NOTE PURCHASE AGREEMENT

Exhibit 10.1

CONFORMED COPY

Porex Holding Corporation

$67,500,000

$10,000,000 8.75% Senior Secured Notes due October 19, 2010
$10,000,000 8.75% Senior Secured Notes due October 19, 2011
$10,000,000 8.75% Senior Secured Notes due October 19, 2012
$37,500,000 8.75% Senior Secured Notes due October 19, 2013

NOTE PURCHASE AGREEMENT

Dated October 19, 2009

Table of Contents

Porex Holding Corporation
c/o Aurora Capital Group
10877 Wilshire Boulevard, Suite 2100
Los Angeles, California 90024

$10,000,000 8.75% Senior Secured Notes due October 19, 2010
$10,000,000 8.75% Senior Secured Notes due October 19, 2011
$10,000,000 8.75% Senior Secured Notes due October 19, 2012
$37,500,000 8.75% Senior Secured Notes due October 19, 2013

October 19, 2009

To SNTC Holding, Inc.

Ladies and Gentlemen:

     Porex Holding Corporation, a Delaware corporation (the “Company” ), and the Subsidiaries of the Company listed on Schedule B (collectively, the “ Initial Guarantors ”) each agrees jointly and severally, with SNTC Holding, Inc., a Delaware corporation (in its individual capacity as the “Purchaser” and also in its capacity as the Collateral Agent) as follows:

Section 1. Authorization of Notes .

     The Company has authorized the issue and sale of (i) $10,000,000 aggregate principal amount of its 8.75% Senior Secured Notes due October 19, 2010 (the “ 2010 Notes ”), (ii) $10,000,000 aggregate principal amount of its 8.75% Senior Secured Notes due October 19, 2011 (the “ 2011 Notes ”), (iii) $10,000,000 aggregate principal amount of its 8.75% Senior Secured Notes due October 19, 2012 (the “ 2012 Notes ”) and (iv) $37,500,000 aggregate principal amount of its 8.75% Senior Secured Notes due October 19, 2013 (the “ 2013 Notes ” and, together with the 2010 Notes, the 2011 Notes and the 2012 Notes, the “ Notes ”, each such term to include any such notes issued in substitution therefor pursuant to Section 13, and each series of 2010 Notes, 2011 Notes, 2012 Notes and 2013 Notes being a “ Series ” of Notes). The Notes of each Series shall be substantially in the form set out in Exhibit 1. Certain capitalized and other terms used in this Agreement are defined in Schedule C; and references to a “Schedule” or an “Exhibit” are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.

Section 2. Sale and Purchase of Notes .

     Subject to the terms and conditions of this Agreement, the Company will issue and sell to the Purchaser and the Purchaser will purchase from the Company, at the Closing provided for in Section 3,

2010 Notes in the principal amount of $10,000,000, 2011 Notes in the principal amount of $10,000,000, 2012 Notes in the principal amount of $10,000,000 and 2013 Notes in the principal amount of $37,500,000 as the non-cash portion of the purchase price for the “Shares” (as defined in the Stock Purchase Agreement) in accordance with the Stock Purchase Agreement.

Section 3. Closing .

     The sale and purchase of the Notes to be purchased by the Purchaser shall occur at the offices of Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY 10022, at 10:00 a.m., Eastern time, at a closing (the “Closing” ) occurring contemporaneously with the “Closing” (as such term is defined in the Stock Purchase Agreement). At the Closing the Company will deliver the Notes to the Purchaser in the form of a single Note for each Series dated the date of the Closing and registered in the Purchaser’s name, against delivery by the Purchaser to the Company of the “Shares” (as defined in the Stock Purchase Agreement). If at the Closing the Company shall fail to tender such Notes to the Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to the Purchaser’s satisfaction, the Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights the Purchaser may have by reason of such failure or such nonfulfillment.

Section 4. Conditions to Closing .

     The Purchaser’s obligation to purchase and pay for the Notes to be sold to the Purchaser at the Closing is subject to the fulfillment to the Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

      Section 4.1. Representations and Warranties . The representations and warranties of the Obligors in this Agreement shall be true and correct in all material respects at the time of the Closing.

      Section 4.2. Performance; No Default . The Obligors shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by them prior to or at the Closing, and after giving effect to the issue and sale of the Notes and the consummation of the transactions contemplated by this Agreement and the Stock Purchase Agreement, no Default or Event of Default shall have occurred and be continuing (other than as a result of the inaccuracy of any information included in the Guarantee and Collateral Agreement that was provided to the Company by the Purchaser for inclusion therein that relates to the Collateral).

      Section 4.3. Compliance Certificates .

     (a)  Officer’s Certificate . The Company shall have delivered to the Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

     (b)  Secretary’s Certificate . The Company shall have delivered to the Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes and this Agreement.

      Section 4.4. Opinions of Counsel . The Purchaser shall have received opinions in form and substance satisfactory to the Purchaser, dated the date of the Closing from external counsel for the Obligors, covering matters described in Schedule 4.4 in form and substance reasonably satisfactory to the Purchaser.

      Section 4.5. No Violation of Law, Etc . On the date of the Closing the Purchaser’s purchase of Notes shall (a) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board) and (b) not subject the Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date of the Stock Purchase Agreement.

      Section 4.6. Stock Purchase . Contemporaneously with the Closing the Company shall consummate the acquisition of the “Shares” (as defined in the Stock Purchase Agreement) in accordance with the Stock Purchase Agreement (the “ Stock Purchase ”).

      Section 4.7. [Reserved] .

      Section 4.8. [Reserved] .

      Section 4.9. Changes in Corporate Structure . The Company shall not have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the Stock Purchase Agreement.

      Section 4.10. [Reserved] .

      Section 4.11. [Reserved] .

      Section 4.12. Note Documents . The Purchaser shall have received copies of each of the Note Documents, executed and delivered by the Obligors party thereto.

      Section 4.13. Pledged Stock; Stock Powers; Pledged Notes . The Collateral Agent shall have received (i) the certificates representing the shares, if any, of Capital Stock of each of the Company’s Domestic Subsidiaries pledged to the Collateral Agent pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) required to be pledged to the Collateral Agent pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

      Section 4.14. Filings, Registrations and Recordings . Each document (including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents to be filed, registered or recorded in order to create in favor of the Collateral Agent for the benefit of the Secured Parties, a first priority perfected Lien on the Collateral described therein, shall have been delivered to the Collateral Agent in proper form for filing, registration or recordation.

      Section 4.15. [Reserved] .

      Section 4.16. Mortgages, etc . The Purchaser shall have received the Mortgages for the properties listed on Schedule 4.16, each duly executed and delivered by the parties thereto, and such other documentation relating to each such Mortgage or the real property subject thereto as may reasonably be required by the Purchaser (or arrangements satisfactory to the Purchaser for delivery thereof shall have been made).

      Section 4.17. Certain Post-Closing Matters . Notwithstanding anything herein to the contrary, to the extent any security interest in the Collateral or any deliverable related to the perfection of security interests in or Liens upon the Collateral or the properties listed in Schedule 4.16 (other than any (x) the Capital Stock in each of the Company’s Domestic Subsidiaries to be pledged, (y) such property the security interest in or Lien upon which may be perfected by the filing of a Uniform Commercial Code financing statement and (z) such property in which perfection of security interests is not required under the Guaranty and Collateral Agreement) is not provided on the Closing after the Company’s use of commercially reasonable efforts to do so, the provision of any such security interest(s) or Liens(s) or deliverable shall not constitute a condition precedent to the issuance of the Notes under this Section 4 on the Closing but shall be required to be delivered after the Closing pursuant to arrangements to be satisfactory to the Purchaser. Notwithstanding any contrary provision of the Note Documents, the Purchaser and the Obligors hereby agree that the Company and its Subsidiaries shall deliver certificates representing sixty-five percent (65%) of the Voting Stock of each of Porex Technologies LTD and Porex Technologies SDN, BHD to the Purchaser, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, in each case as promptly as reasonably practicable following the Closing and in no event later than 30 days following the Closing; provided that nothing in this sentence shall be deemed to alter the requirements of Section 9.8(d) hereof.

Section 5. Representations and Warranties of the Obligors .

     To induce the Purchaser to enter into this Agreement and to acquire the Notes, the Obligors hereby jointly represent and warrant to the Purchaser, which representations and warranties shall be deemed made at the Closing (immediately before and immediately after giving effect to the Stock Purchase), that:

      Section 5.1. Existence; Compliance with Law . The Company (a) (i) is duly incorporated, validly existing and in good standing under the laws of the State of Delaware, (ii) has the corporate power to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged except, in each case, to the extent that any such failure to have such power could not reasonably be expected to have a Material Adverse Effect and (iii) is duly qualified as a foreign corporation and in good standing (where such concept is relevant) under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification except, in each case, to the extent that the failure to be so qualified or in good standing (where such concept is relevant) could not reasonably be expected to have a Material Adverse Effect and (b) is in compliance with all Requirements of Law except to the extent that any such failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

      Section 5.2. Corporate Power; Authorization; Enforceable Obligations . Each Obligor has the corporate or organizational power to make, deliver and perform the Note Documents to which it is a party and, in the case of the Company, to issue the Notes hereunder. Each Obligor has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Note Documents to which it is a party and, in the case of the Company, to authorize the issuance of the Notes on the terms and conditions of this Agreement. Each Obligor has duly executed and delivered each Note Document to which it is a party. Except as could not reasonably be expected to have a Material Adverse Effect, no consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority is required in connection with the issuance of the Notes hereunder or the execution, delivery,

performance, validity or enforceability of this Agreement or any of the other Note Documents, except the filings referred to in Section 5.7. This Agreement and each other Note Document constitutes a legal, valid and binding obligation of each Obligor that is a party thereto, enforceable against each such Obligor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law) and the implied covenants of good faith and fair dealing.

      Section 5.3. No Legal Bar . The execution, delivery and performance of this Agreement and the other Note Documents, the issuance of the Notes hereunder and the use of the proceeds thereof will not (a) violate the organizational or governing documents of any of the Obligors, (b) violate any Requirement of Law or any Contractual Obligation of the Company (other than any violation which could not reasonably be expected to result in a Material Adverse Effect) or (c) result in, or require, the creation or imposition of any Lien on any of the properties or revenues of any Obligor (other than the Liens permitted by Section 10.2).

      Section 5.4. No Material Litigation . No litigation, proceeding or investigation of or before any arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened against the Company or against any of its Properties (other than the “Shares” as defined under the Stock Purchase Agreement and other than any such litigation, proceeding or investigation against HLTH Corporation, SNTC Holding, Inc. and Porex and any of its Subsidiaries in respect of their obligations under the Stock Purchase Agreement) or revenues which, taken as a whole, (a) involve any of the Note Documents or (b) could reasonably be expected to have a Material Adverse Effect.

      Section 5.5. No Default . No Default or Event of Default has occurred and is continuing.

      Section 5.6. Ownership of Property; Liens . The Company has good title to, or a valid leasehold interest in or right to use, all its Property (other than the “Shares” as defined under the Stock Purchase Agreement), in each case, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, and none of such Property (other than the “Shares” as defined under the Stock Purchase Agreement) is subject to any Lien except as permitted by the Note Documents. The Company does not own or lease any real property as of the Closing Date.

      Section 5.7. Investment Company Act . The Company is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended.

      Section 5.8. Subsidiaries . The Company shall have no Subsidiaries immediately prior to the Closing.

      Section 5.9. Accuracy of Information, Etc . No statement or information contained in any certificate furnished to the Purchaser, by or on behalf of the Company for use in connection with the transactions contemplated by this Agreement or the other Note Documents when taken as a whole, contained as of the date such statement, information, or certificate was so furnished, any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained herein or therein not materially misleading in light of the circumstances in which they were made.

      Section 5.10. Security Documents . (a) The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein (including any proceeds of any item of Collateral) to the extent required by the Guarantee and Collateral Agreement. In the case of (i) the Pledged Securities described in the Guarantee and Collateral Agreement, when any stock certificates or notes, as applicable, representing such Pledged Securities are delivered to the Collateral Agent and (ii) the other Collateral described in the Guarantee and Collateral Agreement, when financing statements in appropriate form are filed with the Delaware Secretary of State (which financing statements have been duly completed and delivered to the Collateral Agent) and a short form of the Guarantee and Collateral Agreement is filed with the United States Patent and Trademark Office and the United States Copyright Office (which short form has been duly completed and executed and delivered to the Collateral Agent), the Collateral Agent shall have a fully perfected Lien on, and security interest in, all right, title and interest of the Obligors in such Collateral (including any proceeds of any item of Collateral) (to the extent a security interest in such Collateral can be perfected through the filing of financing statements with the Delaware Secretary of State and the filing of such short form with the United States Patent and Trademark Office and the United States Copyright Office, and through the delivery of the Pledged Securities required to be delivered on the Closing Date), as security for the Obligations, in each case prior and superior in right to any other Person (except Liens permitted by Section 10.3) to the extent required by the Guarantee and Collateral Agreement.

     (b) Upon the execution and delivery of any Mortgage to be executed and delivered pursuant to Sections 4.16 (which have been executed and delivered or for which arrangements satisfactory to the Purchaser for the execution and delivery thereof have been made) or 9.8(b), such Mortgage shall be effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable Lien on the mortgaged property described therein and proceeds thereof; and when such Mortgage is filed in the recording office designated by the Company, such Mortgage shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Obligors in such mortgaged property and the proceeds thereof, as security for the Obligations (as defined in the relevant Mortgage), in each case prior and superior in right to any other Person (other than Liens permitted by Section 10.3).

      Section 5.11. Stock Purchase . The Stock Purchase Agreement has been assigned to the Company by Aurora Equity Partners III L.P. and Aurora Overseas Equity Partners III, L.P. in accordance with Section 11.05 thereof.

      Section 5.12. Operations of the Company . The Company was formed solely for the purpose of consummating the transactions contemplated by the Stock Purchase Agreement and this Agreement, has engaged in no other business activities, has conducted its operations only as contemplated by such agreements and, immediately prior to the consummation of such transactions, had no material assets or liabilities and no outstanding Indebtedness.

      Section 5.13. Private Offering by the Obligors . Neither the Company nor anyone acting on its behalf has offered the Notes or the Note Guarantees by means of any form of general advertising or general soliciation (as such terms are defined in Regualtion D under the Securities Act of 1933, as amended) or has offered the Notes or the Note Guarantees or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any

person other than the Purchaser, which has been offered the Notes and the Note Guarantees at a private sale for investment. Neither the Company nor anyone acting on its or their behalf has taken any action that would subject the issuance or sale of the Notes and the Note Guarantees to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.

      Section 5.14. Existing Indebtedness . The Company has no Indebtedness outstanding immediately prior to the Closing.

      Section 5.15. Taxes . Immediately prior to the Closing, the Company (i) has filed or caused to be filed all federal, state, provincial and other tax returns that are required to be filed and (ii) has paid all taxes shown to be due and payable on said returns and all other taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority responsible for administering taxes.

Section 6. Representations of the Purchaser .

      Section 6.1. Purchase for Investment . The Purchaser represents that (i) it is acquiring the Notes and the Note Guarantees for its own account and not with a view to the distribution thereof, (ii) it has such knowledge and experience in financial affairs that it is capable of evaluating the merits and risks of an investment in the Notes, and (iii) its financial situation is such that it can afford to bear the economic risk of holding the Notes for an indefinite period of time and can afford to suffer the complete loss of its investment in the Notes. The Purchaser understands that the Notes and the Note Guarantees have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Obligors are not required to register the Notes or the Note Guarantees. The Purchaser understands that, in addition to any other legends required by applicable state securities laws, a legend will be placed on any certificate or certificates representing the Notes substantially to the following effect:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT.

THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE NOTE PURCHASE AGREEMENT REFERRED TO BELOW.

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH OPINION OF COUNSEL AS MAY BE REASONABLY REQUESTED TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.”

Section 7. Tax Indemnification .

     All payments whatsoever under this Agreement and the Notes will be made in lawful currency of the United States of America free and clear of, and without liability for withholding or deduction for or on account of, any present or future taxes of whatever nature imposed or levied by or on behalf of any jurisdiction (other than Excluded Taxes), unless the withholding or deduction of such tax is compelled by law. So long as the holder of a Note delivers to the Company evidence (including the appropriate IRS forms) that, at the Closing (or at such later time as such holder first becomes a holder), it is entitled to receive payments from each Obligor without any requirement for withholding or deduction of tax imposed by the United States, then if any deduction or withholding for any tax shall at any time be required in respect of any amounts to be paid by an Obligor under this Agreement or the Notes, the Obligor will pay to the relevant jurisdiction the full amount required to be withheld, deducted or otherwise paid before penalties attach thereto or interest accrues thereon, and such holder of a Note will be entitled to receive such additional amounts as may be necessary in order that the net amounts paid to such holder pursuant to the terms of this Agreement or the Notes after such deduction, withholding or payment (including, without limitation, any required deduction or withholding of tax on or with respect to such additional amount), shall be not less than the amounts then due and payable to such holder under the terms of this Agreement or the Notes before the assessment of such tax. Notwithstanding the foregoing, no payment of any additional amounts shall be required to be made for or on account of:

     (a) any tax that would not have been imposed but for the existence of any present or former connection between a holder of a Note (or a fiduciary, settlor, beneficiary, member of, shareholder of, or possessor of a power over, such holder, if such holder is an estate, trust, partnership or corporation or any Person other than the holder to whom the Notes or any amount payable thereon is attributable for the purposes of such tax) and the relevant jurisdiction imposing in the tax, other than the mere holding of the relevant Note and the receipt of payments and enforcement of rights thereunder or in respect thereof; or

     (b) any tax that would not have been imposed but for the delay or failure by a holder of a Note (following at least 10 days prior written request by the Company) in the filing with the relevant jurisdiction imposing the tax of any forms that are required by applicable law to be filed by such holder in order to avoid or reduce such taxes, provided that the filing of such forms would not (in such holder’s reasonable judgment) impose any unreasonable burden (in time, resources or otherwise) on such holder or result in any confidential or proprietary tax return information being revealed, either directly or indirectly, to any Person.

     The Obligors will furnish the holders of Notes, promptly and in any event within 60 days after the date of any payment by an Obligor of any tax in respect of any amounts paid under this Agreement or the Notes, the original tax receipt issued by the relevant taxation or other authorities involved for all amounts paid as aforesaid (or if such original tax receipt is not available or must legally be kept in the possession of an Obligor, a duly certified copy of the original tax receipt or any other reasonably satisfactory evidence of payment), together with such other documentary evidence with respect to such payments as may be reasonably requested from time to time by any holder of a Note.

     If an Obligor is required by any applicable law, as modified by the practice of the taxation or other authority of any relevant jurisdiction, to make any deduction or withholding of any tax in respect of which the Obligor would be required to pay any additional amount under this Section 7, but for any reason does not make such deduction or withholding with the result that a liability in respect of such tax is assessed directly against such holder of any Note, and such holder pays such liability, then the Obligor will promptly reimburse such holder for such payment (including any related interest or penalties to the

extent such interest or penalties arise by virtue of a default or delay by the Obligor) upon demand by such holder.

     The obligations of the Obligors under this Section 7 shall be joint and several, and shall survive the payment or transfer of any Note.

Section 8. Repayment and Prepayment of the Notes .

      Section 8.1. Required Repayments and Prepayments . (a) The Company shall repay the aggregate outstanding principal amount of the 2010 Notes on the first anniversary of the Closing; the aggregate outstanding principal amount of the 2011 Notes on the second anniversary of the Closing; the aggregate outstanding principal amount of the 2012 Notes on the third anniversary of the Closing; and the aggregate outstanding principal amount of the 2013 Notes on the fourth anniversary of the Closing. In each case, such amounts shall be reduced as a result of the application of any prepayments in accordance with Section 8.1(b) or (c) or 8.2.

     (b) Unless the Required Holders of the relevant Series shall otherwise agree, if any Funded Debt (excluding any Indebtedness permitted to be incurred in accordance with Section 10.2 or incurred with the consent of the Required Holders) shall be incurred by the Company or any Guarantor, an amount equal to 100% of the Net Cash Proceeds thereof shall be applied within two Business Days of the date of receipt of such Net Cash Proceeds toward the pro rata prepayment of the Notes of each Series as set forth in Section 8.1(d).

     (c) Unless the Required Holders of the relevant Series shall otherwise agree, if on any date any of the Company or any Subsidiary shall for its own account receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be applied within two Business Days of such date toward the pro rata prepayment of the Notes of each Series as set forth in Section 8.1(d); provided that notwithstanding the foregoing, on the date (the “ Trigger Date ”) that is 12 months after the applicable Reinvestment Prepayment Date, the Notes of each Series shall be prepaid on a pro rata basis as set forth in Section 8.1(d) by an amount equal to the portion of any Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event not actually expended by such Trigger Date.

     (d) Amounts to be applied in connection with repayments and prepayments pursuant to this Section 8.1(b) or (c) shall be applied to the pro rata prepayment of each Series of Notes until paid in full. Each repayment or prepayment of the Notes under Section 8.1 shall be accompanied by accrued interest to the date of such repayment or prepayment on the amount repaid or prepaid.

      Section 8.2. Optional Prepayments . The Company may, at its option, upon advance written notice, prepay at any time all, or from time to time any part of, the Notes of any Series, at 100% of the principal amount so prepaid plus accrued interest to the date of such prepayment on the amount prepaid.

      Section 8.3. Allocation of Partial Repayments and Prepayments . In the case of each partial repayment or prepayment of the Notes of a Series, the principal amount of the Notes to be repaid or prepaid shall be allocated among all of the Notes of such Series at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof.

      Section 8.4. Maturity; Surrender, Etc . In the case of each repayment or prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be repaid or prepaid shall mature and become due and payable on the date fixed for such repayment or prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any repaid or prepaid principal amount of any Note.

      Section 8.5. Purchase of Notes . The Company will not and will not permit any Subsidiary to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 9. Affirmative Covenants .

     Each of the Obligors hereby agrees that, so long as any amount is owing to any holder of the Notes under any Note Document (other than contingent or indemnification obligations not then due), the Obligors shall and (to the extent relevant) shall cause each of the Subsidiaries to:

      Section 9.1. Financial Statements . Furnish to each holder of the Notes:

     (a) within 120 days after the first fiscal year of the Company ending after the Closing, and within 90 days after each fiscal year of the Company thereafter, a copy of the audited consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures as of the end of and for the previous year, reported on without qualification arising out of the scope of the audit, by independent certified public accountants of nationally recognized standing; and

     (b) as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of each fiscal year of the Company, commencing with the first such fiscal quarter ending after the Closing, the unaudited consolidated balance sheet of the Company and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year-end audit adjustments and the lack of notes);

all such financial statements to be prepared in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or such Responsible Officer, as the case may be, and disclosed therein and except, in the case of the financial statements referred to in clause (b), for normal year-end audit adjustments and the lack of footnotes).

      Section 9.2. Certificates; Other Information . Furnish to each holder of the Notes:

     (a) concurrently with the delivery of any financial statements pursuant to Section 9.1, (i) a certificate of a Responsible Officer on behalf of the Company stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) to the extent not previously disclosed to the holders of the Notes, a description of any new Subsidiary and of any change in the jurisdiction of organization of any Obligor since the date of the most recent list delivered pursuant to this clause (ii) (or, in the case of the first such list so delivered, since the Closing); and

     (b) as soon as available, but in any event not later than 60 days after the end of each fiscal year of the Company (commencing with the fiscal year ending on December 31, 2009), a budget for the following fiscal year consisting of consolidated statements of projected cash flow and projected income (collectively, the “ Annual Operating Budget ”);

     (c) [reserved];

     (d) promptly after the same are filed, copies of all financial statements and reports that the Company or any Subsidiary may make to, or file with, the SEC, in each case to the extent not already provided pursuant to Section 9.1 or any other clause of this Section 9.2;

     (e) promptly upon delivery thereof to the Company or any Subsidiary and to the extent permitted, copies of any accountants’ letters addressed to its Board of Directors (or any committee thereof);

     (f) promptly, such additional financial and other information as any holders of the Notes may from time to time reasonably request; provided that in no event shall such information consist of Trade Secrets (as defined in the Guarantee and Collateral Agreement); and

     (g) at the end of each fiscal quarter of the Company, and promptly upon any Default, notice to the Collateral Agent of any location at which equipment or inventory is kept, if not already specified in the Guarantee and Collateral Agreement.

      Section 9.3. Payment of Obligations . Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its taxes, governmental assessments and governmental charges (other than Indebtedness), except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves required in conformity with GAAP with respect thereto have been provided on the books of the Company or its Subsidiaries, as the case may be, or except where the failure to pay such taxes, assessments or charges could not reasonably be expected to have a Material Adverse Effect.

      Section 9.4. Conduct of Business and Maintenance of Existence, etc; Compliance . (a) (i) Preserve, renew and keep in full force and effect its corporate or other existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 10.4 or except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material

Adverse Effect; and (b) comply with all Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

      Section 9.5. Maintenance of Property; Insurance . (a) Keep all Property useful and necessary in its business in reasonably good working order and condition, ordinary wear and tear excepted except where a failure to do so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

     (b) Take all reasonable and necessary steps, including, in any proceeding before the United States Patent and Trademark Office or the United States Copyright Office, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the Intellectual Property, including, filing of applications for renewal, affidavits of use and affidavits of incontestability, in each case as determined in the reasonable business judgment of the Company, except in each case to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

     (c) Maintain insurance with financially sound and reputable insurance companies insurance on all its material Property in at least such amounts and against at least such risks as is consistent with its past practice, or as is customarily maintained by comparably situated companies. All such insurance shall, to the extent customary (but in any event, not including business interruption insurance and personal injury insurance) (i) provide that no cancellation thereof shall be effective until at least 30 days after receipt by the holders of the Notes of written notice thereof and (ii) name the holders of the Notes as additional insured parties or loss payees, as applicable.

     (d) Obtain at the Closing or promptly thereafter ALTA mortgagee title insurance policies issued by one or more title companies reasonably satisfactory to the Required Holders with respect to the properties listed on Schedule 4.16 in amounts not less than the fair market value of such real property or such other amount reasonably required by the Required Holders, and a current ALTA survey thereof, together with a surveyor’s certificate unless the title insurance policy referred to above shall not contain an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy), each in form and substance reasonably satisfactory to the Required Holders; and maintain flood insurance with respect to each owned real property and leasehold property located in an area at high risk for flood.

      Section 9.6. Books and Records . Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all material dealings and transactions in relation to its business and activities.

      Section 9.7. Notices . Promptly upon a Responsible Officer of any Obligor obtaining knowledge thereof, give notice to each holder of the Notes of:

     (a) the occurrence of any Default or Event of Default;

     (b) any litigation, investigation or proceeding which may exist at any time between the Company or any of its Subsidiaries and any other Person, that in either case, if adversely determined, could reasonably be expected to have a Material Adverse Effect;

     (c) the following events, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, as soon as possible and in any event within 30 days after the Company or any Subsidiary knows thereof: (i) the occurrence of any Reportable Event with respect to any Single Employer Plan, a failure to make any required contribution to a Single Employer Plan, the creation of any Lien in favor of the PBGC or a Single Employer Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan, (ii) the institution of proceedings or the taking of any other action by the PBGC or the Company or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan or (iii) the occurrence of any similar events with respect to a Commonly Controlled Plan, that would reasonably be likely to result in a direct obligation of the Company or any of its Subsidiaries to pay money;

     (d) any development or event that has had or could reasonably be expected to have a Material Adverse Effect; and

     (e) the acquisition of any Property after the Closing Date in which the Collateral Agent does not already have a perfected security interest and in which a security interest is required to be created or perfected pursuant to Section 9.8.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the Company or the relevant Subsidiary proposes to take with respect thereto.

      Section 9.8. Additional Collateral, etc . (a) With respect to any Property (other than assets expressly excluded from the Collateral pursuant to the Security Documents) acquired after the Closing Date by any Obligor (other than (x) any interests in real property, (y) any Property subject to a Lien expressly permitted by Section 10.3(f) and (z) Instruments and Certificated Securities, which are referred to in the last sentence of this paragraph (a)) as to which the Collateral Agent for the benefit of the Secured Parties does not have a perfected Lien, promptly, but in any case within 30 days, (i) give notice of such Property to the Collateral Agent and execute and deliver to the Collateral Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Collateral Agent reasonably requests to grant to the Collateral Agent for the benefit of the Secured Parties a security interest in such Property and (ii) take all actions reasonably requested by the Collateral Agent to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents and with the priority required by Section 5.10) in such Property (with respect to Property of a type owned by an Obligor as of the Closing to the extent the Collateral Agent, for the benefit of the Secured Parties, has a perfected security interest in such Property as of the Closing), including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Collateral Agent. Any Instrument or Certificated Security in excess of $1,000,000 shall be promptly delivered to the Collateral Agent indorsed in a manner reasonably satisfactory to the Collateral Agent to be held as Collateral pursuant to the relevant Security Document.

     (b) With respect to any fee interest in any real property located in the United States having a value (together with improvements thereof) of at least $1,000,000 acquired after the Closing Date by any Obligor (other than any such real property subject to a Lien expressly permitted by Section 10.3(f)), (i)

give notice of such acquisition to the Collateral Agent and, if requested by the Collateral Agent, execute and deliver a first priority Mortgage (subject to Liens permitted by Section 10.3) in favor of the Collateral Agent for the benefit of the Secured Parties, covering such real property (provided that no Mortgage nor survey shall be obtained if the Collateral Agent reasonably determines in consultation with the Company that the costs of obtaining such Mortgage or survey are excessive in relation to the value of the security to be afforded thereby), (ii) if reasonably requested by the Collateral Agent (A) provide the holders of the Notes with a lenders’ title insurance policy with extended coverage covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Collateral Agent) as well as a current ALTA survey thereof, together with a surveyor’s certificate unless the title insurance policy referred to above shall not contain an exception for any matter shown by a survey (except to the extent an existing survey has been provided and specifically incorporated into such title insurance policy), each in form and substance reasonably satisfactory to the Collateral Agent, and (B) use commercially reasonable efforts to obtain any consents reasonably deemed necessary by the Collateral Agent, in connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory to the Collateral Agent and (iii) if requested by the Collateral Agent deliver to the Collateral Agent legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Collateral Agent.

     (c) With respect to any new Subsidiary created or acquired after the Closing Date by any Obligor, promptly, but in any case within 30 days of such acquisition, (i) give notice of such acquisition or creation to the Collateral Agent and, if requested by the Collateral Agent, execute and deliver to the Collateral Agent such amendments to the Guarantee and Collateral Agreement or such other documents as the Collateral Agent reasonably deems necessary to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents and with the priority required by Section 5.7) in the Capital Stock of such new Subsidiary that is owned by such Obligor (provided that no Capital Stock of any Foreign Subsidiary that is a CFC shall be required to be pledged, except for 65% of the Voting Stock and 100% of the Capital Stock (other than Voting Stock) of such CFC of any Foreign Subsidiary owned directly by the Company or any of its Domestic Subsidiaries), (ii) deliver to the Collateral Agent the certificates, if any, representing such Capital Stock, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of such Obligor, and (iii) cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to take such actions necessary or advisable to grant to the Collateral Agent for the benefit of the Secured Parties a perfected security interest (to the extent required by the Security Documents and with the priority required by Section 5.10) in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary (to the extent the Collateral Agent, for the benefit of the Secured Parties has a perfected security interest in the same type of Collateral as of the Closing), including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be reasonably requested by the Collateral Agent. For the avoidance of doubt, with respect to any new Foreign Subsidiary that is a CFC created or acquired after the Closing by any Obligor, such Obligor’s obligations under this clause (c) shall include obligations corresponding to each action described in clause (d) below (as such clause (d) relates to any Foreign Subsidiary that is a CFC at the Closing).

     (d) With respect to any Foreign Subsidiary that is a CFC owned directly by the Company or any of its Domestic Subsidiaries at the Closing, other than Porex Technologies LTD, promptly, but in any case within 30 days of the Closing, (i) take such actions necessary or advisable to grant to the Collateral

Agent for the benefit of the Secured Parties a perfected security interest in 65% of the Voting Stock and 100% of the Capital Stock (other than Voting Stock) of such Foreign Subsidiary, (ii) execute and deliver to the Collateral Agent such filings, registrations and other documents as the Collateral Agent reasonably deems necessary to grant to the Collateral Agent for the benefit of the Secured Parties a perfected first-priority security interest in such Capital Stock of such Foreign Subsidiary, and (iii) deliver to the Collateral Agent an opinion of external local counsel to such Foreign Subsidiary, in form and substance reasonably acceptable to the Collateral Agent, confirming the legality, validity, enforceability, priority and perfection of such security interest.

     (e) Notwithstanding anything to the contrary in any Note Document, this Section 9.8 shall not apply with respect to any Collateral to the extent the Required Holders have reasonably determined that the value of such Collateral to which this Section 9.8 would otherwise apply is insufficient to justify the difficulty, time and/or expense of obtaining a perfected Lien therein.

      Section 9.9. Further Assurances . (a) Maintain the security interest created by the Security Documents as a perfected security interest having at least the priority described in Section 5.10 (to the extent such security interest can be perfected through the filing of UCC-1 financing statements, the Intellectual Property filings to be made pursuant to Schedule 4 of the Guarantee and Collateral Agreement or the delivery of Pledged Securities required to be delivered under the Guarantee and Collateral Agreement), subject to the rights of the Obligors under the Note Documents to dispose of the Collateral. From time to time the Obligors shall execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take all such actions, as the Collateral Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Note Documents, or of renewing the rights of the Secured Parties with respect to the Collateral as to which the Collateral Agent for the ratable benefit of the Secured Parties has a perfected Lien pursuant hereto or thereto, including, without limitation, filing any financing or continuation statements or financing change statements under the Uniform Commercial Code (or other similar laws) in effect in any United States jurisdiction with respect to the security interests created hereby. At the reasonable request of the Collateral Agent, the Company will, and will cause each Obligor to, provide information with respect to its deposit accounts and, at the reasonable request of the Collateral Agent, the Company will, and will cause each Obligor to, execute and deliver account control agreements with financial institutions holding such accounts (except in the case of deposit accounts that are “Exempt Deposit Accounts” as defined under the Guarantee and Collateral Agreement).

Section 10. Negative Covenants .

     Each of the Obligors (on behalf of itself and each of the Subsidiaries) hereby agrees that, so long as any amount is owing to any holder of the Notes under any Note Document (other than contingent or indemnification obligations not then due), it shall not, and shall not permit any of the Subsidiaries to:

      Section 10.1. Amendments of Certain Documents . Enter into any amendment or modification of, or agree to or accept any waiver under, its Organizational Documents that (i) is adverse in any material respect to the interest of the holders of the Notes or (ii) adversely affects the voting rights or voting power of any Capital Stock forming part of the Collateral.

      Section 10.2. Indebtedness . Create, issue, incur, assume, or suffer to exist any Indebtedness, except:

     (a) Indebtedness of any Obligor pursuant to any Note Document and any Permitted Refinancing Indebtedness thereof provided that such Permitted Refinancing Indebtedness is unsecured and subordinated on the terms set forth in Schedule 10.2;

     (b) Indebtedness (i) of the Company to any Obligor, (ii) of any Obligor to the Company or another Obligor, or (iii) of a Foreign Subsidiary to any Obligor not to exceed an aggregate principal amount of $3,000,000 at any one time outstanding; provided that such Indebtedness under this clause (b) is either subordinated on the terms set forth in Schedule 10.2 (if incurred pursuant to subclause (i) or (ii)) or evidenced by a promissory note that has been pledged and delivered to the Collateral Agent for the benefit of the Secured Parties (if incurred pursuant to subclause (i), (ii) or (iii));

     (c) Indebtedness consisting of Capital Lease Obligations and purchase money Indebtedness in an aggregate principal amount not to exceed $2,500,000 at any one time outstanding, including any Permitted Refinancing Indebtedness thereof;

     (d) Guarantee Obligations by any Obligor of obligations of any other Obligor;

     (e) Indebtedness of the Company or any of its Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn by the Company or such Subsidiary in the ordinary course of business against insufficient funds so long as such Indebtedness is promptly repaid;

     (f) Indebtedness of the Company or any of its Subsidiaries in respect of workers’ compensation claims; property casualty or liability insurance; take-or-pay obligations in supply arrangements; self-insurance obligations; performance, bid, surety bonds; and completion guaranties (in each case in the ordinary course of business);

     (g) Indebtedness of any Obligor as an account party in respect of letters of credit issued in the ordinary course of business, provided that upon the drawing of such letters of credit, such Indebtedness is reimbursed within 30 days following such drawing;

     (h) Indebtedness of any Person that becomes a Subsidiary as part of a Permitted Acquisition or Investment permitted hereunder after the Closing Date, and any Permitted Refinancing Indebtedness thereof; provided that (A) such acquired Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary (except to the extent such acquired Indebtedness refinanced (and did not increase principal (except for accrued interest premium or fees, or expenses) or shorten maturity during the term of this Agreement) other Indebtedness to facilitate such entity becoming a Subsidiary), and (B) neither the Company nor any Subsidiary shall be a new obligor therefor and no property of the Company or any other Subsidiary shall provide security therefor, and (C) either (1) (i) the aggregate amount of Indebtedness that is incurred pursuant to this clause shall not exceed $2,000,000 at any one time outstanding or (2) the Consolidated Total Leverage

Ratio of the Company, as at the last day of the most recently ended fiscal quarter of the Company for which internal financial statements are available, on a pro forma basis (assuming that the consummation of such acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day of the four consecutive fiscal quarters ending on such day), does not exceed 3.25:1.

     (i) the incurrence by Porex or any of its Subsidiaries of additional Indebtedness and letters of credit under Revolving Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of Porex and its Subsidiaries thereunder) not to exceed $12,500,000, provided that such Indebtedness (A) is incurred by an Obligor and is unsecured or (B) is incurred by a Foreign Subsidiary and is either unsecured or secured only by the assets of such Foreign Subsidiary; provided that to the extent that such Indebtedness is incurred by Foreign Subsidiaries, such Indebtedness shall be non-recourse to the Obligors;

     (j) Indebtedness under Hedge Agreements designed solely to protect the Company and its Subsidiaries against fluctuations in commodity prices, foreign exchange rates or interest rates and not entered into for speculative purposes; and

     (k) Indebtedness consisting of Investments permitted by Section 10.7(d)(ii) or (j).

      Section 10.3. Liens . Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for:

     (a) Liens for taxes, assessments or governmental charges or claims not yet due or which are being contested in good faith by appropriate proceedings; provided that adequate reserves with respect thereto are maintained on the books of the Company or its Subsidiaries, as the case may be, to the extent required by GAAP;

     (b) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days, that are being contested in good faith by appropriate proceedings;

     (c) pledges, deposits or statutory trusts in connection with workers’ compensation, unemployment insurance and other social security legislation;

     (d) deposits and other Liens to secure the performance of bids, trade contracts (other than for borrowed money), leases, subleases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

     (e) easements, zoning restrictions, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business;

     (f) Liens securing Indebtedness of the Company or any Subsidiary incurred pursuant to Section 10.2(c) or 10.2(h); provided that in the case of any such Liens securing Indebtedness

incurred pursuant to Section 10.2(c) to the extent incurred to finance Permitted Acquisitions or Investments permitted under Section 10.7, (x) such Liens shall be created substantially concurrently with the acquisition of the assets financed by such Indebtedness and (y) such Liens do not at any time encumber any Property of the Company or any Subsidiary other than the Property financed by such Indebtedness and the proceeds thereof;

     (g) Liens created pursuant to the Note Documents;

     (h) any interest or title of a lessor under any lease entered into by the Company or any Subsidiary in the ordinary course of its business, and any financing statement filed in connection with any such lease;

     (i) Liens arising from judgments in circumstances not constituting an Event of Default under Section 11(h);

     (j) Liens securing acquired Indebtedness permitted by Section 10.2(h); provided that such Liens do not extend to property not subject to such Liens at the time of acquisition and were not granted in connection therewith or anticipation thereof (other than improvements thereon) and are no more favorable to the lienholders than such existing Lien;

     (k) receipt of progress payments and advances from customers in the ordinary course of business to the extent same creates a Lien on the related inventory and proceeds thereof;

     (l) Liens in favor of customs and revenue authorities arising as a matter of law to secure the payment of customs duties in connection with the importation of goods;

     (m) Liens arising out of consignment or similar arrangements for the sale by the Company and its Subsidiaries of goods through third parties in the ordinary course of business;

     (n) Liens deemed to exist in connection with Investments permitted by Section 10.7(b) that constitute repurchase obligations;

     (o) any license of Intellectual Property granted by the Company or any of its Subsidiaries in the ordinary course of business;

     (p) Liens created in the ordinary course of business in favor of banks or other financial institutions over credit balances of any bank account held at such bank or financial institution;

     (q) Liens on assets of a Foreign Subsidiary securing Indebtedness incurred pursuant to Section 10.2(i)(B);

     (r) other Liens with respect to obligations that do not exceed $500,000 at any one time outstanding.

      Section 10.4. Fundamental Changes . Consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

     (a) (i) any Subsidiary may be merged, amalgamated, liquidated or consolidated with or into, or all or substantially all of the Property or business may be transferred to, the Company ( provided that the Company shall be the continuing or surviving corporation) or (ii) any Subsidiary may be merged, amalgamated, liquidated or consolidated with or into, or all or substantially all of the Property or business may be transferred to, any Subsidiary ( provided that (x) if one of the parties to such merger, amalgamation or consolidation is a Guarantor, such Guarantor shall be the continuing or surviving corporation or (y) simultaneously with such transaction, the continuing or surviving corporation shall become a Guarantor and the Company shall comply with Section 9.8 in connection therewith);

     (b) Dispositions permitted by Section 10.5 may be consummated.

      Section 10.5. Dispositions of Property . Dispose of any of its owned Property (including, without limitation, receivables) whether now owned or hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such Subsidiary’s Capital Stock to any Person, except:

     (a) the Disposition of surplus, obsolete or worn out property in the ordinary course of business and the abandonment of Intellectual Property in the ordinary course of business;

     (b) (i) the sale of inventory and Dispositions of cash and Cash Equivalents, in each case in the ordinary course of business, (ii) the licensing of Intellectual Property in the ordinary course of business and (iii) the contemporaneous exchange, in the ordinary course of business, of Property for Property of a like-kind to the extent that the Property received in such exchange is of a value at least equivalent to the value of the Property exchanged ( provided that after giving effect to such exchange, the value of the Property of the Obligors subject to perfected first priority Liens in favor of the Collateral Agent under the Security Documents is not reduced);

     (c) the sale or issuance of any Subsidiary’s Capital Stock to any Obligor;

     (d) the Disposition of other assets having a fair market value not to exceed $10,000,000 in the aggregate in any calendar year; provided that the requirements of Section 8.1(c), are complied with in connection therewith;

     (e) any Recovery Event; provided that the requirements of Section 8.1(c) are complied with in connection therewith;

     (f) the leasing, occupancy agreements or sub-leasing of Property that would not materially interfere with the required use of such Property by the Company or its Subsidiaries;

     (g) Dispositions of non-core assets that are acquired pursuant to a Permitted Acquisition; provided that the requirements of Section 8.1(c), to the extent applicable, are complied with in connection therewith;

     (h) transfers of condemned property as a result of the exercise of “eminent domain” or other similar policies to the respective Governmental Authority or agency that has condemned same (whether by deed in lieu of condemnation or otherwise), and transfers of properties that have been subject to a casualty to the respective insurer of such property as part of an insurance settlement;

     (i) the transfer of Property (i) by any Obligor to any other Obligor, (ii) by any Foreign Subsidiary to another Foreign Subsidiary, (iii) by any Foreign Subsidiary to an Obligor and (iv) by any Obligor to a Foreign Subsidiary for not less than fair market value (as reasonably determined by the Company; provided that for purposes of this subclause (iv), the Company may, acting in good faith, determine that a transfer of equipment that has been used in the business of an Obligor, for not less than the book value of such equipment, is a transfer for not less than fair market value);

     (j) sale and leaseback transactions permitted by Section 10.10; provided that the requirements of Section 8.1(c) are complied with in connection therewith;

     (k) Liens permitted by Section 10.3;

     (l) Restricted Payments permitted by Section 10.6;

     (m) Investments not prohibited by this Agreement;

     (n) the sale or discount without recourse of accounts receivable arising in the ordinary course of business in connection with the compromise or collection thereof;

     (o) assignments or subleases for fair value of leasehold interests that are no longer used or useful in the business the Company or any of its Subsidiaries;

     (p) any exclusive license to Pentair, Inc. of the Specified Intellectual Property; and

     (q) any Disposition for not less than fair market value (as reasonably determined by the Company) if at least 75% of the consideration is received in the form of cash and the Net Cash Proceeds of which at the consummation of such Disposition are entirely applied to the repayment of the Notes of each Series then outstanding on a pro rata basis, pursuant to Section 8.2.

      Section 10.6. Restricted Payments . Declare or pay any dividend on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of the Company or any Subsidiary, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of the Company or any Subsidiary (collectively, “ Restricted Payments ”), except:

     (a) any Subsidiary may make Restricted Payments to any Obligor, and any Foreign Subsidiary may make Restricted Payments to another Foreign Subsidiary;

     (b) Investments permitted by Section 10.7;

     (c) the Company may make Restricted Payments in the form of common equity of the Company or preferred equity of the Company; and

     (d) so long as no Default or Event of Default shall have occurred and be continuing, the Company or any other Obligor may purchase, redeem or otherwise acquire any Capital Stock or options to purchase Capital Stock of the Company or Porex Equity Partners, L.P. (so long as it owns Capital Stock of the Company) held by any former officer or employee of the Company or any other Obligor issued pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided that any Restricted Payments made pursuant to this clause (b) shall not exceed $500,000 in any fiscal year.

      Section 10.7. Investments . Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or all or substantially all of the assets constituting an ongoing business from, or make any other investment in, any other Person (all of the foregoing, “Investments”), except:

     (a) extensions of trade credit in the ordinary course of business;

     (b) Investments in Cash Equivalents and Foreign Cash Equivalents;

     (c) Investments resulting from the incurrence of Indebtedness permitted by Sections 10.2(b) and (d);

     (d) (i) Investments (other than those relating to the incurrence of Indebtedness permitted by Section 10.7(c)) by the Company or any of its Subsidiaries in the Company or any Person that, prior to such Investment, is a Guarantor and (ii) Investments made by a Foreign Subsidiary in another Foreign Subsidiary;

     (e) Permitted Acquisitions;

     (f) loans or advances to employees in an aggregate amount of up to $1,000,000 outstanding at any time;

     (g) Investments in existence immediately prior to the Closing;

     (h) Investments of the Company or any Subsidiary under Hedge Agreements permitted hereunder;

     (i) Investments of any Person in existence at the time such Person becomes a Subsidiary; provided that such Investment was not made in connection with or anticipation of such Person becoming a Subsidiary;

     (j) provided that no Default or Event of Default is continuing or would result therefrom, the Company may make Investments in an aggregate amount (determined as the

amount originally advanced, loaned or otherwise invested, less any returns on the respective Investment not to exceed the original amount invested) not to exceed at any time outstanding $1,000,000;

     (k) wholly owned Subsidiaries of the Company may be established or created, if the Company and such Subsidiary comply with the provisions of Section 9.8(c) provided that, in each case, to the extent such new Subsidiary is created solely for the purpose of consummating a merger transaction pursuant to an acquisition permitted by Section 10.7(e), and such new Subsidiary at no time holds any assets or liabilities other than its rights under the relevant acquisition documents and any merger consideration contributed to it contemporaneously with the closing of such merger transactions, such new Subsidiary shall not be required to take the actions set forth in Section 9.8(c) until the respective acquisition is consummated (at which time the surviving entity of the respective merger transaction shall be required to so comply within ten Business Days);

     (l) Investments resulting from pledges and deposits referred to in Sections 10.3(c) and (d);

     (m) the forgiveness or conversion to equity of any Indebtedness permitted by Section 10.2(b)(i) through (iv);

     (n) Investments (other than Permitted Acquisitions) made (i) by the Company with cash proceeds of equity contributions (other than with Disqualified Capital Stock) from shareholders of the Company to the Company, or (ii) by a Subsidiary of the Company with cash proceeds of an Investment in such Subsidiary permitted by Section 10.7(n)(i), in each case after the Closing;

     (o) Guarantee Obligations permitted by Section 10.2 and any payments made in respect of such Guarantee Obligations;

     (p) any acquisition permitted by Section 10.4(a);

     (q) Investments in notes or securities of trade creditors or customers received in the ordinary course of business upon foreclosure, or pursuant to any plan of reorganization or liquidation or similar arrangement, upon the bankrupty or insolvency of such trade creditors or customers or in settlement of delinquent obligations of, and other disputes with, trade creditors or customers arising in the ordinary course of business;

     (r) accounts receivable if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms; and

     (s) Investments made as a result of the receipt of non-Cash consideration from a Disposition permitted under Section 10.5.

It is further understood and agreed that for purposes of determining the value of any Investment outstanding for purposes of this Section 10.7, such amount shall deemed to be the amount of such

Investment when made, purchased or acquired less any returns on such Investment (not to exceed the original amount invested).

      Section 10.8. Optional Payments . Make any optional or voluntary payment, prepayment, repurchase or redemption of, or otherwise voluntarily or optionally defease the principal of or interest on, or any other amount owing in respect of any Indebtedness that is subordinated in right of payment to the Notes or the Note Guarantees.

      Section 10.9. Transactions with Affiliates . Enter into any transaction or series of transactions, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than any Obligor) unless such transaction or series of transactions is (a) otherwise not prohibited under this Agreement and (b) upon fair and reasonable terms no less favorable to the Company or such Subsidiary, as the case may be, than it would reasonably expect to obtain in a comparable arm’s-length transaction with a Person that is not an Affiliate. For the avoidance of doubt, this Section 10.9 shall not apply to (i) employment arrangements with, and payments of compensation, expense reimbursement, indemnification or benefits to or for the benefit of, current or former employees, officers or directors of the Company or any of its Subsidiaries, (ii) Indebtedness permitted by Section 10.2(b), transactions permitted by Section 10.4(a), Restricted Payments permitted by Section 10.6(a), (c) or (d), or Investments permitted by Section 10.7(d) or (f), (iii) payments under the Management Services Agreement as in effect at the Closing, not to exceed $1,000,000 during any annual period beginning on the date of the Closing or any anniversary thereof plus reasonable out-of-pocket expenses, (iv) the provision of management services by the Company or any Subsidiary to any Subsidiary of the Company in the ordinary course of business, (v) transfers of the non-exclusive license to a Subsidiary to use Intellectual Property in the ordinary course of business and (vi) transactions in existence immediately before the Closing.

      Section 10.10. Sales and Leasebacks . Enter into any arrangement with any Person providing for the leasing by the Company or any Subsidiary of real or personal property which is to be sold or transferred by the Company or such Subsidiary (a) to such Person or (b) to any other Person to whom funds have been or are to be advanced by such Person on the security of such property or rental obligations of the Company or such Subsidiary, except for (i) sales or transfers that do not exceed $1,000,000 in the aggregate at any one time outstanding and (ii) sales or transfers by any Obligor to any other Obligor. Notwithstanding anything to the contrary herein, no transaction or arrangement shall be restricted under this Section 10.8 if, in connection with such transaction or arrangement, any Indebtedness or Lien incurred is permitted to be incurred under Section 10.2 and Section 10.3 or any Disposition of property is permitted under Section 10.5.

      Section 10.11. Negative Pledge Clauses . Enter into any agreement that prohibits or limits the ability of the Company or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Obligations or, in the case of any Guarantor, its obligations under the Guarantee and Collateral Agreement, other than (a) this Agreement and the other Note Documents, (b) any agreements governing any purchase money Liens or Capital Lease Obligations, or any Permitted Refinancing Indebtedness thereof, otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby and the proceeds thereof), (c) Contractual Obligations incurred in the ordinary course of business and on customary terms which limit Liens on the assets that are subject of the applicable

Contractual Obligation, (d) prohibitions and limitations in effect immediately prior to the date hereof, (e) customary provisions restricting the subletting or assignment of any lease governing a leasehold interest or restrictions on assignment of any Intellectual Property or general intangibles, (f) customary restrictions and conditions contained in any agreement relating to an asset sale permitted by Section 10.4 or 10.5, and (g) any agreement in effect at the time any Person becomes a Subsidiary, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary.

      Section 10.12. Clauses Restricting Subsidiary Distributions . Enter into any consensual encumbrance or restriction on the ability of any Subsidiary to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness owed to, the Company or any Subsidiary or (b) make Investments in the Company or any Subsidiary, except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Note Documents, (ii) any restrictions with respect to such Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, (iii) any restrictions regarding licenses or sublicenses by the Company and its Subsidiaries of Intellectual Property in the ordinary course of business (in which case such restriction shall relate only to such Intellectual Property), (iv) Contractual Obligations incurred in the ordinary course of business which include customary provisions restricting the assignment of any agreement relating thereto, (v) customary provisions contained in joint venture agreements and other similar agreements applicable to joint ventures entered into in the ordinary course of business, (vi) customary provisions restricting the subletting or assignment of any lease governing a leasehold interest, (vii) customary restrictions and conditions contained in any agreement relating to an asset sale permitted by Section 10.4 or 10.5, (viii) any agreement in effect at the time any Person becomes a Subsidiary, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary, (ix) such restrictions in effect immediately prior to the Closing, (x) applicable law, (xi) restrictions on cash or other deposits or net worth imposed by customers or landlords under contracts entered into in the ordinary course of business, (xii) any restrictions on the transfer of any property subject to a Lien permitted by Section 10.3; and (xiii) restrictions set forth in Indebtedness incurred pursuant to Section 10.2(a) (provided that the restrictions in any Permitted Refinancing Indebtedness incurred under Section 10.2(a) taken as a whole are no less favorable in any material respect to the holders of the Notes than those restrictions that are then in effect under the Indebtedness that is being refinanced, renewed, replaced or extended), Section 10.2(c) (provided that (i) the restriction is not materially more disadvantageous to the holders of the Notes than is customary in comparable financings, and any such restriction will not materially affect the Company’s ability to make principal or interest payments on the Notes, and (ii) the restrictions in any Permitted Refinancing Indebtedness incurred under Section 10.2(c) taken as a whole are no less favorable in any material respect to the holders of the Notes than those restrictions that are then in effect under the Indebtedness that is being refinanced, renewed, replaced or extended), Section 10.2(h) (provided that (i) the restriction is not applicable to any Person, or the property or assets of any Person, other than the Person that becomes a Subsidiary as described in such Section 10.2(h), and (ii) the restrictions in any Permitted Refinancing Indebtedness incurred under Section 10.2(h) taken as a whole are no less favorable in any material respect ot the holders of the Notes than those restrictions that are then in effect under the Indebtedness that is being refinanced, renewed, replaced or extended) or Section 10.2(i) (provided that the restriction is not materially more disadvantageous to the holders of the Notes than is customary in comparable financings, and any such restriction will not materially affect the Company’s ability to make principal or interest payments on the Notes).

      Section 10.13. Limitation on Hedge Agreements . Enter into any Hedge Agreement other than Hedge Agreements entered into for a bona fide business purpose, and not for speculative purposes.

      Section 10.14. Limitation on Cash-Pay Preferred Stock . Issue or permit to exist any Cash-Pay Preferred Stock.

      Section 10.15. Limitation on Activities of the Company . In the case of the Company only, notwithstanding anything to the contrary in this Agreement or any other Note Document:

     (a) conduct, transact or otherwise engage in, or commit to conduct, transact or otherwise engage in, any business or operations other than (i) ownership of the Capital Stock of its Subsidiaries, (ii) activities incidental to the maintenance of its existence and compliance with applicable laws and legal, tax and accounting matters related thereto and activities relating to its employees, (iii) activities relating to the performance of obligations under the Note Documents to which it is a party or expressly permitted thereunder and (iv) the making of Restricted Payments to the extent permitted to be made pursuant to Section 10.6;

     (b) own, lease, manage or otherwise operate any properties or assets other than the ownership of shares of Capital Stock of its Subsidiaries; or

     (c) except as permitted under Section 10.04, consummate any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business.

      Section 10.16. Lines of Business . Enter into any business, either directly or through any of its Subsidiaries, except for the Business.

Section 11. Events of Default .

     An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

     (a) The Company shall fail to pay (i) any principal of any Note when due in accordance with the terms thereof or (ii) any interest owed by it on any Note, or any other amount payable by it hereunder or under any other Note Document, within two Business Days after any such interest or other amount becomes due in accordance with the terms hereof or thereof; or

     (b) Any representation or warranty made or deemed made by any Obligor herein or in any other Note Document on the Closing or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any other Note Document, shall, in either case, prove to have been inaccurate in any material respect on or as of the date made or deemed made or furnished; or

     (c) Any Obligor shall default in the observance or performance of any agreement contained in Section 9.4(a)(i), Section 9.7(a) or Section 10 of this Agreement; or

     (d) Any Obligor shall default in the observance or performance of any other agreement contained in this Agreement or any other Note Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days after such Obligor receives from any holder of the Notes, notice of the existence of such default; or

     (e) The Company or any of its Subsidiaries shall (i) default in making any payment of any principal of any Indebtedness (excluding the Notes) on the scheduled or original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event of default shall occur, the effect of which payment or other default or other event of default described in clauses (i), (ii) or (iii) of this paragraph (e) is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or to become subject to a mandatory offer to purchase by the obligor thereunder; provided that (A) a default, event or condition described in this paragraph shall not at any time constitute an Event of Default unless, at such time, one or more defaults or events of default of the type described in this paragraph shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $2,500,000 and (B) this paragraph (e) shall not apply to (I) secured Indebtedness that becomes due as a result of the sale, transfer, destruction or other disposition of the Property or assets securing such Indebtedness if such sale, transfer, destruction or other disposition is not prohibited hereunder or (II) any Guarantee Obligations except to the extent such Guarantee Obligations shall become due and payable by any Obligor and remain unpaid after any applicable grace period or period permitted following demand for the payment thereof; or

     (f) (i) The Company or any of its Material Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or the Company or any of its Subsidiaries (other than any Immaterial Subsidiary) shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Company or any of its Subsidiaries (other than any Immaterial Subsidiary) any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against the Company or any of its Subsidiaries (other than any Immaterial Subsidiary) any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against substantially all of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from

the entry thereof; or (iv) the Company or any of its Subsidiaries (other than any Immaterial Subsidiary) shall consent to or approve of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its Subsidiaries (other than any Immaterial Subsidiary) shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

     (g) (i) The Company or any of its Subsidiaries shall incur any liability in connection with any non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) a determination is made that a Single Employer Plan is in “at risk” status (within the meaning of Section 303 of ERISA) or any Lien in favor of the PBGC or a Single Employer Plan shall arise on the assets of the Company or any of its Subsidiaries, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is reasonably likely to result in the termination of such Single Employer Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company or any of its Subsidiaries shall, or is reasonably likely to, incur any liability as a result of a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event or condition (other than one which could not reasonably be expected to result in a violation of any applicable law or of the qualification requirements of the Code) shall occur or exist with respect to a Plan or a Commonly Controlled Plan; and in each case in clauses (i) through (vi) above, such event or condition, together with all other such events or conditions, if any, could reasonably be expected to result in a direct obligation of the Company or any of its Subsidiaries to pay money that could reasonably be expected to have a Material Adverse Effect; or

     (h) One or more judgments or decrees shall be entered against the Company or any of its Material Subsidiaries involving for the Company and any Material Subsidiaries taken as a whole a liability (to the extent not paid or covered by insurance or effective indemnity) of $1,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or

     (i) Any of the Security Documents shall cease, for any reason (other than by reason of the express release thereof pursuant to Section 22.10), to be in full force and effect in any material respect, or any Obligor shall so assert in writing, or any Lien on any material amount of Collateral created by any of the Security Documents shall cease in any material respect to be enforceable and of the same effect and priority purported to be created thereby; or

     (j) (i) the Company shall cease to own, directly or indirectly, 100% of the Capital Stock of Porex; or (ii) the Sponsor Group shall cease to beneficially own at least 50.1% of the total voting power of the Voting Stock of the Company.

Section 12. Remedies on Default, Etc .

      Section 12.1. Acceleration . (a) If an Event of Default described in Section 11(f) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

     (b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 50% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

     (c) If any Event of Default described in Section 11(a) has occurred and is continuing in respect of any Notes of a Series held by a holder, any such holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes of such Series held by it or them to be immediately due and payable.

     Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.

      Section 12.2 Other Remedies . If any Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the Required Holders may proceed to protect and enforce the rights of the holders by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

      Section 12.3. Rescission . At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the holders of not less than 51% in principal amount of the Notes then outstanding, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

      Section 12.4. No Waivers or Election of Remedies, Expenses, Etc . No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.

Section 13. Registration; Exchange; Substitution of Notes .

      Section 13.1. Registration of Notes . The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

      Section 13.2. Transfer and Exchange of Notes . Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $5,000,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $5,000,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.1.

      Section 13.3. Replacement of Notes . Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of notice from the holder thereof of the loss, theft, destruction or mutilation of any Note, and

     (a) in the case of loss, theft or destruction, of such Person’s own unsecured agreement of indemnity, or

     (b) in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

Section 14. Payments on Notes .

      Section 14.1. Place of Payment . Subject to Section 14.2, payments of principal and interest becoming due and payable on the Notes shall be made in Los Angeles, California at the principal office of the Company in such jurisdiction. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

      Section 14.2. Home Office Payment . So long as the Purchaser shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, and interest by the method and at the address specified for such purpose below the Purchaser’s name in Schedule A, or by such other method or at such other address as the Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made at a reasonable time before, concurrently with or reasonably promptly after payment or prepayment in full of any Note, the Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by the Purchaser permitted under Section 13.2, the Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Person that is the direct or indirect transferee of any Note purchased by the Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchaser has made in this Section 14.2.

Section 15. Expenses, Etc .

      Section 15.1. Transaction Expenses . The Company will pay all reasonable, documented out-of-pocket costs and expenses (including reasonable attorneys’ fees of special counsel and local or other counsel) incurred by any holder of the Notes after the Closing in connection with (a) any amendments, waivers or consents under or in respect of this Agreement or the Notes (whether or not such amendment, waiver or consent becomes effective), (b) enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement or the Notes or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement or the Notes, or by reason of being a holder of any Note, and (c) the insolvency or bankruptcy of the Company or any Obligor or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes.

      Section 15.2. Survival . The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement or the Notes, and the termination of this Agreement.

Section 16. Survival of Representations and Warranties; Entire Agreement .

     All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by the Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of the Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of any Obligor pursuant to this Agreement shall be deemed representations and warranties of such Obligors under this Agreement. Subject to the preceding sentence, this Agreement and the Notes embody the entire agreement and understanding between the Purchaser and the Obligors and supersede all prior agreements and understandings relating to the subject matter hereof.

Section 17. Amendment and Waiver .

      Section 17.1. Requirements . Any Note Document may be amended, and the observance of any term of any Note Document may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company, the Collateral Agent and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, or 6 hereof, or any defined term (as it is used therein), will be effective as to the Purchaser unless consented to by the Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, reduce the amount or postpone the time of any prepayment or payment of principal of, or reduce the rate or postpone the time of payment or change the method of computation of interest on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20, (iv) release all or substantially all of the Collateral, or (v) release all or substantially all of the Guarantors from their Note Guarantees.

      Section 17.2. Delivery of Amendments .

     (a)  Solicitation . The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

     (b)  Payment . The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding that consented to such waiver or amendment.

      Section 17.3. Binding Effect, etc . Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term “this Agreement” and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.

      Section 17.4. Notes Held by Company, etc . Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

Section 18. Notices .

     All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:

     (a) if to the Purchaser, to the Purchaser at the address specified for such communications in Schedule A, or at such other address as the Purchaser or nominee shall have specified to the Company in writing,

     (b) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

     (c) if to any Obligor, to the Company at its address set forth at the beginning hereof to the attention of Timothy J. Hart, Esq. (facsimile (310) 277-5591), or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

Section 19. [Reserved].

Section 20. Confidential Information .

     For the purposes of this Section 20, “Confidential Information” means information delivered to the Purchaser by or on behalf of the Company or any Subsidiary after the Closing in connection with the

transactions contemplated by or otherwise pursuant to this Agreement, provided that such term does not include information that (a) was publicly known prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by the Purchaser or any person acting on the Purchaser’s behalf, (c) otherwise becomes known to the Purchaser other than through disclosure by the Company or any Subsidiary; provided that the source of such information was not known by the Purchaser to be bound by a confidentiality agreement with, or other contractual, legal or fiduciary obligation to, the Company or any other Person with respect to such information; and provided further that such information does not consist of Porex Confidential Information (as defined in the Stock Purchase Agreement) subject to the terms of Section 5.03 of the Stock Purchase Agreement), or (d) constitutes financial statements delivered to the Purchaser under Section 7.1 that are otherwise publicly available. The Purchaser will maintain the confidentiality of such Confidential Information, provided that the Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes and such Persons agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20), (ii) its financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 20, (iii) any other holder of any Note, (iv) any Person to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20 and such Person has been approved as a potential transferee by the Company), (v) any Person from which it offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over the Purchaser, or (vii) any other Person to which such delivery or disclosure may be necessary (following notice to the Company and exercise of all reasonably available means to avoid such disclosures) (w) to effect compliance with any law, rule, regulation or order applicable to the Purchaser, (x) in response to any subpoena or other legal process, or (y) in connection with any litigation to which the Purchaser is a party relating to, in connection with or arising out of the Note Documents or (z) if an Event of Default has occurred and is continuing, to the extent the Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under the Purchaser’s Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.

Section 21. [Reserved] .

Section 22. Miscellaneous .

      Section 22.1. Successors and Assigns . All covenants an