoted by Reuters at 10:00 a.m. (New
York time) for spot purchases of the Base Currency with the Judgment Currency
other than the Base Currency referred to in subsections (b)(1) and (b)(2) above
and includes any premiums and costs of exchange payable.

 

100

 

IN WITNESS WHEREOF, the
parties have caused this Indenture to be duly executed as of the date first
written above.

 

	
   

  	
  PP ACQUISITION CORPORATION,

  to be merged with and into, POLYPORE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name: Lynn Amos

  
	
   

  	
   

  	
  Title:  Chief
  Financial Officer, Treasurer and

  Secretary

  

 

101

 

	
   

  	
  DARAMIC, INC., a Delaware corporation

  
	
   

  	
  CELGARD, INC., a Delaware corporation

  
	
   

  	
  POLYPORE HOLDINGS, INC., a Delaware

  corporation

  
	
   

  	
  DARAMIC INTERNATIONAL, INC., a Delaware

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name: Lynn Amos

  
	
   

  	
   

  	
  Title: Executive Vice
  President, Chief Financial Officer, Treasurer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  as Trustee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
     /s/
  Miriam Y. Molina

  	
   

  
	
   

  	
   

  	
  Name: Miriam Y. Molina

  
	
   

  	
   

  	
  Title: Assistant Vice
  President

  

 

102

 

The undersigned hereby
acknowledges and agrees that, upon the effectiveness of the merger of PP
Acquisition Corporation with and into Polypore, Inc. with Polypore, Inc.
continuing as the surviving corporation, it will succeed by operation of law to
all of the rights and obligations of PP Acquisition Corporation set forth
herein and that all references herein to the “Company” shall thereupon be
deemed to be references to the undersigned.

 

	
   

  	
  POLYPORE, INC.,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
     /s/
  Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name: Lynn Amos

  
	
   

  	
   

  	
  Title: Executive Vice
  President, Chief Financial

  Officer, Treasurer and Secretary

  
	
   

  	
   

  	
   

  	
   

  

 

103

 

RULE
144A/REGULATION S APPENDIX

 

PROVISIONS
RELATING TO INITIAL NOTES, 

ADDITIONAL NOTES AND EXCHANGE NOTES

 

1.                                      
Definitions

 

1.1                                
Definitions

 

For the purposes of this
Appendix the following terms shall have the meanings indicated below:

 

“Clearstream” means
Clearstream Banking, société anonyme, or any successor securities clearing
agency.

 

“Common Depository”
means, with respect to the Euro Notes, The Bank of New York Depository
(Nominees) Limited as common depository for Euroclear and Clearstream or
another Person designated as common depository by the Company, which Person
must be a clearing agency registered under the Exchange Act.

 

“Definitive Dollar Note”
means a certificated Initial Dollar Note or Exchange Dollar Note (bearing the
Restricted Notes Legend if the transfer of such Note is restricted by
applicable law) that does not include the Global Notes Legend.

 

“Definitive Euro Note”
means a certificated Initial Euro Note or Exchange Euro Note (bearing the
Restricted Notes Legend if the transfer of such Note is restricted by
applicable law) that does not include the Global Notes Legend.

 

“Definitive Notes” means,
collectively, Definitive Dollar Notes and Definitive Euro Notes.

 

“Depository” means,
respect to the Dollar Notes, The Depository Trust Company, its nominees and
their respective successors.

 

“Euroclear” means the
Euroclear Clearance System or any successor securities clearing agency.

 

“Global Notes Legend”
means the legend set forth under that caption in the applicable Exhibit to this
Indenture.

 

“IAI” means an
institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.

 

“Initial Purchasers”
means (1) with respect to the Initial Notes issued on the Issue Date, J.P.
Morgan Securities Inc., Bear, Stearns & Co. Inc., UBS Securities LLC and
Lehman Brothers Inc. (in the case of the Initial Dollar Notes) and J.P. Morgan
Securities Ltd., Bear, Stearns International Limited, UBS Limited and Lehman
Brothers International (in the case of the Initial

 

 

Euro Notes) and (2) with respect to each issuance of
Additional Notes, the Persons purchasing or underwriting such Additional Notes
under the related Purchase Agreement.

 

“Purchase Agreement”
means with (1) respect to the Initial Notes issued on the Issue Date, the
Purchase Agreement dated May 6, 2004, among the Company, PP Acquisition
Corporation and the Initial Purchasers, and (2) with respect to each issuance
of Additional Notes, the purchase agreement or underwriting agreement among the
Company and the Persons purchasing or underwriting such Additional Notes.

 

“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 Notes, to issue and deliver to such
Holders, in exchange for the Initial Notes, a like aggregate principal amount
of Exchange Notes registered under the Securities Act.

 

“Registration Rights
Agreement” means (1) with respect to the Initial Notes issued on the Issue
Date, the Registration Rights Agreement dated May 13, 2004, among the Company,
the Guarantors and the Initial Purchasers, and (2) with respect to each
issuance of Additional Notes issued in a transaction exempt from the
registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company, the Guarantors and the Persons purchasing
such Additional Notes under the related Purchase Agreement.

 

“Regulation S” means
Regulation S under the Securities Act.

 

“Regulation S Notes”
means all Initial Notes offered and sold outside the United States in reliance
on Regulation S.

 

“Restricted Period”, with
respect to any Notes, means the period of 40 consecutive days beginning on and
including the later of (a) the day on which such Notes 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 Issue Date, and with
respect to any Additional Notes that are Transfer Restricted Notes, it means
the comparable period of 40 consecutive days.

 

“Restricted Notes Legend”
means the legend set forth in Section 2.2(f)(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 Notes” means
all Initial Notes offered and sold to QIBs in reliance on Rule 144A.

 

“Note Custodian” means
the Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.

 

“Notes” means the Initial
Notes and the Exchange Notes treated as a single class.

 

2

 

“Securities Custodian”
means the custodian with respect to a Global Note (as appointed by the
Depository), or any successor Person thereto and shall initially be the
Trustee.

 

“Shelf Registration
Statement” means the registration statement issued by the Company in connection
with the offer and sale of Initial Notes pursuant to a Registration Rights
Agreement.

 

“Transfer Restricted
Notes” means Definitive Notes and any other Notes that bear or are required to
bear or are subject to the Restricted Notes Legend.

 

“Unrestricted Definitive
Note” means Definitive Notes and any other Notes that are not required to bear,
or are not subject to, the Restricted Notes Legend.

 

1.2                                
Other Definitions

 

	
  Term:

  	
   

  	
  Defined
  in Section:

  
	
  “Agent Members”

  	
   

  	
  2.1(b)

  
	
  “Global Dollar Notes”

  	
   

  	
  2.1(b)

  
	
  “Global Euro Notes”

  	
   

  	
  2.1(b)

  
	
  “Global Notes”

  	
   

  	
  2.1(b)

  
	
  “Regulation S Global
  Dollar Notes”

  	
   

  	
  2.1(b)

  
	
  “Regulation S Global
  Euro Notes”

  	
   

  	
  2.1(b)

  
	
  “Regulation S Global
  Notes”

  	
   

  	
  2.1(b)

  
	
  “Rule 144A Global
  Dollar Note”

  	
   

  	
  2.1(b)

  
	
  “Rule 144A Global Euro
  Note”

  	
   

  	
  2.1(b)

  
	
  “Rule 144A Global
  Notes”

  	
   

  	
  2.1(b)

  

 

2.                                      
The Notes.

 

2.1                                
Form and Dating;
Global Notes. 
(a) The Initial Notes issued on the date hereof will be (i) offered and sold by
the Company pursuant to the Purchase Agreement and (ii) resold, initially only
to (1) QIBs in reliance on Rule 144A and (2) Persons other than U.S. Persons
(as defined in Regulation S) in reliance on Regulation S.  Such Initial
Notes may thereafter be transferred to, among others, QIBs, purchasers in
reliance on Regulation S and, except as set forth below, IAIs in accordance
with Rule 501.  Additional Notes 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.

 

(b)                                
Global Notes.  (i)  Rule 144A Notes that
are Dollar Notes initially shall be represented by one or more Notes in
definitive, fully registered, global form without interest coupons
(collectively, the “Rule 144A Global Dollar Notes”).  Rule 144A
Notes that are Euro Notes initially shall be represented by one or more Notes
in definitive, fully registered, global form without interest coupons
(collectively, the “Rule 144A Global Euro Notes” and, together with the
Rule 144A Global Dollar Notes, the “Rule 144A Global Notes”). 
Regulation S Notes that are Dollar Notes initially shall be
represented by one or more Notes in fully registered, global form
without interest coupons (collectively, the “Regulation S Global Dollar
Notes”).  Regulation S Notes that are Euro Notes initially shall be
represented by one or more Notes in

 

3

 

fully registered, global
form without interest coupons (collectively, the “Regulation S Global Euro
Notes” and, together with the Regulation S Global Dollar Notes, the “Regulation
S Global Notes”).  The term “Global Dollar Notes” means the
Rule 144A Global Dollar Notes and the Regulation S Global Dollar Notes. 
The term “Global Euro Notes” means, collectively, the Rule 144A Global
Euro Notes and the Regulation S Global Euro Notes.  The term “Global
Notes” means, collectively, the Rule 144A Global Notes and the Regulation S
Global Notes.  The Global Notes shall bear the Global Note Legend. 
The Global Dollar Notes initially shall (i) be registered in the name of the
Depository or the nominee of such Depository, in each case for credit to an
account of an Agent Member, (ii) be delivered to the Trustee as custodian for
such Depository and (iii) bear the Restricted Notes Legend.  The Global
Euro Notes initially shall (i) be registered in the name of the Common
Depository or the nominee of such Common Depository, in each case for credit to
an account of an Agent Member, (ii) be delivered to the Euro Paying Agent as
custodian for such Common Depository and (iii) bear the Restricted Notes
Legend.

 

Members of, or direct or
indirect participants in, the Depository, Euroclear or Clearstream (“Agent
Members”) shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depository or the Common Depository, or
the Trustee as its custodian, or under the Global Notes.  The Depository
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Dollar Notes for all purposes
whatsoever.  The Common Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
the Global Euro Notes 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 the Common
Depository, as the case may be, or impair, as between the Depository, Euroclear
or Clearstream, as the case may be, and their respective Agent Members, the
operation of customary practices governing the exercise of the rights of a
Holder of any Note.

 

(ii)                                 
Transfers of Global
Dollar Notes shall be limited to transfer in whole, but not in part, to the
Depository, its successors or their respective nominees.  Transfers of
Global Euro Notes shall be limited to transfer in whole, but not in part, to
the Common Depository, its successor and their respective nominees. 
Interests of beneficial owners in the Global Notes may be transferred or exchanged
for Definitive Notes only in accordance with the applicable rules and
procedures of the Depository, Euroclear or Clearstream, as the case may be, and
the provisions of Section 2.2.  In addition, a Global Note shall be
exchangeable for Definitive Notes if (i) in the case of a Global Dollar Note,
the Depository (x) notifies the Company that it is unwilling or unable to
continue as depository for such Global Note and the Company thereupon fails to
appoint a successor depository or (y) has ceased to be a clearing agency
registered under the Exchange Act, (ii) in the case of a Global Euro Note, (x)
Euroclear or Clearstream notifies the Company that it is unwilling or unable to
continue as clearing agency or (y) the Common Depository notifies the Company
that it is unwilling or unable to continue as common depository for such Global
Euro Note and the Company fails to appoint a successor common depository within
120 days of such notice or (iii) in the case of any Global Note, there shall
have occurred and be continuing an Event of Default with respect to such Global
Note.  In all cases, Definitive Notes delivered in exchange for any Global
Note or beneficial interests therein shall be registered in the names, and
issued in any approved denominations, requested by or on behalf of 

 

4

 

the Depository or the Common Depository, as
applicable, in accordance with its customary procedures.

 

(iii)                              
In connection with
the transfer of a Global Note as an entirety to beneficial owners pursuant to
subsection (i) of this Section 2.1(b), such Global Note shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and make available for delivery, to
each beneficial owner identified by the Depository in writing in exchange for
its beneficial interest in such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations.

 

(iv)                             
Any Transfer
Restricted Note delivered in exchange for an interest in a Global Note pursuant
to Section 2.2 shall, except as otherwise provided in Section 2.2,
bear the Restricted Notes Legend.

 

(v)                                
Notwithstanding the
foregoing, through the Restricted Period, a beneficial interest in such
Regulation S Global Note may be held only through Euroclear or Clearstream
unless delivery is made in accordance with the applicable provisions of
Section 2.2.

 

(vi)                             
The Holder of any
Global Note 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
Notes.

 

2.2                                
Transfer and
Exchange.

 

(a)                                 
Transfer and
Exchange of Global Notes.  A Global Note may not be transferred as a whole except as set
forth in Section 2.1(b).  Global Notes will not be exchanged by the
Company for Definitive Notes except under the circumstances described in
Section in Section 2.1(b)(ii).  Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07 and
2.10 of this Indenture.  Beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.2(b) or 2.2(g).

 

(b)                                
Transfer and
Exchange of Beneficial Interests in Global Notes.  The transfer and exchange of beneficial interests
in the Global Dollar Notes shall be effected through the Depository, in
accordance with the provisions of this Indenture and the applicable rules and
procedures of the Depository.  The transfer and exchange of beneficial
interests in the Global Euro Notes shall be effected through the Common
Depository, in accordance with the provisions of this Indenture and the
applicable rules and procedures of Euroclear and Clearstream.  Beneficial
interests in Restricted Global Notes shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.  Beneficial interests in Global Dollar Notes shall be
transferred or exchanged only for beneficial interests in Global Dollar
Notes.  Beneficial interests in Global Euro Notes shall be transferred or
exchanged only for beneficial interests in Global Euro Notes.  Transfers
and exchanges of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well
as one or more of the other following subparagraphs, as applicable:

 

(i)                                    
Transfer of
Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted Global
Note may be transferred to Persons who take delivery thereof

 

5

 

in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth
in the Restricted Notes Legend; provided,
however, that prior to the
expiration of the Restricted Period, transfers of beneficial interests in a
Regulation S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser).  A beneficial
interest in an Unrestricted Global Dollar Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Dollar Note.  Beneficial interests in any Unrestricted
Global Euro Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Euro Note.  No
written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.2(b)(i).

 

(ii)                                 
All Other
Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers
and exchanges of beneficial interests in any Global Dollar Note that is not
subject to Section 2.2(b)(i), the transferor of such beneficial interest
must deliver to the Registrar (1) a written order from an Agent Member given to
the Depository in accordance with the applicable rules and procedures of the
Depository directing the Depository to credit or cause to be credited a
beneficial interest in another Global Dollar Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given
in accordance with the applicable rules and procedures of the Depository
containing information regarding the Agent Member account to be credited with
such increase.  In connection with all transfers and exchanges of
beneficial interests in any Global Euro Note that is not subject to
Section 2.2(b)(i), the transferor of such beneficial interest must deliver
to the Registrar (1) a written order from an Agent Member given to the Common
Depository in accordance with the applicable rules and procedures of Euroclear
or Clearstream directing the Common Depository to credit or cause to be credited
a beneficial interest in another Global Euro Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given
in accordance with the applicable rules and procedures of Euroclear or
Clearstream containing information regarding the Agent Member account to be
credited with such increase.  Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the Securities Act,
the Trustee shall adjust the principal amount of the relevant Global Note
pursuant to Section 2.2(g).

 

(iii)                              
Transfer of
Beneficial Interests to Another Restricted Global Note.  A beneficial interest in (x) a
Transfer Restricted Global Dollar Note may be transferred to a Person who takes
delivery thereof in the form of a beneficial interest in another Transfer
Restricted Global Dollar Note and (y) a Transfer Restricted Global Euro Note
may be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Transfer Restricted Global Euro Note, in each
case if the transfer complies with the requirements of Section 2.2(b)(ii)
above and the Registrar receives the following:

 

(A)                             
if the transferee
will take delivery in the form of a beneficial interest in a Rule 144A Global
Note, then the transferor must deliver a certificate in the form attached to
the applicable Note; and

 

(B)                               
if the transferee
will take delivery in the form of a beneficial interest in a Regulation S
Global Note, then the transferor must deliver a certificate in the form
attached to the applicable Note.

 

6

 

(iv)                             
Transfer and Exchange
of Beneficial Interests in a Transfer Restricted Global Note for Beneficial
Interests in an Unrestricted Global Note.  A beneficial interest in (x) a
Transfer Restricted Global Dollar Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Dollar Note or transferred
to a Person who takes delivery thereof in the form of a beneficial interest in
an Unrestricted Global Dollar Note or (y) a Restricted Global Euro Note may be
exchanged by any holder thereof for a beneficial interest in an Unrestricted
Global Euro Note or transferred to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Euro Note, in each case
if the exchange or transfer complies with the requirements of
Section 2.2(b)(ii) above and the Registrar receives the following:

 

(A)                             
if the holder of such
beneficial interest in a Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form attached to the applicable Note; or

 

(B)                               
if the holder of such
beneficial interest in a Restricted Global Note proposes to transfer such
beneficial interest to a Person who shall take delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note, a certificate from such
holder in the form attached to the applicable Note,

 

and, in each such case, if the Registrar so requests
or if the applicable rules and procedures of the Depository, Euroclear or
Clearstream, as applicable, so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Restricted Notes Legend are no longer
required in order to maintain compliance with the Securities Act.  If any
such transfer or exchange is effected pursuant to this subparagraph (iv) at a
time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an written order of the Company in the form of
an Officers’ Certificate in accordance with Section 2.02, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred or exchanged pursuant to this subparagraph (iv).

 

(v)                                
Transfer and Exchange
of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests
in a Restricted Global Note.  Beneficial interests in an Unrestricted
Global Note cannot be exchanged for, or transferred to Persons who take
delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.

 

(c)                                 
Transfer and
Exchange of Beneficial Interests in Global Notes for Definitive Notes.  A beneficial interest in a Global
Note may not be exchanged for a Definitive Note except under the circumstances
described in Section 2.1(b)(ii).  A beneficial interest in a Global
Note may not be transferred to a Person who takes delivery thereof in the form
of a Definitive Note except under the circumstances described in
Section 2.1(b)(ii).  In any case, beneficial interests in Global
Dollar Notes shall be transferred or exchanged only for Definitive Dollar Notes
and beneficial interests in Global Euro Notes shall be transferred or exchanged
only for Definitive Euro Notes.

 

7

 

(d)                                
Transfer and
Exchange of Definitive Notes for Beneficial Interests in Global Notes.  Definitive Dollar Notes shall be
transferred or exchanged only for beneficial interests in Global Dollar
Notes.  Definitive Euro Notes shall be transferred or exchanged only for
beneficial interests in Global Euro Notes.  Transfers and exchanges of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i), (ii) or (ii) below, as applicable:

 

(i)                                    
Transfer
Restricted Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a Transfer
Restricted Note proposes to exchange such Transfer Restricted Note for a
beneficial interest in a Restricted Global Note or to transfer such Transfer
Restricted Note to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:

 

(A)                             
if the Holder of such
Transfer Restricted Note proposes to exchange such Transfer Restricted Note for
a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form attached to the applicable Note;

 

(B)                               
if such Transfer
Restricted Note is being transferred to a Qualified Institutional Buyer in
accordance with Rule 144A under the Securities Act, a certificate from such
Holder in the form attached to the applicable Note;

 

(C)                               
if such Transfer
Restricted Note is being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a
certificate from such Holder in the form attached to the applicable Note;

 

(D)                              
if such Transfer
Restricted Note is being transferred pursuant to an exemption from the
registration requirements of the Securities Act in accordance with Rule 144
under the Securities Act, a certificate from such Holder in the form attached
to the applicable Note;

 

(E)                                
if such Transfer
Restricted Note is being transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D) above, a
certificate from such Holder in the form attached to the applicable Note,
including the certifications, certificates and Opinion of Counsel, if
applicable; or

 

(F)                                
if such Transfer
Restricted Note is being transferred to the Company or a Subsidiary thereof, a
certificate from such Holder in the form attached to the applicable Note;

 

the Trustee shall cancel the Transfer Restricted Note,
and increase or cause to be increased the aggregate principal amount of 
the appropriate Restricted Global Note.

 

(ii)                                 
Transfer
Restricted Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a Transfer Restricted
Note may exchange such Transfer Restricted

 

8

 

Definitive Note for a beneficial interest in an
Unrestricted Global Note or transfer such Transfer Restricted Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if the Registrar receives the following:

 

(A)                             
if the Holder of such
Transfer Restricted Note proposes to exchange such Transfer Restricted Note for
a beneficial interest in an Unrestricted Global Note, a certificate from such
Holder in the form attached to the applicable Note; or

 

(B)                               
if the Holder of such
Transfer Restricted Notes proposes to transfer such Transfer Restricted Note to
a Person who shall take delivery thereof in the form of a beneficial interest
in an Unrestricted Global Note, a certificate from such Holder in the form
attached to the applicable Note,

 

and, in each such case, if the Registrar so requests
or if the applicable rules and procedures of the Depository, Euroclear or
Clearstream, as applicable, so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Restricted Notes Legend are no longer
required in order to maintain compliance with the Securities Act.  Upon
satisfaction of the conditions of this subparagraph (ii), the Trustee shall
cancel the Transfer Restricted Notes and increase or cause to be increased the
aggregate principal amount of the Unrestricted Global Note.  If any such
transfer or exchange is effected pursuant to this subparagraph (ii) at a time
when an Unrestricted Global Note has not yet been issued, the Company shall
issue and, upon receipt of an written order of the Company in the form of an
Officers’ Certificate, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of Transfer Restricted Notes transferred or exchanged pursuant to this
subparagraph (ii).

 

(iii)                              
Unrestricted
Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted
Definitive Note may exchange such Unrestricted Definitive Note for a beneficial
interest in an Unrestricted Global Note or transfer such Unrestricted Definitive
Note to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note at any time.  Upon receipt of a
request for such an exchange or transfer, the Trustee shall cancel the
applicable Unrestricted Definitive Note and increase or cause to be increased
the aggregate principal amount of one of the Unrestricted Global Notes. 
If any such transfer or exchange is effected pursuant to this subparagraph
(iii) at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an written order of the Company in the
form of an Officers’ Certificate, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of Unrestricted Definitive Notes transferred or
exchanged pursuant to this subparagraph (iii).

 

(iv)                             
Unrestricted
Definitive Notes to Beneficial Interests in Restricted Global Notes.  An Unrestricted Definitive Note
cannot be exchanged for, or transferred to a Person who takes delivery thereof
in the form of, a beneficial interest in a Restricted Global Note.

 

9

 

(e)                                 
Transfer and Exchange
of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes
and such Holder’s compliance with the provisions of this Section 2.2(e),
the Registrar shall register the transfer or exchange of Definitive
Notes.  Definitive Dollar Notes shall be transferred or exchanged only for
Definitive Dollar Notes.  Definitive Euro Notes shall be transferred or
exchanged only for Definitive Euro Notes.  Prior to such registration of
transfer or exchange, the requesting Holder shall present or surrender to the
Registrar the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by its attorney, duly authorized in writing.  In addition,
the requesting Holder shall provide any additional certifications, documents
and information, as applicable, required pursuant to the following provisions
of this Section 2.2(e).

 

(i)                                    
Transfer
Restricted Notes to Transfer Restricted Notes.  A Transfer Restricted Note may be transferred
to and registered in the name of a Person who takes delivery thereof in the
form of a Transfer Restricted Note if the Registrar receives the following:

 

(A)                             
if the transfer will
be made pursuant to Rule 144A under the Securities Act, then the transferor
must deliver a certificate in the form attached to the applicable Note;

 

(B)                               
if the transfer will
be made pursuant to Rule 903 or Rule 904 under the Securities Act, then the
transferor must deliver a certificate in the form attached to the applicable
Note;

 

(C)                               
if the transfer will
be made pursuant to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a certificate in the
form attached to the applicable Note;

 

(D)                              
if the transfer will
be made to an IAI in reliance on an exemption from the registration requirements
of the Securities Act other than those listed in subparagraphs (A) through (D)
above, a certificate in the form attached to the applicable Note; and

 

(E)                                
if such transfer will
be made to the Company or a Subsidiary thereof, a certificate in the form
attached to the applicable Note.

 

(ii)                                 
Transfer
Restricted Notes to Unrestricted Definitive Notes.  Any Transfer Restricted Note may
be exchanged by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note if the Registrar receives the following:

 

(1)                                 
if the Holder of such
Transfer Restricted Note proposes to exchange such Transfer Restricted Note for
an Unrestricted Definitive Note, a certificate from such Holder in the form
attached to the applicable Note; or

 

(2)                                 
if the Holder of such
Transfer Restricted Note proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of an

 

10

 

Unrestricted Definitive Note, a certificate from such
Holder in the form attached to the applicable Note,

 

and, in each such case, if the Registrar so requests,
an Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Restricted
Notes Legend are no longer required in order to maintain compliance with the
Securities Act.

 

(iii)                              
Unrestricted
Definitive Notes to Unrestricted Definitive Notes.  A Holder of an Unrestricted
Definitive Note may transfer such Unrestricted Definitive Notes to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note at any
time.  Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.

 

(iv)                             
Unrestricted
Definitive Notes to Transfer Restricted Notes.  An Unrestricted Definitive Note cannot be
exchanged for, or transferred to a Person who takes delivery thereof in the
form of, a Transfer Restricted Note.

 

At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with
Section 2.11.  At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an endorsement
shall be made on such Global Note by the Trustee or by the Depository or the
Common Depository, as applicable, at the direction of the Trustee to reflect
such reduction; and if the beneficial interest is being exchanged for or
transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depository or the Common Depository, as applicable, at
the direction of the Trustee to reflect such increase.

 

(f)                                   
Legend.

 

(i)                                    
Except as permitted
by the following paragraphs (ii), (iii) or (iv), each Note certificate
evidencing the Global Notes and the Definitive Notes (and all Notes 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 NOTE (OR ITS PREDECESSOR) 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
NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED

 

11

 

OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.  THE
HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT (A) IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) 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 NOTE, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS [IN
THE CASE OF RULE 144A NOTES:  TWO YEARS] [IN THE CASE OF REGULATION S NOTES: 
40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
(OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) 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 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 INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE NOTE 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 COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS

 

12

 

LEGEND.  THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.”

 

Each Definitive Note 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 Note that is a Definitive Note, the Registrar
shall permit the Holder thereof to exchange such Transfer Restricted Note for a
Definitive Note that does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted Note 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 Note).

 

(iii)                              
After a transfer of
any Initial Notes during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial  Notes, all
requirements pertaining to the Restricted Notes Legend on such Initial Notes
shall cease to apply and the requirements that any such Initial Notes be issued
in global form shall continue to apply.

 

(iv)                             
Upon the consummation
of a Registered Exchange Offer with respect to the Initial Notes pursuant to
which Holders of such Initial Notes are offered Exchange Notes in exchange for
their Initial Notes, all requirements pertaining to Initial Notes that Initial
Notes be issued in global form shall continue to apply, and Exchange Notes in
global form  without the Restricted Notes Legend shall be available to
Holders that exchange such Initial Notes in such Registered Exchange Offer.

 

(v)                                
Upon a sale or
transfer after the expiration of the Restricted Period of any Initial Note
acquired pursuant to Regulation S, all requirements that such Initial Note bear
the Restricted Notes Legend shall cease to apply and the requirements requiring
any such Initial Note be issued in global form shall continue to apply.

 

(vi)                             
Any Additional Notes
sold in a registered offering shall not be required to bear the Restricted
Notes Legend.

 

(g)                                
Cancellation or
Adjustment of Global Note.  At such time as all beneficial interests in a particular Global
Note have been exchanged for Definitive Notes or a particular Global Note has
been redeemed, repurchased or canceled in whole and not in part, each such
Global Note shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.11 of this Indenture.  At any time prior to
such cancellation, if any beneficial interest in a Global Note is exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall

 

13

 

be made on such Global
Note by the Trustee or by the Depository or the Common Depository, as
applicable, at the direction of the Trustee to reflect such reduction; and if
the beneficial interest is being exchanged for or transferred to a Person who
will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depository or the Common Depository, as applicable, at the direction of the
Trustee to reflect such increase.

 

(h)                                
Obligations with
Respect to Transfers and Exchanges of Notes.

 

(i)                                    
To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate, Definitive Notes and Global Notes 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 3.03, 4.10, 4.15 and 9.05 of this Indenture).

 

(iii)                              
Prior to the due
presentation for registration of transfer of any Note, the Company, the Trustee,
a Paying Agent or the Registrar may deem and treat the person in whose name a
Note is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note is overdue, and none of the
Company, the Trustee, a Paying Agent or the Registrar  shall be affected
by notice to the contrary.

 

(iv)                             
All Notes issued upon
any transfer or exchange pursuant to the terms of this Indenture shall evidence
the same debt and shall be entitled to the same benefits under this Indenture
as the Notes surrendered upon such transfer or exchange.

 

(i)                                    
No Obligation of
the Trustee.

 

(i)                                    
The Trustee shall
have no responsibility or obligation to any beneficial owner of a Global Note,
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 Notes 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 Notes.  All notices and
communications to be given to the Holders and all payments to be made to the
Holders under the Notes shall be given or made only to the registered Holders
(which shall be the Depository or its nominee in the case of a Global
Note).  In addition, for so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of such securities exchange so require, notices to
the Holders of the Notes shall be published in a newspaper having a general
circulation in Luxembourg (which is expected to be the Luxemburger Wort).  The rights of
beneficial owners in any Global Note shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository.  The

 

14

 

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 Note
(including any transfers between or among Depository participants, members or
beneficial owners in any Global Note) 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.

 

15

 

EXHIBIT A

 

[FORM OF FACE OF
INITIAL DOLLAR NOTE]

 

[Global Notes
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
NOTE 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 NOTE SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.

 

[Restricted Notes
Legend]

 

THIS NOTE (OR ITS
PREDECESSOR) 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 NOTE 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 NOTE, BY
ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (2) 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 NOTE, PRIOR TO THE
DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS [IN THE CASE OF RULE 144A NOTES:  TWO
YEARS] [IN THE CASE OF REGULATION S NOTES: 
40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
(OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) 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 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 INSTITUTIONAL
“ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED
INVESTOR ACQUIRING THE NOTE 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 COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

 

A-2

 

THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

Each Definitive Dollar Note 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.

 

A-3

 

[FORM OF INITIAL
DOLLAR NOTE]

 

	
  No.

  	
   

  	
  $                  

  

 

83/4%
Senior Subordinated Note due 2012

 

	
   

  	
  CUSIP No.
  [144A:                    ]/[REG
  S:               ]/[IAI:              ]

  
	
   

  	
  ISIN No.
  [144A:                    ]/[REG
  S:              ]/[IAI:              
  ]

  
	
   

  	
  Common
  Code:[144A                ]/[REG
  S:              ]/[IAI:              ]

  

 

PP ACQUISITION
CORPORATION, a Delaware corporation, promises to pay to
[                  ],
or registered assigns, the principal sum [of                    Dollars]
[listed on the Schedule of Increases or Decreases in Global Dollar Note
attached hereto](1) on May 15, 2012.

 

Interest Payment Dates:  May 15 and
November 15.

Record Dates: May 1 and November 1.

 

Additional provisions of
this Dollar Note are set forth on the other side of this Note.

 

IN WITNESS WHEREOF, the
parties have caused this instrument to be duly executed.

 

	
   

  	
  PP ACQUISITION
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

The undersigned hereby
acknowledges and agrees that, upon the effectiveness of the merger of PP
Acquisition Corporation with and into Polypore, Inc. with Polypore, Inc.
continuing as the surviving corporation, it will succeed by operation of law to
all of the rights and obligations of PP Acquisition Corporation set forth
herein and that all references herein to the “Company” shall thereupon be
deemed to be references to the undersigned.

 

POLYPORE, INC.,

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(1)               
Use the
Schedule of Increases and Decreases language if Dollar Note is in Global Form.

 

A-4

 

Dated:

 

	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  
	
   

  
	
  THE BANK OF NEW YORK,

  as Trustee, certifies that this is

  one of the Dollar Notes

  referred to in the Indenture.

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  

	
  */

  	
  If the Dollar Note is
  to be issued in global form, add the Global Notes Legend and the attachment
  from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES -
  SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.

  

 

A-5

 

[FORM OF REVERSE
SIDE OF INITIAL DOLLAR NOTE]

 

83/4%
Senior Subordinated Note due 2012

 

1.                                      
Interest

 

(a)                                 
PP ACQUISITION
CORPORATION, a Delaware corporation (such corporation, and its successors and
assigns under the Indenture, including Polypore, Inc. following the merger of
PP Acquisition Corporation with and into Polypore, Inc., hereinafter referred
to, being herein called the “Company”), promises to pay interest on the
principal amount of this Dollar Note at the rate per annum shown above. 
The Company shall pay interest semiannually on May 15 and November 15 of
each year, commencing November 15, 2004.  Interest on the Dollar
Notes 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
May 13, 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 Dollar
Notes, and it shall pay interest on overdue installments of interest at the
same rate to the extent lawful.

 

(b)                                
Registration
Rights Agreement. 
The Holder of this Dollar Note is entitled to the benefits of a Registration
Rights Agreement, dated as of May 13, 2004, among the Company, the Guarantors
and the Initial Purchasers.

 

2.                                      
Method of Payment

 

The Company shall pay
interest on the Dollar Notes (except defaulted interest) and Additional
Interest, if any, to the Persons who are registered Holders at the close of
business on May 1 and November 1 next preceding the interest payment date
even if Dollar Notes are canceled after the record date and on or before the
interest payment date.  Holders must surrender Notes 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 Dollar Notes represented by a Global Dollar Note (including
principal, premium, if any, interest and Additional Interest, if any) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company or any successor depositary.  The Company
will make all payments in respect of a certificated Dollar Note (including
principal, premium, if any, interest and Additional Interest, if any), at the
office of each Paying Agent, except that, at the option of the Company, payment
of interest and Additional Interest, if any, may be made by mailing a check to
the registered address of each Holder thereof; provided, however,
that payments on the Dollar Notes may also be made, in the case of a Holder of
at least $1,000,000 aggregate principal amount of Dollar Notes, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or a Paying Agent to such effect designating such account
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).

 

A-6

 

3.                                      
Paying Agent and
Registrar

 

Initially, The Bank of
New York, a New York banking corporation (the “Trustee”), will act as Dollar
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
Dollar Notes under an Indenture dated as of May 13, 2004 (the “Indenture”),
among PP Acquisition Corporation, the predecessor of the Company, the
Guarantors and the Trustee.  The terms of the Dollar Notes 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. §§ 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 Dollar Notes are subject to all terms and provisions of
the Indenture, and the Holders (as defined in the Indenture) are referred to
the Indenture and the TIA for a statement of such terms and provisions

 

The Dollar Notes are
senior subordinated unsecured obligations of the Company.  This Dollar
Note is one of the Initial Dollar Notes referred to in the Indenture.  The
Dollar Notes include the Initial Dollar Notes and any Exchange Dollar Notes
issued in exchange for Initial Dollar Notes pursuant to the Indenture. 
The Initial Dollar Notes and any Exchange Dollar Notes together with the
Initial Euro Notes and any Exchange Euro Notes are treated as a single class of
securities 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, sell or otherwise dispose of
assets including capital stock, enter into or permit certain transactions with
Affiliates, create or incur Liens and engage in other business activities. The
Indenture also imposes limitations on the ability of the Company and each
Guarantor to consolidate or merge with or into any other Person or convey,
transfer or lease all or substantially all of its property.

 

To guarantee the due and
punctual payment of the principal of, if any, or interest on in respect of the
Dollar Notes and all other amounts payable by the Company under the Indenture
and the Dollar Notes when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Dollar
Notes and the Indenture, each of the Guarantors have, jointly and severally,
unconditionally and irrevocably guaranteed the Guaranteed Obligations on a
senior subordinated basis pursuant to the terms of the Indenture.

 

5.                                      
Optional
Redemption; Special Redemption

 

Except as set forth in
the following paragraphs, the Dollar Notes shall not be redeemable at the
Company’s option prior to May 15, 2008. Thereafter, the Dollar Notes shall be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days’ notice, at the redemption
prices (expressed as percentages of principal amount thereof) set forth below
plus accrued and unpaid interest to the applicable

 

A-7

 

redemption date, if redeemed during the twelve month
period commencing on May 15 of the year set forth below:

 

	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.375

  	
  %

  
	
  2009

  	
   

  	
  102.188

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, prior to May
15, 2008, the Company may redeem the Dollar Notes at its option, in whole at
any time or in part from time to time, upon not less than 30 nor more than 60
days’ prior notice mailed by first-class mail to each Holder’s registered
address, at a redemption price equal to 100% of the principal amount of the
Dollar Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest to, the applicable redemption date (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).

 

Notwithstanding the
foregoing, prior to May 15, 2007, the Company may at its option on one or more
occasions redeem the Dollar Notes (which includes Additional Dollar Notes, if
any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Dollar Notes (which includes Additional Dollar Notes,
if any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 108.75% plus accrued and unpaid interest to the redemption
date, with the net cash proceeds from one or more Equity Offerings; provided, however, that (i) at
least 65% of such aggregate principal amount of Dollar Notes (which includes
Additional Dollar Notes, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (ii) each such redemption
occurs within 60 days after the date of the related Equity Offering.

 

Notwithstanding the
foregoing, in the event that the Transactions have not been consummated on or
prior to May 20, 2004, then the Company shall mandatorily redeem all the Notes
on or prior to May 21, 2004, at a redemption price in cash equal to 100% of the
issue price of the Notes plus accrued and unpaid interest to the date of
redemption.  Notice of such redemption shall be given to the Trustee no
later than the close of business on May 20, 2004.

 

6.                                      
Sinking Fund

 

The Dollar Notes are not
subject to any sinking fund.

 

7.                                      
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 Dollar Notes to be redeemed at his, her
or its registered address.  Dollar Notes 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 Dollar Notes (or portions thereof) to

 

A-8

 

be redeemed on the redemption date is deposited with a
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 Dollar
Notes (or such portions thereof) called for redemption.

 

8.                                      
Repurchase of
Dollar Notes at the Option of the Holders upon Change of Control and Asset
Sales

 

If a Change of Control
occurs, each Holder shall have the right, subject to certain conditions
specified in the Indenture, to require the Company to repurchase all or a
portion of such Holder’s Dollar Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued interest to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), as provided in,
and subject to the terms of, the Indenture.

 

In accordance with
Section 4.10 of the Indenture, the Company will be required to offer to
purchase Dollar Notes upon the occurrence of certain events.

 

9.                                      
Subordination

 

The Dollar Notes and
Guarantees are subordinated to Senior Indebtedness, as defined in the
Indenture.  To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Notes and Guarantees may be paid.  The Company and
each Guarantor agrees, and each Holder by accepting a Dollar Note agrees, to
the subordination provisions contained in the Indenture and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.

 

10.                                
Denominations;
Transfer; Exchange

 

The Dollar Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000.  A Holder shall register the transfer of or exchange
of Dollar Notes in accordance with the Indenture.  Upon any registration
of 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 Dollar Notes
selected for redemption in whole or in part, except the unredeemed portion of
any Dollar Note being redeemed in part.  The Company shall not be required
(i) to issue, to register the transfer of or to exchange any Dollar Notes
during a period beginning at the opening of business 15 days before the day of
the mailing of notice of redemption and ending at the close of business on such
day, (ii) to register the transfer of or to exchange any Dollar Note so selected
for redemption in whole or in part, except the unredeemed portion of any Dollar
Note being redeemed in part or (iii) to register the transfer of or to exchange
a Dollar Note between a record date and the next succeeding Interest Payment
Date.

 

11.                                
Persons Deemed
Owners

 

The registered Holder of
this Dollar Note shall be treated as the owner of it for all purposes.

 

A-9

 

12.                                
Unclaimed Money

 

If money for the payment
of principal or interest remains unclaimed for two years, the Trustee and a
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, the Holders entitled to the money must look to the Company for payment
as general creditors and the Trustee and a 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 Dollar Notes and the Indenture if the Company deposits
with the Trustee cash in United States dollars, non-callable Government
Obligations, or a combination of United States dollars and Government
Obligations, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of public accountant, to pay the principal amount at
maturity of, premium, if any, and interest on the Dollar Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be.

 

14.                                
Amendment, Waiver

 

Subject to certain
exceptions set forth in the Indenture, (i) the Indenture, the Guarantees or the
Notes may be amended with the written consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class and (ii) any past default or compliance with any provisions of the
Indenture, the Guarantees or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class; provided,
however, that if any
amendment, waiver or other modification will only affect the Dollar Notes or
the Euro Notes, only the consent of the Holders of at least a majority in
principal amount of the then outstanding Dollar Notes or Euro Notes, as the
case may be, (and not the consent of the majority of all Notes) 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, the Guarantees or the Notes (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for uncertificated Notes in
addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code) or to alter the provisions of Article 2 of the Indenture or
the Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not adversely affect any Holder; (iii) to
provide for the assumption of the Company’s or a Guarantor’s obligations to
Holders of the Notes by a successor to the Company or a Guarantor in case of a
merger or consolidation; (iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder; (v)
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; (vi) to provide
for the issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in the Indenture; (vii) to release any Guarantor from its
Guarantee in accordance with the Indenture; (viii) or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes; or (ix) make any change in Article 10 and
Article 12 of the Indenture that would limit or terminate the

 

A-10

 

benefits available to any holder of Senior Debt of the
Company or a holder of Guarantor Senior Debt (or any Representative thereof)
under such Article 10 and Article 12.

 

15.                                
Defaults and
Remedies

 

Events of Default
include: (i) the failure to pay interest or Additional Interest, if any, on any
Notes when the same becomes due and payable if the default continues for a
period of 30 days (whether or not such payment shall be prohibited by
Article 10 or Article 12 of the Indenture); (ii) the failure to pay
the principal of or premium, if any, on any Notes when such principal or
premium, if any, becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer on the date
specified for such payment in the applicable offer to purchase) (whether or not
such payment shall be prohibited by Article 10 or Article 12 of the
Indenture); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture if the default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes
(except in the case of a default with respect to Section 5.01 or
Section 11.06 of the Indenture, which will constitute an Event of Default
with such notice requirement but without such passage of time requirement);
(iv) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount of
any Indebtedness of the Company or any Significant Subsidiary of the Company
(other than a Securitization Entity) or the acceleration of the maturity of any
such Indebtedness, if the aggregate principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness, whether such
Indebtedness now exists, or is created after the date of the Indenture, in
default for failure to pay principal at final maturity or which has been
accelerated, aggregates $20.0 million or more at any time; (v) one or more
judgments in an aggregate amount in excess of $20.0 million (which are not
covered by insurance or indemnity as to which the insurer or a creditworthy
indemnitor has not disclaimed coverage) shall have been rendered against the
Company or any of its Significant Subsidiaries or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary, and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; (vi) certain events of bankruptcy, insolvency
or reorganization affecting the Company or any of its Significant Subsidiaries
or group of Restricted Subsidiaries that taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary; and (vii) any
Guarantee of a Significant Subsidiary, or group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries) would constitute a
Significant Subsidiary, ceases to be in full force and effect (except as
contemplated by the terms of the Indenture) or is declared null and void in a
judicial proceeding or any Guarantor that is a Significant Subsidiary or group
of Guarantors that taken together (as of the latest audited consolidated
financial statements of the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary denies or disaffirms its obligations under
the Indenture or its Guarantee. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the

 

A-11

 

foregoing, in the case of an Event of Default arising
from certain events of bankruptcy with respect to the Company, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest or Additional Interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest
(including Additional Interest, if any) on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.

 

16.                                
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 Notes and
may otherwise deal the Company or its Affiliates with the same rights it would
have if it were not Trustee.

 

17.                                
Authentication

 

This Dollar Note 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 Dollar Note.

 

18.                                
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).

 

19.                                
Governing Law

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

20.                                
CUSIP Numbers,
ISINs and Common Codes

 

The Company has caused
CUSIP numbers and ISINs and, in the case of the Euro Notes, Common Codes, to be
printed on the Notes and has directed the Trustee to use CUSIP numbers and
ISINs and, in the case of the Euro Notes, Common Codes, in notices of
redemption as a convenience to the Holders.  No representation is made as
to the accuracy of such numbers

 

A-12

 

either as printed on the Notes 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 Notes upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of this
Note.

 

A-13

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

 

               
(Print or type assignee’s name, address and zip code)

 

               
(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably
appoint            agent
to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

 

Sign exactly as your name appears on the other side of
this Note.

 

 

	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor program reasonably acceptable to the
  Trustee

  	
   

  	
  Signature of Signature
  Guarantee

  
	
   

  	
   

  	
   

  	
   

  

 

A-14

 

CERTIFICATE TO BE
DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED DOLLAR NOTES

 

This certificate relates to $           
principal amount of Dollar Notes held in (check applicable space)          
book-entry or             
definitive form by the undersigned.

 

The undersigned (check one box below):

 

o                                   
has requested the
Trustee by written order to deliver in exchange for its beneficial interest in
the Global Dollar Note held by the Depository a Dollar Note or Dollar Notes in
definitive, registered form of authorized denominations and an aggregate
principal amount equal to its beneficial interest in such Global Dollar Note
(or the portion thereof indicated above);

 

o                                   
has requested the
Trustee by written order to exchange or register the transfer of a Dollar Note
or Dollar Notes.

 

In connection with any transfer of any of the Dollar
Notes evidenced by this certificate occurring prior to the expiration of the
period referred to in Rule 144(k) under the Notes Act, the undersigned confirms
that such Dollar Notes are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW

 

	
  (1)

  	
  o

  	
  to the Company; or

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  o

  	
  to the Registrar for
  registration in the name of the Holder, without transfer; or

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  o

  	
  pursuant to an
  effective registration statement under the Securities Act of 1933; or

  
	
   

  	
   

  	
   

  
	
  (4)

  	
  o

  	
  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)

  	
  o

  	
  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 and such Note shall be held immediately after the transfer through
  Euroclear or Clearstream until the expiration of the Restricted Period (as
  defined in the Indenture); or

  
	
   

  	
   

  	
   

  
	
  (6)

  	
  o

  	
  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

  

 

A-15

 

	
  (7)

  	
  o

  	
  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 Notes 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 Notes, 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.

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor program reasonably acceptable to the
  Trustee

  	
   

  	
  Signature of Signature
  Guarantee

  

 

A-16

 

TO BE COMPLETED BY
PURCHASER IF (4) ABOVE IS CHECKED.

 

The undersigned
represents and warrants that it is purchasing this Dollar Note 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

  

 

A-17

 

[TO BE ATTACHED TO
GLOBAL DOLLAR NOTES]

 

SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL DOLLAR NOTE

 

The initial principal
amount of this Global Dollar Note is $                           . 
The following increases or decreases in this Global Dollar Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount
  of decrease

  in Principal Amount

  of this Global Dollar

  Note

  	
   

  	
  Amount
  of increase in

  Principal Amount of

  this Global Dollar

  Note

  	
   

  	
  Principal
  amount of this

  Global Dollar Note

  following such decrease or

  increase

  	
   

  	
  Signature
  of authorized

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-18

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you
want to elect to have this Dollar Note purchased by the Company pursuant to
Section 4.10 (Asset Sale) or 4.15 (Change of Control) of the Indenture,
check the box:

 

	
  Asset
  Sale  o

  	
   

  	
  Change
  of Control  o

  

 

If you
want to elect to have only part of this Dollar Note purchased by the Company
pursuant to Section 4.10 (Asset Sale) or 4.15 (Change of Control) 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

  this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Signature must be guaranteed by a
participant in a recognized signature guaranty medallion program or other
signature guarantor program reasonably acceptable to the Trustee

 

A-19

EXHIBIT B

 

[FORM OF FACE OF
INITIAL EURO NOTE]

 

[Global Notes
Legend]

 

UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK DEPOSITORY
(NOMINEES) LIMITED, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN A NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK DEPOSITORY (NOMINEES)
LIMITED (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK DEPOSITORY (NOMINEES)
LIMITED), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN
INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE COMMON
DEPOSITORY, TO NOMINEES OF THE COMMON DEPOSITORY OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

[Restricted Notes
Legend]

 

THIS NOTE (OR ITS
PREDECESSOR) 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 NOTE 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
NOTE, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) 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 NOTE, PRIOR TO THE DATE (THE “RESALE
RESTRICTION TERMINATION DATE”) THAT IS [IN
THE CASE OF RULE 144A NOTES:  TWO YEARS] [IN THE CASE OF REGULATION S NOTES: 
40 DAYS] AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE

 

 

(OR ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) 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 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 INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE NOTE 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 THE EURO EQUIVALENT 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 COMPANY’S AND THE TRUSTEE’S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

Each Definitive Euro Note
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.

 

B-2

 

[FORM OF INITIAL
EURO NOTE]

 

 

	
  No.

  	
   

  	
  €                  

  

 

83/4%
Senior Subordinated Note due 2012

 

	
   

  	
  CUSIP No.
  [144A:                    ]/[REG
  S:               ]

  
	
   

  	
  ISIN No.
  [144A:                   ]/[REG
  S:               ]

  
	
   

  	
  Common Code
  [144A:               ]/[REG
  S:              ]

  

 

PP ACQUISITION
CORPORATION, a Delaware corporation, promises to pay to
[                  ],
or registered assigns, the principal sum [of              Euros]
[listed on the Schedule of Increases or Decreases in Global Euro Note
attached hereto](1) on May 15, 2012.

 

Interest Payment Dates:  May 15 and
November 15.

 

Record Dates:  May 1 and November 1.

 

Additional provisions of
this Euro Note are set forth on the other side of this Note.

 

IN WITNESS WHEREOF, the
parties have caused this instrument to be duly executed.

 

	
   

  	
  PP ACQUISITION
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

The undersigned hereby
acknowledges and agrees that, upon the effectiveness of the merger of PP
Acquisition Corporation with and into Polypore, Inc. with Polypore, Inc. continuing
as the surviving corporation, it will succeed by operation of law to all of the
rights and obligations of PP Acquisition Corporation set forth herein and that
all references herein to the “Company” shall thereupon be deemed to be
references to the undersigned.

 

	
  POLYPORE, INC.,

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

(1)               
Use the
Schedule of Increases and Decreases language if Euro Note is in Global
Form.

 

B-3

 

	
  Dated:

  
	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  
	
   

  
	
  THE BANK OF NEW YORK,

  as Trustee, certifies that this is

  one of the Euro Notes referred to

  in the Indenture.

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

*/                    
If the Euro Note is
to be issued in global form, add the Global Notes Legend and the attachment
from Exhibit A captioned “TO BE ATTACHED TO GLOBAL NOTES - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL NOTE”.

 

B-4

 

[FORM OF REVERSE SIDE
OF INITIAL EURO NOTE]

 

83/4%
Senior Subordinated Note due 2012

 

1.                                      
Interest

 

(a)                                 
PP ACQUISITION
CORPORATION, a Delaware corporation (such corporation, and its successors and
assigns under the Indenture, including Polypore, Inc. following the merger of
PP Acquisition Corporation with an into Polypore, Inc., hereinafter referred
to, being herein called the “Company”), promises to pay interest on the
principal amount of this Euro Note at the rate per annum shown above.  The
Company shall pay interest semiannually on May 15 and November 15 of each
year, commencing November 15, 2004.  Interest on the Euro Notes 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 May
13, 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 Euro Notes, and it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful.

 

(b)                                
Registration
Rights Agreement. 
The Holder of this Euro Note is entitled to the benefits of a Registration
Rights Agreement, dated as of May 13, 2004, among the Company, the Guarantors
and the Initial Purchasers named therein.

 

2.                                      
Method of Payment

 

The Company shall pay
interest on the Euro Notes (except defaulted interest and Additional Interest,
if any) to the Persons who are registered Holders at the close of business on
May 1 and November 1 next preceding the interest payment date even if Euro
Notes are canceled after the record date and on or before the interest payment
date.  Holders must surrender Euro Notes to a Paying Agent to collect
principal payments.  The Company shall pay principal, premium, if any, and
interest in money of a member state of the European Union that at the time of
payment is legal tender for payment of public and private debts.  Payments
in respect of the Euro Notes represented by a Global Note (including principal,
premium, if any, interest and Additional Interest, if any) shall be made by
wire transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depositary.  The Company will
make all payments in respect of a certificated Euro Note (including principal,
premium, if any, interest and Additional Interest, if any), at the office of a
Paying Agent, except that, at the option of the Company, payment of interest
and Additional Interest, if any, may be made by mailing a check to the
registered address of each Holder thereof; provided,
however, that payments on
the Euro Notes may also be made, in the case of a Holder of at least €1,000,000
aggregate principal amount of Euro Notes, by wire transfer to a Euro account
maintained by the payee with a bank in member state of the European Union if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or a Paying Agent to such effect designating such account 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).

 

B-5

 

3.                                      
Paying Agent and
Registrar

 

Initially, The Bank of
New York, will act as Euro Paying Agent.  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
Euro Notes under an Indenture dated as of May 13, 2004 (the “Indenture”), among
PP Acquisition Corporation, the predecessor of the Company, the Guarantors and
The Bank of New York, a New York banking corporation (the “Trustee”).  The
terms of the Euro Notes 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.
§§ 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 Euro Notes are subject to
all terms and provisions of the Indenture, and the Holders (as defined in the
Indenture) are referred to the Indenture and the TIA for a statement of such
terms and provisions.

 

The Euro Notes are senior
subordinated unsecured obligations of the Company.  This Euro Note is one
of the Initial Euro Notes referred to in the Indenture.  The Euro Notes
include the Initial Euro Notes and any Exchange Euro Notes issued in exchange
for Initial Euro Notes pursuant to the Indenture.  The Initial Euro Notes
and any Exchange Euro Notes together with the Initial Dollar Notes and the
Exchange Dollar Notes are treated as a single class of securities 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, sell or otherwise dispose of assets
including capital stock, enter into or permit certain transactions with
Affiliates, create or incur Liens and engage in other business
activities.  The Indenture also imposes limitations on the ability of the
Company and each Guarantor to consolidate or merge with or into any other
Person or convey, transfer or lease all or substantially all of its property.

 

To guarantee the due and
punctual payment of the principal of, premium, if any, or interest on in
respect of the Euro Notes and all other amounts payable by the Company under the
Indenture and the Euro Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of
the Euro Notes and the Indenture, each of the Guarantors have, jointly and
severally, unconditionally and irrevocably guaranteed the Guaranteed
Obligations on a senior subordinated basis pursuant to the terms of the
Indenture.

 

5.                                      
Optional
Redemption; Special Redemption

 

Except as set forth in
the following paragraphs, the Euro Notes shall not be redeemable at the
Company’s option prior to May 15, 2008. Thereafter, the Euro Notes shall be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days’ notice, at the redemption
prices (expressed as percentages of principal amount thereof) set forth below
plus accrued and unpaid interest to the applicable

 

B-6

 

redemption date, if redeemed during the twelve month
period commencing on May 15 of the year set forth below:

 

	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.375

  	
  %

  
	
  2009

  	
   

  	
  102.188

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, prior to May
15, 2008, the Company may redeem the Euro Notes, at its option, in whole at any
time or in part from time to time, upon not less than 30 nor more than 60 days’
prior notice mailed by first-class mail to each Holder’s registered address, at
a redemption price equal to 100% of the principal amount of the Euro Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest to,
the applicable redemption date (subject to the right of the Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).

 

Notwithstanding the
foregoing, prior to May 15, 2007, the Company may at its option on one or more
occasions redeem the Euro Notes (which includes Additional Euro Notes, if any)
in an aggregate principal amount not to exceed 35% of the aggregate principal amount
of the Euro Notes (which includes Additional Dollar Notes, if any) originally
issued at a redemption price (expressed as a percentage of principal amount) of
108.75% plus accrued and unpaid interest to the redemption date, with the net
cash proceeds from one or more Equity Offerings; provided, however, that (i) at least 65% of such
aggregate principal amount of Dollar Notes (which includes Additional Dollar
Notes, if any) remains outstanding immediately after the occurrence of each
such redemption (other than Notes held, directly or indirectly, by the Company
or its Affiliates); and (ii) each such redemption occurs within 60 days after
the date of the related Equity Offering.

 

Notwithstanding the
foregoing, in the event that the Transactions have not been consummated on or
prior to May 20, 2004, then the Company shall mandatorily redeem all the Notes
on or prior to May 21, 2004, at a redemption price in cash equal to 100% of the
issue price of the Notes plus accrued and unpaid interest to the date of redemption. 
Notice of such redemption shall be given to the Trustee no later than the close
of business on May 20, 2004.

 

6.                                      
Sinking Fund

 

The Euro Notes are not
subject to any sinking fund.

 

7.                                      
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 Euro Notes to be redeemed at his, her or
its registered address.  Euro Notes 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 Euro Notes (or portions thereof) to be

 

B-7

 

redeemed on the redemption date is deposited with a
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 Euro Notes
(or such portions thereof) called for redemption.

 

8.                                     
Repurchase of Euro
Notes at the Option of the Holders upon Change of Control and Asset Sales

 

If a Change of Control
occurs, each Holder shall have the right, subject to certain conditions
specified in the Indenture, to require the Company to repurchase all or a
portion of such Holder’s Euro Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued interest to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), as provided in,
and subject to the terms of, the Indenture.

 

In accordance with
Section 4.10 of the Indenture, the Company will be required to offer to
purchase Euro Notes upon the occurrence of certain events.

 

9.                                      
Subordination

 

The Euro Notes and
Guarantees are subordinated to Senior Indebtedness, as defined in the
Indenture.  To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Euro Notes and Guarantees may be paid.  The
Company and each Guarantor agrees, and each Holder by accepting a Euro Note
agrees, to the subordination provisions contained in the Indenture and authorizes
the Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.

 

10.                                
Denominations;
Transfer; Exchange

 

The Euro Notes are in
registered form, without coupons, in denominations of €1,000 and integral
multiples of €1,000.  A Holder shall register the transfer of or exchange
of Euro Notes in accordance with the Indenture.  Upon any registration of
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 Euro Notes selected
for redemption in whole or in part, except the unredeemed portion of any Euro
Note being redeemed in part.  The Company shall not be required (i) to
issue, to register the transfer of or to exchange any Euro Notes during a
period beginning at the opening of business 15 days before the day of the mailing
of notice of redemption and ending at the close of business on such day, (ii)
to register the transfer of or to exchange any Euro Note so selected for
redemption in whole or in part, except the unredeemed portion of any Euro Note
being redeemed in part or (iii) to register the transfer of or to exchange a
Euro Note between a record date and the next succeeding Interest Payment Date.

 

11.                                
Persons Deemed
Owners

 

The registered Holder of
this Euro Note shall be treated as the owner of it for all purposes.

 

B-8

 

12.                                
Unclaimed Money

 

If money for the payment
of principal or interest remains unclaimed for two years, the Trustee and a
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, the Holders entitled to the money must look to the Company for
payment as general creditors and the Trustee and a 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 Notes and the Indenture if the Company deposits with the
Trustee cash in euros or EU Government Obligations, or a combination of euros
and EU Government Obligations, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of public accountants to pay the
principal amount at maturity of, premium, if any, and interest on the Notes on
the stated date for payment thereof or on the applicable redemption date, as
the case may be.

 

14.                                
Amendment, Waiver

 

Subject to certain
exceptions set forth in the Indenture, (i) the Indenture, the Guarantees or the
Notes may be amended with the written consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class and (ii) any past default or compliance with any provisions of the
Indenture, the Guarantees or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class; provided,
however, that if any
amendment, waiver or other modification will only affect the Dollar Notes or
the Euro Notes, only the consent of the Holders of at least a majority in
principal amount of the then outstanding Dollar Notes or Euro Notes, as the case
may be, (and not the consent of the majority of all Notes) 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, the Guarantees or the Notes (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for uncertificated Notes in
addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code) or to alter the provisions of Article 2 of the Indenture or
the Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not adversely affect any Holder; (iii) to
provide for the assumption of the Company’s or a Guarantor’s obligations to
Holders of the Notes by a successor to the Company or a Guarantor in case of a
merger or consolidation; (iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder; (v)
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; (vi) to provide
for the issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in the Indenture; (vii) to release any Guarantor from its
Guarantee in accordance with the Indenture; (viii) or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes; or (ix) make any change in Article 10 and
Article 12 of the Indenture that would limit or terminate the

 

B-9

 

benefits available to any holder of Senior Debt of the
Company or a holder of Guarantor Senior Debt (or any Representative thereof)
under such Article 10 and Article 12.

 

15.                                
Defaults and
Remedies

 

Events of Default
include: (i) the failure to pay interest or Additional Interest, if any, on any
Notes when the same becomes due and payable if the default continues for a
period of 30 days (whether or not such payment shall be prohibited by
Article 10 or Article 12 of the Indenture); (ii) the failure to pay
the principal of or premium, if any, on any Notes when such principal or
premium, if any, becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer on the date
specified for such payment in the applicable offer to purchase) (whether or not
such payment shall be prohibited by Article 10 or Article 12 of the
Indenture); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture if the default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes
(except in the case of a default with respect to Section 5.01 or Section 11.06
of the Indenture, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement); (iv) the failure to
pay at final stated maturity (giving effect to any applicable grace periods and
any extensions thereof) the principal amount of any Indebtedness of the Company
or any Significant Subsidiary of the Company (other than a Securitization
Entity) or the acceleration of the maturity of any such Indebtedness, if the
aggregate principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness, whether such Indebtedness now exists, or
is created after the date of the Indenture, in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $20.0
million or more at any time; (v) one or more judgments in an aggregate amount
in excess of $20.0 million (which are not covered by insurance or indemnity as
to which the insurer or a creditworthy indemnitor has not disclaimed coverage)
shall have been rendered against the Company or any of its Significant
Subsidiaries or group of Restricted Subsidiaries that, taken together (as of
the latest audited consolidated financial statements for the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary, and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days after
such judgment or judgments become final and non-appealable; (vi) certain events
of bankruptcy, insolvency or reorganization affecting the Company or any of its
Significant Subsidiaries or group of Restricted Subsidiaries that taken
together (as of the latest audited consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary; and (vii) any Guarantee of a Significant Subsidiary, or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary, ceases to be in full
force and effect (except as contemplated by the terms of the Indenture) or is
declared null and void in a judicial proceeding or any Guarantor that is a
Significant Subsidiary or group of Guarantors that taken together (as of the latest
audited consolidated financial statements of the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary denies or disaffirms
its obligations under the Indenture or its Guarantee. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the

 

B-10

 

foregoing, in the case of an Event of Default arising
from certain events of bankruptcy with respect to the Company, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest or Additional Interest) if it determines
that withholding notice is in their interest. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest (including
Additional Interest, if any) on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.

 

16.                                
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 Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.

 

17.                                
Authentication

 

This Euro Note 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 Euro Note.

 

18.                                
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).

 

19.                                
Governing Law

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

20.                                
CUSIP Numbers,
ISINs and Common Codes

 

The Company has caused
CUSIP numbers and ISINs and, in the case of the Euro Notes, Common Codes, to be
printed on the Notes and has directed the Trustee to use CUSIP numbers and
ISINs and, in the case of the Euro Notes, Common Codes, in notices of redemption
as a convenience to the Holders.  No representation is made as to the
accuracy of such numbers

 

B-11

 

either as printed on the Notes 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 Notes upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Note.

 

B-12

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

 

               
(Print or type assignee’s name, address and zip code)

 

               
(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably
appoint                  agent
to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

 

Sign exactly as your name appears on the other side of
this Note.

 

 

	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor program reasonably acceptable to the
  Trustee

  	
   

  	
  Signature of Signature
  Guarantee

  
	
   

  	
   

  	
   

  	
   

  

 

B-13

 

CERTIFICATE TO BE
DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED EURO NOTES

 

This certificate relates to €                    
principal amount of Euro Notes held in (check applicable space)             
book-entry or                
definitive form by the undersigned.

 

The undersigned (check one box below):

 

o                                   
has requested the
Trustee by written order to deliver in exchange for its beneficial interest in
the Global Euro Note held by the Depository a Euro Note or Euro Notes in
definitive, registered form of authorized denominations and an aggregate
principal amount equal to its beneficial interest in such Global Euro Note (or
the portion thereof indicated above);

 

o                                   
has requested the
Trustee by written order to exchange or register the transfer of a Euro Note or
Euro Notes.

 

In connection with any transfer of any of the Euro
Notes evidenced by this certificate occurring prior to the expiration of the
period referred to in Rule 144(k) under the Notes Act, the undersigned confirms
that such Euro Notes are being transferred in accordance with its terms:

 

CHECK ONE BOX BELOW

 

	
  (1)

  	
  o

  	
  to the Company; or

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  o

  	
  to the Registrar for
  registration in the name of the Holder, without transfer; or

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  o

  	
  pursuant to an
  effective registration statement under the Securities Act of 1933; or

  
	
   

  	
   

  	
   

  
	
  (4)

  	
  o

  	
  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)

  	
  o

  	
  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 and such Note shall be held immediately after the transfer through
  Euroclear or Clearstream until the expiration of the Restricted Period (as
  defined in the Indenture); or

  
	
   

  	
   

  	
   

  
	
  (6)

  	
  o

  	
  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

  

 

B-14

 

	
  (7)

  	
  o

  	
  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 Notes 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 Notes, 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.

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor program reasonably acceptable to the
  Trustee

  	
   

  	
  Signature of Signature
  Guarantee

  

 

B-15

 

TO BE COMPLETED BY
PURCHASER IF (4) ABOVE IS CHECKED.

 

The undersigned
represents and warrants that it is purchasing this Euro Note 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

  

 

B-16

 

[TO BE ATTACHED TO
GLOBAL EURO NOTES]

 

SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL EURO NOTE

 

The initial principal
amount of this Global Euro Note is €                       . 
The following increases or decreases in this Global Euro Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount
  of decrease

  in Principal Amount

  of this Global Euro

  Note

  	
   

  	
  Amount
  of increase in

  Principal Amount of

  this Global Euro Note

  	
   

  	
  Principal
  amount of this

  Global Euro Note

  following such decrease or

  increase

  	
   

  	
  Signature
  of authorized

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-17

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you
want to elect to have this Euro Note purchased by the Company pursuant to
Section 4.10 (Asset Sale) or 4.15 (Change of Control) of the Indenture,
check the box:

 

	
  Asset
  Sale  o

  	
   

  	
  Change
  of Control  o

  

 

If you
want to elect to have only part of this Euro Note purchased by the Company
pursuant to Section 4.10 (Asset Sale) or 4.15 (Change of Control) 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

  this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Signature must be guaranteed by a
participant in a recognized signature guaranty medallion program or other
signature guarantor program reasonably acceptable to the Trustee

 

B-18

 

EXHIBIT C

 

[FORM OF FACE OF
EXCHANGE DOLLAR NOTE]

 

[Global Notes
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
NOTE 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 NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF.

 

 

	
  No.

  	
   

  	
  $                  

  

 

83/4%
Senior Subordinated Note due 2012

 

	
   

  	
  CUSIP No. [144A:
                      ]/[REG
  S:               ]/[IAI:
                ]

  
	
   

  	
  ISIN No. [144A:
                      ]/[REG
  S:
                ]/[IAI:
                ]

  
	
   

  	
  Common Code
  [144A:               ]/[REG
  S:               ]/[IAI:               ]

  

 

POLYPORE, INC., a
Delaware corporation, promises to pay to
[                  ],
or registered assigns, the principal sum
[of                      Dollars]
[listed on the Schedule of Increases or Decreases in Global Dollar Note
attached hereto](1) on May 15, 2012.

 

Interest Payment Dates:  May 15 and
November 15.

Record Dates:  May 1 and November 1.

 

Additional provisions of
this Dollar Note are set forth on the other side of this Note.

 

IN WITNESS WHEREOF, the
parties have caused this instrument to be duly executed.

 

	
   

  	
  POLYPORE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Dated:

 

	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  
	
   

  
	
  THE BANK OF NEW YORK,

  as Trustee, certifies that this is

  one of the Dollar Notes

  referred to in the Indenture.

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

(1)                                 
Use the
Schedule of Increases and Decreases language if Dollar Note is in Global
Form.

 

C-2

 

*/                            
If the Dollar Note is
to be issued in global form, add the Global Notes Legend and the attachment
from Exhibit A captioned “TO BE ATTACHED TO GLOBAL SECURITIES -
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.

 

C-3

 

[FORM OF REVERSE
SIDE OF EXCHANGE DOLLAR NOTE]

 

83/4%
Senior Subordinated Note due 2012

 

1.                                      
Interest

 

POLYPORE, INC., a
Delaware 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 Dollar Note at the
rate per annum shown above.  The Company shall pay interest semiannually
on May 15 and November 15 of each year, commencing November 15,
2004.  Interest on the Dollar Notes 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 May 13, 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 Dollar Notes, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

 

2.                                      
Method of Payment

 

The Company shall pay
interest on the Dollar Notes (except defaulted interest) and Additional
Interest, if any, to the Persons who are registered Holders at the close of
business on May 1 and November 1 next preceding the interest payment date
even if Dollar Notes are canceled after the record date and on or before the
interest payment date.  Holders must surrender Notes 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 Dollar Notes represented by a Global Dollar Note (including
principal, premium, if any, interest and Additional Interest, if any) shall be
made by wire transfer of immediately available funds to the accounts specified
by The Depository Trust Company or any successor depositary.  The Company
will make all payments in respect of a certificated Dollar Note (including
principal, premium, if any, interest and Additional Interest, if any), at the
office of each Paying Agent, except that, at the option of the Company, payment
of interest and Additional Interest, if any, may be made by mailing a check to
the registered address of each Holder thereof; provided, however,
that payments on the Dollar Notes may also be made, in the case of a Holder of
at least $1,000,000 aggregate principal amount of Dollar Notes, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or a Paying Agent to such effect designating such account
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, The Bank of
New York, a New York banking corporation (the “Trustee”), will act as Dollar
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.

 

C-4

 

4.                                      
Indenture

 

The Company issued the
Dollar Notes under an Indenture dated as of May 13, 2004 (the “Indenture”),
among PP Acquisition Corporation, the predecessor of the Company, the
Guarantors and the Trustee.  The terms of the Dollar Notes 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. §§ 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 Dollar Notes are subject to all terms and provisions of
the Indenture, and the Holders (as defined in the Indenture) are referred to
the Indenture and the TIA for a statement of such terms and provisions.

 

The Dollar Notes are
senior subordinated unsecured obligations of the Company.  This Dollar
Note is one of the Exchange Dollar Notes referred to in the Indenture. 
The Dollar Notes include the Initial Dollar Notes and any Exchange Dollar Notes
issued in exchange for Initial Dollar Notes pursuant to the Indenture. 
The Initial Dollar Notes and any Exchange Dollar Notes together with the
Initial Euro Notes and any Exchange Euro Notes are treated as a single class of
securities 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, sell or otherwise dispose of
assets including capital stock, enter into or permit certain transactions with
Affiliates, create or incur Liens and engage in other business activities. The
Indenture also imposes limitations on the ability of the Company and each
Guarantor to consolidate or merge with or into any other Person or convey,
transfer or lease all or substantially all of its property.

 

To guarantee the due and
punctual payment of the principal of, if any, or interest on in respect of the
Dollar Notes and all other amounts payable by the Company under the Indenture
and the Dollar Notes when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the Dollar
Notes and the Indenture, each of the Guarantors have, jointly and severally,
unconditionally and irrevocably guaranteed the Guaranteed Obligations on a
senior subordinated basis pursuant to the terms of the Indenture.

 

5.                                      
Optional
Redemption; Special Redemption

 

Except as set forth in
the following paragraphs, the Dollar Notes shall not be redeemable at the
Company’s option prior to May 15, 2008. Thereafter, the Dollar Notes shall be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days’ notice, at the redemption
prices (expressed as percentages of principal amount thereof) set forth below
plus accrued and unpaid interest to the applicable redemption date, if redeemed
during the twelve month period commencing on May 15 of the year set forth
below:

 

C-5

 

	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.375

  	
  %

  
	
  2009

  	
   

  	
  102.188

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, prior to May
15, 2008, the Company may redeem the Dollar Notes at its option, in whole at
any time or in part from time to time, upon not less than 30 nor more than 60
days’ prior notice mailed by first-class mail to each Holder’s registered
address, at a redemption price equal to 100% of the principal amount of the
Dollar Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest to, the applicable redemption date (subject to the right of the
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).

 

Notwithstanding the
foregoing, prior to May 15, 2007, the Company may at its option on one or more
occasions redeem the Dollar Notes (which includes Additional Dollar Notes, if
any) in an aggregate principal amount not to exceed 35% of the aggregate
principal amount of the Dollar Notes (which includes Additional Dollar Notes,
if any) originally issued at a redemption price (expressed as a percentage of
principal amount) of 108.75% plus accrued and unpaid interest to the redemption
date, with the net cash proceeds from one or more Equity Offerings; provided, however, that (i) at
least 65% of such aggregate principal amount of Dollar Notes (which includes
Additional Dollar Notes, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Notes held, directly or indirectly,
by the Company or its Affiliates); and (ii) each such redemption occurs within
60 days after the date of the related Equity Offering.

 

Notwithstanding the
foregoing, in the event that the Transactions have not been consummated on or
prior to May 20, 2004, then the Company shall mandatorily redeem all the Notes
on or prior to May 21, 2004, at a redemption price in cash equal to 100% of the
issue price of the Notes plus accrued and unpaid interest to the date of
redemption.  Notice of such redemption shall be given to the Trustee no
later than the close of business on May 20, 2004.

 

6.                                      
Sinking Fund

 

The Dollar Notes are not
subject to any sinking fund.

 

7.                                      
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 Dollar Notes to be redeemed at his, her
or its registered address.  Dollar Notes 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 Dollar Notes (or portions thereof) to be redeemed on the redemption date
is deposited with a 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 Dollar Notes (or such portions thereof) called for redemption.

 

C-6

 

8.                                      
Repurchase of
Dollar Notes at the Option of the Holders upon Change of Control and Asset
Sales

 

If a Change of Control
occurs, each Holder shall have the right, subject to certain conditions
specified in the Indenture, to require the Company to repurchase all or a
portion of such Holder’s Dollar Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued interest to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), as provided in,
and subject to the terms of, the Indenture.

 

In accordance with
Section 4.10 of the Indenture, the Company will be required to offer to
purchase Dollar Notes upon the occurrence of certain events.

 

9.                                      
Subordination

 

The Dollar Notes and
Guarantees are subordinated to Senior Indebtedness, as defined in the
Indenture.  To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Notes and Guarantees may be paid.  The Company and
each Guarantor agrees, and each Holder by accepting a Dollar Note agrees, to
the subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such
purpose.

 

10.                                
Denominations;
Transfer; Exchange

 

The Dollar Notes are in
registered form, without coupons, in denominations of $1,000 and integral multiples
of $1,000.  A Holder shall register the transfer of or exchange of Dollar
Notes in accordance with the Indenture.  Upon any registration of 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 Dollar Notes selected for
redemption in whole or in part, except the unredeemed portion of any Dollar
Note being redeemed in part.  The Company shall not be required (i) to
issue, to register the transfer of or to exchange any Dollar Notes during a
period beginning at the opening of business 15 days before the day of the
mailing of notice of redemption and ending at the close of business on such
day, (ii) to register the transfer of or to exchange any Dollar Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Dollar Note being redeemed in part or (iii) to register the transfer of or
to exchange a Dollar Note between a record date and the next succeeding
Interest Payment Date.

 

11.                                
Persons Deemed
Owners

 

The registered Holder of
this Dollar Note shall 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 a
Paying Agent shall pay the money back to the Company at its written request

 

C-7

 

unless an abandoned property law designates another
Person.  After any such payment, the Holders entitled to the money must
look to the Company for payment as general creditors and the Trustee and a
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 Dollar Notes and the Indenture if the Company deposits
with the Trustee cash in United States dollars, non-callable Government
Obligations, or a combination of United States dollars and Government
Obligations, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of public accountant, to pay the principal amount at
maturity of, premium, if any, and interest on the Dollar Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be.

 

14.                                
Amendment, Waiver

 

Subject to certain
exceptions set forth in the Indenture, (i) the Indenture, the Guarantees or the
Notes may be amended with the written consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class and (ii) any past default or compliance with any provisions of the
Indenture, the Guarantees or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class; provided,
however, that if any
amendment, waiver or other modification will only affect the Dollar Notes or
the Euro Notes, only the consent of the Holders of at least a majority in
principal amount of the then outstanding Dollar Notes or Euro Notes, as the
case may be, (and not the consent of the majority of all Notes) 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, the Guarantees or the Notes (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for uncertificated Notes in
addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code) or to alter the provisions of Article 2 of the Indenture or
the Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not adversely affect any Holder; (iii) to
provide for the assumption of the Company’s or a Guarantor’s obligations to
Holders of the Notes by a successor to the Company or a Guarantor in case of a
merger or consolidation; (iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder; (v) to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; (vi) to provide
for the issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in the Indenture; (vii) to release any Guarantor from its
Guarantee in accordance with the Indenture; (viii) or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes; or (ix) make any change in Article 10 and
Article 12 of the Indenture that would limit or terminate the benefits
available to any holder of Senior Debt of the Company or a holder of Guarantor
Senior Debt (or any Representative thereof) under such Article 10 and Article 12.

 

C-8

 

15.                                
Defaults and
Remedies

 

Events of Default
include: (i) the failure to pay interest or Additional Interest, if any, on any
Notes when the same becomes due and payable if the default continues for a
period of 30 days (whether or not such payment shall be prohibited by
Article 10 or Article 12 of the Indenture); (ii) the failure to pay
the principal of or premium, if any, on any Notes when such principal or
premium, if any, becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer on the date
specified for such payment in the applicable offer to purchase) (whether or not
such payment shall be prohibited by Article 10 or Article 12 of the
Indenture); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture if the default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes
(except in the case of a default with respect to Section 5.01 or
Section 11.06 of the Indenture, which will constitute an Event of Default
with such notice requirement but without such passage of time requirement);
(iv) the failure to pay at final stated maturity (giving effect to any applicable
grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Significant Subsidiary of the Company (other
than a Securitization Entity) or the acceleration of the maturity of any such
Indebtedness, if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness, whether such
Indebtedness now exists, or is created after the date of the Indenture, in
default for failure to pay principal at final maturity or which has been
accelerated, aggregates $20.0 million or more at any time; (v) one or more
judgments in an aggregate amount in excess of $20.0 million (which are not
covered by insurance or indemnity as to which the insurer or a creditworthy
indemnitor has not disclaimed coverage) shall have been rendered against the
Company or any of its Significant Subsidiaries or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary, and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; (vi) certain events of bankruptcy, insolvency
or reorganization affecting the Company or any of its Significant Subsidiaries
or group of Restricted Subsidiaries that taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary; and (vii) any
Guarantee of a Significant Subsidiary, or group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries) would constitute a
Significant Subsidiary, ceases to be in full force and effect (except as
contemplated by the terms of the Indenture) or is declared null and void in a
judicial proceeding or any Guarantor that is a Significant Subsidiary or group
of Guarantors that taken together (as of the latest audited consolidated
financial statements of the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary denies or disaffirms its obligations under
the Indenture or its Guarantee. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy with respect to the Company, all outstanding Notes
will become due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the

 

C-9

 

Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest or Additional Interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount of the
Notes then outstanding by notice to the Trustee may on behalf of the Holders of
all of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest (including Additional Interest, if any) on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.

 

16.                                
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 Notes and
may otherwise deal the Company or its Affiliates with the same rights it would
have if it were not Trustee.

 

17.                                
Authentication

 

This Dollar Note 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 Dollar Note.

 

18.                                
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).

 

19.                                
Governing Law

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

20.                                
CUSIP Numbers,
ISINs and Common Codes

 

The Company has caused
CUSIP numbers and ISINs and, in the case of the Euro Notes, Common Codes, to be
printed on the Notes and has directed the Trustee to use CUSIP numbers and
ISINs and, in the case of the Euro Notes, Common Codes, in notices of
redemption as a convenience to the Holders.  No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

 

C-10

 

The
Company will furnish to any Holder of Notes upon written request and without
charge to the Holder a copy of the Indenture which has in it the text of this
Note.

 

C-11

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

 

               
(Print or type assignee’s name, address and zip code)

 

               
(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably
appoint                          
agent to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

Sign exactly as your name appears on the other side of
this Note.

 

	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor program reasonably acceptable to the
  Trustee

  	
   

  	
  Signature of Signature
  Guarantee

  
	
   

  	
   

  	
   

  	
   

  

 

C-12

 

[TO BE ATTACHED TO
GLOBAL DOLLAR NOTES]

 

SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL DOLLAR NOTE

 

The initial principal
amount of this Global Dollar Note is
$                        . 
The following increases or decreases in this Global Dollar Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount
  of decrease

  in Principal Amount

  of this Global Dollar

  Note

  	
   

  	
  Amount
  of increase in

  Principal Amount of

  this Global Dollar

  Note

  	
   

  	
  Principal
  amount of this

  Global Dollar Note

  following such decrease or

  increase

  	
   

  	
  Signature
  of authorized

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

C-13

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you
want to elect to have this Dollar Note purchased by the Company pursuant to
Section 4.10 (Asset Sale) or 4.15 (Change of Control) of the Indenture,
check the box:

 

	
  Asset
  Sale  o

  	
   

  	
  Change
  of Control  o

  

 

If you
want to elect to have only part of this Dollar Note purchased by the Company
pursuant to Section 4.10 (Asset Sale) or 4.15 (Change of Control) 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

  this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Signature must be guaranteed by a
participant in a recognized signature guaranty medallion program or other
signature guarantor program reasonably acceptable to the Trustee

 

C-14

 

EXHIBIT D

 

[FORM OF FACE OF
EXCHANGE EURO NOTE]

 

[Global Notes Legend]

 

UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK DEPOSITORY
(NOMINEES) LIMITED, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN A NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK DEPOSITORY
(NOMINEES) LIMITED (AND ANY PAYMENT IS MADE TO SUCH ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE BANK OF NEW YORK DEPOSITORY (NOMINEES)
LIMITED), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN
INTEREST HEREIN.

 

TRANSFERS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE COMMON
DEPOSITORY, TO NOMINEES OF THE COMMON DEPOSITORY OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

 

	
  No.

  	
   

  	
  €                  

  

 

83/4%
Senior Subordinated Note due 2012

 

	
   

  	
  CUSIP No.
  [144A:                    ]/[REG
  S:               ]

  
	
   

  	
  ISIN No.
  [144A:                   ]/[REG
  S:               ]

  
	
   

  	
  Common Code
  [144A:               ]/[REG
  S:              ]

  

 

POLYPORE, INC., a
Delaware corporation, promises to pay to
[                 ],
or registered assigns, the principal sum
[of                    Euros]
[listed on the Schedule of Increases or Decreases in Global Euro Note
attached hereto](1) on May 15, 2012.

 

Interest Payment
Dates:  May 15 and November 15.

 

Record
Dates:  May 1 and November 1.

 

Additional provisions of
this Euro Note are set forth on the other side of this Note.

 

IN WITNESS WHEREOF, the
parties have caused this instrument to be duly executed.

 

	
   

  	
  POLYPORE, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Dated:

 

	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  
	
   

  
	
  THE BANK OF NEW YORK,

  as Trustee, certifies that this is

  one of the Euro Notes

  referred to in the Indenture.

  

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

*/                      
If the Euro Note is
to be issued in global form, add the Global Notes Legend and the attachment
from Exhibit A captioned “TO BE ATTACHED TO GLOBAL NOTES - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL NOTE”.

 

(1)                                 
Use the
Schedule of Increases and Decreases language if Euro Note is in Global
Form.

 

D-2

 

[FORM OF REVERSE
SIDE OF EXCHANGE EURO NOTE]

 

83⁄4% Senior Subordinated Note due 2012

 

1.                                      
Interest

 

POLYPORE, INC., a
Delaware 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 Euro Note at the rate
per annum shown above.  The Company shall pay interest semiannually on May
15 and November 15 of each year, commencing November 15, 2004. 
Interest on the Euro Notes 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 May 13, 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
Euro Notes, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.

 

2.                                      
Method of Payment

 

The Company shall pay
interest on the Euro Notes (except defaulted interest and Additional Interest,
if any) to the Persons who are registered Holders at the close of business on
May 1 and November 1 next preceding the interest payment date even if Dollar
Notes are canceled after the record date and on or before the interest payment
date.  Holders must surrender Euro Notes to a Paying Agent to collect
principal payments.  The Company shall pay principal, premium, if any, and
interest in money of a member state of the European Union that at the time of
payment is legal tender for payment of public and private debts.  Payments
in respect of the Euro Notes represented by a Global Note (including principal,
premium, if any, interest and Additional Interest, if any) shall be made by
wire transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depositary.  The Company will
make all payments in respect of a certificated Euro Note (including principal,
premium, if any, interest and Additional Interest, if any), at the office of a
Paying Agent, except that, at the option of the Company, payment of interest
and Additional Interest, if any, may be made by mailing a check to the
registered address of each Holder thereof; provided,
however, that payments on
the Euro Notes may also be made, in the case of a Holder of at least €1,000,000
aggregate principal amount of Euro Notes, by wire transfer to a Euro account
maintained by the payee with a bank in member state of the European Union if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or a Paying Agent to such effect designating such account 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, The Bank of
New York, will act as Euro Paying Agent.  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.

 

D-3

 

4.                                      
Indenture

 

The Company issued the
Euro Notes under an Indenture dated as of May 13, 2004 (the “Indenture”), among
PP Acquisition Corporation, the predecessor of the Company, the Guarantors and
The Bank of New York, a New York banking corporation (the “Trustee”).  The
terms of the Euro Notes 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.
§§ 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 Euro Notes are subject to
all terms and provisions of the Indenture, and the Holders (as defined in the
Indenture) are referred to the Indenture and the TIA for a statement of such terms
and provisions.

 

The Euro Notes are senior
subordinated unsecured obligations of the Company.  This Euro Note is one
of the Exchange Euro Notes referred to in the Indenture.  The Euro Notes
include the Initial Euro Notes and any Exchange Euro Notes issued in exchange
for Initial Euro Notes pursuant to the Indenture.  The Initial Euro Notes
and any Exchange Euro Notes together with the Initial Dollar Notes and the
Exchange Dollar Notes are treated as a single class of securities 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, sell or otherwise dispose of assets
including capital stock, enter into or permit certain transactions with
Affiliates, create or incur Liens and engage in other business activities. The
Indenture also imposes limitations on the ability of the Company and each
Guarantor to consolidate or merge with or into any other Person or convey,
transfer or lease all or substantially all of its property.

 

To guarantee the due and
punctual payment of the principal of, premium, if any, or interest on in
respect of the Euro Notes and all other amounts payable by the Company under
the Indenture and the Euro Notes when and as the same shall be due and payable,
whether at maturity, by acceleration or otherwise, according to the terms of
the Euro Notes and the Indenture, each of the Guarantors have, jointly and
severally, unconditionally and irrevocably guaranteed the Guaranteed
Obligations on a senior subordinated basis pursuant to the terms of the
Indenture.

 

5.                                      
Optional
Redemption; Special Redemption

 

Except as set forth in
the following paragraphs, the Euro Notes shall not be redeemable at the
Company’s option prior to May 15, 2008. Thereafter, the Euro Notes shall be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days’ notice, at the redemption
prices (expressed as percentages of principal amount thereof) set forth below
plus accrued and unpaid interest to the applicable redemption date, if redeemed
during the twelve month period commencing on May 15 of the year set forth
below:

 

D-4

 

	
  Year

  	
   

  	
  Redemption
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  104.375

  	
  %

  
	
  2009

  	
   

  	
  102.188

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, prior to May
15, 2008, the Company may redeem the Euro Notes, at its option, in whole at any
time or in part from time to time, upon not less than 30 nor more than 60 days’
prior notice mailed by first-class mail to each Holder’s registered address, at
a redemption price equal to 100% of the principal amount of the Euro Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest to,
the applicable redemption date (subject to the right of the Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).

 

Notwithstanding the
foregoing, prior to May 15, 2007, the Company may at its option on one or more
occasions redeem the Euro Notes (which includes Additional Euro Notes, if any)
in an aggregate principal amount not to exceed 35% of the aggregate principal
amount of the Euro Notes (which includes Additional Dollar Notes, if any)
originally issued at a redemption price (expressed as a percentage of principal
amount) of 108.75% plus accrued and unpaid interest to the redemption date,
with the net cash proceeds from one or more Equity Offerings; provided, however, that (i) at
least 65% of such aggregate principal amount of Dollar Notes (which includes
Additional Dollar Notes, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Notes held, directly or
indirectly, by the Company or its Affiliates); and (ii) each such redemption
occurs within 60 days after the date of the related Equity Offering.

 

Notwithstanding the
foregoing, in the event that the Transactions have not been consummated on or
prior to May 20, 2004, then the Company shall mandatorily redeem all the Notes
on or prior to May 21, 2004, at a redemption price in cash equal to 100% of the
issue price of the Notes plus accrued and unpaid interest to the date of
redemption.  Notice of such redemption shall be given to the Trustee no
later than the close of business on May 20, 2004.

 

6.                                      
Sinking Fund

 

The Euro Notes are not
subject to any sinking fund.

 

7.                                      
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 Euro Notes to be redeemed at his, her or
its registered address.  Euro Notes 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 Euro Notes (or portions thereof) to be redeemed on the redemption date is
deposited with a 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 Euro Notes (or such portions thereof) called for redemption.

 

D-5

 

8.                                     
Repurchase of Euro
Notes at the Option of the Holders upon Change of Control and Asset Sales

 

If a Change of Control
occurs, each Holder shall have the right, subject to certain conditions
specified in the Indenture, to require the Company to repurchase all or a
portion of such Holder’s Euro Notes at a purchase price equal to 101% of the
principal amount thereof plus accrued interest to the date of repurchase
(subject to the right of the Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), as provided in,
and subject to the terms of, the Indenture.

 

In accordance with
Section 4.10 of the Indenture, the Company will be required to offer to
purchase Euro Notes upon the occurrence of certain events.

 

9.                                      
Subordination

 

The Euro Notes and
Guarantees are subordinated to Senior Indebtedness, as defined in the
Indenture.  To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Euro Notes and Guarantees may be paid.  The
Company and each Guarantor agrees, and each Holder by accepting a Euro Note
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give it effect and appoints the Trustee as
attorney-in-fact for such purpose.

 

10.                                
Denominations;
Transfer; Exchange

 

The Euro Notes are in
registered form, without coupons, in denominations of €1,000 and integral
multiples of €1,000.  A Holder shall register the transfer of or exchange
of Euro Notes in accordance with the Indenture.  Upon any registration of
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 Euro Notes selected
for redemption in whole or in part, except the unredeemed portion of any Euro
Note being redeemed in part.  The Company shall not be required (i) to
issue, to register the transfer of or to exchange any Euro Notes during a
period beginning at the opening of business 15 days before the day of the
mailing of notice of redemption and ending at the close of business on such
day, (ii) to register the transfer of or to exchange any Euro Note so selected
for redemption in whole or in part, except the unredeemed portion of any Euro
Note being redeemed in part or (iii) to register the transfer of or to exchange
a Euro Note between a record date and the next succeeding Interest Payment
Date.

 

11.                                
Persons Deemed
Owners

 

The registered Holder of
this Euro Note shall be treated as the owner of it for all purposes.

 

D-6

 

12.                                
Unclaimed Money

 

If money for the payment
of principal or interest remains unclaimed for two years, the Trustee and a
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, the Holders entitled to the money must look to the Company for
payment as general creditors and the Trustee and a 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 Notes and the Indenture if the Company deposits with the
Trustee cash in euros or EU Government Obligations, or a combination of euros
and EU Government Obligations, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of public accountants to pay the principal
amount at maturity of, premium, if any, and interest on the Notes on the stated
date for payment thereof or on the applicable redemption date, as the case may
be.

 

14.                                
Amendment, Waiver

 

Subject to certain
exceptions set forth in the Indenture, (i) the Indenture, the Guarantees or the
Notes may be amended with the written consent of the Holders of at least a
majority in principal amount of the Notes then outstanding voting as a single
class and (ii) any past default or compliance with any provisions of the
Indenture, the Guarantees or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class; provided,
however, that if any
amendment, waiver or other modification will only affect the Dollar Notes or
the Euro Notes, only the consent of the Holders of at least a majority in
principal amount of the then outstanding Dollar Notes or Euro Notes, as the
case may be, (and not the consent of the majority of all Notes) 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, the Guarantees or the Notes (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for uncertificated Notes in
addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code) or to alter the provisions of Article 2 of the Indenture or
the Appendix hereof relating to the form of the Notes (including the related
definitions) in a manner that does not adversely affect any Holder; (iii) to
provide for the assumption of the Company’s or a Guarantor’s obligations to
Holders of the Notes by a successor to the Company or a Guarantor in case of a
merger or consolidation; (iv) to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder; (v)
to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; (vi) to provide
for the issuance of Notes issued after the Issue Date in accordance with the
limitations set forth in the Indenture; (vii) to release any Guarantor from its
Guarantee in accordance with the Indenture; (viii) or to allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Guarantee with
respect to the Notes; or (ix) make any change in Article 10 and
Article 12 of the Indenture that would limit or terminate the

 

D-7

 

benefits available to any holder of Senior Debt of the
Company or a holder of Guarantor Senior Debt (or any Representative thereof) under
such Article 10 and Article 12.

 

15.                                
Defaults and
Remedies

 

Events of Default
include: (i) the failure to pay interest or Additional Interest, if any, on any
Notes when the same becomes due and payable if the default continues for a
period of 30 days (whether or not such payment shall be prohibited by
Article 10 or Article 12 of the Indenture); (ii) the failure to pay
the principal of or premium, if any, on any Notes when such principal or
premium, if any, becomes due and payable, at maturity, upon redemption or
otherwise (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer on the date
specified for such payment in the applicable offer to purchase) (whether or not
such payment shall be prohibited by Article 10 or Article 12 of the
Indenture); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture if the default continues for a
period of 30 days after the Company receives written notice specifying the
default (and demanding that such default be remedied) from the Trustee or the
Holders of at least 25% of the outstanding principal amount of the Notes
(except in the case of a default with respect to Section 5.01 or
Section 11.06 of the Indenture, which will constitute an Event of Default
with such notice requirement but without such passage of time requirement);
(iv) the failure to pay at final stated maturity (giving effect to any applicable
grace periods and any extensions thereof) the principal amount of any
Indebtedness of the Company or any Significant Subsidiary of the Company (other
than a Securitization Entity) or the acceleration of the maturity of any such
Indebtedness, if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness, whether such
Indebtedness now exists, or is created after the date of the Indenture, in
default for failure to pay principal at final maturity or which has been
accelerated, aggregates $20.0 million or more at any time; (v) one or more
judgments in an aggregate amount in excess of $20.0 million (which are not
covered by insurance or indemnity as to which the insurer or a creditworthy
indemnitor has not disclaimed coverage) shall have been rendered against the
Company or any of its Significant Subsidiaries or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted Subsidiaries), would
constitute a Significant Subsidiary, and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable; (vi) certain events of bankruptcy, insolvency or
reorganization affecting the Company or any of its Significant Subsidiaries or
group of Restricted Subsidiaries that taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary; and (vii) any
Guarantee of a Significant Subsidiary, or group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries) would constitute a
Significant Subsidiary, ceases to be in full force and effect (except as
contemplated by the terms of the Indenture) or is declared null and void in a
judicial proceeding or any Guarantor that is a Significant Subsidiary or group
of Guarantors that taken together (as of the latest audited consolidated
financial statements of the Company and its Restricted Subsidiaries) would
constitute a Significant Subsidiary denies or disaffirms its obligations under
the Indenture or its Guarantee. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the

 

D-8

 

foregoing, in the case of an Event of Default arising
from certain events of bankruptcy with respect to the Company, all outstanding
Notes will become due and payable without further action or notice. Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest or Additional Interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest
(including Additional Interest, if any) on, or the principal of, the Notes. The
Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware
of any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.

 

16.                                
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 Notes and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.

 

17.                                
Authentication

 

This Euro Note 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 Euro Note.

 

18.                                
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).

 

19.                                
Governing Law

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

20.                                
CUSIP Numbers,
ISINs and Common Codes

 

The Company has caused
CUSIP numbers and ISINs and, in the case of the Euro Notes, Common Codes, to be
printed on the Notes and has directed the Trustee to use CUSIP numbers and
ISINs and, in the case of the Euro Notes, Common Codes, in notices of
redemption as a convenience to the Holders.  No representation is made as
to the accuracy of such numbers

 

D-9

 

either as printed on the Notes 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 Notes upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Note.

 

D-10

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to:

 

               
(Print or type assignee’s name, address and zip code)

 

               
(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably
appoint                          
agent to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

 

	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  

 

Sign exactly as your name appears on the other side of
this Note.

 

	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
  Signature must be
  guaranteed by a participant in a recognized signature guaranty medallion
  program or other signature guarantor program reasonably acceptable to the
  Trustee

  	
   

  	
  Signature of Signature
  Guarantee

  
	
   

  	
   

  	
   

  	
   

  

 

D-11

 

[TO BE ATTACHED TO
GLOBAL EURO NOTES]

 

SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL EURO NOTE

 

The initial principal
amount of this Global Euro Note is €                                 . 
The following increases or decreases in this Global Euro Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount
  of decrease

  in Principal Amount

  of this Global Euro

  Note

  	
   

  	
  Amount
  of increase in

  Principal Amount of

  this Global Euro Note

  	
   

  	
  Principal
  amount of this

  Global Euro Note

  following such decrease or

  increase

  	
   

  	
  Signature
  of authorized

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

D-12

 

OPTION
OF HOLDER TO ELECT PURCHASE

 

If you
want to elect to have this Euro Note purchased by the Company pursuant to
Section 4.10 (Asset Sale) or 4.15 (Change of Control) of the Indenture,
check the box:

 

	
  Asset
  Sale  o

  	
   

  	
  Change
  of Control  o

  

 

If you
want to elect to have only part of this Euro Note purchased by the Company
pursuant to Section 4.10 (Asset Sale) or 4.15 (Change of Control) 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

  this Note)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Signature must be guaranteed by a
participant in a recognized signature guaranty medallion program or other
signature guarantor program reasonably acceptable to the Trustee

 

D-13

 

EXHIBIT E

 

Form of

Transferee Letter of Representation

 

PP Acquisition Corporation

 

c/o The Bank of New York

101 Barclay Street, Fl. 21W

New York, New York  10286

 

Ladies and Gentlemen:

 

This certificate is
delivered to request a transfer of $/€[     ] principal
amount of the 83⁄4% Senior Subordinated Notes due 2012 (the “Notes”) of PP
ACQUISITION CORPORATION (such corporation, and its successors and assigns under
the Indenture, including Polypore, Inc. following the merger of PP Acquisition
with and into Polypore, Inc., being herein called the “Company”).

 

Upon transfer, the Notes
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 Notes, and we
are acquiring the Notes 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 Notes, and we invest
in or purchase securities similar to the Notes 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 Notes 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 Notes to offer, sell or otherwise transfer
such Notes 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 Notes (or any predecessor thereto) (the “Resale
Restriction Termination Date”) only (a) to the 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, (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 Notes of
$250,000, or (f) pursuant to any other 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 Notes 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 Notes 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 Notes 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.

 

	
  Dated: 

  	
   

  	
   

  
	
   

  
	
   

  	
  TRANSFEREE:

  	
   

  	
  ,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

E-2

 

EXHIBIT F

 

[FORM OF
SUPPLEMENTAL INDENTURE]

 

SUPPLEMENTAL INDENTURE
(this “Supplemental Indenture”) dated as of 
[                   
], among [GUARANTOR] (the “New Guarantor”), a subsidiary of POLYPORE, INC., a
Delaware corporation (the “Company”), and THE BANK OF NEW YORK, a New York
banking corporation, as trustee under the indenture referred to below (the
“Trustee”).

 

W I T N E S S E T
H :

 

WHEREAS the Company and
the existing Guarantors has heretofore executed and delivered to the Trustee an
Indenture (as amended, supplemented or otherwise modified, the “Indenture”)
dated as of May 13, 2004, providing for the issuance of the Company’s U.S.
Dollar-denominated 83⁄4% Senior Subordinated Notes due 2012 (the “Dollar Notes”)
and Euro-denominated 83⁄4% Senior Subordinated Notes due 2012 (the “Euro Notes”
and, together with the Dollar Notes, the “Notes”), initially in the aggregate
principal amount of $225,000,000 and €150,000,000, respectively;

 

WHEREAS
Section 11.09 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 Notes
pursuant to a Senior Subordinated 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, and
the Trustee mutually covenant and agree for the equal and ratable benefit of
the holders of the Notes as follows:

 

1.                                      
Defined Terms.  As used in this Supplemental
Indenture, terms defined in the Indenture or in the preamble or recital hereto
are used herein as therein defined, except that the term “Holders” in this
Guarantee shall refer to the term “Holders” as defined in the Indenture and the
Trustee acting on behalf of and for the benefit of such Holders.  The
words “herein,” “hereof” and hereby and other words of similar import used in
this Supplemental Indenture refer to this Supplemental Indenture as a whole and
not to any particular section hereof.

 

2.                                      
Agreement to
Guarantee. 
The New Guarantor hereby agrees, jointly and severally with all existing
Guarantors (if any), to unconditionally guarantee the Company’s obligations
under the Notes on the terms and subject to the conditions set forth in
Articles 11 and 12 of the Indenture and to be bound by all other applicable
provisions of the Indenture and the Notes and to perform all of the obligations
and agreements of a Guarantor under the Indenture.

 

 

3.                                      
Notices.  All notices or other
communications to the New Guarantor shall be given as provided in
Section 13.02 of the Indenture.

 

4.                                      
Ratification of
Indenture; Supplemental Indentures Part of Indenture.  Except as expressly amended
hereby, the Indenture is in all respects ratified 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 Notes heretofore or hereafter
authenticated and delivered shall be bound hereby.

 

5.                                      
Governing Law.  THIS
SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

 

6.                                      
Trustee Makes No
Representation. 
The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.

 

7.                                      
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.

 

8.                                      
Effect of Headings.  The Section headings herein
are for convenience only and shall not effect the construction thereof.

 

F-2

 

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:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  POLYPORE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK, AS TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

F-3

 

Schedule I

 

Permitted
Acquisition Payments

 

Payment to Warburg Pincus Private Equity VIII, L.P.
and Warburg Pincus International Partners, L.P., representing reimbursement for
out-of-pocket expenses incurred in connection with the Transactions, not to
exceed $6,500,000 in the aggregate.

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