Exhibit-10.1
WAIVER AND AMENDMENT TO
CREDIT AGREEMENT
          This Waiver and Amendment to Credit Agreement, dated as of October 1,
2006 (this “Agreement”), is among ATLANTIS PLASTIC FILMS, INC., a Delaware
corporation (“Atlantis Plastic Films”), ATLANTIS MOLDED PLASTICS, INC., a
Florida corporation (“Atlantis Molded Plastics”), ATLANTIS FILMS, INC., a
Delaware corporation (“Atlantis Films”), RIGAL PLASTICS, INC., a Florida
corporation (“Rigal Plastics”), ATLANTIS PLASTICS INJECTION MOLDING, INC., a
Kentucky corporation (“Injection Molding”), PIERCE PLASTICS, INC., a Delaware
corporation (“Pierce Plastics”), and EXTRUSION MASTERS, INC., an Indiana
corporation (“Extrusion Masters” and together with Atlantis Plastic Films,
Atlantis Molded Plastics, Atlantis Films, Rigal Plastics, Injection Molding and
Pierce Plastics, collectively, the “Borrowers” and individually, a “Borrower”),
the other persons designated as “Credit Parties” on the signature pages hereof,
the Persons set forth on the signature pages hereto who are designated as
“Lenders”, MERRILL LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC., a Delaware corporation (in its individual capacity “ML Capital”),
as Administrative Agent, Lead Arranger and Sole Bookrunner and GENERAL ELECTRIC
CAPITAL CORPORATION, as Syndication Agent.
WITNESSETH:
          WHEREAS, Borrowers, Credit Parties, Agent and Lenders are parties to
that certain Credit Agreement dated as of March 22, 2005 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
capitalized terms not otherwise defined herein having the definitions provided
therefor in the Credit Agreement);
          WHEREAS, an Event of Default exists under the Credit Agreement (as set
forth below) and Borrowers have requested that the Requisite Lenders waive such
Event of Default;
          WHEREAS, Borrowers have further requested that Agent and Lenders amend
the Credit Agreement in certain respects;
          NOW, THEREFORE, the parties hereto agree as follows:
          1. Waiver.
          (a) Subject to the satisfaction of the conditions set forth in
Section 3 below and in reliance on the representations and warranties set forth
in Section 4 below, the undersigned Lenders hereby waive an Event of Default
existing pursuant to Section 6.1(c) of the Credit Agreement due to Borrowers’
breach of Section 4.4 of the Credit Agreement with respect to the period ended
September 30, 2006 (the “Existing Default”). Except for the waiver set forth in
this Section 1 and the amendments set forth in Section 2 below, nothing
contained herein shall be deemed to constitute a waiver of any Default or Event
of Default that may heretofore or hereafter occur or have occurred and be
continuing or to modify any provision of the Credit Agreement.

 

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          (b) Except as expressly provided herein, the execution and delivery of
this Agreement shall not: (i) constitute an extension, modification, or waiver
of any aspect of the Credit Agreement or the other Loan Documents; (ii) extend
the terms of the Credit Agreement or the due date of any of the Obligations;
(iii) give rise to any obligation on the part of Agent or any Lender to extend,
modify or waive any term or condition of the Credit Agreement or the other Loan
Documents; or (iv) give rise to any defenses or counterclaims to Agent’s or any
Lenders’ right to compel payment of the Obligations or to otherwise enforce its
rights and remedies under the Credit Agreement and the other Loan Documents.
          2. Amendments to the Credit Agreement. Subject to the satisfaction of
the conditions set forth in Section 3 below and in reliance on the
representations and warranties set forth in Section 4 below, the Credit
Agreement is hereby amended as follows:
          (a) The following defined terms are hereby added to Annex A of the
Credit Agreement in proper alphabetic order.
          (i) “Adjustment Date” means the first Business Day of each February,
May, August and November of each year, commencing with the first Business Day of
November, 2006.
          (ii) “Pricing Table” means the following table:

                                      Revolving Loans, Term             Loan and
all other             Obligations (other than     Tier       Swingline Loans)  
Swing Line Loans Level   Leverage Ratio   Index Rate   LIBOR   Index Rate
3
  Greater than or equal to 5.75 to 1.0     1.50 %     3.50 %     1.50 %
2
  Greater than or equal to 5.25 to 1.0, but less than 5.75 to 1.0     1.00 %    
3.00 %     1.00 %
1
  Less than 5.25 to 1.0     .75 %     2.75 %     .75 %

          For purposes of the Pricing Table, if Borrower Representative shall at
any time fail to timely deliver a Compliance Certificate, then effective as of
the tenth (10th) Business Day following the date on which such Compliance
Certificate was due, each Applicable Margin shall be conclusively presumed to
equal the highest Applicable Margin specified in the Pricing Table until the
date of delivery of such Compliance Certificate.
          (b) Section 1.2(a) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

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          “(a) Borrowers shall pay interest to Agent, for the ratable benefit of
Lenders, in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the following rates:
(i) with respect to the Revolving Credit Advances which are designated as Index
Rate Loans (and for all other Obligations not otherwise set forth below), the
Index Rate plus the Applicable Revolver Index Margin per annum or, with respect
to Revolving Credit Advances which are designated as LIBOR Loans, at the
election of Borrower Representative, the applicable LIBOR Rate plus the
Applicable Revolver LIBOR Margin per annum; (ii) with respect to such portion of
the Term Loan designated as an Index Rate Loan, the Index Rate plus the
Applicable Term Loan Index Margin per annum or, with respect to such portion of
the Term Loan designated as a LIBOR Loan, the applicable LIBOR Rate plus the
Applicable Term Loan LIBOR Margin per annum; and (iii) with respect to the Swing
Line Loan, the Index Rate plus the Applicable Revolver Index Margin per annum.
The Applicable Margins are as follows:
          “Applicable Revolver Index Margin” means .75% per annum until the
first Adjustment Date, and thereafter, as of each Adjustment Date, the
applicable percent per annum set forth in the Pricing Table, under the “Index
Rate” heading, corresponding to the Leverage Ratio as of the last day of the
most recently completed calendar quarter prior to the applicable Adjustment
Date; provided that if an Event of Default has occurred and is continuing on
such Adjustment Date; no reduction of this margin shall occur on such Adjustment
Date.
          “Applicable Revolver LIBOR Margin” means 2.75% per annum until the
first Adjustment Date, and thereafter, as of each Adjustment Date, the
applicable percent per annum set forth in the Pricing Table, under the “LIBOR”
heading, corresponding to the Leverage Ratio as of the last day of the most
recently completed calendar quarter prior to the applicable Adjustment Date;
provided that if an Event of Default has occurred and is continuing on such
Adjustment Date; no reduction of this margin shall occur on such Adjustment
Date.
          “Applicable Term Loan Index Margin” means .75% per annum until the
first Adjustment Date, and thereafter, as of each Adjustment Date, the
applicable percent per annum set forth in the Pricing Table, under the “Index
Rate” heading, corresponding to the Leverage Ratio as of the last day of the
most recently completed calendar quarter prior to the applicable Adjustment
Date; provided that if an Event of Default has occurred and is continuing on
such Adjustment Date; no reduction of this margin shall occur on such Adjustment
Date.
          “Applicable Term Loan LIBOR Margin” means 2.75% per annum until the
first Adjustment Date, and thereafter, as of each Adjustment Date, the
applicable percent per annum set forth in the Pricing Table, under the “LIBOR”
heading, corresponding to the Leverage Ratio as of the last day of the most
recently completed calendar quarter prior to the applicable Adjustment Date;
provided that if an Event of Default has occurred and is continuing on such
Adjustment Date; no reduction of this margin shall occur on such Adjustment
Date.

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          “Applicable L/C Margin” means the Applicable Revolver LIBOR Margin
then in effect.”
          (c) Section 3.5(c) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
          “(c) Borrowers may pay the base management fee under Section 6.1 of
the Management Agreement, the incentive compensation under Section 6.3 of the
Management Agreement and reasonable out-of-pocket expenses pursuant to the
Management Agreement; provided that (i) the Borrowers may amend, restate or
replace the Management Agreement but only if the amounts permitted to be paid
pursuant to the Management Agreement shall not be increased or accelerated as a
result of any such amendment, restatement or replacement; (ii) upon the election
of the Agent, Borrowers may not make any payment of fees, incentive compensation
or other similar amounts (excluding out-of-pocket expenses) otherwise permitted
under this Section 3.5(c) during the existence and continuance of any Event of
Default; (iii) notwithstanding anything to the contrary herein, in respect of
the calendar year 2006 the total management fee and incentive compensation
payable shall be consistent with the terms of the Management Agreement as of the
date hereof but shall not exceed an aggregate amount of $1,100,000; and
(iv) notwithstanding anything to the contrary herein, commencing on October 1,
2006 and thereafter, (x) if the amount of the base salary of the Borrowers’
Chief Executive Officer and President exceeds $450,000 in any calendar year, as
adjusted annually to reflect any increase in the Consumer Price Index (which CPI
adjustment shall be calculated on the same basis as the CPI adjustment described
in Section 6.1 of the Management Agreement with respect to Manager (as defined
in the Management Agreement) then the Base Compensation (as defined in
Section 6.1 of the Management Agreement) to be paid to Manager shall be reduced
dollar-for dollar by the amount of such excess and (y) no incentive compensation
shall be payable in cash until such time as the Leverage Ratio is certified
pursuant to the terms hereof to be below 5.25 to 1.0.”
          (d) Section 4.2 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
          “4.2 Minimum EBITDA
          Holdings, Borrowers and their Subsidiaries on a consolidated basis
shall have, for each period set forth below, EBITDA of not less than the
following:

          Fiscal Quarter   EBITDA  
 
       
3 months ended June 30, 2005
  $ 9,000,000  
6 months ended September 30, 2005
  $ 19,000,000  
9 months ended December 31, 2005
  $ 28,200,000  
12 months ended March 31, 2006
  $ 37,700,000  
12 months ended October 31, 2006
  $ 33,500,000  
12 months ended November 30, 2006
  $ 31,500,000”  

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          (e) The following is hereby added to the Credit Agreement as
Section 4.4A thereof:
          “4.4A Borrowing Availability.
          Holdings, Borrower and their Subsidiaries shall, at all times between
October 30, 2006 and March 31, 2007, maintain Borrowing Availability of not less
than $3,000,000.”
          (f) Part 4.2 of Exhibit 4.5(o) to the Credit Agreement is hereby
amended and restated as set forth on Exhibit A hereto.
          3. Conditions. The effectiveness of this Agreement is subject to the
following conditions precedent, each to be in form and substance reasonably
satisfactory to Agent:
          (a) Agent shall have received a copy of this Agreement executed by
Borrowers, other Credit Parties, Agent and Requisite Lenders, together with such
other documents, agreements and instruments as Agent may require or reasonably
request;
          (b) Agent shall have received an executed copy of that certain Waiver
and Amendment to Second Lien Credit Agreement attached as Exhibit B hereto,
which Waiver and Amendment to Second Lien Credit Agreement shall contain a
consent by the holders of Second Lien Debt to the execution and delivery of this
Agreement;
          (c) Except for the Existing Default, no Default or Event of Default
under the Credit Agreement, as amended hereby, shall have occurred and be
continuing;
          (d) All actions and proceedings taken in connection with the
transactions contemplated by this Agreement and all documents, instruments and
other legal matters incident thereto shall be satisfactory to Agent and its
legal counsel; and
          (e) The warranties and representations of Borrowers contained in this
Agreement, the Credit Agreement, as amended or otherwise modified hereby, and
the Loan Documents (after giving effect to this Agreement), shall be true and
correct in all material respects as of the date hereof, with the same effect as
though made on such date, except to the extent that such warranties and
representations expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date.
          4. Representations and Warranties. To induce Agent and Lenders to
enter into this Agreement, Borrowers represent and warrant to Agent and Lenders
that:
          (a) the execution, delivery and performance of this Agreement has been
duly authorized by all requisite corporate action on the part of each Borrower,
this Agreement has been duly executed and delivered by each Borrower and this
Agreement constitutes a valid and binding agreement of each Borrower,
enforceable against each Borrower in accordance with its terms, except as the
enforceability thereof may be limited by

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bankruptcy, insolvency or other similar laws relating to the enforcement of
creditors’ rights generally and by general equitable principles;
          (b) that, except for the Existing Default, no Default or Event of
Default has occurred and is continuing as of the date hereof; and
          (c) immediately after giving effect to this Agreement and the
consummation of the transactions contemplated hereby, each of the
representations and warranties set forth in the Credit Agreement and each of the
other Loan Documents are true and correct in all material respects as of the
date hereof, with the same effect as though made on such date, except to the
extent that such warranties and representations expressly relate to an earlier
date, in which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date.
          5. Retention of Consultant. To induce Agent and Lenders to enter into
this Agreement, Borrowers and the other Credit Parties agree that:
          (a) Agent, on behalf of Lenders, is entitled to retain Giuliani
Capital Advisors or another third party financial advisor mutually agreed to by
Agent and Borrowers (the “Financial Advisor”) to perform the tasks set forth on
Exhibit C hereto and such other services as are reasonably related thereto. The
fees and expenses of the Financial Advisor will constitute Obligations under the
Credit Agreement. Prior to retaining a Financial Advisor, Agent will disclose
the identity thereof to Borrowers.
          (b) Borrowers and the other Credit Parties will provide the Financial
Advisor engaged by Agent access at all times to all documentation, places of
business, officers, consultants and employees of Borrowers and the other Credit
Parties. Borrowers and the other Credit Parties will promptly provide to the
Financial Advisor such financial information concerning Borrowers’ and the other
Credit Parties’ financial condition, businesses, assets, liabilities and
prospects as the Financial Advisor may reasonably request from time to time.
          (c) Borrowers and the other Credit Parties acknowledge that the
Financial Advisor will not have any managerial authority or control over
Borrowers’ or the other Credit Parties’ businesses or any of the Borrowers’ or
the other Credit Parties’ assets, employees, agents or other consultants.
          6. Other Agreements.
          (a) Accrued Interest. All interest which has accrued prior to the date
hereof under the Credit Agreement shall not be affected by the changes to the
rate at which interest accrues as set forth in this Agreement. Such interest
shall remain due and owing, and shall be paid as provided in the Credit
Agreement without giving effect to this Agreement. All changes to interest rates
contemplated hereby shall be effective on a going forward basis. For the period
commencing on the date hereof and ending on the next Adjustment Date, interest
will accrue at the rates set forth on Level 1 of the Pricing Table.

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          (b) Compliance Certificate. Notwithstanding the drafting note set
forth in paragraph (d) of the form Compliance and Excess Cash Flow Certificate,
Borrowers shall complete the portion of Schedule 1 to the form Compliance and
Excess Cash Flow Certificate pertaining to financial covenants when it submits
such Certificate concurrently with the delivery of financial statements for the
months of October and November of 2006.
          (c) Replacement of Second Lien Debt. Notwithstanding the provisions of
Section 3.18 of the Credit Agreement and notwithstanding the provisions of
Section 2 of that certain Intercreditor Agreement dated as of March 22, 2005 by
and among Agent, the agent for the holders of the Second Lien Debt, the
Borrowers and certain other persons designated as Obligors (the “Intercreditor
Agreement”), Borrowers may prepay the existing Second Lien Debt, provided that
(i) the sole source of funds used to prepay the existing Second Lien Debt are
proceeds provided from replacement Second Lien Debt (the “Replacement Second
Lien Debt”), (ii) the Second Lien Debt Documents for the Replacement Second Lien
Debt are reasonably satisfactory to the Requisite Lenders, (iii) the identity of
each provider of Replacement Second Lien Debt is reasonably satisfactory to
Requisite Lenders, and (iv) the Replacement Second Lien Debt becomes subject to
the Intercreditor Agreement to the same extent as the existing Second Lien Debt,
pursuant to agreements, instruments and documents as Agent may reasonably
require. Requisite Lenders hereby consent to Borrower’s use of Revolving Loans
(provided that all conditions to making Revolving Loans contained in the Loan
Documents have been satisfied) to pay transaction costs and customary fees owed
by any Borrower in connection with the incurrence of the Replacement Second Lien
Debt.
          7. Consent to Second Lien Waiver and Amendment. Subject to the
satisfaction of the conditions set forth in Section 3 hereof and in reliance on
the representations and warranties set forth in Section 4 hereof, Agent and the
undersigned Lenders hereby consent to the execution of the Waiver and Amendment
to Second Lien Credit Agreement attached as Exhibit B hereto.
          8. Miscellaneous.
          (a) Default. Borrowers hereby acknowledge and agree that the breach by
any Borrower of any of the representations, warranties, covenants or agreements
made by any Borrower under this Agreement shall constitute an Event of Default.
          (b) Expenses. Each Borrower agrees to reimburse Agent for all costs
and expenses (including reasonable legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
          (c) Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
          (d) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

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          (e) CONSENT TO JURISDICTION. BORROWERS AND CREDIT PARTIES HEREBY
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW
YORK COUNTY, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENT’S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. BORROWERS AND CREDIT PARTIES
EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND
WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWERS AND CREDIT PARTIES HEREBY
WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON BORROWERS AND CREDIT PARTIES BY CERTIFIED OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER REPRESENTATIVE, AT THE
ADDRESS SET FORTH IN THE CREDIT AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE
TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY LITIGATION, TRIAL,
ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING TO THIS AGREEMENT,
ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF BORROWERS, CREDIT PARTIES OR
ANY OF THEIR AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF
BORROWERS OR SUCH CREDIT PARTIES FOR PURPOSES OF ALL APPLICABLE LAW OR COURT
RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN
A DEPOSITION, AT TRIAL OR OTHERWISE). BORROWERS AND CREDIT PARTIES AGREE THAT
AGENT’S OR ANY LENDER’S COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY
EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY
DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE
AN EVIDENCE DEPOSITION. BORROWERS AND CREDIT PARTIES IN ANY EVENT WILL USE ALL
COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION
PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY AGENT OR ANY LENDER, ALL
PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER
THINGS UNDER THEIR CONTROL AND RELATING TO THE DISPUTE.
          (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement.
          (g) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the sole benefit of Borrowers, Credit Parties, Agent and Lenders
and their respective successors and assigns.
          (h) References. Any reference to the Credit Agreement contained in any
notice, request, certificate, or other document executed concurrently with or
after the execution and delivery of this Agreement shall be deemed to include
this Agreement unless the context shall otherwise require.

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          (i) No Set-Off. Without limiting the Credit Agreement and the other
Loan Documents, each Borrower and each other Credit Party hereby confirms and
agrees that, to its knowledge, it has no set-offs, counterclaims or defenses to
the enforcement of the Credit Agreement and of the other Loan Documents, and
hereby acknowledges that Agent and each Lender are relying on this statement in
entering into this Agreement.
          (j) Continued Effectiveness. Notwithstanding anything contained
herein, the terms of this Agreement are not intended to and do not serve to
effect a novation as to the Credit Agreement. The parties hereto expressly do
not intend to extinguish the Credit Agreement. Instead, it is the express
intention of the parties hereto to reaffirm the indebtedness created under the
Credit Agreement which is evidenced by the Notes and secured by the Collateral.
The Credit Agreement as amended hereby and each of the Loan Documents remain in
full force and effect.
          (k) Construction. Each Borrower and each other Credit Party
acknowledges that it has been represented by its own legal counsel in connection
with the Loan Documents and this Agreement, that it has exercised independent
judgment with respect to the Loan Documents and this Agreement, and that it has
not relied on the Agent’s or on Lenders’ counsel for any advice with respect to
the Loan Documents or this Agreement.
          (l) Loan Document. This Agreement shall constitute a Loan Document.
[SIGNATURE PAGES FOLLOW]

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     Delivered at Chicago, Illinois, as of the day and year first above written.

            ATLANTIS PLASTIC FILMS, INC.
ATLANTIS MOLDED PLASTICS, INC.
ATLANTIS FILMS, INC.
RIGAL PLASTICS, INC.
ATLANTIS PLASTICS INJECTION
    MOLDING, INC.
PIERCE PLASTICS, INC.
EXTRUSION MASTERS, INC.,
each as a Borrower         Each by:  /s/ Paul G. Saari         Name:   Paul G.
Saari        Title:   Senior Vice President and Chief Financial Officer     

            ATLANTIS PLASTICS, INC.,
as a Credit Party         By:   /s/ Paul G. Saari         Name:   Paul G. Saari 
      Title:   Senior Vice President and Chief Financial Officer     

            MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.,
acting through its division Merrill Lynch Capital,
as Administrative Agent and a Lender
      By:   /s/ Troy A. Oder         Name:   Troy A. Oder        Title:   Vice
President     

            GENERAL ELECTRIC CAPITAL CORPORATION
      By:   /s/ James N. Urbates         Name:   James N. Urbates       
Title:   Duly Authorized Signatory   

 

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            CENTURION CDO 8, LIMITED

By: American Express Asset Management Group, Inc.
Its: Collateral Manager
      By:           Name:           Title:        

            CENTURION CDO 9, LIMITED
      By: American Express Asset Management Group, Inc.
Its: Collateral Manager
      By:           Name:           Title:        

            CENTURION CDO 10, LIMITED
      By: American Express Asset Management Group, Inc.
Its: Collateral Manager
      By:           Name:           Title:        

            AVENUE CLO FUND, LTD.
      By:           Name:           Title:      

 

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            FRANKLIN FLOATING RATE MASTER
SERIES
      By:   /s/ Richard Hsu         Name:   Richard Hsu        Title:   Vice
President     

            FRANKLIN FLOATING RATE DAILY ACCESS
      By:   /s/ Richard Hsu         Name:   Richard Hsu        Title:   Vice
President     

            FRANKLIN CLO I, LIMITED
      By:   /s/ David Ardini         Name:   David Ardini        Title:   Vice
President     

            FRANKLIN CLO II, LIMITED
      By:   /s/ David Ardini         Name:   David Ardini        Title:   Vice
President     

            FRANKLIN CLO IV, LIMITED
      By:   /s/ David Ardini         Name:   David Ardini        Title:   Vice
President     

            BLACKROCK GLOBAL FLOATING RATE
INCOME TRUST
      By:           Name:           Title:      

 

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            BLACKROCK LIMITED DURATION INCOME
TRUST
      By:           Name:           Title:        

            BLACKROCK SENIOR INCOME SERIES
      By:           Name:           Title:        

            BLACKROCK SENIOR INCOME SERIES II
      By:           Name:           Title:        

            MAGNETITE IV CLO, LIMITED
      By:           Name:           Title:        

            MAGNETITE V CLO, LIMITED
      By:           Name:           Title:      

 

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            ACCESS INSTITUTIONAL LOAN FUND

By: Deerfield Capital Management LLC
Its: Portfolio Manager
      By:   /s/ Lynne Sanders         Name:   Lynne Sanders        Title:   Vice
President     

            MUIRFIELD TRADING LLC
      By:           Name:           Title:        

            CUMBERLAND II CLO LTD.

By: Deerfield Capital Management LLC
Its: Collateral Manager
      By:   /s/ Lynne Sanders         Name:   Lynne Sanders        Title:   Vice
President     

            MARKET SQUARE CLO, LTD.

By: Deerfield Capital Management LLC
Its: Collateral Manager
      By:   /s/ Lynne Sanders         Name:   Lynne Sanders        Title:   Vice
President   

 

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            HANOVER SQUARE CLO LTD.

By: Blackstone Debt Advisors L.P.
Its: Collateral Manager
      By:           Name:           Title:        

            UNION SQUARE CDO LTD.

By: Blackstone Debt Advisors L.P.
Its: Collateral Manager
      By:           Name:           Title:        

            MONUMENT PARK CDO LTD.

By: Blackstone Debt Advisors L.P.
Its: Collateral Manager
      By:           Name:           Title:        

            LOAN FUNDING VI, LLC,
for itself or as agent for Corporate Loan Funding VI LLC
      By:           Name:           Title:      

 

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            GSC PARTNERS GEMINI FUND LIMITED
By: GSCP (NJ), L.P.
Its: Collateral Manager

By: GSCP (NJ), INC.
Its: General Partner
      By:           Name:           Title:        

            GSC PARTNERS CDO FUND V, LIMITED

By: GSCP (NJ), L.P.
Its: Collateral Manager

By: GSCP (NJ), INC.
Its: General Partner
      By:           Name:           Title:        

            GSC PARTNERS CDO FUND VI, LIMITED

By: GSCP (NJ), L.P.
Its: Collateral Manager
      By:           Name:         Title:        

            ING CAPITAL LLC
      By:           Name:           Title:      

 

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            MERRILL LYNCH CREDIT PRODUCTS, LLC
      By:   /s/ Pierre Batrouni         Name:   Pierre Batrouni        Title:  
Vice President     

            GREYROCK CDO LTD.
By Aladdin Capital Management LLC as Manager
      By:   /s/ Todd Murray         Name:   Todd Murray        Title:  
Authorized Signatory     

            CENTURION CDO II, LTD.

By: RiverSource Investments, LLC
Its: Collateral Manager
      By:           Name:           Title:        

            BOLDWATER CBNA LOAN FUNDING, LLC
Boldwater CBNA Loan Funding LLC, for itself or as
Boldwater CFPI Loan Funding LLC
      By:           Name:           Title:      

 

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            GE COMMERCIAL LOAN HOLDING LLC

By: General Electric Capital Corporation
Its: Administrator
      By:           Name:           Title:        

            GE CFS LOAN HOLDING 2006-3 LLC

By: General Electric Capital Corporation
Its: Administrator
      By:           Name:           Title:        

 

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EXHIBIT A
EBITDA
Attached

 

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MINIMUM EBITDA
(Section 4.2)

          Consolidated Net Income is defined as follows:    
 
        Consolidated net income during the measuring period excluding:   $
                         
 
       
 
       
 
  the income (or deficit) of any Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, Holdings or any of Holdings’
Subsidiaries  
 
 
       
 
  the income (or deficit) of any Person (other than a Subsidiary) in which
Holdings has an ownership interest, except to the extent any such income has
actually been received by Borrowers or any of their Subsidiaries in the form of
cash dividends or distributions  
 
 
       
 
  the undistributed earnings of any Subsidiary of Holdings to the extent that
the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation or requirement of law applicable to such Subsidiary  
 
 
       
 
  any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period  
 
 
       
 
  any net gain attributable to the write-up of any asset  
 
 
       
 
  any net gain from the collection of the proceeds of life insurance policies  
 
 
       
 
  any net gain arising from the acquisition of any securities, or the
extinguishment of any Indebtedness, of Holdings or any of their Subsidiaries  
 
 
       
 
  in the case of a successor to Holdings or any of their Subsidiaries by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets  
 
 
       
 
  any deferred credit representing the excess of equity in any Subsidiary of
Holdings at the date of acquisition of such Subsidiary over the cost to Holdings
of the investment in such Subsidiary  
 

 

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          Consolidated Net Income   $                          
 
       
 
        EBITDA is defined as follows:    
 
        Consolidated Net Income (from above)   $                          
 
       
 
       
Less:
  (in each case to the extent included in the calculation of Consolidated Net
Income, but without duplication):    
 
       
 
  income tax credits  
 
 
       
 
  interest income  
 
 
       
 
  gain from extraordinary items (net of loss from extraordinary items)  
 
 
       
 
  any aggregate net gain (but not any aggregate net loss) arising from the sale,
exchange or other disposition of capital assets (including any fixed assets,
whether tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets and all securities)  
 
 
       
 
  any other non-cash gains  
 
 
       
 
  expenditures pursuant to the last sentence of Section 4.6 of the Credit
Agreement applicable to, but not included on, the Pro Forma, including
expenditures made in connection with Related Transactions and payment of
liabilities on the Closing Date  
 
 
       
Plus:
  (in each case to the extent deducted in the calculation of Consolidated Net
Income, but without duplication):    
 
       
 
  any provision for income taxes (calculated as provided in Section 4.3 of this
Exhibit)  
 
 
       
 
  Interest expense (whether cash or non-cash) deducted in the determination of
Consolidated Net Income, including interest expense with respect to any Funded
Debt and interest expense that has been capitalized  
 
 
       
 
  depreciation and amortization  
 
 
       
 
  amortized debt discount (but in the case of amortization and expenses of
Related Transactions, only to the extent included in the Pro Forma)  
 

-2-

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  any deduction as the result of any grant to any members of the management of
Holdings or any of their Subsidiaries of any Stock  
 
 
       
 
  any deduction for fees paid under the Management
Agreement  
 
 
       
 
  any deduction attributable to the issuance to employees of awards to acquire
stock of Holdings and any deduction attributable to the Permitted
Dividend/Option Cancellation  
 
 
       
 
  expenses of the Related Transactions acceptable to Agent, provided that such
expenses were included in the Pro Forma, or disclosed in any notes thereto, and
are deducted from Net Income (other than as amortization expenses)  
 
 
       
 
  up to $531,500 of expenses attributable to the failed senior note offering
conducted during the first quarter of 2005, provided that such expenses were
included in the Pro Forma, or disclosed in any notes thereto  
 
 
       
 
  any deductions attributable to (a) the fees and expenses of the Financial
Advisor retained pursuant to Section 5 of the Waiver and Amendment to Credit
Agreement dated on or about October 1, 2006 (the “Waiver”), and (b) the fees and
expenses incurred in connection with the transactions contemplated by the
Waiver, including those paid pursuant to Section 7 of the Waiver  
 
 
       
 
  any deductions incurred prior to December 31, 2006 (but in an aggregate amount
not to exceed $1,100,000) for the severance costs of Anthony Bova (not to exceed
$605,000), John Geary (not to exceed $300,000) and additional employees  
 
 
       
 
  any deductions for plant closing, lease exit and/or restructuring costs,
including impairment of goodwill, in each case attributable to the closing of
the Warren, Ohio facility, of an aggregate amount not to exceed $3,000,000
(consisting of up to $1,000,000 of cash charges and up to $2,000,000 of non-cash
restructuring charges)  
 

-3-

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          EBITDA   $                          
 
       
 
        Required EBITDA   $                          
 
       
 
        In Compliance   Yes/No

-4-

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EXHIBIT B
Waiver and Amendment to Second Lien Credit Agreement
Attached

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EXHIBIT C
Scope of Financial Advisor Services

1.   Examine the underlying assumptions to the Borrowers’ 2006 and 2007 revised
forecasts, with a particular emphasis on analyzing 2005-2006 and 2006-2007
EBITDA bridges, including:

  •   Validation of significant components of EBITDA bridges     •   Analysis of
performance by business unit     •   Analysis of projected capital expenditures
segregated between maintenance and growth     •   Identification and evaluation
of the key risks and opportunities for the Borrowers’ 2006 and 2007 revised
forecasts     •   Assessment of management’s operational ability to execute the
2006 and 2007 revised forecast

2.   Perform an analysis of the Borrowers’ performance relative to industry
peers, with a particular focus on the Stretch Films business unit