Exhibit 10.1

 

PURCHASE AGREEMENT

 

THIS PURCHASE AGREEMENT (this “Agreement”) is made as of June 14, 2007 by and
among Pliant Corporation, a Delaware corporation (the “Company”), the purchasers
set forth on Schedule I hereto (each a “Purchaser” and collectively, the
“Purchasers”) and the Guarantors (as defined below) set forth on Schedule II
hereto.

 

RECITALS

 

WHEREAS, the Company has authorized the issuance and sale of up to $24,000,000
in aggregate principal amount of its 18% Senior Subordinated Notes due 2012 (the
“Notes”) for the purpose of refinancing its existing 13% Senior Subordinated
Notes due 2010 (the “Existing Subordinated Notes”) issued pursuant to an
Indenture, dated as of July 18, 2006 (the “Existing Subordinated Notes
Indenture”) among the Company, the Guarantor and the Trustee (as defined below);

 

WHEREAS, the Company proposes, subject to the terms and conditions stated
herein, to issue and sell on the Closing Date (as defined below) $24,000,000 in
aggregate principal amount of the Notes to the Purchasers in the respective
amounts set forth opposite each Purchaser’s name on Schedule I hereto;

 

WHEREAS, the Notes will be issued pursuant to an indenture substantially in the
form agreed to between the parties (the “Indenture”) to be dated as of the
Closing Date (as defined herein) by and between the Company and The Bank of New
York Trust Company, N. A., a national banking association, as Trustee (the
“Trustee”);

 

WHEREAS, this Agreement and the Indenture, collectively, are referred to herein
as the “Transaction Documents;”

 

WHEREAS, the Company’s obligations under the Notes will be guaranteed (the
“Subsidiary Guarantees”) by each of the Company’s subsidiaries listed on
Schedule II hereto (each, a “Guarantor” and, collectively, the “Guarantors”);

 

WHEREAS, the Notes and the Subsidiary Guarantees, collectively, are referred to
herein as the “Securities;” and

 

WHEREAS, the offer and sale of the Securities will not be registered under the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the “Securities Act”), in reliance on an exemption
therefrom.

 

 

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AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises
and covenants set forth herein and certain other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

1.             Agreement to Sell and Purchase.   On the basis of the
representations and warranties contained in this Agreement, and subject to the
terms and conditions of this Agreement, the Company agrees to issue and sell to
each Purchaser the respective principal amount of Notes set forth opposite such
Purchaser’s name on Schedule I hereto, and each Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, severally and not jointly agrees to purchase from the
Company such respective principal amount of the Notes at a purchase price of one
hundred percent (100%) of the principal amount of the Notes to be purchased by
such Purchaser hereunder (the “Purchase Price”).

 

2.             Closing.   Payment for the Notes shall be made severally by the
Purchasers to an account specified in writing by the Company to the Purchasers
on or prior to the date hereof in United States dollars in cash or other funds
immediately available in New York City against delivery to each Purchaser of the
Notes purchased by such Purchaser at 10:00 a.m., New York City time, on June 14,
2007 (the date hereof), or at such other time on the same or such other date as
shall be mutually agreed upon by the Company and the Purchasers purchasing more
than fifty percent (50%) of the aggregate principal amount of the Notes to be
purchased hereunder. The time and date of such payment and delivery are
hereinafter referred to as the “Closing Date.”

 

3.             Representations and Warranties.   The Company and each Guarantor,
jointly and severally, represents and warrants to the Purchasers as of the date
hereof and as of the Closing Date, as follows:

 

(a)           Exchange Act Documents.   The documents filed by the Company with
the Securities and Exchange Commission (the “SEC”) pursuant to the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the SEC
thereunder (collectively, the “Exchange Act”) since May 15, 2006 (as amended or
supplemented from time to time prior to the date hereof, including the exhibits
thereto, the “Exchange Act Documents”), when taken together, do not contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.

 

(b)           Financial Statements.   The financial statements included in the
Exchange Act Documents present fairly, in all material respects, the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates indicated and the results of their operations and the changes in
their consolidated cash flows for the periods specified therein and all such
financial statements have been prepared in conformity with generally accepted
accounting principles and practices (“GAAP”) applied on a consistent basis,
except as

 

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indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Rule 10-01 of Regulation S-X promulgated by the SEC.

 

(c)           Absence of Material Adverse Effect.   Since the Company’s Annual
Report on Form 10-K filed with the SEC on March 30, 2007 (the “Latest 10-K”),
there has not been any Material Adverse Change affecting the Company and its
consolidated subsidiaries considered as a single enterprise that has not been
publicly disclosed by the Company. As used in this Agreement, “Material Adverse
Change” or “Material Adverse Effect” means any change or effect that would be
materially adverse to the business, properties, financial condition or results
of operations of the Company and its consolidated subsidiaries considered as a
single enterprise, or to the ability or authority of the Company or any
Guarantor to consummate the transactions contemplated hereby; provided, that any
reduction in the market price or trading volume of any security of the Company
or in the Company’s general credit rating or the rating of any of the Company’s
outstanding indebtedness shall not, in any event, be deemed to constitute a
Material Adverse Change or a Material Adverse Effect (it being understood that
the foregoing shall not prevent a person from asserting that any underlying
cause of such reduction independently constitutes such a Material Adverse Change
or Material Adverse Effect).

 

(d)           Absence of Certain Changes.   Except as may be disclosed in the
Exchange Act Documents, since the Latest 10-K, neither the Company nor any
Guarantor has entered into any transaction or agreement that has or would be
reasonably likely to have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole. Since the Latest 10-K, there has not been any
material change in the long-term debt of the Company or any Guarantor. Except as
disclosed on the face of the balance sheet included in the Company’s Annual
Report on Form 10-Q filed with the SEC on May 15, 2007 (the “Latest 10-Q”), the
company and its Subsidiaries have no liabilities, absolute or contingent, other
than those that have been incurred since March 31, 2007 in the ordinary course
of business that are not, individually or in the aggregate, material to the
Company and its Subsidiaries, taken as a whole. Since the emergence of the
Company from bankruptcy protection on July 18, 2006, the Company has not taken
any steps to seek protection pursuant to any bankruptcy law nor does the Company
have knowledge that its creditors intend to initiate involuntary bankruptcy
proceedings or knowledge of any fact which would reasonably lead a creditor to
do so. The Company is not as of the date hereof, and after giving effect to the
transactions contemplated hereby will not be, Insolvent (as defined below). For
purposes of this Section 3(d), “Insolvent” means (i) the present fair saleable
value of the Company’s assets is less than the amount required to pay the
Company’s known liabilities and identified contingent liabilities, (ii) the
Company is unable to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured or (iii)
the Company has unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted.

 

(e)           Organization and Qualification.   The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and authority to own or
lease its properties and conduct its business as described in the Exchange Act
Documents, and has been duly qualified as a foreign

 

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corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts its business in a manner or to an extent that would require such
qualification, other than such failures to be so qualified or in good standing
as, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

 

(f)            Subsidiaries.   Each “significant subsidiary”(as such term is
defined in Rule 1-02 of Regulation S-X) of the Company, including each
Guarantor, has been duly incorporated or formed and is validly existing as a
corporation, limited liability company or unlimited company, as applicable, in
good standing under the laws of its jurisdiction of incorporation or formation
with requisite power and authority to own or lease, as the case may be, and to
operate its properties and conduct its business as currently operated and
conducted, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification, except where the failure so to qualify or to be in good standing
would not, individually or in the aggregate, result in a Material Adverse
Effect; all the issued and outstanding shares of capital stock of each such
subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are owned, directly or indirectly, by the Company.

 

(g)           Capitalization.   Except as may be disclosed in the Exchange Act
Documents, since the Latest 10-Q, (i) there has not been any (A) material change
in the capital stock of the Company or any Guarantor or (B) issuance of any
options or warrants for the purchase of capital stock of the Company or any
Guarantor, securities convertible into or exercisable or exchangeable for
capital stock of the Company or any Guarantor or rights to purchase capital
stock of the Company or any Guarantor, except for changes or issuances occurring
in the ordinary course of business and changes in outstanding capital stock
resulting from transactions relating to employee benefit plans or stock option,
stock award and stock purchase plans and (ii) the Company has not declared or
paid any dividends or made any distribution of any kind with respect to its
capital stock. The shares of capital stock of the Company outstanding on the
date hereof have been duly authorized and are validly issued, fully paid and
non-assessable.

 

(h)           Power and Authority. The Company and each Guarantor has requisite
power and authority to enter into the Transaction Documents and to perform and
discharge its respective obligations thereunder, including without limitation
issuance of the Securities and performance and discharge of its respective
obligations thereunder.

 

(i)            Authorization and Enforceability of this Agreement.   This
Agreement has been duly authorized, executed and delivered by or on behalf of
the Company and each Guarantor and, assuming due authorization, execution and
delivery thereof by each Purchaser, this Agreement constitutes the legal, valid
and binding obligation of the Company and each Guarantor, enforceable against
the Company and each Guarantor in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally,

 

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and to general principles of equity, including principles of materiality,
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
rights to indemnification and contribution hereunder may be limited by federal
or state securities laws or public policy relating thereto.

 

(j)            Authorization and Enforceability of Indenture as to Company.
  The Indenture has been duly authorized by the Company and, when executed and
delivered by the Company and each Guarantor, assuming due authorization,
execution and delivery thereof by the Trustee, the Indenture will constitute the
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, moratorium and
similar laws affecting creditors’ rights and remedies generally,and to general
principles of equity, including principles of materiality, commercial
reasonableness, good faith and fair dealing (regardless of whether enforcement
is sought in a proceeding at law or in equity).

 

(k)           Authorization and Enforceability of Notes as to Company.   The
Notes have been duly authorized by the Company, and when duly executed, and
delivered by the Company as provided in the Indenture, assuming due
authentication of the Notes by the Trustee, against payment by the Purchasers
therefor as provided herein, the Notes will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance
or transfer, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally, and to general principles of equity, including
principles of materiality, commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

 

(l)            Authorization and Enforceability of Indenture and Subsidiary
Guarantees as to Guarantors.   The Indenture, including the Subsidiary Guarantee
of each Guarantor set forth therein, has been duly authorized by such Guarantor,
and when (i) the Indenture is duly executed and delivered by the Company and
such Guarantor, assuming due authorization, execution and delivery thereof by
the Trustee, and (ii) the Notes are duly executed and delivered by the Company,
assuming due authentication of the Notes by the Trustee, against payment by the
Purchasers therefor as provided herein, the Indenture, including such Subsidiary
Guarantee, will constitute the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and to general principles of equity, including principles of
materiality, commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).

 

(m)          No Conflicts.   The issuance and sale of the Securities by the
Company and the Guarantors, the execution and delivery by the Company and the
Guarantors of the Transaction Documents and the performance by the Company and
the Guarantors of all their respective obligations and the consummation of the
transactions herein and therein contemplated,

 

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will not (i) result in a breach of any of the terms or provisions of, constitute
a default (with or without the giving of notice or the passage of time or
otherwise) under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any Guarantor under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any Guarantor is a party or by which the
Company or any Guarantor is bound or to which any of the property or assets of
the Company or any Guarantor is subject except, in each case, for such
conflicts, breaches, defaults, liens, charges or encumbrances which would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (ii) result in any violation of the provisions of the
certificate of incorporation or bylaws of the Company or any Guarantor that is a
corporation or the certificate of formation or limited liability agreement of
any Guarantor that is a limited liability company, or (iii) result in any
violation of any material applicable law or statute or any order, rule or
regulation of any court or governmental agency or of any self-regulatory agency
or body having jurisdiction over the Company or any Guarantor or any of their
respective properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or governmental agency
or of any self-regulatory agency or body is required for the issuance and sale
of the Securities or the consummation by the Company or any Guarantor of the
transactions contemplated by any of the Transaction Documents, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as may be required under state securities or Blue Sky Laws in
connection with the purchase of the Securities by the Purchasers.

 

(n)           Absence of Litigation.   Except as disclosed in the Exchange Act
Documents, there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the Company’s knowledge, threatened against or
affecting the Company or any Guarantor or any of their respective properties or
to which the Company or any Guarantor is or may be a party or to which any
property of the Company or any Guarantor is or may be subject that, if
determined adversely to the Company or any such Guarantor, would, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(o)           No Integrated Offering.   Neither the Company, nor any affiliate
(as defined in Rule 501(b) of Regulation D under the Securities Act) of the
Company or any person acting on its or their behalf, has directly, or through
any agent, sold, offered for sale, solicited offers to buy, or otherwise
approached or negotiated with, any person in respect of, any security (as
defined in the Securities Act) that is or will be integrated with the sale of
the Securities in a manner that would require the registration under the
Securities Act of the issuance of any of the Securities contemplated hereby.

 

(p)           No General Solicitation.   None of the Company, any affiliate of
the Company or any person acting on its or their behalf has offered or sold any
of the Securities by means of any general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio,

 

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or (ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States.

 

(q)           Securities Act and Trust Indenture Act.   Assuming the accuracy of
the representations and warranties of the Purchasers contained in Section 4
hereof and the Purchasers’ compliance with the agreements set forth therein, it
is not necessary in connection with the offer, issuance, sale and delivery of
the Securities in the manner contemplated by the Transaction Documents to
register the offer or sale of any of the Securities under the Securities Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended.

 

(r)            Placement Agent.   Except for its engagement letter with Goldman,
Sachs & Co. dated December 18, 2006, neither the Company nor its subsidiaries is
a party to any contract, agreement or understanding with any person that would
reasonably be expected to give rise to a valid claim against the Company or the
Purchasers for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities.

 

(s)           Tax Status.   Except as may be described in the Exchange Act
Documents, the Company and each of the Guarantors (i) has filed all material
federal, state, local and foreign tax returns, reports and declarations required
by any jurisdiction to which it is subject and (ii) has paid all taxes that are
material in amount shown or determined to be due in the returns, reports and
declarations filed by them and all assessments received by them or any of them
to the extent that such taxes have become due and are not being contested in
good faith and for which adequate reserves have been provided; and there is no
tax deficiency in any material amount which has been or, to the Company’s
knowledge, might reasonably be expected to be asserted or threatened against the
Company or any Guarantor and the Company is not aware of any reasonable basis
for any such claim.

 

(t)            Labor Relations.   Except as disclosed in the Exchange Act
Documents, no labor disputes exist with employees of the Company or any of the
Guarantors except for such disputes as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and the
Company is not aware that any key employee or significant group of employees of
the Company or any of the Guarantors plans to terminate employment with the
Company or any of the Guarantors.

 

(u)           Environmental Laws.   Except as disclosed in the Exchange Act
Documents, to the Company’s knowledge, each of the Company and the Guarantors is
in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health or the environment or
imposing liability or standards of conduct concerning any Hazardous Material
(collectively, “Environmental Laws”), except where such non-compliance with
Environmental Laws would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The term “Hazardous Material” means
(1) any “hazardous substance” as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, (2) any “hazardous
waste” as defined by the Resource Conservation and Recovery Act, as amended, (3)
any petroleum or petroleum product, (4) any polychlorinated biphenyl, and (5)
any pollutant or

 

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contaminant or hazardous, dangerous, or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental Law.

 

(v)           Intellectual Property.   (i) The Company or its subsidiaries own
or possess the right to use the patents, patent licenses, trademarks, service
marks, trade names, copyrights and know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) (collectively, the “Intellectual Property”) reasonably necessary
to carry on the business conducted by the Company and its subsidiaries, taken as
a whole, as described in the Exchange Act Documents, except to the extent that
the failure to own or possess the right to use such Intellectual Property would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (ii) all of such patents, registered trademarks and registered
copyrights owned by the Company or its subsidiaries have been duly registered
in, filed in or issued by the United States Patent and Trademark Office, the
United States Registrar of Copyrights or the corresponding offices of other
jurisdictions, except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect, (iii) all material licenses or other
material agreements under which (1) the Company or any of its subsidiaries is
granted rights in Intellectual Property, other than Intellectual Property
generally available on commercial terms from other sources, and (2) the Company
or any of its subsidiaries has granted rights to others in Intellectual Property
owned or licensed by the Company, are in full force and effect and there is no
default by the Company or its subsidiaries or, to the Company’s knowledge, the
other parties thereto, except for such failures to be in full force and effect
and such defaults as would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect, (iv) neither the Company nor
any Guarantor has received any notice of infringement of or conflict with
asserted rights of others with respect to any Intellectual Property, except for
notices the content of which if accurate would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and (v) the
Company and its subsidiaries do not have and, to the Company’s knowledge, none
of its and their employees have any agreements or arrangements with any persons
other than the Company or its subsidiaries related to confidential information
or trade secrets of such persons other than such agreements that would not
restrict the Company and its subsidiaries from conducting their business as
described in the Exchange Act Documents to an extent that would reasonably be
expected to result in a Material Adverse Effect.

 

(w)          Permits.   The Company and each of its subsidiaries, taken
together, have (i) made all filings, applications and submissions required by,
and possesses all approvals, licenses, certificates, clearances, consents,
exemptions, orders, permits and other authorizations required to be issued by,
the appropriate federal, state or foreign regulatory authorities (collectively,
“Permits”) in order for the Company and its subsidiaries to conduct their
business, except for such Permits for which the failure to obtain would not
reasonably be expected to have a Material Adverse Effect, and are in compliance
in all material respects with the terms and conditions of all such Permits; all
such Permits held by the Company and its subsidiaries are valid and in full
force and effect; there is no pending or, to the Company’s knowledge, threatened
action, suit, claim or proceeding that may cause any such Permit to be limited,
revoked, cancelled, suspended, modified or not renewed and neither the Company
nor its

 

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subsidiaries has received any notice of proceedings relating to the limitation,
revocation, cancellation, suspension, modification or non-renewal of any such
Permit that, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding would reasonably be expected to have a Material
Adverse Effect and (ii) such licenses, franchises, permits, authorizations,
approvals and orders of and from governmental and regulatory officials and
bodies as are, to the Company’s knowledge, reasonably necessary to own or lease
and operate the properties and conduct the business of the Company and its
subsidiaries, taken as a whole, on the date hereof.

 

(x)            Title.   (i) The Company and each of its subsidiaries have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by it that is material to the business of
the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects, except such as do not materially affect the value of
such property, do not materially interfere with the use made and proposed to be
made of such property by the Company and its subsidiaries or would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and (ii) any real property and buildings held under lease by the
Company or any of its subsidiaries are held by it under valid, subsisting and
enforceable leases with such exceptions as do not interfere with the use made
and proposed to be made of such property and buildings by the Company or such
subsidiary or as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(y)           ERISA.   (i) The Company is in compliance with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
(“ERISA”), except where the failure to be in such compliance would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; (ii) no “reportable event” (as defined in Section 4043 of ERISA)
has occurred with respect to any “pension plan” (as defined in Section 3(2) of
ERISA) for which the Company is required to provide notice under Section 4043 of
ERISA and would have any liability, except where such liability would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; (iii) except for matters that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (a) with
respect to any “pension plan” (other than a “multiemployer plan” (as defined in
Section 4001(a)(3) of ERISA)), the Company has not incurred and does not
reasonably expect to incur liability under Title IV of ERISA with respect to
termination of, or withdrawal from, such “pension plan,” or under Section 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the “Code”), and (b) with respect to
any “pension plan” that is a “multiemployer plan,” the Company has not received
notice that the Company has incurred liability under Title IV of ERISA with
respect to termination of, or withdrawal from, such “pension plan,” or under
Section 412 or 4971 of the Code; (iv) except where the failure to be in such
compliance would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, each “pension plan” (other than a
“multiemployer plan”) that is intended to be qualified under Section 401(a) of
the Code and for which the Company would have any liability is so qualified in
all material respects and

 

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nothing has occurred, whether by action or by failure to act, which would
reasonably be expected cause the loss of such qualification; and (v) except
where the failure to be in such compliance would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, no
non-exempt “prohibited transaction” (as defined in Section 406 of ERISA or
Section 4975 of the Code) or “accumulated funding deficiency” (as defined in
section 302 of ERISA) has occurred with respect to any “pension plan” (other
than a “multiemployer plan”) for which the Company would have any liability.

 

(z)            OSHA.   Other than as disclosed in the Exchange Act Documents, to
the Company’s knowledge, the Company and each of its subsidiaries is in
compliance with any and all applicable Occupational Safety and Health
Administration standards and requirements (the “OSHA Laws”), except where such
non-compliance with OSHA Laws would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(aa)         Investment Company.   Neither the Company nor any of its
subsidiaries is, and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof, will not be, required to
register as an “investment company” or an entity controlled by an investment
company as such term is defined in the Investment Company Act of 1940, as
amended.

 

(bb)         Independent Accountants.   Ernst & Young, LLP, who have certified
the consolidated financial statements of the Company as of December 31, 2006, is
an independent registered public accounting firm within the meaning of the
Securities Act.

 

(cc)         Internal Controls.   The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management’s general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with management’s
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences, and the Company maintains a
system of “disclosure controls and procedures” (as such term is defined in Rule
13a-15(e) under the Exchange Act).

 

(dd)         Sarbanes-Oxley Act.   The Company and its executive officers and
directors, in their capacities as such, are in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley Act of 2002,
including Section 402 related to loans and Sections 302 and 906 related to
certifications.

 

(ee)         Ranking of Securities. The Securities will be subordinate in right
of payment to the following existing indebtedness of the Company for borrowed
money:  (i) the Working Capital Credit Agreement and Fixed Asset Credit
Agreement, each dated as of July 18, 2006, among the Company and certain of its
subsidiaries as borrowers, the lenders thereunder, Merrill Lynch Bank USA, as
Administrative Agent, and Merrill Lynch Commercial Finance

 

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Corp., as Sole Lead Arranger and Book Manager, as each term is defined therein,
as may be amended, modified or supplemented, (ii) the 11.85% (formerly 11 5/8%)
senior secured notes due 2009 and the remaining 11.35% (formerly 11 1/8%) senior
secured notes due 2009, each issued under the Indenture, dated as of February
17, 2004 (as amended and restated as of May 6, 2005 and further amended as of
July 18, 2006, the “2004 Notes Indenture”), among the Company, the guarantors
named therein, and Wilmington Trust Company, as indenture trustee, as may be
amended, modified or supplemented, and (iii) the 11 1/8% senior secured notes
due 2009 issued under the Indenture, dated as of May 30, 2003 (the “2003 Notes
Indenture”), among the Company, the guarantors named therein, and Wilmington
Trust Company, as initial indenture trustee, and succeeded by Wells Fargo Bank,
National Association, as successor indenture trustee, under which the 2003 Notes
were issued, as may be amended, modified, or supplemented. Except as set forth
in the immediately preceding sentence, there is no other existing indebtedness
of the Company for borrowed money which ranks senior to the Notes in right of
payment.

 

(ff)           Rule 144A.   The Notes are eligible for resale pursuant to Rule
144A under the Securities Act and will not be, on the Closing Date, of the same
class as any securities listed on a national securities exchange registered
under Section 6 of the 1934 Act or quoted in a U.S. automated interdealer
quotation system.

 

Each Purchaser acknowledges and agrees that the Company and the Guarantors have
not made and do not make any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 3.

 

4.             Representations and Warranties of the Purchasers. Each Purchaser
severally represents and warrants to the Company and the Guarantors only as to
itself, as of the date hereof and the Closing Date, as follows:

 

(a)           Accredited Investor Status.   Such Purchaser is knowledgeable,
sophisticated and experienced in business and financial matters and qualifies as
an “accredited investor” as defined in Rule 501(a) of Regulation D and as a
“qualified institutional buyer” under Regulation 144A. Such Purchaser is
experienced in evaluating investments in companies such as the Company.

 

(b)           Information.   Such Purchaser has been afforded access to
information about the Company and the Guarantors and the financial condition,
results of operations, business, property and management of the Company and the
Guarantors sufficient to enable it to evaluate its investment in the Securities.
Such Purchaser has reviewed the Latest 10-Q, the Latest 10-K, including without
limitation the risk factors set forth therein, and such other Exchange Act
Documents as such Purchaser has deemed advisable. Such Purchaser has been
afforded the opportunity to execute a confidentiality agreement to enable it to
review financial projections and other material nonpublic information regarding
the Company prior to making its investment decision with respect to the
Securities and understands that the Company intends to disclose such material
nonpublic information in accordance with Section 5(e) hereof. Such Purchaser and
its advisors, if any, have been afforded the opportunity to ask questions of the

 

11

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Company and the Guarantors. Such Purchaser has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Securities.

 

(c)           Investment Risk.   Such Purchaser understands that its investment
in the Securities involves a high degree of risk. Such Purchaser has been
represented by legal counsel in connection with the negotiation of the
Transaction Documents and the Securities and understands the terms and
conditions thereof, including without limitation that the Securities will be
subordinated in right of payment to other indebtedness of the Company. Such
Purchaser is able to bear the economic risk of its investment in the Securities
for an indefinite period of time, and is presently able to afford the complete
loss of such investment.

 

(d)           No Public Sale or Distribution.   Such Purchaser is acquiring the
Securities in the ordinary course of business solely for its own account and not
as a nominee or agent for any other person and not with a view to any
distribution thereof that violates the Securities Act or the securities laws of
any State of the United States or any applicable jurisdiction; provided,
however, that by making the representations herein, such Purchaser does not
agree to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the Securities
Act. Such Purchaser does not presently have any intention, or any agreement or
understanding, directly or indirectly, with any person, to distribute any of the
Securities.

 

(e)           Organization, Power and Authority.   Such Purchaser was duly
organized or formed and is a validly existing organization in good standing
under the laws of its jurisdiction of organization, with requisite power and
authority to execute and deliver this Agreement and perform and discharge its
obligations hereunder.

 

(f)            Authorization and Enforceability of this Agreement.   This
Agreement has been duly authorized, executed and delivered by such Purchaser
and, assuming due authorization, execution and delivery thereof by the Company
and the Guarantors, this Agreement constitutes a legally valid and binding
agreement of such Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium and similar laws affecting
creditors’ rights and remedies generally, and to general principles of equity,
including principles of materiality, commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law
or in equity).

 

(g)           Residency.   Such Purchaser is a resident of that jurisdiction
specified in its address set forth on Schedule I hereto. Such Purchaser was not
formed for the specific purpose of acquiring the Securities.

 

(h)           Source of Funds.   Such Purchaser is not acquiring the Securities
with assets of any “employee benefit plan” (within the meaning of Section 3(3)
of ERISA) that is subject to Title I of ERISA or Section 4975 of the Code.

 

12

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(i)            Independent Evaluation.   Such Purchaser has independently
evaluated the merits of its decision to purchase the Securities pursuant to this
Agreement, and the Purchaser confirms that it has not relied on the advice of
any other Purchaser’s business and/or legal counsel in making such decision.

 

(j)            Financing.   Such Purchaser has, and will have at Closing,
immediately available funds in U.S. dollars (through cash or cash equivalents
and existing committed credit arrangements) sufficient to pay the Purchase Price
for the Notes to be purchased by such Purchaser and any other amounts payable
pursuant to this Agreement and to consummate the transactions contemplated by,
and otherwise satisfy the obligations of such Purchaser under, this Agreement.

 

(k)           Certain Exemptions.   Such Purchaser understands that the
Securities have not been registered under the Securities Act or any state
securities or Blue Sky laws, that the Securities are being offered and sold to
such Purchaser in reliance upon specific exemptions from the registration
requirements of the Securities Act and state securities and Blue Sky laws and
that the Company is relying upon the truth and accuracy of, and such Purchaser’s
compliance with, the representations, warranties, agreements, acknowledgements
and understandings of such Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities.

 

(l)            Legends.   Such Purchaser understands that the certificates or
other instruments representing the Notes shall bear any legend as required by
the “blue sky” laws of any state and a restrictive legend in substantially the
form set forth in Appendix A to the Indenture and such Notes may only be
transferred in accordance therewith.

 

(m)          No Brokers.   Such Purchaser is not a party to any contract,
agreement or understanding with any person that would reasonably be expected to
give rise to a valid claim against the Company or the Purchasers for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Securities.

 

The Company and the Guarantors acknowledge and agree that the Purchasers have
not made, and do not make, any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in this
Section 4.

 

5.             Covenants of the Company.   The Company covenants and agrees with
the Purchasers as follows:

 

(a)           Fees and Expenses.   Whether or not the transactions contemplated
in this Agreement are consummated or this Agreement is terminated, the Company
shall pay or cause to be paid all fees, costs and expenses incident to the
performance of its obligations hereunder, including without limiting the
generality of the foregoing, all fees, costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, or (ii) incurred in connection with the
qualification of the Securities for sale. In addition to the foregoing (and
without duplication), the Company agrees

 

13

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to pay each Purchaser their reasonable and documented out of pocket expenses
incurred in connection with the negotiation, due diligence and documentation of
the Transaction Documents and the transactions contemplated thereby
(“Transaction Expenses”); provided, that the maximum amount of Transaction
Expenses that the Company shall be obligated to pay to the Purchasers,
collectively, shall not exceed $75,000 in the aggregate.

 

(b)           General Solicitation.   None of the Company, any of its affiliates
(as defined in Rule 501(b) under the Securities Act) or any person acting on
behalf of the Company or such affiliate will solicit any offer to buy or offer
or sell the Securities by means of any form of general solicitation or general
advertising within the meaning of Regulation D, including:  (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio; and
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

 

(c)           Integration.   None of the Company, any of its affiliates (as
defined in Rule 501(b) under the Securities Act) or any person acting on behalf
of the Company or such affiliate will sell, offer for sale or solicit offers to
buy, or otherwise approach or negotiate with, any person in respect of any
security (as defined in the Securities Act) which will be integrated with the
sale of the Securities in a manner which would require the registration under
the Securities Act of the Securities and the Company will take all action that
is appropriate or necessary to assure that its offerings of other securities
will not be integrated for purposes of the Securities Act with the issuance of
Securities contemplated hereby.

 

(d)           Use of Proceeds to Redeem Existing Subordinated Notes.   The
Company shall use the proceeds from the sale of the Securities solely for the
repayment of the Existing Subordinated Notes of the Company, including interest
accrued thereon, and payment of the fees and expenses incurred in connection
with the issuance of the Securities. On the Closing Date: (i)  the Company shall
cause that portion of such proceeds equal to the amount required to redeem the
Existing Subordinated Notes to be deposited with the Trustee in its capacity as
paying agent under the Existing Subordinated Note Indenture; and (ii) the
Company shall cause to be mailed by first class mail an irrevocable redemption
notice with respect to the Existing Subordinated Notes pursuant to Section 3.03
of the Existing Subordinated Notes Indenture.

 

(e)           Disclosure of Transactions and Other Material Information.   The
Company shall file a current report on Form 8-K (the “8-K Filing”) on or before
8:30 a.m., New York City time, on the first business day following the Closing
Date, in the form required by the Exchange Act, relating to the transactions
contemplated by the Transaction Documents and attaching the material Transaction
Documents, or forms thereof, as exhibits to such filing. At the time of the 8-K
Filing, the Company shall not have provided any Purchaser with any material,
nonpublic information that is not disclosed in the 8-K Filing.

 

(f)            Material Non-Public Information.   Other than as set forth in the
8-K Filing, the Company covenants and agrees that neither it nor any other
person or entity acting on its behalf has provided or will provide any Purchaser
or its agents or counsel with any

 

14

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information that constitutes material non-public information, unless prior
thereto such Purchaser shall have executed a written agreement regarding the
confidentiality and use of such information. The Company understands and
confirms that the Purchasers shall be relying on the foregoing covenants in
effecting transactions in securities of the Company.

 

(g)           Subsequent Transfer to Certain Permitted Assignees.   The Company
agrees that, in the event that Goldman, Sachs & Co. (“GS”) shall determine to
transfer, subsequent to the date hereof, all or a portion of the Notes purchased
by GS hereunder to a prospective investor that would constitute a Permitted
Assignee in accordance with Section 11(iii) hereof, the Company shall make its
senior management available at reasonable times and upon reasonable notice to
meet with such prospective investor and its representatives; provided that (i)
such prospective investor executes a confidentiality agreement in the form
agreed to between the Company and GS and (ii) the number of such prospective
investors with whom the Company’s senior management is requested to meet does
not exceed fifteen.

 

6.             Conditions to the Purchasers’ Obligations.   The obligation of
each Purchaser hereunder to purchase the Notes on the Closing Date is subject to
the performance by the Company of its obligations hereunder and to the following
additional conditions:

 

(a)           the representations and warranties of the Company and the
Guarantors set forth in Section 3 above are true and correct in all material
respects (except for those representations and warranties already qualified by
materiality, which such representations and warranties shall be true and correct
in all respects) on and as of the Closing Date as if made on and as of the
Closing Date and the Company shall have complied in all material respects with
all agreements and all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date;

 

(b)           the Purchasers shall have received on and as of the Closing Date a
certificate of an executive officer of the Company and each of the Guarantors,
reasonably satisfactory to the Purchasers, to the effect set forth in Section
6(a) above and to the further effect that except as disclosed in the Exchange
Act Documents filed as of the date hereof, there has not occurred any Material
Adverse Change since the date of the Latest 10-K;

 

(c)           the Company, the Guarantors and the Trustee shall have duly
executed the Indenture and the Company shall have duly executed, and the Trustee
shall have duly authenticated, the Notes;

 

(d)           the Company shall have obtained all governmental, regulatory or
third-party consents and approvals, if any, necessary to be obtained prior to
the Closing Date for the sale of the Securities, including an amendment to the
Working Capital Credit Agreement and Fixed Asset Credit Agreement, each dated as
of July 18, 2006, among the Company and certain of its subsidiaries as
borrowers, the lenders thereunder, Merrill Lynch Bank USA, as Administrative
Agent, and Merrill Lynch Commercial Finance Corp., as Sole Lead Arranger and
Book Manager, as each term is defined therein;

 

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(e)           the Company shall have delivered to the Purchasers (i) a
certificate evidencing the incorporation and good standing of the Company in the
State of Delaware issued by the Secretary of State of the State of Delaware as
of a date within ten (10) business days of the Closing Date and (ii) a
certificate evidencing the incorporation or formation of each Guarantor in the
jurisdiction of its incorporation or formation issued by the applicable
government agency as of a date within ten (10) business days of the Closing
Date;

 

(f)            the Company shall have delivered to such Purchasers a
certificate, executed by the Secretary of the Company and each of the Guarantors
dated as of the Closing Date, as to (i) the resolutions consistent with Sections
3(i) – (l), as applicable, as adopted by the Company’s Board of Directors and
its Lead Pricing Director and by the Board of Directors of each Guarantor in a
form reasonably acceptable to such Purchaser, (ii) the certificate or articles
of incorporation and bylaws of the Company, as in effect at the Closing, and
(iii) the certificate of incorporation and bylaws of each Guarantor that is a
corporation, the certificate of formation and limited liability agreement of the
Guarantor that is a limited liability company and the articles of association of
the Guarantor that is an unlimited company, as in effect at the Closing;

 

(g)           each of (i)  Sidley Austin, LLP, special counsel to the Company
and certain of the Guarantors, (ii) Van Cott, Bagley, Cornwall & McCarthy, P.C.,
special Utah counsel to certain of the Guarantors, and (iii) Stewart McKelvey,
special Nova Scotia counsel to one of the Guarantors, shall have furnished to
the Purchasers their respective written opinion, dated the Closing Date, in
substantially the form agreed to between the parties;

 

(h)           the Company shall have delivered to the Trustee, in the Trustee’s
capacity as paying agent under the Existing Subordinated Notes Indenture, a duly
executed escrow agreement pursuant to which the funds required to redeem the
Existing Subordinated Notes will be held until disbursed on the redemption date;
and

 

(i)            the Trustee shall have issued an acknowledgement of satisfaction
and discharge with respect to the Existing Subordinated Notes pursuant to
Section 8.01 of the Existing Subordinated Notes Indenture.

 

7.             Conditions to the Company’s Obligations.   The obligations of the
Company hereunder to issue and sell the Notes, and of each Guarantor to issue
its Subsidiary Guarantee, to each Purchaser on the Closing Date are subject to
the performance by the Purchasers of all of their obligations hereunder and to
the following additional conditions:

 

(a)           the representations and warranties of each Purchaser set forth in
Section 4 above are true and correct in all material respects (except for those
representations and warranties already qualified by materiality, which such
representations and warranties shall be true and correct in all respects) on and
as of the Closing Date as if made on and as of the Closing Date and each
Purchaser shall have complied in all material respects with all agreements and
all conditions on its part to be performed or satisfied hereunder at or prior to
the Closing Date;

 

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(b)           the Company shall have received on and as of the Closing Date a
certificate of an executive officer of each Purchaser, reasonably satisfactory
to the Company, to the effect set forth in Section 7(a) above;

 

(c)           the Trustee shall have duly executed the Indenture and duly
authenticated the Notes; and

 

(d)           each Purchaser shall have paid, in accordance with Section 2 and
in consideration for the issuance of the Securities, the aggregate principal
amount set forth opposite such Purchaser’s name on Schedule 1 hereto; provided
that the Company and the Guarantors shall have no obligation to issue any of the
Securities unless one hundred percent (100%) of the Securities to be issued to
all of the Purchasers are purchased on the Closing Date.

 

8.             Indemnity and Contribution.   The Company and each of the
Guarantors jointly and severally agree to indemnify and hold harmless each
Purchaser and each of their respective directors, officers, employees, members,
representatives, attorneys and agents and each person, if any, who controls each
Purchaser within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, an “Indemnified Person”), from and against
any and all losses, claims, damages, penalties, fees and liabilities
(collectively, “Losses”), as incurred, including, without limitation, the
reasonable legal fees and other reasonable expenses of one primary counsel
(together with local counsel, where appropriate) in connection with any suit,
action or proceeding or any claim, as incurred, as a result of, or arising out
of or relating to any breach of any representation, warranty, covenant,
agreement or obligation made by it in this Agreement.

 

If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any
Indemnified Person, such Indemnified Person shall promptly notify the person
against whom such indemnity may be sought (the “Indemnifying Person”) in
writing, and the Indemnifying Person, upon request of the Indemnified Person,
shall retain one primary counsel (together with local counsel, where
appropriate) reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding; provided, however, that failure to so notify the
Indemnifying Person shall not relieve such Indemnifying Person from any
liability hereunder except to the extent the Indemnifying Person is prejudiced
as a result thereof. In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person unless (i) the Indemnifying
Person and the Indemnified Person shall have mutually agreed to the contrary,
(ii) the Indemnifying Person has failed within a reasonable time to retain
counsel reasonably satisfactory to the Indemnified Person or (iii) the named
parties in any such proceeding (including any impleaded parties) include both
the Indemnifying Person and the Indemnified Person, the Indemnifying Person
proposes to have the same counsel represent it and the Indemnified Person, and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. In no event shall the

 

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Indemnifying Person be liable for the fees and expenses of more than one counsel
separate from its own counsel (together with local counsel, where appropriate)
for all Indemnified Persons in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, in which case such counsel need only be
reasonably satisfactory to Indemnified Persons holding more than fifty percent
(50%) of the aggregate principal amount of the Notes held by such indemnified
parties. It is understood that the Indemnifying Person shall reimburse all such
reasonable fees and expenses actually incurred by the Indemnified Persons
consistent with the foregoing limitations upon delivery to the Indemnifying
Person of reasonable documentation therefor setting forth such expenses in
reasonable detail unless a bona fide dispute exists with respect to such
expenses. The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final, non-appealable judgment for the plaintiff, the
Indemnifying Person agrees to indemnify any Indemnified Person from and against
any Losses by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent of the Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is a party, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding and no admission of fault on the part of the
Indemnified Party.

 

Notwithstanding anything to the contrary set forth herein, no Indemnified Person
shall be entitled to be indemnified pursuant to this Section 8 for any Loss to
the extent such Loss is judicially determined by final order to have resulted
from the Indemnified Person’s gross negligence or willful misconduct; provided,
however, that the Indemnifying Person shall pay the expenses incurred by any
such Indemnified Person hereunder, as such expenses are incurred, in connection
with any proceeding in advance of the final disposition, so long as the
Indemnifying Person receives an undertaking by such Indemnified Person to repay
the full amount advanced if there is a final determination that such Indemnified
Person failed the standards set forth above or that such Indemnified Person is
not entitled to indemnification as provided herein for other reasons; and
provided, further, that the termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that such Indemnified
Person was either grossly negligent or engaged in willful misconduct.

 

The remedies provided for in this Section 8 are not exclusive and shall not
limit any rights or remedies that may otherwise be available to any Indemnified
Person at law or in equity.

 

In circumstances in which the indemnity agreement provided for in the preceding
paragraphs of this Section 8 is unavailable to, or insufficient to hold
harmless, an Indemnified Party in respect of any Losses, each Indemnifying
Party, in order to provide for just and equitable contribution, shall contribute
to the amount paid or payable by such Indemnified Party as a result of such
Losses, including reasonable legal or other expenses incurred, as incurred, in
such proportion as is appropriate to reflect (i) the relative benefits received
by the Indemnifying

 

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Party on the one hand and the Indemnified Party on the other from the offering
of the Securities or (ii) if the allocation provided by the foregoing clause (i)
is not permitted by applicable law, not only such relative benefits but also the
relative fault of the Indemnifying Party on the one hand and the Indemnified
Party on the other in connection with the breach that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
fault of the parties shall be determined by reference to, among other things,
any equitable considerations appropriate in the circumstances. The Company and
the Purchasers agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph. For purposes
of this paragraph, each person, if any, who controls any of the Purchasers
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Purchaser. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

 

The indemnity agreements and contribution provisions contained in this Section 8
and the representations and warranties of the Company, the Guarantors and the
Purchasers set forth in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Purchaser or any person controlling
any Purchaser or by or on behalf of the Company, its officers or directors or
any other person controlling the Company and (iii) acceptance of and payment for
any of the Securities.

 

9.             Termination. The Purchasers may terminate this Agreement as to
all, but not less than all, of the Purchasers by notice given to the Company
executed by the Purchasers purchasing more than fifty percent (50%) of the
aggregate principal amount of the Notes hereunder as set forth in Schedule I
hereto, if prior to the Closing Date (i) a Material Adverse Effect shall have
occurred between the date hereof and the Closing Date, (ii) a material
disruption in securities settlement, payment or clearance services in the United
States shall have occurred, (iii) any moratorium on commercial banking
activities shall have been declared by United States or New York State
authorities, (iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an outbreak
or escalation of any other insurrection or armed conflict involving the United
States or any other national or international calamity or emergency, or (C) any
material change in the financial markets of the United States which, in the case
of (A), (B) or (C) above, makes it impracticable or inadvisable to proceed with
the transactions contemplated by this Agreement or (v) the failure of the
Company to satisfy the conditions set forth in Section 6 of this Agreement on or
before the date that is ten (10) calendar days after the date of this Agreement;
provided, in each case, that the party seeking to terminate this Agreement is
not then in material breach of this Agreement.

 

10.           Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.

 

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11.           Parties. This Agreement shall inure to the benefit of and be
binding upon the Company, the Guarantors and the Purchasers, any Indemnified
Person referred to herein and their respective successors and, with respect to
the Purchasers, their Permitted Assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. No purchaser of Securities
from the Purchasers shall be deemed to be a successor by reason merely of such
purchase, and rights under this Agreement may be assigned by the Purchasers only
to Permitted Assigns. For purposes of this Section 11, “Permitted Assigns” shall
mean:  (i) an “affiliate” (as defined in Rule 501(b) of Regulation D) of the
Purchaser to whom Securities are assigned, (ii) a pledgee (or a transferee of
such pledgee) that succeeds to the Securities in connection with a bona fide
margin account or other loan or financing arrangement secured by the Securities
and (iii) in the case of GS only, any “qualified institutional buyer” within the
meaning of Rule 144A that purchases, directly from GS or an affiliate of GS in a
transaction complying with Rule 144A, Notes originally purchased by GS
hereunder; provided that, in the case of an assignment pursuant to clause (iii)
hereof, (a) such assignment shall be comprised of only those rights, benefits
and obligations inuring to GS under Sections 3, 5(c), 5(d), 8, 11 (other than
the right of GS to make an assignment pursuant to this Section 11(iii)), 12
(subject to the requirement that GS provide the Company with the Permitted
Assignee’s requisite notice information prior to the date of the assignment), 13
and 15 — 20 of this Agreement, (b) the representations and warranties of the
Company set forth in Section 3 shall not be deemed to be made or reaffirmed by
the Company as of the date of such assignment and shall speak only as of the
date of this Agreement, except that the Company shall, upon request by GS no
less than three business days prior to the date of such assignment, deliver to
the Permitted Assignee, as of the date of such assignment, a certificate
executed by a duly appointed officer of the Company confirming the
representation and warranty set forth in Section 3(a) as of the date of such
assignment and (c) GS and the Permitted Assignee, by its acceptance of the
assignment contemplated by this clause (iii), agree that neither such assignment
nor compliance by the Company with the covenant contained in Section 5(g) hereof
shall be construed or deemed to constitute an offer or sale of the Notes by the
Company to the Permitted Assignee.

 

12.           Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed by registered
or certified mail, postage prepaid, return receipt requested, or otherwise
delivered by hand or by messenger.

 

Notices to the Purchasers shall be given at the address as set forth on Schedule
I hereto, with a copy to (solely for informational purposes):

 

Latham & Watkins LLP
885 Third Avenue, Suite 1000
New York, NY  10022
Telephone:  (212) 906-1200
Facsimile:   (212) 751-4864
Attention:   Kirk A. Davenport II, Esq.

 

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Notices to the Company shall be given to the Company at:

 

Pliant Corporation
1475 Woodfield Road, Suite 700

Schaumburg, IL  60173
Attention: General Counsel

Telephone: (847) 969-3319

Facsimile:  (847) 969-3338

 

with a copy to (solely for informational purposes):

 

Sidley Austin LLP

One South Dearborn Street

Chicago, IL 60603

Telephone: (312) 853-7000

Facsimile: (312) 853-7036

Attention:  Robert P. Freeman, Esq.

 

13.           Governing Law.   THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. To the fullest extent
permitted by applicable law, the Company and the Guarantors hereby irrevocably
submit to the non-exclusive jurisdiction of any New York State court or Federal
court sitting in the County of New York in respect of any suit, action or
proceeding arising out of or relating to the provisions of this Agreement and
irrevocably agree that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. The parties hereto
hereby waive, to the fullest extent permitted by applicable law, any objection
that they may now or hereafter have to the laying of venue of any such suit,
action or proceeding brought in any such court, and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

 

14.           Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original and all of which together shall constitute one and
the same instrument; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature.

 

15.           Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, portions of such provision, or such

 

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provision in its entirety, to the extent necessary, shall be severed from this
Agreement and the balance of this Agreement shall be enforceable in accordance
with its terms.

 

16.           Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

 

17.           Amendments and Waivers. Any term of this Agreement may be amended,
modified or supplemented only with the written consent of the Company and the
holders of more than fifty percent (50%) of the then-outstanding aggregate
principal amount of the Notes. Neither this Agreement nor any term hereof may be
waived, discharged or terminated (either generally or in a particular instance
and either retroactively or prospectively) other than by a written instrument
signed by the party against whom enforcement of any such waiver, discharge or
termination is sought.

 

18.           Entire Agreement. This Agreement and the documents referenced
herein constitute the full and entire understanding and agreement among the
parties with regard to the subject matters hereof.

 

19.           Survival. The respective representations, warranties, covenants
and agreements of the Company and the Purchasers set forth in or made pursuant
to this Agreement will remain in full force and effect and will survive delivery
of and payment for the Securities sold hereunder and any termination of this
Agreement.

 

20.           Independence of Purchasers. The obligations of each Purchaser
under any Transaction Document are several and not joint with the obligations of
any other Purchaser, and no Purchaser shall be responsible in any way for the
performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no
action taken by the Purchasers pursuant hereto or thereto, shall be deemed to
constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. The Purchasers represent
and warrant that they are not acting in concert or as a group with respect to
such obligations or the transactions contemplated by the Transaction Documents
and confirm that they have or legal counsel has on their behalf independently
participated in the negotiation of the transaction contemplated hereby. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any
Purchaser to be joined as an additional party in any proceeding for such
purpose.

 

[signature pages follow]

 

22

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If the foregoing is in accordance with your understanding, please sign and
return four counterparts hereof.

 

 

Very truly yours,

 

 

 

 

 

PLIANT CORPORATION

 

 

 

By:

/s/ Joseph Kwederis

 

 

 

Name: Joseph Kwederis

 

 

Title: Senior Vice President and Chief

 

 

         Financial Officer

 

 

[SIGNATURE PAGE TO PURCHASE AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

GUARANTORS

 

 

 

PLIANT CORPORATION INTERNATIONAL,

 

PLIANT FILM PRODUCTS OF MEXICO, INC.,

 

PLIANT SOLUTIONS CORPORATION,

 

UNIPLAST HOLDINGS, INC.,

 

UNIPLAST U.S., INC.,

 

UNIPLAST INDUSTRIES CO.,

 

 

 

By:

/s/ Joseph Kwederis

 

 

 

Joseph Kwederis

 

 

Vice President and Treasurer

 

 

 

PLIANT PACKAGING OF CANADA, LLC,

 

 

 

By:

/s/ Harold C. Bevis

 

 

 

Harold C. Bevis

 

 

President

 

 

[SIGNATURE PAGE TO PURCHASE AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

PURCHASERS:

 

 

 

 

 

GOLDMAN, SACHS & CO.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

[SIGNATURE PAGE TO PURCHASE AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

PURCHASERS:

 

 

 

 

 

UBS WILLOW FUND LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

[SIGNATURE PAGE TO PURCHASE AGREEMENT]

 

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Schedule I

 

Schedule of Purchasers

 

Name and Address of Purchaser

 

Principal Amount of Securities
and Purchase Price Therefor

 

 

 

 

 

Goldman, Sachs & Co.

 

$

12,000,000

 

85 Broad Street

 

 

 

New York, NY 10004

 

 

 

Telephone: (212) 902-1000

 

 

 

Facsimile: (212) 902-3000

 

 

 

Attention: Robert Schatzman

 

 

 

 

 

 

 

UBS Willow Fund LLC
c/o Bond Street Capital, LLC
700 Palisade Avenue
Englewood Cliffs, NJ 07632
Telephone: (201) 567-5050
Facsimile: (201) 567-5055
Attention: Joel Yarkony

 

$

12,000,000

 

 

 

 

 

Total:

 

$

24,000,000

 

 

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SCHEDULE II

 

SCHEDULE OF GUARANTORS

 

 

 

 

 

Jurisdiction of

Name of Guarantor

 

Entity Type

 

Formation

 

 

 

 

 

Pliant Corporation International

 

Corporation

 

Utah

Pliant Film Products of Mexico, Inc.

 

Corporation

 

Utah

Pliant Solutions Corporation

 

Corporation

 

Utah

Pliant Packaging of Canada, LLC

 

Limited Liability Company

 

Utah

Uniplast Holdings, Inc.

 

Corporation

 

Delaware

Uniplast U.S., Inc.

 

Corporation

 

Delaware

Uniplast Industries Co.

 

Unlimited Company

 

Nova Scotia

 

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