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Exhibit 10.1

SEVENTH AMENDMENT TO
CREDIT AGREEMENT

        SEVENTH AMENDMENT TO CREDIT AGREEMENT, dated as of October 29, 2004
(this "Amendment"), to the Credit Agreement referred to below by and among
APPLIED EXTRUSION TECHNOLOGIES, INC., a Delaware corporation (the "Borrower");
the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation (in its individual capacity, "GE Capital"), for itself,
as Lender, and as Agent for Lenders; and the other Lenders signatory hereto.

W I T N E S S E T H

        WHEREAS, the Borrower, the other Credit Parties, the Agent, and the
Lenders are parties to that certain Credit Agreement, dated as of October 3,
2003 (as amended, supplemented or otherwise modified from time to time, prior to
the date hereof, the "Credit Agreement");

        WHEREAS, Borrower has requested that Agent and the Lenders agree to
amend the Credit Agreement to provide, among other things, that failure to pay
the interest on the Senior Notes due on July 1, 2004 shall not constitute a
Default or Event of Default, so long as such payment is made on or prior to the
Waiver Termination Date (as defined below); and

        WHEREAS, the Borrower, the Agent and the Lenders have agreed to such
request and agree to amend certain provisions of the Credit Agreement in the
manner, and on the terms and conditions, provided for herein.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

        1.    Certain Definitions.    Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Credit
Agreement.

        2.    Amendment to Annex A to the Credit Agreement.    As of the Seventh
Amendment Effective Date, Annex A to the Credit Agreement shall be amended as
follows:

(a)by deleting the definition of "Waiver Termination Date" therein and inserting
the following definition in lieu thereof:

        "Waiver Termination Date" shall mean December 15, 2004."; and

(b)by inserting the following new definitions therein in appropriate
alphabetical order:

        "Seventh Amendment" means the Seventh Amendment to the Credit Agreement,
dated as of October 29, 2004, among the Borrower, the other Credit Parties, the
Agent and the Lenders."

        "Seventh Amendment Effective Date" means the date on which each of the
conditions precedent to the effectiveness of the Seventh Amendment have been
satisfied or waived."

        3.    Defaults; Conditions to Funding.    

        (a)   Agent and Requisite Lenders agree that, notwithstanding the
provisions of (i) Section 1.5(d) of the Credit Agreement, (ii) Section 2.2(c) of
the Credit Agreement, (iii) Section 8.2 of the Credit Agreement, and
(iv) clause (c) of Annex C to the Credit Agreement to the contrary, for purposes
of (i) Section 1.5(d) of the Credit Agreement, (ii) Section 2.2(c) of the Credit
Agreement, (iii) Section 8.2 of the Credit Agreement, and (iv) clause (c) of
Annex C to the Credit Agreement, the failure of the Borrower to make payment of
interest on the Senior Notes due on July 1, 2004 shall not constitute a
"Default" or "Event of Default" for the period beginning from the Sixth
Amendment Effective Date through the Waiver Termination Date), so long as such
payment is made on or prior to the Waiver

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Termination Date and, with respect to clause (iv) above, prior to the payment of
such interest, Borrower and AET Canada transfers or cause to be transferred
prior to the end of each business day from the AET Canada Account and/or the
Disbursement Accounts of AET Canada the aggregate balance in (or held for the
benefit of) AET Canada in the AET Canada Account and such Disbursement Accounts
in excess of CDN$1,500,000 to a Blocked Account of Borrower (or, if established,
the Concentration Account).

        (b)   Agent and Requisite Revolving Lenders agree that (i) with respect
to the provisions of Section 2.2(a) of the Credit Agreement, the failure of any
representation or warranty to be true in any Loan Document, solely as a result
of the Borrower's failure to make payment of interest on the Senior Notes due on
July 1, 2004 shall not limit any Lender's obligations to fund any Advance,
convert or continue any Loan as a LIBOR Loan or incur any Letter of Credit
Obligation and (ii) with respect to the provisions of Section 2.2(b) of the
Credit Agreement, Borrower's failure to make payment of interest on the Senior
Notes due on July 1, 2004 shall not alone, without the presence of any other
facts, events or circumstances (whether arising as a result of such failure or
otherwise), be deemed to create a Material Adverse Effect, in the case of each
of clauses (i) and (ii) of this sentence, for the period beginning from the
Sixth Amendment Effective Date through the Waiver Termination Date and so long
as such payment is made on or prior to the Waiver Termination Date.

        (c)   Agent and Requisite Lenders agree that the execution and delivery
of that certain Restructuring Agreement by and among Borrower and its
Subsidiaries and the Participating Holders, dated as of August 24, 2004 (the
"Restructuring Agreement"), shall not alone, without the presence of any other
facts, events or circumstances, constitute an Event of Default under clause (iv)
of Section 8.1(i) of the Credit Agreement, for the period beginning on the
Seventh Amendment Effective Date through the Waiver Termination Date, provided
that nothing set forth herein shall be construed to constitute the consent of
Agent or any Lender to any action or transaction by any Credit Party pursuant
to, or as contemplated by, such Restructuring Agreement, except as expressly
provided to the contrary herein.

        (d)   Agent and Requisite Lenders agree that the commencement by the
Borrower of a solicitation of all of the beneficial holders of the Senior Notes
to vote to accept the Reorganization Plan (as such term is defined in the
Restructuring Agreement) (the "Solicitation") pursuant to the terms of the
Restructuring Agreement and any actions undertaken by the Borrower in
conjunction therewith, including, without limitation, the delivery by the
Borrower to each such holder of the (i) Disclosure Statement (as such term is
defined in the Restructuring Agreement), including all schedules and exhibits
thereto, (ii) Reorganization Plan, including all schedules and exhibits thereto,
(iii) ballots to vote to accept or reject the Reorganization Plan and (iv) other
documents or materials that the Holder Representative (as such term is defined
in the Restructuring Agreement) reasonably requests be delivered in connection
with the Solicitation shall not constitute an Event of Default under clause (iv)
of Section 8.1(i) of the Credit Agreement, during the period beginning on the
Seventh Amendment Effective Date through the Waiver Termination Date.

        (e)   This Section 3 supercedes and replaces the provisions of Section 5
of the Sixth Amendment.

        4.    Ratification of Credit Agreement; Remedies.    

        (a)   Except as expressly provided for, and on the terms and conditions
set forth, herein, the Credit Agreement and the other Loan Documents shall
continue to be in full force and effect in accordance with their respective
terms and shall be unmodified. In addition, this Amendment shall not be deemed a
waiver of any term or condition of any Loan Document by the Agent or the Lenders
with respect to any right or remedy which the Agent or the Lenders may now or in
the future have under the Loan Documents, at law or in equity or otherwise or be
deemed to prejudice any rights or remedies which the Agent or the Lenders may
now have or may have in the future under or in connection with any Loan Document
or under or in connection with any Default or Event of Default which may now
exist

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or which may occur after the date hereof. The Credit Agreement and all other
Loan Documents are hereby in all respects ratified and confirmed.

        (b)   This Amendment shall constitute a Loan Document. The breach by any
Credit Party of any representation, warranty, covenant or agreement in this
Amendment shall constitute an immediate Event of Default hereunder and under the
other Loan Documents.

        5.    Representations and Warranties.    The Borrower and the Credit
Parties hereby represent and warrant to the Agent and Lenders that:

        (a)   The execution, delivery and performance of this Amendment and the
performance of the Credit Agreement as amended by this Amendment (the "Amended
Credit Agreement") by the Borrower and the other Credit Parties: (i) are within
their respective organizational powers; (ii) have been duly authorized by all
necessary corporate and shareholder action; (iii) are not in contravention of
any provision of their respective certificates or articles of incorporation or
by-laws or other organizational documents; (iv) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority;
(v) do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which the Borrower or any Credit Party is a party or by which the
Borrower or any Credit Party or any of its property is bound; (vi) do not result
in the creation or imposition of any Lien upon any of the property of the
Borrower or any Credit Party other than those in favor of Agent pursuant to the
Loan Documents; and (vii) do not require the consent or approval of any
Governmental Authority or any other Person. (a)

        (b)   This Amendment has been duly executed and delivered by or on
behalf of the Borrower and the other Credit Parties.

        (c)   Each of this Amendment and the Amended Credit Agreement
constitutes a legal, valid and binding obligation of the Borrower and the other
Credit Parties enforceable against each of them in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditor's rights generally
and general equitable principles (whether enforcement is sought by proceedings
in equity or at law).

        (d)   No Default or Event of Default has occurred and is continuing both
before and after giving effect to this Amendment.

        (e)   No action, claim or proceeding is now pending or, to the knowledge
of the Borrower and the other Credit Parties, threatened against the Borrower or
the other Credit Parties, at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of any federal, state, or local
government or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, (i) which challenges the Borrower's or the other Credit
Parties' right, power, or competence to enter into this Amendment or, to the
extent applicable, perform any of its obligations under this Amendment, the
Amended Credit Agreement or any other Loan Document, or the validity or
enforceability of this Amendment, the Amended Credit Agreement or any other Loan
Document or any action taken under this Amendment, the Amended Credit Agreement
or any other Loan Document or (ii) which, if determined adversely, is reasonably
likely to have or result in a Material Adverse Effect. To the knowledge of the
Borrower and each Credit Party, there does not exist a state of facts which is
reasonably likely to give rise to such proceedings.

        (f)    The representations and warranties of the Borrower and the other
Credit Parties contained in the Amended Credit Agreement and each other Loan
Document shall be true and correct on and as of the date hereof and the Seventh
Amendment Effective Date with the same effect as if such representations and
warranties had been made on and as of such date, except that

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any such representation or warranty which is expressly made only as of a
specified date need be true only as of such date.

        6.    Outstanding Indebtedness.    The Borrower and the other Credit
Parties hereby acknowledge and agree that as of October 28, 2004, (i) the
aggregate outstanding amount of the Revolving Credit Advances is $49,596,191.40,
(ii) the aggregate outstanding amount of Letter of Credit Obligations is
$825,000.00, and (iii) the aggregate outstanding principal amount of the Term
Loan is $43,750,000.00, and that such principal amounts are payable pursuant to
the Credit Agreement without defense, offset, withholding, counterclaim or
deduction of any kind.

        7.    Fees and Expenses.    The Borrower hereby reconfirms its
obligations pursuant to Section 11.3(b) of the Credit Agreement to reimburse
Agent for all out-of-pocket fees, costs and expenses, including the reasonable
fees, costs and expenses of counsel, consultants, auditors or other advisors,
incurred in connection incurred with the negotiation, preparation, execution and
delivery of this Amendment and all other documents and instruments delivered in
connection herewith.

        8.    GOVERNING LAW.    THIS AMENDMENT, IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.

        9.    Effectiveness.    This Amendment shall become effective as of the
date hereof (the "Seventh Amendment Effective Date") only upon satisfaction in
full in the judgment of the Agent or waiver of each of the following conditions
on or before October 31, 2004:

        (a)    Amendment.    Agent shall have received facsimile copies of this
Amendment duly executed and delivered by the Agent, the Requisite Lenders, the
Requisite Revolving Lenders, the Borrower and each Credit Party.(a)

        (b)    Representations and Warranties.    All representations and
warranties of or on behalf of the Borrower and each Credit Party in this
Amendment and all the other Loan Documents shall be true and correct in all
respects with the same effect as though such representations and warranties had
been made on and as of the date hereof and on and as of the date that the other
conditions precedent in this Section 9 have been satisfied, except to the extent
that any such representation or warranty expressly relates to an earlier date.

        10.    Counterparts.    This Amendment may be executed in any number of
counterparts, each of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.

[SIGNATURE PAGES FOLLOW]

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        IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment as of date and year first written above.

    BORROWER
 
 
APPLIED EXTRUSION TECHNOLOGIES, INC.
 
 
By:
 
/s/  BRIAN P. CRESCENZO      

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Name:  Brian P. Crescenzo
Title:    Vice President, Secretary and Chief Financial
             Officer
 
 
AGENT
 
 
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
 
 
By:
 
/s/  CHRISTOPHER COX      

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Duly Authorized Signatory
 
 
By:
 
/s/  JAMES KAUFMAN      

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Duly Authorized Signatory

 
 
LENDERS
 
 
BLACK DIAMOND INTERNATIONAL FUNDING, LTD.
 
 
By:
 
/s/  DAVID DYER      

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    Title:   Director/Authorized Signatory

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TRS 1, LLC
 
 
By:
 

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    Title:    

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MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial
Services Inc.
 
 
By:
 
/s/  STEVE COLEY      

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    Title:   Vice President, Group Credit MLC

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        The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrower.

    APPLIED EXTRUSION TECHNOLOGIES (CANADA) INC.
 
 
By:
 
/s/  BRIAN P. CRESCENZO      

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Name:  Brian P. Crescenzo
Title:    Vice President and Treasurer
 
 
APPLIED EXTRUSION TECHNOLOGIES LIMITED
 
 
By:
 
/s/  BRIAN P. CRESCENZO      

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Name:  Brian P. Crescenzo
Title:    Vice President and Treasurer

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Exhibit 10.1

SEVENTH AMENDMENT TO CREDIT AGREEMENT
W I T N E S S E T H