Document:

ex104.htm

Exhibit 10.4

 

 

Natural Person Guarantee Agreement

November, 2011

 

  

1

  

 

 

Special Reminder

    In order to protect the Company’s (or personal) legal right, please read and confirm the following carefully before signed this agreement.

 

	
1.  

	
All data provided by the Company (or person) is true, completed, legal, valid, and does not contain any false records, misleading statements or material omissions.

 

	
2.  

	
The Company (or person) has read all terms of this agreement, especially the terms in bold front, and have fully understood its meaning and legal consequences.

 

	
3.  

	
Before signature, the Company (or person) has the right to amend this agreement. After the commencement of this agreement, the Company (or person) has to exercise the rights under this agreement and actively fulfill the obligations.

 

	
4.  

	
In order to protect the Company’s (or personal) interest, any change for the Company’s (or personal) living address, mailing address, telephone number, business scope, legal representative and others should inform our company by written notice within 10 days after changed.

 

5.  If any question, please consult with our company.

  

2

  

Guarantee Agreement

(Natural Personal)

                                         

To: New Energy Systems Group (Creditor)

In order to guarantee the implement of the agreement which was signed between creditor and Xuemei Fang, Weirong Xu (debtors) on November 24, 2011, NEWN20111101-1 <Equity Transfer Agreement> (hereinafter referred as main agreement; the amount of main agreement is RMB$85,553,892.75, the term of the agreement are 2 years, starting from November 24, 2011 to November 23, 2013), the guarantee ( Weirong Xu ) is willing to be the guarantee of the main agreement’s debtor to provide the related guarantee. The details are as following:

	
A.  

	
Scope of Security: The security transfer amount of Billion Electronics Limited (BVI) (based on the amount disclosed under the main agreement), interest, penalty, damages, and the fees which creditor paid for achieve their credit rights, including legal fees, arbitration fees, property preservation fee, evidence preservation fees, enforcement fees, assessment fees, auction fees, appraisal fees, lawyer fees, travel expenses, investigation and evidence collection fees.

 

	
B.  

	
The guarantor guarantees: if the debtors could not pay back all of the debts in accordance with the term required by the main agreement, the guarantor will bear the responsibility as mentioned in the item A (included but not limited to the amount of equity agreement, interests, and penalty) once received the  <Guarantee Notice> from the creditor. If the debts could not be cleared during the term as agreement, the guarantor will bear all the security responsibility within the guarantee scope under the law.

 

	
C.  

	
This guarantee is independent. The guarantee will not be affected if part or full of main agreement become invalid and will not be affected or invalid if any term of the main agreement were modified, supplied, and deleted. The guarantor have received, read, understood the content of the main agreement, and have no objection. The guarantor does not have any defense for the main agreement.

 

	
D.  

	
The guarantee period of this agreement is 2 years which started from the date when the term of the main agreement expired. (If any legal or regulative situation related to the main agreement resulted in early maturity of the main agreement, the term of this agreement will be 2 years starting from the date of the early maturity of the main agreement.)

 

	
E.  

	
The guarantor confirm and guarantees:

 

	
1.  

	
The guarantor’s financial condition is sufficient to assume the security responsibilities listed in this agreement;

 

	
2.  

	
The guarantor is willing to use all of his/her assets (including family property) to assume the responsibilities;

 

	
3.  

	
The guarantor ensures that he or she has the full ownership and disposition right of his or her property. Once this agreement is signed, the guarantor cannot dispose any property mentioned above without approving by the creditor, including setting mortgage, pledge, transfer, lease, etc.) If the creditor deems it necessary, he or she could have property insurance, set mortgage, pledge, lease, and the guarantor guarantees to assist with related registration process (such as setting mortgage and pledge need sign a separate mortgage, pledge guarantee agreement, etc.);

 

 

  

3

  

 

 

	
4.  

	
If all of the above property is still insufficient to guarantee the responsibility to the creditor, the guarantor guarantees to keep bear the responsibilities to ensure the payment and expenses mentioned in the term A of this agreement are all paid out.

	
F.  

	 

	
1.  

	 

	
F.  

	
The responsibilities under this agreement will not change if the debtor does not appear to limit or loss of civil rights, restrictions or incapacitated; will not be affected by the other agreement, contract, documents which the debtor signed with others; will not change due to the debtor’s bankrupt, insolvent borrow, the loss of corporate status, the change of the article of incorporation and other situation; will not be affected if the creditor’s gave up or change of any other security under the main agreement. This agreement remains in effect during the guarantee period.

 

	
G.  

	
Any dispute occurred when implemented this agreement, both sides should actively negotiated settlement; otherwise, either party may apply to the primary jurisdiction of the People’s Court of main agreement (the People’s Court where this agreement is signed).

 

	
H.  

	
This agreement will enter into force immediately after signed by the guarantor.

Guarantor: Weirong Xu (signature, finger print)                                                                                     ID number: 420700197003014925

Living address: No. 1187-19, Huangshi Ave., Huangshi Harbor, Huangshi Harbor Dist., Huangshi City, Hubei Province, China

Phone number: 0755-61268588

Date of signature: November 24, 2011

Signature Location:  Nanshan District, Shenzhen City

 

 

 

4Exhibit 4.1

 

EXECUTION COPY

 

 

POLYPORE INTERNATIONAL, INC.,

 

and

 

THE BANK OF NEW YORK, as Trustee

 

 

 

INDENTURE

 

Dated as of October 18, 2004

 

 

101/2% Senior
Discount Notes due 2012

 

 

 

CROSS-REFERENCE TABLE*

 

	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  
	
   

  	
   

  	
   

  
	
  310(a)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.10

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  312(a)

  	
   

  	
  2.05

  
	
  (b)

  	
   

  	
  10.03

  
	
  (c)

  	
   

  	
  10.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)(2)

  	
   

  	
  7.07

  
	
  (c)

  	
   

  	
  7.06;
  7.07; 10.02

  
	
  (vi)(d)

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
  4.03;
  4.04; 10.05

  
	
  318(c)

  	
   

  	
  10.01

  

 

N.A. means not
applicable.

*This Cross-Reference
Table is not part of the Indenture.

 

 

Table of Contents

 

	
  ARTICLE 1
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
   

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
   

  
	
  SECTION 1.03.

  	
  Trust
  Indenture Act Definitions

  	
   

  
	
  SECTION 1.04.

  	
  Rules of
  Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2
  THE NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Form and Dating

  	
   

  
	
  SECTION 2.02.

  	
  Execution
  and Authentication

  	
   

  
	
  SECTION 2.03.

  	
  Registrar
  and Paying Agent

  	
   

  
	
  SECTION 2.04.

  	
  Paying
  Agent to Hold Money in Trust

  	
   

  
	
  SECTION 2.05.

  	
  Holder Lists

  	
   

  
	
  SECTION 2.06.

  	
  Transfer and
  Exchange

  	
   

  
	
  SECTION 2.07.

  	
  Replacement Notes

  	
   

  
	
  SECTION 2.08.

  	
  Outstanding Notes

  	
   

  
	
  SECTION 2.09.

  	
  Treasury Notes

  	
   

  
	
  SECTION 2.10.

  	
  Temporary Notes

  	
   

  
	
  SECTION 2.11.

  	
  Cancellation

  	
   

  
	
  SECTION 2.12.

  	
  Defaulted Interest

  	
   

  
	
  SECTION 2.13.

  	
  CUSIP or ISIN
  Numbers

  	
   

  
	
  SECTION 2.14.

  	
  Issuance of
  Additional Notes

  	
   

  
	
  SECTION 2.15.

  	
  Calculation of
  Amounts

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3
  REDEMPTION AND PREPAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Notices to Trustee

  	
   

  
	
  SECTION 3.02.

  	
  Selection
  of Notes to Be Redeemed

  	
   

  
	
  SECTION 3.03.

  	
  Notice of
  Redemption

  	
   

  
	
  SECTION 3.04.

  	
  Effect of
  Notice of Redemption

  	
   

  
	
  SECTION 3.05.

  	
  Deposit of
  Redemption Price

  	
   

  
	
  SECTION 3.06.

  	
  Notes Redeemed in
  Part

  	
   

  
	
  SECTION 3.07.

  	
  Optional Redemption

  	
   

  
	
  SECTION 3.08.

  	
  Mandatory
  Redemption; Open Market Purchases

  	
   

  
	
  SECTION 3.09.

  	
  Offer
  to Purchase by Application of Net Proceeds Offer Amount

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Payment of Notes

  	
   

  
	
  SECTION 4.02.

  	
  Maintenance
  of Office or Agency

  	
   

  
	
  SECTION 4.03.

  	
  Reports

  	
   

  

 

i

 

	
  SECTION 4.04.

  	
  Compliance
  Certificate

  	
   

  
	
  SECTION 4.05.

  	
  [Intentionally
  Omitted]

  	
   

  
	
  SECTION 4.06.

  	
  Stay,
  Extension and Usury Laws

  	
   

  
	
  SECTION 4.07.

  	
  Restricted Payments

  	
   

  
	
  SECTION 4.08.

  	
  Dividend
  and Other Payment Restrictions Affecting Subsidiaries

  	
   

  
	
  SECTION 4.09.

  	
  Incurrence of
  Indebtedness

  	
   

  
	
  SECTION 4.10.

  	
  Asset Sales

  	
   

  
	
  SECTION 4.1l.

  	
  Transactions
  with Affiliates

  	
   

  
	
  SECTION 4.12.

  	
  Liens

  	
   

  
	
  SECTION 4.13.

  	
  Conduct of Business

  	
   

  
	
  SECTION 4.14.

  	
  Corporate Existence

  	
   

  
	
  SECTION 4.15.

  	
  Offer
  to Repurchase upon Change of Control

  	
   

  
	
  SECTION 4.16.

  	
  Limitation
  on Preferred Stock of Restricted Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Merger,
  Consolidation, or Sale of Assets

  	
   

  
	
  SECTION 5.02.

  	
  Successor
  Corporation Substituted

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Events of Default

  	
   

  
	
  SECTION 6.02.

  	
  Acceleration

  	
   

  
	
  SECTION 6.03.

  	
  Other Remedies

  	
   

  
	
  SECTION 6.04.

  	
  Waiver of Past
  Defaults

  	
   

  
	
  SECTION 6.05.

  	
  Control by Majority

  	
   

  
	
  SECTION 6.06.

  	
  Limitation on Suits

  	
   

  
	
  SECTION 6.07.

  	
  Rights
  of Holders of Notes to Receive Payment

  	
   

  
	
  SECTION 6.08.

  	
  Collection
  Suit by Trustee

  	
   

  
	
  SECTION 6.09.

  	
  Trustee
  May File Proofs of Claim

  	
   

  
	
  SECTION 6.10.

  	
  Priorities

  	
   

  
	
  SECTION 6.11.

  	
  Undertaking for
  Costs

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Duties of Trustee

  	
   

  
	
  SECTION 7.02.

  	
  Rights of Trustee

  	
   

  
	
  SECTION 7.03.

  	
  Individual
  Rights of Trustee

  	
   

  
	
  SECTION 7.04.

  	
  Trustee’s
  Disclaimer

  	
   

  
	
  SECTION 7.05.

  	
  Notice of Defaults

  	
   

  
	
  SECTION 7.06.

  	
  Reports
  by Trustee to Holders of the Notes

  	
   

  
	
  SECTION 7.07.

  	
  Compensation
  and Indemnity

  	
   

  
	
  SECTION 7.08.

  	
  Replacement of
  Trustee

  	
   

  
	
  SECTION 7.09.

  	
  Successor
  Trustee by Merger, etc.

  	
   

  
	
  SECTION 7.10.

  	
  Eligibility;
  Disqualification

  	
   

  
	
  SECTION 7.11.

  	
  Preferential
  Collection of Claims Against Company

  	
   

  

 

ii

 

	
  SECTION 7.12.

  	
  Calculation
  of Original Issue Discount

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Option
  to Effect Legal Defeasance or Covenant Defeasance

  	
   

  
	
  SECTION 8.02.

  	
  Legal
  Defeasance and Discharge

  	
   

  
	
  SECTION 8.03.

  	
  Covenant Defeasance

  	
   

  
	
  SECTION 8.04.

  	
  Conditions
  to Legal or Covenant Defeasance

  	
   

  
	
  SECTION 8.05.

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

  	
   

  
	
  SECTION 8.06.

  	
  Satisfaction
  and Discharge

  	
   

  
	
  SECTION 8.07.

  	
  Repayment to
  Company

  	
   

  
	
  SECTION 8.08.

  	
  Reinstatement

  	
   

  
	
  SECTION 8.09.

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Without
  Consent of Holders of Notes

  	
   

  
	
  SECTION 9.02.

  	
  With
  Consent of Holders of Notes

  	
   

  
	
  SECTION 9.03.

  	
  Compliance
  with Trust Indenture Act

  	
   

  
	
  SECTION 9.04.

  	
  Revocation
  and Effect of Consents

  	
   

  
	
  SECTION 9.05.

  	
  Notation
  on or Exchange of Notes

  	
   

  
	
  SECTION 9.06.

  	
  Trustee
  to Sign Amendments, etc.

  	
   

  
	
  SECTION 9.07.

  	
  Additional
  Voting Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 10.01.

  	
  Trust
  Indenture Act Controls

  	
   

  
	
  SECTION 10.02.

  	
  Notices

  	
   

  
	
  SECTION 10.03.

  	
  Communication
  by Holders of Notes with Other Holders of Notes

  	
   

  
	
  SECTION 10.04.

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
  SECTION 10.05.

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
  SECTION 10.06.

  	
  Rules by
  Trustee and Agents

  	
   

  
	
  SECTION 10.07.

  	
  Governing Law

  	
   

  
	
  SECTION 10.08.

  	
  No
  Adverse Interpretation of Other Agreements

  	
   

  
	
  SECTION 10.09.

  	
  Successors

  	
   

  
	
  SECTION 10.10.

  	
  Severability

  	
   

  
	
  SECTION 10.11.

  	
  Counterpart
  Originals

  	
   

  
	
  SECTION 10.12.

  	
  Table
  of Contents, Headings, etc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  APPENDIX
  AND EXHIBITS

  	
   

  
	
   

  	
   

  	
   

  
	
  Appendix

  	
  -

  	
  Rule 144A/Regulation S Appendix:

  Provisions Relating to
  Initial Notes, Additional Notes and Exchange Notes

  	
   

  
				

 

iii

 

EXHIBIT
INDEX

 

	
  Exhibit A

  	
  -

  	
  Initial
  Note

  
	
  Exhibit B

  	
  -

  	
  Exchange
  Note

  
	
  Exhibit C

  	
  -

  	
  Form of
  Transferee Letter of Representation

  

 

iv

 

INDENTURE dated as
of October 18, 2004 between Polypore International, Inc., a Delaware
corporation (the “Company”), 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) $300,000,000 aggregate principal amount at
maturity of 101/2% Senior Discount Notes
due 2012 (the “Initial Notes”) in the form of Exhibit A hereto, (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 101/2% Senior Discount Notes due 2012 (the “Exchange Notes”
and, together with the Initial Notes and any Additional 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 B 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.

 

“Accreted Value”
means, as of any date of determination prior to the Full Accretion Date, with
respect to any Note, the sum of (a) the initial accreted value of $667.30 per
$1,000 principal amount at maturity of such Note and (b) the portion of the
excess of the principal amount at maturity of such Note over such initial
accreted value that shall have been accreted thereon through such date, such
amount to be so accreted as accrued interest on a daily basis at 10.50% per
annum of the initial accreted value of such Note, compounded semi-annually on
each April 1 and October 1 from the date of issuance through the date
of determination, computed on the basis of a 360-day year of twelve 30-day
months; provided  that, on
and after the Full Accretion Date, the Accreted Value of each Note shall be
equal to the principal amount at maturity of such Note.

 

“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, 101/2% Senior Discount 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
Premium” means, with respect to any Note on any applicable redemption date, the
greater of:

 

(1)                                  1.0%
of the then outstanding Accreted Value of the Note; and

 

(2)                                  the
excess of:

 

(a)                                  the
present value at such redemption date of the redemption price of such Note at
the Full Accretion Date (such redemption price being set forth in Section 3.07),
computed using a discount rate equal to the Treasury Rate as of such redemption
date plus 50 basis points; over

 

(b)                                 the
Accreted Value on the applicable redemption date of such 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.

 

“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:

 

2

 

(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 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.

 

“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.

 

3

 

“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 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-l from S&P or at least P-l 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,
Holdings or Polypore, Inc. to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a “Group”), other than to
Polypore, Inc. (in the case of the assets of the Company or Holdings) or to the
Company or Holdings (in the case of the assets of

 

4

 

any Restricted
Subsidiary of the Company), the Permitted Holders or their Related Parties or
any Permitted Group;

 

(ii)                                  the
approval by the holders of Capital Stock of the Company, Holdings or Polypore,
Inc. of any plan or proposal for the liquidation or dissolution of the Company,
Holdings or Polypore, Inc. (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,
Holdings or Polypore, Inc. at a time when the Permitted Holders and their
Related Parties in the aggregate own a lesser 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, Holdings or Polypore, Inc. 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 May 13, 2004; (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 May 13, 2004 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 dated May 6, 2004 relating to the Senior Subordinated Notes.

 

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

 

5

 

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 make such
calculation and any incurrence or repayment of other Indebtedness or the
issuance 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

 

6

 

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 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).

 

7

 

“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 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 loss of any Person, other than a Restricted Subsidiary of
the Company; (vi) 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; (vii) 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; (viii) 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

 

8

 

deferred
compensation, whether or not such reduction is in accordance with GAAP; (ix)
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; (x) unrealized gains and
losses due solely to fluctuations in currency values and related tax effects
according to GAAP.

 

“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, with respect to any Person and as of any date of
determination, any member of the Board of Directors of such Person 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 10.02
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 May 13, 2004 among Polypore, Inc.,
Holdings, the lenders party thereto in their capacities as lenders thereunder,
JPMorgan Chase Bank, as administrative agent, Bear Steans 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.

 

9

 

“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.

 

“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.

 

“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

 

10

 

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 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 Polypore, Inc., Holdings or
the Company; provided  that,
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 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.

 

“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.

 

11

 

“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.

 

“Full Accretion
Date” means October 1, 2008.

 

“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.

 

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

 

“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 for 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

 

12

 

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 voluntary or involuntary liquidation preference and its maximum
fixed repurchase price or, with respect to any Subsidiary, 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 May 13, 2004 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 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.

 

13

 

“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.

 

14

 

“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.

 

“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.

 

“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

 

15

 

financial officer, the
treasurer or the principal accounting officer of the Company, that meets the
requirements of Sections 10.04 and 10.05 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.

 

“Pari Passu
Indebtedness” means Indebtedness that ranks equally in right of payment to the
Notes.

 

“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 May 13, 2004 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 May 13, 2004.

 

“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 May 13, 2004.

 

“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);

 

(ii) Indebtedness
of Polypore, Inc., Holdings or the guarantors of the Senior Subordinated Notes
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 May 13, 2004 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 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;

 

16

 

(iii) other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on May
13, 2004 (and in the case of any line of credit, the unused capacity of such
line of credit as of May 13, 2004), 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) 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 (b) 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
domestic Subsidiary of the Company 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;

 

(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

 

17

 

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 domestic Subsidiary of the Company
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 or any
domestic Subsidiary of the Company 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;

 

(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;

 

18

 

(xviii)
Indebtedness consisting of promissory notes issued by the Company 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; and

 

(xix) Indebtedness of Polypore, Inc. or any of its
Restricted Subsidiaries under the Senior Subordinated Notes.

 

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 May 13, 2004 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 a 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, 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 May 13, 2004; (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

 

19

 

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
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.

 

“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

 

20

 

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 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, such Refinancing Indebtedness is subordinated in right of
payment to the Notes 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, between the Company and the Initial Purchaser 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).

 

“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

 

21

 

at the Corporate Trust
Office of the Trustee who has direct responsibility for the administration of
this Indenture and for the purposes of Section 7.01(c)(ii) and the last
sentence of Section 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 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.

 

22

 

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
Subordinated Notes” means the 83/4% Senior Subordinated
Notes due 2012 of Polypore, Inc.

 

“Senior
Subordinated Notes Indenture” means the Indenture dated as of May 13, 2004
among Polypore, Inc. (as the surviving corporation in the merger with PP
Acquisition Corporation), the guarantors party thereto and The Bank of New
York, as trustee, relating to the Senior Subordinated Notes, as may be amended
(including any amendment and restatement thereof), supplemented or otherwise
modified from time to time.

 

“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 l-02(w) of Regulation S-X under the Securities Act.

 

“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.

 

“Stockholders’ Agreement”
means the Stockholders’ Agreement, dated as of May 13, 2004, among PP Holding
II and certain stockholders of PP Holding II as parties thereto, as in effect
on May 13, 2004 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 May
13, 2004 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.

 

23

 

“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.

 

“Transactions” has
the meaning given to it in the Senior Subordinated Notes Indenture as in effect
on May 13, 2004 (without giving effect to subsequent amendments, waivers or
other modifications to such agreements or documents).

 

“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 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 October 1, 2008; provided, however, that if the period from
such redemption date to October 1, 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. 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.

 

“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.

 

24

 

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.

 

“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 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

 

25

 

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

  
	
  “Change of Control
  Offer”

  	
   

  	
  4.15

  
	
  “Change of Control
  Payment Date”

  	
   

  	
  4.15

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “incur”

  	
   

  	
  4.09

  
	
  “Initial Lien”

  	
   

  	
  4.12

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  
	
  “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

  
	
  “Paying Agent”

  	
   

  	
  2.03

  
	
  “protected purchaser”

  	
   

  	
  2.07

  
	
  “Purchase Date”

  	
   

  	
  3.09

  
	
  “Reference Date”

  	
   

  	
  4.07

  
	
  “Registrar”

  	
   

  	
  2.03

  
	
  “Restricted Payment”

  	
   

  	
  4.07

  
	
  “Surviving Entity”

  	
   

  	
  5.01

  

 

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; and

 

“obligor”
on the Notes means the Company and any successor obligor upon the Notes.

 

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.

 

26

 

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)                                  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

 

(8)                                  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 Notes
and the Trustee’s certificate of authentication with respect thereto shall be
substantially in the forms of Exhibit A to the Appendix, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange Notes
and the Trustee’s certificate of authentication with respect thereto shall be
substantially in the forms of Exhibit B 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
and B to the Appendix are part of the terms of this Indenture.

 

27

 

SECTION 2.02.
Execution and Authentication.

 

On the Issue Date,
the Trustee shall authenticate and deliver $300,000,000 aggregate principal
amount at maturity of 101/2% Senior Discount 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 principal amount at maturity 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.

 

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
(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”) and (ii) an office
or agency in the Borough of Manhattan, the City of New York, the State of New
York where Notes may be presented for payment (the “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 term “Paying Agent” includes the Paying Agent and any
additional paying agents. The

 

28

 

Company initially appoints
the Trustee as (i) Registrar and Paying Agent in connection with the Notes and
(ii) the Notes Custodian with respect to the Global Notes.

 

(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. 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.

 

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 payment of Accreted Value of, 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
Accreted Value, premium, if any, or 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 Accreted Value
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).

 

29

 

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 at maturity 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).

 

(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 Accreted Value 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.

 

30

 

(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.

 

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.

 

31

 

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 Accreted Value or principal amount at
maturity 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 of the Accreted Value, 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.

 

SECTION 2.09. Treasury Notes.

 

In determining whether the Holders of the
required principal amount at maturity 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

 

32

 

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 Notes, the Company shall pay defaulted interest then borne by
the 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.

 

SECTION 2.13. CUSIP or ISIN Numbers.

 

The Company in issuing the Notes may use “CUSIP”,
“ISIN”, or other similar identification numbers (if then generally in use) and,
if so, the Trustee shall use “CUSIP”, “ISIN” 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” 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 Accreted Value and principal amount at maturity of such Additional Notes
to be authenticated and delivered pursuant to this Indenture;

 

(2)                                  the
issue price, the issue date (including the date from which Accreted Value of, premium,
if any, or interest on such Additional Notes shall accrete or accrue, as the
case may be) and the “CUSIP”, “ISIN” or other similar identification numbers of
such Additional Notes; and

 

33

 

(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.

 

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 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 Accreted
Value and principal amount at maturity of Notes to be redeemed, (iv) the
redemption price and (v) the “CUSIP”, “ISIN” 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 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.

 

34

 

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 principal amount at maturity or whole
multiples of $1,000 principal amount at maturity. 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 Notes to be redeemed, including “CUSIP”, “ISIN”
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 at maturity 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 at maturity equal to the unredeemed portion of the
principal amount at maturity 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, Accreted Value or interest on
Notes (or portion thereof) called for redemption ceases to accrete or accrue,
as the case may be, 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” 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 (unless a shorter period shall be acceptable to the Trustee),
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.

 

35

 

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.

 

With respect to any Notes, prior to 10:00
a.m., New York City time, on the redemption date, the Company shall deposit
with the Paying Agent (or, if the Company or 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 Notes or portions thereof to
be redeemed on that date other than Notes or portions of Notes called for
redemption that have been delivered by the Company to the Trustee for
cancellation. On and after the redemption date, Accreted Value will cease to
accrete or interest shall cease to accrue, as the case may be, on Notes or
portions thereof called for redemption so long as the Company has deposited
with the Paying Agent funds sufficient to pay the Accreted Value or principal
of, plus accrued and unpaid interest on, the Notes to be redeemed, unless a
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 at maturity to the unredeemed portion of the
Note surrendered.

 

SECTION 3.07. Optional Redemption.

 

(a)                                  Optional Redemption.
Except as provided in Sections 3.07(b) and (c) hereof, the Notes, shall not be
redeemable at the Company’s option prior to October 1, 2008. On or after
October 1, 2008, the 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 at maturity thereof) set forth below plus accrued and unpaid
interest to the applicable redemption date, if redeemed during the twelve month
period commencing on October 1 of the year set forth below:

 

	
  Year

  	
   

  	
  Percentage of

  Principal Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  105.250

  	
  %

  
	
  2009

  	
   

  	
  102.625

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

36

 

(b)                                 In
addition, prior to October 1, 2008, the Company may redeem the 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 Accreted Value
thereof plus the Applicable Premium as of, and additional amounts, if any 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 October 1, 2007, the Company may at its option on one
or more occasions redeem the Notes (which includes Additional Notes, if any) in
an aggregate principal amount not to exceed 35% of the aggregate principal
amount at maturity of the Notes (which includes Additional Notes, if any)
originally issued at a redemption price of 110.50% of the Accreted Value
thereof (and Additional Interest, if any) as of the applicable redemption date,
with the net cash proceeds from one or more Equity Offerings; provided, however, that (1) at
least 65% of the original aggregate principal amount at maturity of Notes (which
includes Additional 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 90 days after the date of the related Equity Offering.

 

Notwithstanding the foregoing, for so long as
the optional redemption pursuant to this Section 3.07(c) is available, the
Company shall not use the net cash proceeds of the initial public offering of
Capital Stock of the Company, Holdings or Polypore, Inc. to tender for or
repurchase any Notes pursuant to a tender offer using a “Dutch-auction”
procedure.

 

(d)                                 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”).

 

37

 

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 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:

 

(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 Pari Passu Indebtedness of the
Company or Indebtedness of a Restricted Subsidiary of the Company pursuant to
Section 4.10 hereof, the notice shall identify such Pari Passu Indebtedness or
Indebtedness and state that the Net Proceeds Offer is also made to holders of
such Pari Passu Indebtedness or Indebtedness;

 

(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 principal amount at maturity;

 

(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 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;

 

38

 

(h)                                 that, if the Accreted
Value of Notes surrendered by Holders and Pari Passu Indebtedness of the
Company or Indebtedness of a Restricted Subsidiary of the Company surrendered
by the holders thereof exceeds the Offer Amount, the Company shall select the
Notes and Pari Passu Indebtedness of the Company or Indebtedness of a
Restricted Subsidiary of the Company to be purchased on a pro rata basis (based
on the amounts of Notes and such Pari Passu Indebtedness of the Company and
Indebtedness of a Restricted Subsidiary of the Company tendered and with such
adjustments as may be deemed appropriate by the Company so that only Notes or
Pari Passu Indebtedness of the Company or Indebtedness of a Restricted
Subsidiary of the Company in denominations of $1,000 principal amount at
maturity or integral multiples thereof shall be purchased); and

 

(i)                                     that Holders whose
Notes were purchased only in part shall be issued new Notes equal in principal amount
at maturity 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 and Pari Passu
Indebtedness of the Company or Indebtedness of 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 Pari
Passu Indebtedness of the Company or Indebtedness of 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 Pari Passu Indebtedness
of the Company or Indebtedness of a Restricted Subsidiary of the Company or
portions thereof were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the 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 at maturity 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 if the Company so complies.

 

39

 

ARTICLE 4 

 

COVENANTS

 

SECTION 4.01. Payment
of Notes.

 

The Company shall pay or cause to be paid the
Accreted Value of (and premium, if any), and interest on the Notes on the dates
and in the manner provided in the Notes. Accreted Value of (and 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 on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
Accreted Value of (and 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.

 

SECTION 4.02. Maintenance of Office or
Agency.

 

(a)                                  The
Company shall maintain in the Borough of Manhattan, the City of New York, an
office or agency (which may be an office of the Trustee or an affiliate of the
Trustee or 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 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, as such office or agency of
the Company in accordance with Section 2.03 hereof.

 

40

 

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 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 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 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

 

41

 

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 at maturity 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 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 covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not, 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 of its Restricted 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
and 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));

 

42

 

(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
that is subordinate or junior in right of payment to the Notes (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”);

 

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 May 13, 2004 (other than Restricted
Payments made pursuant to clauses (2), (3), (4), (5), (6), (7), (8), (9), (10),
(12) and (13) 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 Polypore, Inc. 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%; provided, further,
that for purposes of calculating Consolidated Net Income pursuant to this
clause (v) only, the Company’s non-cash interest expense and amortization of
original issue discount shall be excluded; 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

 

43

 

and sale subsequent to May 13, 2004 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
May 13, 2004 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 May 13, 2004 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 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

 

44

 

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 that is subordinate or junior in
right of payment to the Notes 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;

 

(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 May 13, 2004; 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 (provided  that, for purposes of calculating the
Consolidated Fixed Charge Coverage Ratio pursuant to this clause (4) only, the
Company’s non-cash interest expense and amortization of original issue discount
shall be excluded);

 

(5)                                  payments
to the Company and/or Holdings for the purpose of permitting, and in an amount
equal to the amount required to permit, the Company and/or Holdings to redeem
or repurchase the Company’s or Holdings’, as the case may be, 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 May 13, 2004 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 May 13, 2004 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

 

45

 

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)                                  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;

 

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

 

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

 

(9)                                  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 4.10 and the application of the entire Net
Proceeds Offer Amount to purchase Notes tendered therein);

 

(10)                            upon
the 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;

 

(11)                            so
long as no Default has occurred and is continuing or would be caused thereby, the
payment of dividends on Common Stock of the Company, Holdings or Polypore, Inc.,
following the first public offering of Common Stock of the Company, Holdings or
Polypore, Inc., after the date of the Indenture, of up to 6% per annum of the
Net Cash Proceeds received by the Company in such public offering;

 

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

 

(13)                            the
repurchase of $150.0 million of Series A nonconvertible preferred stock of the Company
and the declaration and payment of dividends of up to $50.0 million to the
Company’s common stockholders.

 

46

 

In determining the aggregate amount of
Restricted Payments made subsequent to May 13, 2004 in accordance with clause
(iii) of the immediately preceding paragraph of this Section 4.07, (a) amounts
expended pursuant to clauses (1) and (11) 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), (12) and (13)
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 (it being understood that the subordination of loans or advances
made to the Company to other Indebtedness incurred by the Company 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, 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 by Polypore, Inc. on May 13, 2004 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 Polypore, Inc.’s Board of Directors, which determination will be
conclusive; (6) the Senior Subordinated Notes Indenture; (7) agreements
existing on May 13, 2004 to the extent and in the manner such agreements are in
effect on May 13, 2004; (8) restrictions on the transfer of assets subject to
any Lien permitted under this Indenture imposed by the holder of such Lien; (9)
restrictions imposed by any agreement to sell assets or Capital Stock of a
Restricted Subsidiary

 

47

 

permitted under this Indenture to any Person pending the closing of
such sale; (10) any agreement or instrument governing Capital Stock of any
Person that is acquired; (11) 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; (12) other Indebtedness outstanding on May
13, 2004 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; (13) restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business; and (14) 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 (2), (4), (6), (7)
and (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,
Polypore, Inc. and any Restricted Subsidiary of the Company that is a guarantor
of the Senior Subordinated Notes may incur Indebtedness (including, Acquired
Indebtedness), and Restricted Subsidiaries of the Company that are not
guarantors of the Senior Subordinated Notes 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 1.75 to 1.00; provided, further, that
Holdings will not incur any Indebtedness other than Indebtedness permitted
pursuant to clauses (2) and (6) of the definition of “Permitted Indebtedness”.
The maximum amount of Indebtedness that the Company and its Restricted
Subsidiaries may incur pursuant to this Section 4.09 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.

 

48

 

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 425 days of receipt thereof either (A) to prepay any Pari
Passu Indebtedness of the Company (subject to the requirement to make a Net
Proceeds Offer as described below) or any Indebtedness of a Restricted
Subsidiary of the Company 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 425-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 426th 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
426th 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 426th 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

 

49

 

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 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 Pari Passu Indebtedness of the Company or any Indebtedness
of a Restricted Subsidiary of the Company requiring the making of such an
offer, on a pro rata basis, the maximum amount of Notes, such other Pari Passu
Indebtedness of the Company and such Indebtedness of a Restricted Subsidiary of
the Company that may be purchased with the
Net Proceeds Offer Amount at a price equal to 100% of the Accreted Value
thereof as of the date of purchase plus Additional Interest, if any, or of the
principal amount thereof as of the date of purchase, plus accrued and unpaid
interest and Additional Interest, if any (or, in the event such other Pari
Passu Indebtedness of the Company or Indebtedness of a Restricted Subsidiary of
the Company 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 Pari Passu Indebtedness of
the Company or Indebtedness of a Restricted Subsidiary of the Company, such
lesser price, if any, as may be provided for by the terms of such Pari Passu
Indebtedness of the Company or Indebtedness of a Restricted Subsidiary of the
Company); 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 foregoing, if an
offer to purchase Indebtedness of Polypore, Inc. or its Restricted Subsidiaries
is made in accordance with the terms of such Indebtedness, the Net Proceeds
Offer Amount shall be deemed to be reduced to the extent the amount of the
offer to holders of such Indebtedness (whether or not accepted by such holders)
is prohibited as a Restricted Payment to the Company by the terms of such
Indebtedness.

 

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

 

50

 

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.

 

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 any Pari Passu Indebtedness of the Company or any
Indebtedness of a Restricted Subsidiary of the Company 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-l under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of 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

 

51

 

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 May 13, 2004 or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) or by any replacement
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 May 13, 2004 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 May 13, 2004 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 May 13, 2004 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 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

 

52

 

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 incur any Secured Debt
unless:

 

(1)                                  in
the case of Liens securing a Subordinated Obligation, the Notes are secured by a
Lien (the “Initial Lien”) that is senior in priority to the Liens securing such
Subordinated Obligations; and

 

(2)                                  in
all other cases, the Notes are secured by an Initial Lien on an equal and
ratable basis with the Lien securing such other Secured Debt;

 

except for Liens securing Indebtedness
permitted by clauses (2), (4), (5), (7), (8), (13), (14), (16) and (17) of the
definition of Permitted Indebtedness (as to which no such equal and ratable
Lien need be provided).

 

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.

 

SECTION 4.13. Conduct of Business.

 

The Company 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).
The Company and Holdings shall not engage in any business other than managing
their investments in the Subsidiaries and any business incidental thereto
(including issuing securities to finance such investment).

 

SECTION 4.14. Corporate Existence.

 

Subject to Article 5 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

 

53

 

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, prior to the Full Accretion Date, the Accreted Value thereof and, on
or after the Full Accretion Date, 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, 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 Note purchased pursuant
to a Change of Control Offer shall be required to surrender the Note, with the form
entitled “Option of Holder to Elect Purchase” on the reverse of the Note
completed, to the Paying Agent 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 Paying Agent an amount equal
to the Change of Control Payment in respect of all Notes or portions thereof so
tendered and (3) deliver or cause to be delivered to the applicable Trustee the
Notes so accepted together with an Officers’ Certificate stating the Accreted
Value and principal amount at maturity of Notes or portions thereof being purchased
by the Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail or deliver (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount at maturity to any
unpurchased portion of the Notes surrendered, if any; provided  that each such new Note will
be in a principal amount at maturity of $1,000 or an integral multiple thereof.
The Company shall publicly announce the results of the Change of Control Offer
on or as soon as practicable after the Change of Control Payment Date.

 

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 Indebtedness of the Company’s Subsidiaries
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
Indebtedness of the Company’s Subsidiaries 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-l 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

 

54

 

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. 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 4.16 will not apply
to (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

 

55

 

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 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 domestic Subsidiary of the Company will not be subject to 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.

 

56

 

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;

 

(b)                                 the
failure to pay the Accreted Value or 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);

 

(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% in
Accreted Value of the outstanding Notes (except in the case of a default with
respect to Section 5.01 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;

 

(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; or

 

57

 

(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.

 

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 Accreted Value of the outstanding Notes may declare the Accreted
Value of and premium, if any, and accrued and unpaid 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 Company occurs and is continuing, then all unpaid Accreted Value
or 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 Accreted Value 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 the Accreted Value or 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

 

58

 

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 the Accreted Value or 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
Accreted Value of the 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 Accreted Value or 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 Accreted Value of
the Notes may direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that 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;

 

59

 

(b)                                 the
Holders of at least 25% in Accreted Value 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 Accreted Value 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 Accreted
Value, 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 Accreted Value of, premium and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, Accreted Value, premium and 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.

 

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,

 

60

 

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 Notes for amounts due
and unpaid on the Notes for Accreted Value and premium, if any, and interest,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for Accreted Value and premium, if any, and
interest, respectively; and

 

THIRD: 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.

 

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 at maturity of the Notes.

 

61

 

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

 

(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.

 

62

 

(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.

 

(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.

 

63

 

(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 (within the meaning of Section 310(b) of the TIA) 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 from the Company
or a Holder of any event which is in fact such a Default or Event of 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 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 the payment of Accreted Value 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

 

64

 

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 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 against the Company (including this Section 7.07) and
defending itself against or investigating any claim (whether asserted by the
Company, 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 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 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.

 

The obligations of the Company 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 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.

 

65

 

“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 aggregate principal amount
at maturity of the Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.

 

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 aggregate
principal amount at maturity of the 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

 

66

 

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 §
31l(b). A Trustee who has resigned or been removed shall be subject to TIA §
311 (a) to the extent indicated therein.

 

SECTION 7.12. Calculation of Original
Issue Discount.

 

The Company shall file with the Trustee promptly
after the end of each calendar year (i) a written notice specifying the amount
of original issue discount (including daily rates and accrual periods) accrued
on outstanding Notes as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be relevant
under the Internal Revenue Code of 1986, as amended from time to time.

 

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

 

67

 

applied to all outstanding 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 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 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 Accreted Value 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 and 4.16 hereof with respect to
the outstanding Notes on and after the date the conditions set forth in Section
8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the 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 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 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

 

68

 

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, 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 independent public accountants, to pay the
Accreted Value 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 Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

 

69

 

(f)                                    the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that 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 theretofore 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 Accreted Value,
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.

 

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)

 

70

 

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 Notes, as expressly provided for in this Indenture)
as to all outstanding 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.

 

SECTION 8.08. Reinstatement.

 

If the Trustee or Paying Agent is unable to
apply any United States dollars 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,

 

71

 

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 and the Trustee may amend or supplement this Indenture 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 obligations to the Holders of the Notes
by a successor to the Company pursuant to Article 5 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; or

 

(g)                                 to
add guarantees with respect to the Notes.

 

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 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

 

72

 

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), and the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in Accreted Value 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
Accreted Value 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 or the Notes may be waived with the consent of
the Holders of a majority in Accreted Value 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.

 

(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 Accreted
Value 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. 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;

 

73

 

(2)                                  reduce
the principal or Accreted Value 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 (but excluding Additional 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 or Accreted Value 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 Accreted Value 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; or

 

(7)                                  change the method of
calculation of Accreted Value.

 

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.

 

74

 

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 10.04 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, 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.

 

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.

 

ARTICLE 10

 

MISCELLANEOUS

 

SECTION 10.01. 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 10.02. Notices.

 

Any notice or communication by the Company 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:

 

If to the Company:

 

Polypore, Inc.

13800 South Lakes Drive

Charlotte, NC 28273

Facsimile No.: (704) 587-8722

Attention: Lynn K. Amos

 

75

 

With copies
to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Facsimile No.: (212) 728-9228

Attention: William E. Hiller, Esq.

 

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 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.

 

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 10.03. 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 10.04. 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:

 

76

 

(a)                                  an
Officers’ Certificate in form reasonably satisfactory to the Trustee (which
shall include the statements set forth in Section 10.05 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 10.05 hereof) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been complied
with.

 

SECTION 10.05. 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.

 

SECTION 10.06. 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 10.07. Governing Law.

 

THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES 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 10.08. 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.

 

77

 

SECTION 10.09. Successors.

 

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

 

SECTION 10.10. 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 10.11. 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 10.12. 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.

 

78

 

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

 

	
   

  	
  POLYPORE INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Lynn Amos

  	
   

  
	
   

  	
   

  	
  Name: Lynn Amos

  
	
   

  	
   

  	
  Title: Chief Financial Officer, Secretary and

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF
  NEW YORK, 

  
	
   

  	
   

  	
  as Trustee,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
    /s/ Walter D. Salvatori

  	
   

  
	
   

  	
   

  	
  Name: Walter D. Salvatori

  
	
   

  	
   

  	
  Title: Vice President

  

 

79

 

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.

 

“Definitive Note” means a certificated
Initial Note or Exchange 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.

 

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

 

“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)(l), (2), (3) or (7) under the Securities
Act.

 

“Initial Purchaser” means (1) with respect to
the Initial Notes issued on the Issue Date, J.P. Morgan Securities Inc. and (2)
with respect to each issuance of Additional Notes, the Persons purchasing or
underwriting such Additional Notes under the related Purchase Agreement.

 

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

 

“Purchase Agreement” means with (1) respect
to the Initial Notes issued on the Issue Date, the Purchase Agreement dated
October 1, 2004, between the Company and the Initial Purchaser, 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

 

80

 

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 October 18, 2004, between the Company and the Initial
Purchaser, 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 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)(l), (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.

 

“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 Notes”

  	
   

  	
  2.1(b)

  
	
  “Regulation S Global Notes”

  	
   

  	
  2.1 (b)

  
	
  “Rule 144A Global Notes”

  	
   

  	
  2.1(b)

  

 

81

 

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 initially shall be represented by one or more Notes in
definitive, fully registered, global form without interest coupons
(collectively, the “Rule 144A Global Notes”). Regulation S Notes initially
shall be represented by one or more Notes in fully registered, global form
without interest coupons (collectively, the “Regulation S Global Notes”).
The term “Global Notes” means the Rule 144A Global Notes and the
Regulation S Global Notes. The Global shall bear the Global Note Legend. The
Global 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.

 

Members of, or direct or indirect
participants in, the Depository (“Agent Members”) shall have no rights
under this Indenture with respect to any Global Note held on their behalf by
the 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 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 impair, as between the Depository 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
Notes shall be limited to transfer in whole, but not in part, to the
Depository, its successors or 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 and the provisions of Section 2.2. In addition, a Global Note
shall be exchangeable for Definitive Notes if (i) 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 or
(ii) 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 the Depository in accordance with
its customary procedures.

 

82

 

(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 Notes shall be effected through
the Depository, in accordance with the provisions of this Indenture and the
applicable rules and procedures of the Depository. 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 Notes shall be transferred or exchanged only for
beneficial interests in Global 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 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 Note may be
transferred to Persons who take delivery thereof in the form of a beneficial
interest in an Unrestricted Global

 

83

 

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 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 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. 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 a Transfer Restricted Global Note may be transferred to a Person
who takes delivery thereof in the form of a beneficial interest in another
Transfer Restricted Global Note 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.

 

(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 a Transfer
Restricted Global Note may be exchanged by any holder thereof for a beneficial
interest in an Unrestricted Global Note or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an Unrestricted Global
Note 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,

 

84

 

and, in each such case, if the Registrar so
requests or if the applicable rules and procedures of the Depository 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).

 

(d)                                 Transfer and
Exchange of Definitive Notes for Beneficial Interests in Global Notes.
Definitive Notes shall be transferred or exchanged only for beneficial
interests in Global 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

 

85

 

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
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 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

 

86

 

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.

 

(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. 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;

 

87

 

(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 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

 

88

 

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 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 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 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

 

89

 

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)(l), (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. 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

 

90

 

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 be made on such Global Note by the Trustee
or by the Depository 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 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.

 

91

 

(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). 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 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.

 

92

 

EXHIBIT A

 

[FORM OF FACE OF INITIAL 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.

 

THIS
NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES. UPON REQUEST, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO
A HOLDER OF THIS NOTE INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF OID,
THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS NOTE. HOLDERS SHOULD CONTACT
THE CHIEF FINANCIAL OFFICER AT (704) 587-8409.

 

[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)(l), (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

 

A-2

 

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 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 NOTE]

 

	
  No.

  	
  $

  	
   

  

 

101/2% Senior Discount
Note due 2012

 

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

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

 

POLYPORE
INTERNATIONAL, 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 Note
attached hereto](1) on October 1, 2012.

 

Interest
Payment Dates: April 1 and October 1.

Record
Dates: March 15 and September 15.

 

Additional
provisions of this 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 INTERNATIONAL,
  INC.

  
	
   

  	
   

  
	
   

  	
  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 Notes

  
	
  referred to in the Indenture.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  

 

*                           If the 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 NOTE]

 

101/2% Senior
Discount Note due 2012

 

1.                                       Interest

 

(a)                                  POLYPORE INTERNATIONAL, INC., a Delaware
corporation (such corporation, and its successors and assigns under the
Indenture, being herein called the “Company”), promises to pay interest on the
principal amount at maturity of this Note at the rate per annum shown above.
Prior to October 1, 2008, interest on the Note will accrue in the form of an
increase in the Accreted Value of the Note, and no cash interest shall be paid.
The Note will have an initial Accreted Value of $667.30 per $1,000 principal
amount at maturity of the Note. The Accreted Value of the Note will increase
from the date of issuance until October 1, 2008, at a rate of 101/2%
per annum as provided in the definition of “Accreted Value” in the Indenture
such that the Accreted Value will equal the principal amount at maturity on
October 1, 2008.  The Company shall pay
interest semiannually on April 1 and October 1 of each year, commencing October
1, 2008. Interest on the 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 October 18, 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 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 Note is entitled to the benefits
of a Registration Rights Agreement, dated as of October 18, 2004, between the Company
and the Initial Purchaser.

 

2.                                       Method
of Payment

 

The
Company shall pay interest on the Notes (except defaulted interest) and
Additional Interest, if any, to the Persons who are registered Holders at the
close of business on March 15 and September 15 next preceding the interest
payment date even if 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 Accreted Value or 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 Notes represented by a Global Note (including Accreted Value or
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 Note (including Accreted Value
or 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 Notes may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount at maturity of 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

 

A-6

 

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 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 Notes under an Indenture dated as of October 18, 2004 (the “Indenture”),
between the Company and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (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
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 Notes are general unsecured obligations of the
Company. This Note is one of the Initial Notes referred to in the Indenture.
The Notes include the Initial Notes and any Exchange Notes issued in exchange
for Initial Notes pursuant to the Indenture. The Initial Notes and any Exchange
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 to consolidate or merge with or into
any other Person or convey, transfer or lease all or substantially all of its
property.

 

5.                                       Optional Redemption

 

Except
as set forth in the following paragraphs, the Notes shall not be redeemable at
the Company’s option prior to October 1, 2008. On or after October 1, 2008, the
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 at maturity
thereof) set forth below plus accrued and unpaid interest to the applicable
redemption date, if redeemed during the twelve month period commencing on
October 1 of the year set forth below:

 

A-7

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  105.250

  	
  %

  
	
  2009

  	
   

  	
  102.625

  	
  %

  
	
  2010 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In
addition, prior to October 1, 2008, the Company may redeem the 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
Accreted Value thereof plus the Applicable Premium as of, and additional
amounts, if any 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 October 1, 2007, the Company may at its option on one
or more occasions redeem the Notes (which includes Additional Notes, if any) in
an aggregate principal amount not to exceed 35% of the aggregate principal
amount at maturity of the Notes (which includes Additional Notes, if any)
originally issued at a redemption price of 110.50% of the Accreted Value
thereof (and Additional Interest, if any) as of the applicable redemption date,
with the net cash proceeds from one or more Equity Offerings; provided, however, that (i) at
least 65% of the original aggregate principal amount at maturity of Notes
(which includes Additional 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 90 days after the date of the related Equity Offering.

 

6.                                       Sinking Fund

 

The
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 Notes to be redeemed
at his, her or its registered address. Notes in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000 principal amount at maturity. If money sufficient to pay
the redemption price of and accrued and unpaid interest on all 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 Notes (or
such portions thereof) called for redemption.

 

8.                                       Repurchase of 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 Notes at a purchase price equal to
101% of, prior to the Full Accretion Date, the

 

A-8

 

Accreted Value thereof and,
on or after the Full Accretion Date, 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 Notes upon the occurrence of certain events.

 

9.                                       Denominations; Transfer; Exchange

 

The
Notes are in registered form, without coupons, in denominations of $1,000
principal amount at maturity and integral multiples of $1,000 principal amount
at maturity. A Holder shall register the transfer of or exchange of 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 Notes selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part. The
Company shall not be required (i) 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 and ending at the close
of business on such day, (ii) 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 (iii) to register the transfer of
or to exchange a Note between a record date and the next succeeding Interest
Payment Date.

 

10.                                 Persons Deemed Owners

 

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

 

11.                                 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.

 

12.                                 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 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 Accreted Value 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.

 

A-9

 

13.                                 Amendment, Waiver

 

Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Notes maybe amended with the written consent of the Holders of at least a
majority in Accreted Value of the Notes then outstanding voting as a single
class and (ii) any past default or compliance with any provisions of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in Accreted Value of the then outstanding Notes voting as a single
class. Subject to certain exceptions set forth in the Indenture, without the
consent of any Holder, the Company and the Trustee may amend the Indenture 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 obligations to Holders of the Notes by a successor
to the Company 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; or (vii) to add
guarantees with respect to the Notes.

 

14.                                 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; (ii) the failure to pay the Accreted Value or
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); (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% in Accreted Value
of the outstanding Notes (except in the case of a default with respect to
Section 5.01 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

 

A-10

 

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; and (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. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
Accreted Value of the outstanding Notes may declare the Accreted Value of, and
premium, if any, and accrued and unpaid interest on 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
Indenture. Subject to certain limitations, Holders of a majority in Accreted
Value of the 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 Accreted Value, premium, if any, or interest
or Additional Interest) if it determines that withholding notice is in their
interest. The Holders of a majority in Accreted Value 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
the Accreted Value or principal of or interest (including Additional Interest,
if any) on 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.

 

15.                                 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.

 

16.                                 Authentication

 

This
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 Note.

 

17.                                 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).

 

A-11

 

18.                                 Governing Law

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

19.                                 CUSIP Numbers and ISINs

 

The
Company has caused CUSIP numbers and ISINs to be printed on the Notes and has
directed the Trustee to use CUSIP numbers and ISINs 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.

 

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-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 

  
										

 

A-13

 

CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR

REGISTRATION OF TRANSFER RESTRICTED NOTES

 

This
certificate relates to $                 
principal amount of 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 Note held by the
Depository a Note or Notes in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Note (or the portion thereof indicated above);

 

o                                    has requested the Trustee by written order to
exchange or register the transfer of a Note or Notes.

 

In connection with any
transfer of any of the 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 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)(l), (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-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

  
						

 

A-15

 

 

TO
BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.

 

The
undersigned represents and warrants that it is purchasing this 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-16

 

[TO BE ATTACHED TO GLOBAL NOTES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

 

The
initial principal amount of this Global Note is $                              .
The following increases or decreases in this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of decrease 

  in Principal Amount

  of this Global Note

  	
   

  	
  Amount of increase in

  Principal Amount of

  this Global Note

  	
   

  	
  Principal amount of this

  Global Note following

  such decrease or increase

  	
   

  	
  Signature of authorized 

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-17

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this 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 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 principal amount at
maturity 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-18

 

EXHIBIT B

 

[FORM OF FACE OF EXCHANGE 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.

 

THIS
NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES. UPON REQUEST, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO
A HOLDER OF THIS NOTE INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF OID,
THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS NOTE. HOLDERS SHOULD CONTACT
THE CHIEF FINANCIAL OFFICER AT (704) 587-8409.

 

 

	
  No.

  	
   

  	
  $

  	
   

  

 

101/2% Senior Discount
Note due 2012

 

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

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

 

POLYPORE
INTERNATIONAL, 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 Note
attached hereto](1) on October 1, 2012.

 

Interest
Payment Dates: April 1 and October 1.

Record
Dates: March 15 and September 15.

 

Additional
provisions of this 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 INTERNATIONAL,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Dated:

  	
   

  
	
   

  
	
  TRUSTEE’S CERTIFICATE OF

  AUTHENTICATION

  
	
   

  
	
  THE BANK OF NEW YORK,

  
	
  as
  Trustee, certifies that this is

  
	
  one
  of the Notes

  
	
  referred
  to in the Indenture.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
					

 

*                           If the
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”.

 

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

 

B-2

 

[FORM OF REVERSE SIDE OF EXCHANGE NOTE]

 

101/2% Senior
Discount Note due 2012

 

1.                                       Interest

 

POLYPORE
INTERNATIONAL, INC., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture, being herein called the “Company”),
promises to pay interest on the principal amount at maturity of this Note at
the rate per annum shown above. Prior to October 1, 2008, interest on the Note
will accrue in the form of an increase in the Accreted Value of the Note, and
no cash interest shall be paid. The Note will have an initial Accreted Value of
$667.30 per $1,000 principal amount at maturity of the Note. The Accreted Value
of the Note will increase from the date of issuance until October 1, 2008, at a
rate of 101/2% per annum as provided in the definition of
“Accreted Value” in the Indenture such that the Accreted Value will equal the
principal amount at maturity on October 1, 2008.  The Company shall pay interest semiannually
on April 1 and October 1 of each year, commencing October 1, 2008. Interest on
the 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 October 18, 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 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 Notes (except defaulted interest) and
Additional Interest, if any, to the Persons who are registered Holders at the
close of business on March 15 and September 15 next preceding the interest
payment date even if 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 Accreted Value or 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 Notes represented by a Global Note (including
Accreted Value or 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 Note (including
Accreted Value or 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 Notes may also be made, in the case of a Holder of at least
$1,000,000 aggregate principal amount at maturity of 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).

 

B-3

 

3.                                       Paying Agent and Registrar

 

Initially,
The Bank of New York, a New York banking corporation (the “Trustee”), will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent 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 Notes under an Indenture dated as of October 18, 2004 (the “Indenture”),
between the Company and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (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
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
Notes are general unsecured obligations of the Company. This Note is one of the
Initial Notes referred to in the Indenture. The Notes include the Initial Notes
and any Exchange Notes issued in exchange for Initial Notes pursuant to the
Indenture. The Initial Notes and any Exchange 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 to consolidate
or merge with or into any other Person or convey, transfer or lease all or
substantially all of its property.

 

5.                                       Optional Redemption

 

Except
as set forth in the following paragraphs, the Notes shall not be redeemable at
the Company’s option prior to October 1, 2008. On or after October 1, 2008, the
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 at maturity
thereof) set forth below plus accrued and unpaid interest to the applicable
redemption date, if redeemed during the twelve month period commencing on
October 1 of the year set forth below:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2008

  	
   

  	
  105.250

  	
  %

  
	
  2009

  	
   

  	
  102.625

  	
  %

  
	
  2010 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

B-4

 

In
addition, prior to October 1, 2008, the Company may redeem the 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
Accreted Value thereof plus the Applicable Premium as of, and additional
amounts, if any 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 October 1, 2007, the Company may at its option on one
or more occasions redeem the Notes (which includes Additional Notes, if any) in
an aggregate principal amount not to exceed 35% of the aggregate principal
amount at maturity of the Notes (which includes Additional Notes, if any)
originally issued at a redemption price of 110.50% of the Accreted Value
thereof (and Additional Interest, if any) as of the applicable redemption date,
with the net cash proceeds from one or more Equity Offerings; provided, however, that (i) at
least 65% of the original aggregate principal amount at maturity of Notes
(which includes Additional 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 90 days after the date of the related Equity Offering.

 

6.                                       Sinking Fund

 

The
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 Notes to be redeemed
at his, her or its registered address. Notes in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000 principal amount at maturity. If money sufficient to pay
the redemption price of and accrued and unpaid interest on all 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 Notes (or such
portions thereof) called for redemption.

 

8.                                       Repurchase of 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 Notes at a purchase price equal to
101% of, prior to the Full Accretion Date, the Accreted Value thereof and, on
or after the Full Accretion Date, 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.

 

B-5

 

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

 

9.                                       Denominations; Transfer; Exchange

 

The
Notes are in registered form, without coupons, in denominations of $1,000
principal amount at maturity and integral multiples of $1,000 principal amount
at maturity. A Holder shall register the transfer of or exchange of 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 Notes selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part. The Company
shall not be required (i) 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 and ending at the close of
business on such day, (ii) 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 (iii) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest Payment
Date.

 

10.                                 Persons Deemed Owners

 

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

 

11.                                 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.

 

12.                                 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 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 Accreted Value 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.

 

13.                                 Amendment, Waiver

 

Subject
to certain exceptions set forth in the Indenture, (i) the Indenture or the
Notes may be amended with the written consent of the Holders of at least a
majority in Accreted Value of the Notes then outstanding voting as a single
class and (ii) any past default or

 

B-6

 

compliance with any
provisions of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in Accreted Value of the then outstanding Notes voting as
a single class. Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company and the Trustee may amend the
Indenture 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 obligations
to Holders of the Notes by a successor to the Company 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; or (vii) to add guarantees with respect to the Notes.

 

14.                               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; (ii) the failure to pay the Accreted Value
or 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); (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%
in Accreted Value of the outstanding Notes (except in the case of a default
with respect to Section 5.01 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; and (vi) certain events
of bankruptcy, insolvency or

 

B-7

 

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. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in Accreted Value of the
outstanding Notes may declare the Accreted Value of, and premium, if any, and
accrued and unpaid interest on 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 Indenture. Subject
to certain limitations, Holders of a majority in Accreted Value of the
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 Accreted Value, premium, if any, or interest or Additional
Interest) if it determines that withholding notice is in their interest. The
Holders of a majority in Accreted Value 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 the Accreted
Value or principal of or interest (including Additional Interest, if any) on
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.

 

15.                                 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.

 

16.                               Authentication

 

This
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 Note.

 

17.                               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).

 

18.                               Governing Law

 

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

B-8

 

19.                                CUSIP Numbers and ISINs

 

The
Company has caused CUSIP numbers and ISINs to be printed on the Notes and has
directed the Trustee to use CUSIP numbers and ISINs 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.

 

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-9

 

ASSIGNMENT FORM

 

To assign this Note, fill in
the form below:

 

I or we assign and transfer
this Note to:

 

	
   

  
	
  (Print
  or type assignee’s name, address and zip code)

  
	
   

  
	
   

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. No.)

  

 

and
irrevocably appoint
                        
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-10

 

[TO BE ATTACHED TO GLOBAL NOTES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
NOTE

 

The
initial principal amount of this Global Note is $                        .
The following increases or decreases in this Global Note have been made:

 

	
  Date of

  Exchange

  	
   

  	
  Amount of decrease

  in Principal Amount

  of this Global Note

  	
   

  	
  Amount of increase in

  Principal Amount of

  this Global Note

  	
   

  	
  Principal amount of this

  Global Note following

  such decrease or increase

  	
   

  	
  Signature of authorized

  signatory of Trustee or Notes

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-11

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 (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 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 principal amount at
maturity 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-12

 

EXHIBIT C

 

Form of

Transferee Letter of Representation

 

Polypore
International, Inc.

 

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 101/2% Senior
Discount Notes due 2012 (the “Notes”) of POLYPORE INTERNATIONAL, INC. (such
corporation, and its successors and assigns under the Indenture, 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)(l), (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)(l), (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)(l), (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:

  	
   

  
							

 

C-2

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