Exhibit 10.1
 
WAIVER NO. 4
 
WAIVER NO. 4, dated as of December 17, 2007 (this “Agreement”), to the Credit
Agreement, dated as of June 10, 2005 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Tekni-Plex, Inc. (the
“Borrower”), Citicorp USA, Inc., as Administrative Agent (in such capacity, the
“Administrative Agent”), General Electric Capital Corporation, as Syndication
Agent (in such capacity, the “Syndication Agent”), and the Lenders and Issuers
party thereto.
 
W I T N E S S E T H :
 
WHEREAS, an Event of Default may occur under the Credit Agreement on or after
December 17, 2007; and
 
WHEREAS, the Borrower has requested that the Lenders agree and, subject to the
terms and conditions of this Agreement, the Lenders have agreed, to waive any
Bond Interest Cross Default (as defined below) and any Default or Event of
Default arising from a Deposit Account Non-Effectiveness (as defined below) for
the duration of the Waiver Period (as defined below);
 
NOW, THEREFORE, in consideration of the premises and the agreements hereinafter
contained, the parties hereto agree as follows:
 
1.           Defined Terms.  Unless otherwise defined herein, each term used
herein which is defined in the Credit Agreement has the meaning assigned to such
term in the Credit Agreement.  In addition, the following term shall have the
following meaning:
 
“Waiver Default” shall mean the failure of the Borrower to observe or perform
any term, covenant or agreement binding on it contained in Section 6 below.
 
2.           Waiver.
 
(a)           As of the date hereof, the Borrower acknowledges that an Event of
Default may occur under the Credit Agreement as a result of any failure to make
a scheduled interest payment due December 17, 2007 pursuant to the terms of the
Subordinated Note Indenture (the “Bond Interest Cross Default”).
 
(b)           During the period from the date hereof to February 14, 2008 (the
“Waiver Period”), the Lenders hereby agree to waive the Bond Interest Cross
Default and any Default or Event of Default arising out of the Deposit Account
Non-Effectiveness (as defined below); provided, however, that the Waiver Period
shall terminate (i) automatically and immediately, upon the occurrence of any
Event of Default other than the Bond Interest Cross Default or an Event of
Default arising from the Deposit Account Non-Effectiveness, (ii) automatically
and immediately, on or after January 17, 2008, if (A) any Cash Flow Forecast
delivered pursuant to Section 6(b) shows the  total U.S. liquidity of the
Borrower and its Domestic Subsidiaries falling below $5 million in either the
week of or the subsequent two weeks immediately following delivery of such Cash
Flow Forecast (disregarding, however, any impact on liquidity related to the
cash
 

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interest due February 15, 2008 pursuant to the terms of the New Senior Secured
Note Indenture) or (B) Available Credit is less than $5 million at any time,
(iii) upon one Business Day’s notice by the Administrative Agent, if an uncured
Waiver Default exists or (iv) upon one Business Day’s notice by the
Administrative Agent, on or after January 17, 2008, if the Borrower has not
entered into a waiver or forbearance agreement in respect of the Subordinated
Note Indenture acceptable to the Administrative Agent in its sole discretion.
 
3.           Conditions to Effectiveness.  This Agreement shall become effective
(the “Effective Date”) upon the satisfaction of the following conditions
precedent:
 
(a)           The Administrative Agent shall have received a duly executed
counterpart of this Agreement, executed by the Borrower, the Administrative
Agent and the Requisite Lenders, and acknowledged and agreed to by the
Guarantors;
 
(b)           The Administrative Agent shall have received from the Borrower a
projected statement of cash flows for the thirteen week period commencing on
December 17, 2007 (the “Cash Flow Forecast”);
 
(c)           The Administrative Agent shall have received from the Borrower a
certificate of a Responsible Officer of the Borrower to the effect that all
representations and warranties contained in this Agreement are true and correct
as of the date hereof;
 
(d)           There shall have been paid to the Administrative Agent for the
account of each Lender a fee in an amount equal to 0.2% of such Lender’s
Revolving Credit Commitment then in effect; and
 
(e)           The Administrative Agent and the Lenders shall have received all
other fees and expense (including reasonable fees and expenses of counsel)
actually incurred in connection with the negotiation, preparation and execution
of this Agreement, in each case to the extent set forth in an invoice delivered
to the Borrower by 7:00 p.m. (New York City time) on December 13, 2007.
 
4.           Release.  In further consideration of the Lenders’ execution of
this Agreement, the Borrower and each of the other Loan Parties hereby releases
and forever discharges the Administrative Agent, the Syndication Agent and the
Lenders and all persons controlling, controlled by, or under common control with
any of the foregoing, and any of their trustees, agents, employees, directors,
officers, counsel and advisors (collectively, the “Released Group”) of and from
all damage, loss, claims, responsibilities, disputes, demands, liabilities,
obligations, actions and causes of action (whether at law or equity) whatsoever
which the Borrower or any other Loan Party may now have or claim to have against
any such member of the Released Group as of the Effective Date, and whether
presently known or unknown, matured or unmatured, fixed or contingent and of
every nature and extent whatsoever on account of or in any way concerning,
arising out of, founded upon or in any way relating to this Agreement, the
Obligations, the Credit Agreement or the other Loan Documents, including, but
not
 

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limited to, all such loss or damage of any kind heretofore sustained, or that
may arise as a consequence of the dealing between the parties.  For purposes of
the release contained in this paragraph, the term “Borrower” shall mean and
include the Borrower’s successors and assigns, including, without limitation,
any trustees acting on behalf of such parties.
 
5.           Representations and Warranties.
 
(a)           All of the Borrower’s representations and warranties contained in
this Agreement shall survive the execution, delivery and acceptance of this
Agreement by the parties hereto.  The Borrower expressly reaffirms that each of
the representations and warranties set forth in Article IV of the Credit
Agreement, except with respect to any Default or Event of Default arising from
the fact that no Deposit Account Control Agreement is effective with respect to
a concentration account (the “Wachovia Account”) at Wachovia Bank, National
Association (the “Deposit Account Non-Effectiveness”), continues to be true and
correct, and hereby remakes and incorporates herein by reference each such
representation and warranty as though made on the date of the execution of this
Agreement, except to the extent such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall have been true and correct as of such earlier date.
 
(b)           The Borrower has not assigned, conveyed or otherwise transferred,
either directly or indirectly, in whole or in part, any of the claims purported
to be released pursuant to Section 4 above.
 
(c)           This Agreement and the other documents and statements furnished by
or on behalf of the Borrower to the Administrative Agent or any Lender hereunder
or in connection herewith, taken as a whole, do not and will not contain any
material misstatement of fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were, are or will be made, not misleading; provided, however, that to the extent
any such document or statement was based upon or constitutes a forecast or
projection, the Borrower represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such document
or statement.
 
6.           Covenants.
 
(a)           The Borrower shall either (i) deliver an executed Deposit Account
Control Agreement among the Borrower, the Administrative Agent and Wachovia
Bank, National Association in form and substance reasonably satisfactory to the
Administrative Agent within 15 Business Days after the Effective Date (or such
later date as the Administrative Agent may, in its sole discretion, agree) (the
“Control Agreement Deadline”) or (ii) not, at any time after the Control
Agreement Deadline, permit the balance of the Wachovia Account to exceed the
minimum balance necessary to cover checks that have been issued in the ordinary
course of business before the Control Agreement Deadline but have not yet
cleared; provided that if, on and after January 4, 2008, there is not yet an
effective Deposit Account Control Agreement in form and substance reasonably
satisfactory to the Administrative Agent, the Borrower shall not
 

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issue any checks drawable upon the Wachovia Account unless and until a Deposit
Account Control Agreement in form and substance reasonably satisfactory to the
Administrative Agent becomes effective.
 
(b)           The Borrower shall deliver weekly updated Cash Flow Forecasts
(similar in form to those previously delivered) to the Administrative Agent
during the Waiver Period.
 
(c)           The Borrower shall deliver weekly updated Borrowing Base
Certificates to the Administrative Agent on Wednesday of each week (or, if such
day is not a Business Day, on the next succeeding Business Day) with respect to
the last Business Day of the prior week pursuant to Section 5.01(n)(i) of the
Credit Agreement.
 
7.           No Implied Waiver.
 
The Lenders’ failure, at any time or times hereafter, to require strict
performance by the Borrower of any provision or term of this Agreement shall not
waive, affect or diminish any right of the Lenders thereafter to demand strict
compliance and performance therewith.
 
8.           Miscellaneous.
 
(a)           On and after the Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
shall mean and be a reference to the Credit Agreement as modified hereby.
 
(b)           Except as expressly provided herein, the Credit Agreement shall
remain unchanged and continue in full force and effect.  This Agreement is not a
novation nor is it to be construed as a release, waiver or modification of any
of the terms, conditions, representations, warranties, covenants, rights or
remedies set forth in the Credit Agreement or any of the other Loan Documents
except as specifically set forth herein.  Except as expressly provided herein,
the Lenders reserve all rights, claims and remedies that they have or may have
against the Borrower.
 
(c)           This Agreement is solely for the benefit of the parties hereto and
their respective successors and assigns, and no other Person shall have any
right, benefit or interest under or because of the existence of this
Agreement.  This Agreement shall not be assignable by the Borrower without the
written consent of the Lenders.  The Lenders may assign to one or more Persons
all or any part of, or any participation interest in, the Lenders’ rights and
benefits hereunder.
 
(d)           This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, all of which when so executed and
delivered, shall be deemed an original, and which, when taken together, shall
constitute one and the same instrument.  Delivery of an executed counterpart of
a signature page to this Agreement by facsimile or email shall be effective as
delivery of a manually executed counterpart of this Agreement.
 

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(e)           This Agreement and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with,
the laws of the State of New York.
 
(f)           Section headings in this Agreement are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
 
(g)           This Agreement is a Loan Document.
 
(h)           EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY OTHER LOAN DOCUMENT.
 

 
[SIGNATURES ON FOLLOWING PAGE]
 
 
 
 
 
 
 

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

 
TEKNI-PLEX, INC.,
   
as Borrower
               
By: /s/ James E. Condon
   
Name: James E. Condon
   
Title: Chief Financial Officer
                     
CITICORP USA, INC.,
   
as Administrative Agent and Lender
               
By: /s/ David Jaffe
   
Name: David Jaffe
   
Title: Director/Vice President
               
GENERAL ELECTRIC CAPITAL
   
CORPORATION, as Lender
                     
By: /s/ James DeSantis
   
Name: James DeSantis
   
Title: Duly Authorized Signatory
               
WELLS FARGO FOOTHILL, LLC.,
   
as Lender
               
By: /s/ Juan Barrera
   
Name: Juan Barrera
   
Title: Vice President
 

 
 

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Acknowledged and Consented to by:

PURETEC CORPORATION
NATVAR HOLDINGS, INC.
TRI-SEAL HOLDINGS, INC.
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
BURLINGTON RESINS, INC.
PLASTIC SPECIALTIES AND TECHNOLOGIES INVESTMENTS, INC.
DISTRIBUTORS RECYCLING, INC.
TPI ACQUISITION SUBSIDIARY, INC.
TP/ELM ACQUISITION SUBSIDIARY, INC.,
as Guarantors

By:  /s/ James E.
Condon                                                                                     
Name:  James E. Condon
Title:  Chief Financial Officer