Exhibit 10.1
 
AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT
 
AMENDMENT NO. 2 (the “Amendment”), dated as of March 14, 2008, to the
Forbearance Agreement (as amended, the “Agreement”)1 dated as of January 16,
2008 by and among Tekni-Plex, Inc. (the “Company”), each of the Company’s
subsidiaries identified on the signature pages thereof (the “Subsidiaries”), the
Holders of the Company’s 12 3/4% Senior Subordinated Notes due 2010 (the
“Notes”) that were issued pursuant to that certain Indenture, dated as of June
21, 2000 (as supplemented on May 6, 2002, August 22, 2002, and April 25, 2005,
the “Indenture”), that are signatories thereto (each a “Noteholder,” and
collectively, the “Noteholders,” and together with the Company, the “Parties”)
and U.S. Bank National Association, as successor indenture trustee (the
“Indenture Trustee”) under the Indenture.
 
RECITALS
 
WHEREAS, the parties hereto are desirous of extending the Agreement on the terms
set forth herein;
 
WHEREAS, the Noteholders continue to collectively hold not less than
$286,650,000 in aggregate principal amount of the Notes, representing not less
than 91% of the aggregate principal amount of the Notes that are outstanding,
and not less than $184,250,000 in aggregate principal amount of the Second Lien
Notes, representing not less than 67% of the aggregate principal amount of the
Second Lien Notes that are outstanding.
 
 

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  1 Each capitalized term used but not defined herein shall have the meaning
ascribed to it in the Agreement (and to the extent not defined therein, the
meaning ascribed to it in the Indenture).
 

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NOW THEREFORE, in consideration of the premises and the respective covenants and
agreements set forth in this Agreement, the Parties, each intending to be
legally bound, agree as follows:
 
1. Forbearance.  Section 1(c) of the Agreement is hereby amended by replacing
the date “March 17, 2008” with “March 27, 2008”.
 
 
2. Effectiveness.  This Amendment shall become effective upon execution and
delivery of counterparts of this Agreement by the Noteholders, the Company and
the Subsidiaries.  This Amendment shall be effective as to the Noteholders, the
Company and the Subsidiaries in accordance with Section 2 hereof regardless of
whether the Indenture Trustee executes this Agreement.  This Amendment shall be
effective as to the Indenture Trustee upon the Indenture Trustee becoming a
signatory hereto.  
 
3. Representations, Warranties and Covenants.
 
(a) The Company and the Subsidiaries represent, warrant and covenant as follows:
 
(i) Except for the Interest Default, no other Default or Event of Default has
occurred and is continuing.
 
(ii) The execution, delivery and performance by the Company and the Subsidiaries
of this Agreement:
 
(1) are within their corporate powers;
 
(2) have been duly authorized by all necessary corporate action;
 
(3) do not and will not (A) contravene their certificate of incorporation or
by-laws or limited partnership or other constituent documents, (B) violate any
(i) applicable material
 
 
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requirement of law or (ii) material order or decree of any governmental
authority or arbitrator applicable to them, (C) materially conflict with or
result in the breach of, or constitute a default under, or result in or permit
the termination or acceleration of, any material contractual obligation of the
Company or the Subsidiaries, or (D) result in the creation or imposition of any
material lien or encumbrance upon any of the material property of the Company or
the Subsidiaries; and
 
(4) do not and will not require the consent of, authorization by, approval of
any governmental authority.
 
(b) The Noteholders represent as follows:
 
(i) As of the date hereof, based on the representations of each of the
individual Noteholders, the Noteholders, in the aggregate, hold, with all
rights, including without limitation the right to vote, not less than
$286,650,000 in principal amount of the Notes, representing not less than 91% of
the aggregate principal amount of the Notes outstanding.
 
(ii) As of the date hereof, based on the representations of each of the
individual Noteholders, the Noteholders, in the aggregate, hold, with all
rights, including without limitation the right to vote, not less than
$184,250,000 in principal amount of the Second Lien Notes, representing not less
than 67% of the aggregate principal amount of the Second Lien Notes outstanding.
 
4. Ratification of Liability.  The Company and its Subsidiaries hereby ratify
and reaffirm all of their payment and performance obligations and obligations to
indemnify, contingent or otherwise, under the Indenture.
 
5. Complete Integration; Amendments.  This Amendment, together with the
Agreement – which remains in full force and effect except as expressly modified
by this Amendment – constitutes the full and final agreement between the Parties
with respect to the subject matter hereof, and may not be modified or amended
except by a written instrument, signed by each of the Parties, expressing such
amendment or modification.  The Parties warrant, promise and represent that in
 
 
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executing this Amendment, each Party is not relying upon any oral
representation, promise or statement made by any other Party hereto and that
each Party is not relying upon any promise, statement or representation
contained in any other written instrument.
 
6. No Other Amendments; Reservation of Rights, No Waiver.  Other than as
otherwise expressly provided herein, this Amendment shall not be deemed to
operate as an amendment or waiver of, or to prejudice, any right, power,
privilege or remedy of the Noteholders or the Indenture Trustee, as applicable,
under the Indenture or applicable law, nor shall the entering into this
Amendment preclude the Noteholders from refusing to enter into any further
amendments or forbearances with respect to the Indenture.  Other than as
expressly provided herein, this Amendment shall not constitute a forbearance
with respect to (i) any failure by the Company to comply with any covenant or
other provision in the Indenture or (ii) the occurrence or continuance of any
present or future Event of Default.
 
7. Counterparts/Facsimile Transmission.  This Amendment may be signed in
counterparts, each of which, when taken together, shall be deemed an
original.  Execution of this Amendment is effective if a signature is delivered
by facsimile transmission or electronic (e.g., “pdf”) transmission.
 
8. Successors and Assigns.  This Amendment shall be binding upon and inure to
the benefit of the Parties hereto and each of their respective successors,
assigns, heirs and personal representatives.
 
9. Authority.  Any person signing this Amendment in a representative capacity
(i) represents and warrants that he/she is authorized to sign this Amendment on
behalf of the Party he/she represents and that his/her signature upon this
Amendment
 
 
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will bind the represented Party to the terms of this Amendment, and (ii)
acknowledges that the other Party to this Amendment has relied upon such
representation and warranty.
 
10. Governing Law.  This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its choice
of law provisions.
 
11. Direction to Indenture Trustee.  The Noteholders’ agreement to forbear as
provided in the Agreement as amended by this Amendment shall constitute a
direction from such Noteholders to the Indenture Trustee to similarly forbear
during the Forbearance Period as extended hereby.
 
 
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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
duly executed and delivered as of the date first above written.
 

 
TEKNI-PLEX, INC.

 

 
By: 
 /s/ James E. Condon
 

 
Name: 
James E. Condon
 
Title:
Chief Financial Officer

 

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

 

 
By: 
 /s/ James E. Condon
 

 
Name: 
James E. Condon
 
Title:
Chief Financial Officer

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THE NOTEHOLDERS
 

 
AVENUE INVESTMENTS, L.P.

 

 
By:
Avenue Partners, LLC,
its General Partner
           
By: 
 /s/ Sonia Gardner
 

 
Name: 
Sonia Gardner
 
Title:
Member

 

 
AVENUE-CDP GLOBAL OPPORTUNITIES FUND, L.P.

 

 
By:
Avenue Global Opportunities Fund GenPar, LLC,
its General Partner
           
By: 
 /s/ Sonia Gardner
 

 
Name: 
Sonia Gardner
 
Title:
Member

 

 
AVENUE INTERNATIONAL MASTER, L.P.

 

 
By:
Avenue International Master GenPar, Ltd.,
its General Partner
           
By: 
 /s/ Sonia Gardner
 

 
Name: 
 Sonia Gardner  
Title:
Member

 

 
AVENUE SPECIAL SITUATIONS FUND IV, L.P.

 

 
By:
Avenue Capital Partners IV, LLC, its General Partner
   
By:
GL Partners IV, LLC,
its General Partner
           
By: 
 /s/ Sonia Gardner
 

 
Name: 
Sonia Gardner
 
Title:
Member

 

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AVENUE SPECIAL SITUATIONS FUND V, L.P.

 

 
By:
Avenue Capital Partners V, LLC, its General Partner
   
By:
GL Partners V, LLC,
its General Partner
           
By: 
 /s/ Sonia Gardner
 

 
Name: 
Sonia Gardner
 
Title:
Member

 

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BARCLAYS BANK, PLC

 

 
By: 
 /s/ Brian Berman
 

 
Name: 
Brian Berman
 
Title:
Managing Director

 

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GLENVIEW CAPITAL MANAGEMENT, LLC,
as investment adviser for GCM Little Arbor Partners, L.P.,
GCM Little Arbor Institutional Partners, L.P., and
GCM Little Arbor Master Fund, Ltd.

 

 
By: 
 /s/ Mark Horowitz
 

 
Name: 
Mark Horowitz
 
Title:
Chief Operating Officer and General Counsel

 

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MORGAN STANLEY & CO., INC

 

 
By: 
 /s/ Andrew Brenner
 

 
Name: 
Andrew Brenner
 
Title:
Managing Director

 

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OCM OPPORTUNITIES FUND V, L.P.

By:
OCM Opportunities Fund V GP, L.P.
Its:
General Partner
   
By:
Oaktree Fund GP I, L.P.
Its:
General Partner

 

 
By: 
 /s/ Kenneth Liang
 

 
Name: 
Kennneth  Liang
 
Title:
Managing Director

 

 
By: 
 /s/ Robert O’Leary  
 

 
Name: 
Robert O’Leary  
 
Title:
Managing Director

 

 
OCM OPPORTUNITIES FUND VI, L.P.

By:
OCM Opportunities Fund VI GP, L.P.
Its:
General Partner
   
By:
Oaktree Fund GP I, L.P.
Its:
General Partner

 

 
By: 
 /s/ Kenneth Liang
 

 
Name: 
Kenneth Liang
 
Title:
Managing Director

 

 
By: 
 /s/ Robert O’Leary  
 

 
Name: 
Robert O’Leary  
 
Title:
Managing Director

 
 

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OCM OPPORTUNITIES FUND VII, L.P.

By:
OCM Opportunities Fund VII GP, L.P.
Its:
General Partner

By:
OCM Opportunities Fund VII GP Ltd.
Its:
General Partner

 
By:
Oaktree Capital Management, L.P.
Its:
Director

 

 
By: 
 /s/ Kenneth Liang
 

 
Name: 
Kenneth Liang
 
Title:
Managing Director

 

 
By: 
 /s/ Robert O’Leary  
 

 
Name: 
Robert O’Leary  
 
Title:
Managing Director

 

 
OCM PRINCIPAL OPPORTUNITIES FUND III, L.P.
OCM PRINCIPAL OPPORTUNITIES FUND IIIA, L.P.

By:
OCM Opportunities Fund III GP, L.P.
Its:
General Partner
   
By:
Oaktree Fund GP I, L.P.
Its:
General Partner

 

 
By: 
 /s/ Jordan L. Kruse
 

 
Name: 
Jordan L. Kruse
 
Title:
Managing Director

 

 
By: 
 /s/ Aaron Bendikson
 

 
Name: 
Aaron Bendikson
 
Title:
Senior Vice President

 
 

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OCM PRINCPAL OPPORTUNITIES FUND IV, L.P.

By:
OCM Principal Opportunities Fund IV GP, L.P.
Its:
General Partner

By:
OCM Principal Opportunities Fund IV GP Ltd.
Its:
General Partner

 
By:
Oaktree Capital Management, L.P.
Its:
Director

 

 
By: 
 /s/ Jordan L. Kruse
 

 
Name: 
Jordan L. Kruse
 
Title:
Managing Director

 

 
By: 
 /s/ Aaron Bendikson
 

 
Name: 
Aaron Bendikson
 
Title:
Senior Vice President

 

 
OAKTREE VALUE OPPORTUNITIES FUND, L.P.

By:
Oaktree Value Opportunities Fund GP, L.P.
Its:
General Partner

By:
Oaktree Value Opportunities Fund GP Ltd.
Its:
General Partner

 
By:
Oaktree Capital Management, L.P.
Its:
Director

 

 
By: 
 /s/ Kenneth Liang
 

 
Name: 
Kenneth Liang
 
Title:
Managing Director

 

 
By: 
 /s/ Robert O’Leary  
 

 
Name: 
Robert O’Leary  
 
Title:
Managing Director