Exhibit 10.19


 


AMENDED
AND RESTATED CREDIT AGREEMENT


 


dated as of


 


November 21, 2005


 


among


 


PLIANT CORPORATION,


as Parent Borrower,


 


UNIPLAST INDUSTRIES CO.,


as Canadian Subsidiary Borrower,


 


The Domestic Subsidiary Borrowers Party Hereto,


 


The Lenders Party Hereto,


 


GENERAL ELECTRIC CAPITAL CORPORATION,


as Domestic A Agent, Administrative Agent, Collateral Agent and Lender,


 


MORGAN STANLEY SENIOR FUNDING, INC.,


as Domestic B Agent and a Lender


 


MORGAN STANLEY SENIOR FUNDING, INC.,


as Domestic B Revolving Loan 

Lead Arranger and Book Runner




and


 


GE CAPITAL MARKETS, INC.,


as Domestic A Revolving Loan and Canadian
Revolving Loan 

Lead Arranger and Book Runner


 

















 


TABLE
OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  Definitions

  	
  2

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
  2

  
	
  SECTION 1.02.

  	
  Classification of Loans and Borrowings

  	
  41

  
	
  SECTION 1.03.

  	
  Terms Generally

  	
  41

  
	
  SECTION 1.04.

  	
  Accounting Terms; GAAP

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  The Credits

  	
  42

  
	
  SECTION 2.01.

  	
  Commitments; Loans Outstanding on Effective Date

  	
  42

  
	
  SECTION 2.02.

  	
  Loans and Borrowings

  	
  43

  
	
  SECTION 2.03.

  	
  Requests for Borrowings

  	
  44

  
	
  SECTION 2.04.

  	
  Swingline Loans

  	
  45

  
	
  SECTION 2.05.

  	
  Letters of Credit

  	
  46

  
	
  SECTION 2.06.

  	
  Funding of Borrowings

  	
  51

  
	
  SECTION 2.07.

  	
  Interest Elections

  	
  51

  
	
  SECTION 2.08.

  	
  Termination and Reduction of Commitments

  	
  52

  
	
  SECTION 2.09.

  	
  Repayment of Loans; Evidence of Debt

  	
  53

  
	
  SECTION 2.10.

  	
  Prepayment of Loans

  	
  54

  
	
  SECTION 2.11.

  	
  Fees

  	
  56

  
	
  SECTION 2.12.

  	
  Interest

  	
  57

  
	
  SECTION 2.13.

  	
  Alternate Rate of Interest

  	
  59

  
	
  SECTION 2.14.

  	
  Increased Costs

  	
  59

  
	
  SECTION 2.15.

  	
  Break Funding Payments

  	
  60

  
	
  SECTION 2.16.

  	
  Taxes

  	
  61

  
	
  SECTION 2.17.

  	
  Payments Generally; Pro Rata Treatment; Sharing of Setoffs

  	
  62

  
	
  SECTION 2.18.

  	
  Mitigation Obligations; Replacement of Lenders

  	
  66

  
	
  SECTION 2.19.

  	
  Protective Advances

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  Representations and Warranties

  	
  68

  
	
  SECTION 3.01.

  	
  Organization; Powers

  	
  68

  
	
  SECTION 3.02.

  	
  Authorization; Enforceability

  	
  68

  
	
  SECTION 3.03.

  	
  Governmental Approvals; No Conflicts

  	
  68

  
	
  SECTION 3.04.

  	
  Financial Condition; No Material Adverse Change

  	
  68

  
				



 


i

















 


	
  SECTION 3.05.

  	
  Properties

  	
  69

  
	
  SECTION 3.06.

  	
  Litigation and Environmental Matters

  	
  70

  
	
  SECTION 3.07.

  	
  Compliance with Laws and Agreements

  	
  70

  
	
  SECTION 3.08.

  	
  Investment Company Status

  	
  70

  
	
  SECTION 3.09.

  	
  Taxes

  	
  70

  
	
  SECTION 3.10.

  	
  ERISA

  	
  70

  
	
  SECTION 3.11.

  	
  Disclosure

  	
  71

  
	
  SECTION 3.12.

  	
  Subsidiaries

  	
  71

  
	
  SECTION 3.13.

  	
  Insurance

  	
  71

  
	
  SECTION 3.14.

  	
  Labor Matters

  	
  71

  
	
  SECTION 3.15.

  	
  Solvency

  	
  71

  
	
  SECTION 3.16.

  	
  Security Documents

  	
  72

  
	
  SECTION 3.17.

  	
  Federal Reserve Regulations

  	
  73

  
	
  SECTION 3.18.

  	
  Senior Secured Obligations

  	
  73

  
	
  SECTION 3.19.

  	
  Related Names

  	
  73

  
	
  SECTION 3.20.

  	
  Permanent Establishment in Canada

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  Conditions

  	
  74

  
	
  SECTION 4.01.

  	
  Effective Date

  	
  74

  
	
  SECTION 4.02.

  	
  Subsequent to the Effective Date

  	
  77

  
	
  SECTION 4.03.

  	
  Each Credit Event

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  Affirmative Covenants

  	
  80

  
	
  SECTION 5.01.

  	
  Financial Statements and Other Information

  	
  80

  
	
  SECTION 5.02.

  	
  Notices of Material Events

  	
  83

  
	
  SECTION 5.03.

  	
  Information Regarding Collateral

  	
  83

  
	
  SECTION 5.04.

  	
  Existence; Conduct of Business

  	
  84

  
	
  SECTION 5.05.

  	
  Payment of Obligations; Compliance with Leases

  	
  84

  
	
  SECTION 5.06.

  	
  Maintenance of Properties

  	
  85

  
	
  SECTION 5.07.

  	
  Insurance

  	
  85

  
	
  SECTION 5.08.

  	
  Casualty and Condemnation

  	
  85

  
	
  SECTION 5.09.

  	
  Books and Records; Inspection and Audit Rights

  	
  86

  
	
  SECTION 5.10.

  	
  Compliance with Laws

  	
  87

  
	
  SECTION 5.11.

  	
  Use of Proceeds and Letters of Credit

  	
  87

  
	
  SECTION 5.12.

  	
  Additional Subsidiaries

  	
  87

  
				



 


ii

















 


	
  SECTION 5.13.

  	
  Further Assurances

  	
  88

  
	
  SECTION 5.14.

  	
  Supplemental Disclosure

  	
  89

  
	
  SECTION 5.15.

  	
  Intellectual Property

  	
  89

  
	
  SECTION 5.16.

  	
  Landlord Lien Waivers, Mortgagee Agreements and Bailee Letters

  	
  89

  
	
  SECTION 5.17.

  	
  Depository Banks

  	
  89

  
	
  SECTION 5.18.

  	
  ERISA

  	
  89

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  Negative Covenants

  	
  90

  
	
  SECTION 6.01.

  	
  Indebtedness

  	
  90

  
	
  SECTION 6.02.

  	
  Certain Equity Securities

  	
  92

  
	
  SECTION 6.03.

  	
  Liens

  	
  92

  
	
  SECTION 6.04.

  	
  Fundamental Changes

  	
  94

  
	
  SECTION 6.05.

  	
  Investments, Loans, Advances, Guarantees and Acquisitions

  	
  94

  
	
  SECTION 6.06.

  	
  Asset Sales

  	
  96

  
	
  SECTION 6.07.

  	
  Sale and Lease-Back Transactions

  	
  97

  
	
  SECTION 6.08.

  	
  Swap Agreements

  	
  97

  
	
  SECTION 6.09.

  	
  Restricted Payments; Certain Payments of Indebtedness

  	
  98

  
	
  SECTION 6.10.

  	
  Transactions with Affiliates

  	
  99

  
	
  SECTION 6.11.

  	
  Restrictive Agreements

  	
  99

  
	
  SECTION 6.12.

  	
  Amendment of Material Documents

  	
  100

  
	
  SECTION 6.13.

  	
  Designated Senior Debt

  	
  101

  
	
  SECTION 6.14.

  	
  Cash Held by Foreign Subsidiaries

  	
  101

  
	
  SECTION 6.15.

  	
  ERISA

  	
  101

  
	
  SECTION 6.16.

  	
  Cancellation of Indebtedness

  	
  101

  
	
  SECTION 6.17.

  	
  Change in Fiscal Year; Accounting Policies

  	
  101

  
	
  SECTION 6.18.

  	
  Financial Covenants

  	
  101

  
	
  SECTION 6.19.

  	
  No Additional Deposit Accounts

  	
  103

  
	
  SECTION 6.20.

  	
  Pliant Investment, Inc. and Alliant Company LLC

  	
  103

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  Events of Default

  	
  103

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  The Agents

  	
  106

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  Collection Allocation Mechanism

  	
  108

  
	
  SECTION 9.01.

  	
  Implementation of CAM

  	
  108

  
	
  SECTION 9.02.

  	
  Letters of Credit

  	
  109

  
				



 


iii

















 


	
  ARTICLE X

  	
  Miscellaneous

  	
  111

  
	
  SECTION 10.01.

  	
  Notices

  	
  111

  
	
  SECTION 10.02.

  	
  Waivers; Amendments

  	
  112

  
	
  SECTION 10.03.

  	
  Expenses; Indemnity; Damage Waiver; Joint and Several Obligations

  	
  114

  
	
  SECTION 10.04.

  	
  Successors and Assigns

  	
  116

  
	
  SECTION 10.05.

  	
  Survival

  	
  120

  
	
  SECTION 10.06.

  	
  Counterparts; Integration; Effectiveness

  	
  120

  
	
  SECTION 10.07.

  	
  Severability

  	
  120

  
	
  SECTION 10.08.

  	
  Right of Setoff

  	
  120

  
	
  SECTION 10.09.

  	
  Governing Law; Jurisdiction; Consent to Service of Process

  	
  121

  
	
  SECTION 10.10.

  	
  WAIVER OF JURY TRIAL

  	
  121

  
	
  SECTION 10.11.

  	
  Headings

  	
  122

  
	
  SECTION 10.12.

  	
  Confidentiality

  	
  122

  
	
  SECTION 10.13.

  	
  Conversion of Currencies

  	
  123

  
	
  SECTION 10.14.

  	
  Interest Rate Limitation

  	
  123

  
	
  SECTION 10.15.

  	
  Reaffirmation

  	
  123

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  Cross-Guaranty, Subrogation, Contribution and Subordination

  	
  124

  
	
  SECTION 11.01.

  	
  Cross-Guaranty

  	
  124

  
	
  SECTION 11.02.

  	
  Waivers by the Borrowers

  	
  124

  
	
  SECTION 11.03.

  	
  Benefit of Guaranty

  	
  125

  
	
  SECTION 11.04.

  	
  Waiver of Subrogation, Etc

  	
  125

  
	
  SECTION 11.05.

  	
  Election of Remedies

  	
  125

  
	
  SECTION 11.06.

  	
  Limitation

  	
  126

  
	
  SECTION 11.07.

  	
  Contribution with Respect to Guaranty Obligations

  	
  126

  
	
  SECTION 11.08.

  	
  Liability Cumulative

  	
  127

  
	
  SECTION 11.09.

  	
  Subordination

  	
  127

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  Purchase Right and Certain Intercreditor and Agency Matters

  	
  128

  
	
  SECTION 12.01.

  	
  Delay of Acceleration and Enforcement

  	
  128

  
	
  SECTION 12.02.

  	
  Purchase Election of Domestic B Lenders

  	
  128

  
	
  SECTION 12.03.

  	
  Rights After Purchase or Standstill

  	
  129

  
	
  SECTION 12.04.

  	
  Non-Discrimination by Agent

  	
  130

  
	
  SECTION 12.05.

  	
  Intercreditor Agreement

  	
  130

  
				



 


iv

















 


	
  SECTION 12.06.

  	
  Further Assurances

  	
  130

  



 


v

















 


	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.01(a)

  	
   

  	
  Mortgaged
  Properties

  
	
  Schedule 1.01(b)

  	
   

  	
  Existing
  Letters of Credit

  
	
  Schedule 1.01(c)

  	
   

  	
  Domestic
  Subsidiary Borrowers

  
	
  Schedule 1.01(d)

  	
   

  	
  Excluded
  Subsidiaries

  
	
  Schedule 2.01(a)(i)

  	
   

  	
  Domestic
  A Commitments

  
	
  Schedule
  2.01(a)(ii)

  	
   

  	
  Domestic
  B Commitments

  
	
  Schedule
  2.01(b)

  	
   

  	
  Canadian
  Commitments

  
	
  Schedule 3.05

  	
   

  	
  Owned
  or Leased Property

  
	
  Schedule 3.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 3.13

  	
   

  	
  Insurance

  
	
  Schedule 3.16(d)

  	
   

  	
  Mortgage
  Filing Offices

  
	
  Schedule
  4.01(f)

  	
   

  	
  Intercompany
  Indebtedness

  
	
  Schedule
  4.01(g)

  	
   

  	
  Lien
  Search Jurisdictions

  
	
  Schedule 4.02

  	
   

  	
  Foreign
  Jurisdictions

  
	
  Schedule 5.07

  	
   

  	
  Insurance
  Levels

  
	
  Schedule 6.01

  	
   

  	
  Existing
  Indebtedness

  
	
  Schedule 6.03

  	
   

  	
  Existing
  Liens

  
	
  Schedule 6.05

  	
   

  	
  Existing
  Investments

  
	
  Schedule 6.05(h)

  	
   

  	
  Existing
  Joint Ventures

  
	
  Schedule
  6.06

  	
   

  	
  Asset
  Sales

  
	
  Schedule 6.10

  	
   

  	
  Affiliate
  Transactions

  
	
  Schedule 6.11

  	
   

  	
  Existing
  Restrictions

  
	
  Schedule
  6.19

  	
   

  	
  Deposit
  Accounts

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of Assignment and Assumption

  
	
  Exhibit B

  	
   

  	
  Form
  of Guarantee Agreement

  
	
  Exhibit C-1

  	
   

  	
  Form
  of Domestic Pledge Agreement

  
	
  Exhibit C-2

  	
   

  	
  Form
  of Canadian Pledge Agreement

  
	
  Exhibit D-1

  	
   

  	
  Form
  of Domestic Security Agreement

  
	
  Exhibit D-2

  	
   

  	
  Form
  of Canadian Security Agreement

  
	
  Exhibit E

  	
   

  	
  Form
  of Borrowing Base Certificate

  



 


vi

















 


AMENDED
AND RESTATED CREDIT AGREEMENT dated as of November 21, 2005, among PLIANT
CORPORATION, a Utah corporation, UNIPLAST INDUSTRIES CO., a Nova Scotia
corporation, the Domestic Subsidiary Borrowers party hereto, the Lenders party
hereto, MORGAN STANLEY SENIOR FUNDING, INC., as Domestic B Agent, and, GENERAL
ELECTRIC CAPITAL CORPORATION, as Domestic A Agent, Administrative Agent and
Collateral Agent.


 


RECITALS


 


WHEREAS, a credit facility
was extended to Parent Borrower, Uniplast Industries Co., and certain other
subsidiaries of the Parent Borrower pursuant to the terms and conditions of
that certain Credit Agreement dated as of February 17, 2004 (as amended,
restated, supplemented or otherwise modified from time to time prior to the
date hereof, the “Existing Credit Agreement”), among the Parent
Borrower, Uniplast Industries Co., as Canadian Subsidiary Borrower, the other
subsidiaries of the Parent Borrower party thereto as borrowers, as Borrowers,
the lenders party thereto (the “Existing Lenders”), Credit Suisse First
Boston, acting through its Cayman Islands Branch, as Administrative Agent and
Documentation Agent (the “Prior Administrative Agent”), Deutsche Bank
Trust Company Americas, as Collateral Agent (the “Prior Collateral Agent”),
General Electric Capital Corporation, as Co-Collateral Agent, and JPMorgan
Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as Syndication Agent;


 


WHEREAS, in connection with
the Existing Credit Agreement, the Loan Parties (as defined in the Existing
Credit Agreement) executed and delivered the Security Documents (as defined in
the Existing Credit Agreement, the “Existing Security Documents”) in
favor of the Prior Collateral Agent to secure the payment and performance of
the Obligations (as defined under the Existing Security Documents);


 


WHEREAS, prior to the
execution of this Agreement, the Prior Collateral Agent resigned as “Collateral
Agent” under the Existing Credit Agreement, the Existing Security Documents and
the other Loan Documents (as defined in the Existing Credit Agreement) and the Collateral
Agent succeeded the Prior Collateral Agent as the “Collateral Agent”
thereunder, all pursuant to that certain Consent and Amendment dated as of
March 8, 2004 by and among the Prior Administrative Agent, the Prior Collateral
Agent, the Collateral Agent, Deutsche Bank Trust Company Americas, as replaced
Issuing Bank, LaSalle Business Credit, LLC, as replacement Issuing Bank, the
Borrowers and the Existing Lenders;


 


WHEREAS, the Borrowers have
requested that the Existing Credit Agreement be amended, modified and restated,
pursuant to the terms and conditions set forth herein;


 


WHEREAS, the Borrowers each
acknowledge and agree that the security interests granted to the Prior
Collateral Agent, on behalf of the Loan Parties (as defined in the Existing Credit
Agreement), pursuant to the Existing Credit Agreement and the other Loan
Documents (as defined in the Existing Credit Agreement), shall remain
outstanding and in full force and effect, without interruption or impairment of
any kind, in accordance with the Existing Credit Agreement and shall continue
to secure the Obligations;


 

















 


WHEREAS, the Borrowers each
acknowledge and agree that such Liens and security interests granted pursuant
to the Existing Security Documents shall remain outstanding and in full force
and effect, without interruption or impairment of any kind, in accordance with
their terms, and such Liens shall continue to secure the Obligations in favor
of the Collateral Agent;


 


WHEREAS, the Borrowers each
acknowledge and agree that (a) the Obligations represent, among other things,
the amendment, restatement, renewal, extension, consolidation and modification
of the Obligations (as defined in the Existing Security Documents) arising in
connection with the Existing Credit Agreement and other Loan Documents (as
defined in the Existing Credit Agreement) executed in connection therewith; (b)
the Borrowers intend that the Existing Credit Agreement and the other Credit
Documents (as defined in the Existing Credit Agreement) executed in connection
therewith and the collateral pledged thereunder shall secure, without
interruption or impairment of any kind, all existing Indebtedness (as defined
in the Existing Credit Agreement) under the Existing Credit Agreement and the
other Credit Documents (as defined in the Existing Credit Agreement) executed
in connection therewith, as they may be amended, restated, renewed, extended,
consolidated and modified hereunder, together with all other obligations
hereunder; (c) all Liens (as defined in the Existing Credit Agreement)
evidenced by the Loan Documents (as defined in the Existing Credit Agreement)
executed in connection therewith are hereby ratified, confirmed and continued;
and (d) the Loan Documents (as defined herein) are intended to restate, renew,
extend, consolidate, amend and modify the Existing Credit Agreement and the
other Loan Documents (as defined in the Existing Credit Agreement) executed in
connection therewith; and


 


WHEREAS, the Borrowers each
intend that (a) the provisions of the Existing Credit Agreement and the other
Loan Documents (as defined in the Existing Credit Agreement) executed in
connection therewith, to the extent restated, renewed, extended, consolidated,
amended and modified hereby, be hereby superseded and replaced by the provisions
hereof and of the other Loan Documents (as defined herein); and (b) by entering
into and performing their respective obligations hereunder, this transaction
shall not constitute a novation.


 


NOW THEREFORE, in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Existing Credit Agreement is hereby amended and restated as
follows:


 


ARTICLE I


 


Definitions


 


SECTION 1.01.  Defined
Terms. As used in this Agreement, the following terms have the meanings
specified below:


 


“ABR”, when used in
reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are bearing interest at a rate determined by
reference to the Alternate Base Rate.


 


2

















 


“Account” shall have
the meaning assigned to such term in the New York Uniform Commercial Code and
shall also include any right to payment for goods sold or leased, or for services
rendered, whether or not earned by performance.


 


“Account Debtor”
means any Person who is, or may be, obligated to any Loan Party under, with
respect to or on account of an Account.


 


“Accumulated Investment
Balance” means, at any time, the aggregate amount of investments, loans,
advances and Indebtedness required to be added to the “Accumulated Investment
Balance” pursuant to Sections 6.05(c)(ii), (d)(ii), (e)(iii)
and (l)(ii) that remain outstanding at such time.


 


“Adjusted Eligible
Accounts Receivable” means, on any date, the amount of Eligible Accounts
Receivable on such date, minus the Dilution Reserve on such date.


 


“Adjusted Eligible
Finished Goods” means, on any date, the amount of Eligible Finished Goods
on such date, minus the Inventory Reserves with respect to such Eligible
Finished Goods on such date.


 


“Adjusted Eligible Raw
Materials” means, on any date, the amount of Eligible Raw Materials on such
date, minus the Inventory Reserves with respect to such Eligible Raw
Materials on such date.


 


“Administrative Agent”
means General Electric Capital Corporation, in its capacity as administrative
agent for the Lenders hereunder.


 


“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.


 


“Affiliate” means,
with respect to a specified Person, another Person that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.


 


“Agents” means,
collectively, the Administrative Agent, the Collateral Agent, the Domestic A
Agent, the Domestic B Agent or, as the context may require, any such Agent.


 


“Aggregate Borrowing Base”
means, at any time of determination, an amount equal to the sum of the
Borrowing Base A plus the Borrowing Base B.


 


“Allocable Amount”
has the meaning assigned to such term in Section 11.07(b).


 


“Alternate Base Rate”
means, for any day, a rate per annum equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.


 


3

















 


“Amended 2004 Notes”
has the meaning assigned to such term in the definition of “2004 Notes
Restatement”.


 


“Applicable Percentage”
means, (a) with respect to any Domestic A Lender, the percentage of the
total amount of the Domestic A Commitments represented by such Domestic A
Lender’s Domestic A Commitment, (b) with respect to any Domestic B Lender, the
percentage of the total amount of the Domestic B Commitments represented by
such Domestic B Lender’s Domestic B Commitment and (c) with respect to any
Canadian Lender, the percentage of the total amount of the Canadian Commitments
represented by such Canadian Lender’s Canadian Commitment. If the Commitments
of any Class have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments of such Class most recently in effect,
giving effect to any assignments.


 


“Approved Fund” has
the meaning assigned to such term in Section 10.04.


 


“Arranger A” means GE
Capital Markets, Inc., as arranger and book runner for the Domestic A Revolving
Loans and the Canadian Revolving Loans.


 


“Arranger B” means
Morgan Stanley Senior Funding, Inc., as arranger and book runner for the
Domestic B Revolving Loans.


 


“Arrangers” means the
Arranger A and the Arranger B.


 


“Assignment and
Assumption” means an assignment and assumption entered into by a Lender and
an assignee (with the consent of any party whose consent is required by Section 10.04),
and accepted by the Administrative Agent, in the form of Exhibit A
or any other form approved by (i) the Administrative Agent, in the case of any
assignment of any Domestic A Commitment, Domestic A Revolving Loan, Canadian
Commitment or Canadian Revolving Loan or (ii) the Domestic B Agent, in the case
of any assignment of any Domestic B Commitment or Domestic A Revolving Loan.


 


“Availability Amount”
means, at any time, an amount equal to (a) the lesser of (i) the
total amount of the Commitments at such time and (ii) the Aggregate Borrowing
Base in effect at such time minus (b) the total Revolving Exposures
at such time.


 


“Bailee Letter” means
a written agreement reasonably acceptable to the Collateral Agent, pursuant to
which a bailee of Inventory of any Loan Party agrees to hold such Inventory for
the benefit of the Collateral Agent, to waive or subordinate its rights and
claims as bailee in such Inventory, including warehouseman’s liens, processor’s
liens, rights of levy and distraint for rent, grant access to the Collateral
Agent for the repossession and sale of such Inventory and make other agreements
relative thereto.


 


“Bankruptcy Code”
means Chapter 11 of Title 11 of the United States Code, 11 U.S.C. 101 et seq.


 


“Banking
Services” means overdrafts and related liabilities owed to any of the
Lenders (or any Affiliates thereof) or Wachovia Bank, National
Association (or any Affiliates


 


4

















 


thereof) arising from treasury,
depositary and cash management services or in connection with any automated
clearinghouse transfers of funds.


 


“Banking Services
Obligations” of any Loan Party means all monetary obligations of such Loan
Party in respect of Banking Services.


 


“Board” means the
Board of Governors of the Federal Reserve System of the United States of
America.


 


“BONS” has the
meaning assigned to such term in Section 4.01(s).


 


“BONS Reserve” means
(a) at any time prior to the receipt by the Collateral Agent of fully executed
copy of an amended and restated deposit account control agreement between the
applicable Loan Parties, BONS and the Collateral Agent pursuant to Section
4.02(c), an amount equal to the amount on deposit in account number
92312-0001414 in the name of the Canadian Borrower at BONS and (b) at any
time after receipt by the Collateral Agent of fully executed copy of an amended
and restated deposit account control agreement between the applicable Loan
Parties, BONS and the Collateral Agent pursuant to Section 4.02(c), $0.


 


“Borrower” means the
Parent Borrower, any Domestic Subsidiary Borrower or the Canadian Subsidiary
Borrower.


 


“Borrowing” means
(a) Loans of the same Class and Type made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect, (b) a Swingline Loan and (c) a Protective Advance.


 


“Borrowing Base A”
means, at any time of determination, an amount equal to the sum, without
duplication, of (a) 85% of Adjusted Eligible Accounts Receivable, plus
(b) the lesser of (i) 65% of Adjusted Eligible Finished Goods and
(ii) the product of (A) 85% of the Adjusted Eligible Finished Goods multiplied
by (B) the Recovery Rate with respect to Adjusted Eligible Finished
Goods, plus (c) the lesser of (i) 35% of Adjusted Eligible Raw
Materials valued at the lower of cost (determined on a first-in, first-out
basis) or market value and (ii) the product of (A) 85% of the
Adjusted Eligible Raw Materials multiplied  by (B) the
Recovery Rate with respect to Adjusted Eligible Raw Materials, minus (d)
the Minimum Availability Reserve, minus (e) the Rent Reserve, minus
(f) the Priority Payables Reserve, minus (g) the Secured
Obligations Reserve minus (h) the Domestic B Availability Reserve minus
(i) the BONS Reserve minus (j) any Reserves, in each case of the
Borrowers.  The Borrowing Base A at any
time shall be determined by reference to the most recent Borrowing Base
Certificate delivered to the Agents pursuant to this Agreement.  Standards of eligibility and reserves and
advance rates of the Borrowing Base A may be revised and adjusted from time to
time solely at the discretion of the Administrative Agent (subject to the
consent of the Domestic B Agent if the effect of such revision or adjustment
would be to increase the Borrowing Base A or the Availability Amount), with any
changes in such standards to be effective immediately after delivery of notice
thereof to the Parent Borrower.  For
purposes of calculating the Borrowing Base A on any date, all amounts reflected
or outstanding in Canadian Dollars shall be translated into dollars at the
exchange rate in effect on such date, as determined in good faith by the Parent
Borrower.


 


5

















 


“Borrowing Base B”
means, at any time of determination, an amount equal to the sum, without
duplication, of (a) an incremental 10% of the Adjusted Eligible Accounts
Receivable in excess of the Adjusted Eligible Accounts Receivable included in
the calculation of the Borrowing Base A pursuant to clause (a) of the
definition thereof, in an aggregate amount not to exceed 95% of the Adjusted
Eligible Accounts Receivable, plus (b)(i) if the Borrowing Base A is
calculated pursuant to clause (b)(i) of the definition thereof, then an
incremental 20% of the Adjusted Eligible Finished Goods in excess of the
Adjusted Eligible Finished Goods included in the calculation of the Borrowing
Base A pursuant to clause (b)(i) of the definition thereof, in an aggregate
amount not to exceed 85% of the Adjusted Eligible Finished Goods and (ii) if
the Borrowing Base A is calculated pursuant to clause (b)(ii) of the definition
thereof, then, the product of (A) an incremental 10% of the Adjusted Eligible
Finished Goods in excess of the Adjusted Eligible Finished Goods included in
the calculation of the Borrowing Base A pursuant to clause (b)(ii) of the
definition thereof, in an aggregate amount not to exceed 95% of the Adjusted
Eligible Finished Goods multiplied  by (B) the Recovery Rate
with respect to Adjusted Eligible Finished Goods, plus (c)(i) if the
Borrowing Base A is calculated pursuant to clause (c)(i) of the definition
thereof, then an incremental 20% of the Adjusted Eligible Raw Materials in
excess of the Adjusted Eligible Raw Materials included in the calculation of
the Borrowing Base A pursuant to clause (c)(i) of the definition thereof, in an
aggregate amount not to exceed 55% of the Adjusted Eligible Raw Materials and
(ii) if the Borrowing Base A is calculated pursuant to clause (c)(ii) of the
definition thereof, then, the product of (A) an incremental 10% of the Adjusted
Eligible Raw Materials in excess of the Adjusted Eligible Raw Materials
included in the calculation of the Borrowing Base A pursuant to clause (c)(ii)
of the definition thereof, in an aggregate amount not to exceed 95% of the
Adjusted Eligible Raw Materials multiplied  by (B) the
Recovery Rate with respect to Adjusted Eligible Raw Materials, minus (d)
any Reserves applied in the calculation of the Borrowing Base A, in each case
of the Borrowers.  The Borrowing Base B
at any time shall be determined by reference to the most recent Borrowing Base
Certificate delivered to the Agents pursuant to this Agreement.  Standards of eligibility and reserves and
advance rates of the Borrowing Base B may be revised and adjusted from time to
time solely at the discretion of the Administrative Agent (subject to the
consent of the Domestic B Agent if the effect of such revision or adjustment
would be to increase the Borrowing Base B or the Availability Amount), or any
time after the Domestic A Revolving Loans and the Canadian Revolving Loans have
been paid in full and the Domestic A Commitments and the Canadian Commitments
have been terminated, at the sole discretion of the Domestic B Agent, with any
changes in such standards to be effective immediately after delivery of notice thereof
to the Parent Borrower.  For purposes of
calculating the Borrowing Base B on any date, all amounts reflected or
outstanding in Canadian Dollars shall be translated into dollars at the
exchange rate in effect on such date, as determined in good faith by the Parent
Borrower.


 


“Borrowing Base
Certificate” means a certificate substantially in the form of Exhibit E
(with such changes therein as may be required by either Agent, to reflect the
components of, and reserves against, the Borrowing Bases as provided for
hereunder from time to time), executed and certified as accurate and complete
by a Financial Officer of the Parent Borrower, which certificate shall include
appropriate exhibits, schedules, supporting documentation and reports as
reasonably requested by either Agent.


 


“Borrowing Bases”
means the Borrowing Base A and the Borrowing Base B.


 


6

















 


“Borrowing Request”
means a request by a Borrower for a Borrowing in accordance with Section 2.03.


 


“Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks
in New York City are authorized or required by law to remain closed; provided
that, (a) when used in connection with a Eurodollar Loan, the term “Business
Day” shall also exclude any day on which banks generally are not open for
dealings in dollar deposits in the London interbank market and (b) when
used in connection with any Canadian Revolving Loan, the term “Business Day”
shall also exclude any day on which banks are not open for deposits in Toronto.


 


“CAM” means the
mechanism established under Article IX for the allocation and
exchange of the Lenders’ interests in, and collections under, the Loan
Documents.


 


“CAM Exchange” means
the exchange of the Lenders’ interests provided for in Section 9.01.


 


“CAM Exchange Date”
means the first date on which (a) any event referred to in
clause (h)or (i) of Article VII shall occur in respect of any
Loan Party or (b) any acceleration of the maturity of any Loans occurs
under Article VII.


 


“CAM Percentage”
means, as to each Lender, a fraction, expressed as a decimal, of which
(a) the numerator shall be the sum of (i) the aggregate principal and
interest on the Loans owed to such Lender, (ii) the LC Exposure of such
Lender, (iii) the Swingline Exposure of such Lender and (iv) the
aggregate amount of any other Obligations otherwise owed to such Lender, in
each case immediately prior to the CAM Exchange Date, and (b) the
denominator shall be the sum of (i) the aggregate principal and interest
on the Loans owed to all the Lenders, (ii) the aggregate LC Exposure of
all the Lenders, (iii) the aggregate Swingline Exposure of all the Lenders
and (iv) the aggregate amount of any other Obligations owed to any of the
Lenders, in each case immediately prior to such CAM Exchange Date.


 


“Canadian Commitment”
means, with respect to each Canadian Lender, the commitment of such Canadian
Lender to make Canadian Revolving Loans, expressed as an amount representing
the maximum aggregate amount of such Canadian Lender’s Canadian Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Canadian Lender
pursuant to Section 10.04, together with the commitment of such
Lender to acquire participations in Protective Advances hereunder.  The initial amount of each Canadian Lender’s
Canadian Commitment is set forth on Schedule 2.01(b), or in the
Assignment and Assumption pursuant to which such Canadian Lender shall have
assumed its Canadian Commitment, as applicable. 
The initial aggregate amount of the Canadian Lenders’ Canadian
Commitments is $30,000,000.


 


“Canadian Dollars” or
“Cdn$” refers to lawful money of Canada.


 


“Canadian Filings
Certificate” means that certain certificate delivered by the applicable
Loan Parties in connection with this Agreement setting forth information with
respect


 


7

















 


to certain PPSA filings in Canada which have
collateral descriptions which are unacceptable to the Collateral Agent in its
sole discretion.


 


“Canadian Lender”
means the Persons listed on Schedule 2.01(b) and any other Person
that shall have become a party hereto as a Canadian Lender pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption.


 


“Canadian Lending Office”
means, as to any Canadian Lender, the applicable branch, office or Affiliate of
such Canadian Lender located in Canada designated by such Canadian Lender to
make Canadian Revolving Loans to the Canadian Subsidiary Borrower.


 


“Canadian Perfection
Certificate” has the meaning assigned to the term “Perfection Certificate”
in the Canadian Security Agreement.


 


“Canadian Pledge
Agreement” means the Canadian Pledge Agreement, substantially in the form
of Exhibit C-2, among the Canadian Subsidiary Borrower, each other
Loan Party organized under the laws of Canada or any province thereof and the
Collateral Agent.


 


“Canadian Revolving
Exposure” means, with respect to any Canadian Lender at any time, the sum
of the outstanding principal amount of such Canadian Lender’s Canadian
Revolving Loans.


 


“Canadian Revolving Loan”
means a Loan made by a Canadian Lender pursuant to Section 2.01(b).  Each Canadian Revolving Loan shall be a
Eurodollar Loan or an ABR Loan.


 


“Canadian Security
Agreement” means the Canadian Security Agreement, substantially in the form
of Exhibit D-2, among the Parent Borrower, the Canadian Subsidiary
Borrower, Pliant Solutions Corporation, Pliant Packaging of Canada, LLC, each
other Loan Party organized under the laws of Canada or any province thereof and
the Collateral Agent.


 


“Canadian Subsidiary
Borrower” means Uniplast Industries Co., a Nova Scotia corporation.


 


“Capital Expenditures”
means, for any period, without duplication, (a) the additions to property,
plant and equipment and other capital expenditures of the Parent Borrower and
the Subsidiaries that are (or would be) set forth in a consolidated statement
of cash flows of the Parent Borrower and the Subsidiaries for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations
incurred by the Parent Borrower and the Subsidiaries during such period.


 


“Capital Lease Obligations”
of any Person means the obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP.


 


8

















 


“Cash Amount” has the
meaning assigned to such term in Section 2.10(f).


 


“Cash Interest Expense”
means, for any period, Consolidated Interest Expense for such period excluding
any portion thereof in respect of interest not required to be paid in cash
during such period or within one year thereafter.


 


“Cash Management
Arrangement” means any arrangement pursuant to which any financial
institution provides any Loan Party with treasury, depositary or cash
management services or automated clearinghouse transfers of funds.


 


“Cash Management
Obligations” has the meaning assigned to the term “Senior Lender Cash
Management Obligations” in the Intercreditor Agreement.


 


“CERCLA” means the
Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. § 9601 et seq.


 


“Change in Control”
means, at any time, (a) prior to an IPO, the failure by the Control Group
to own, directly or indirectly, beneficially and of record, Equity Interests in
the Parent Borrower representing at least a majority of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests in the
Parent Borrower; (b) after an IPO, the failure by the Control Group to
own, directly or indirectly, beneficially and of record, Equity Interests in
the Parent Borrower representing 25% of the aggregate voting power represented
by the issued and outstanding Equity Interests in the Parent Borrower;
(c) after an IPO, the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the SEC thereunder as in
effect on the Effective Date) other than the Control Group, of Equity Interests
in the Parent Borrower representing more than 35% of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests in the
Parent Borrower; provided that the Control Group owns beneficially and
of record, in the aggregate, a lesser percentage of such voting power;
(d) occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Parent Borrower by Persons who were neither
(i) nominated by members of the Control Group or the board of directors of
the Parent Borrower nor (ii) appointed by directors so nominated; (e) the
acquisition of ownership, directly or indirectly, beneficially or of record, by
any Person other than the Parent Borrower (or a Wholly Owned Subsidiary of the
Parent Borrower that is a Loan Party) of any Equity Interests in any Domestic
Subsidiary Borrower or the Canadian Subsidiary Borrower; (e) the
occurrence of a “Change of Control” as defined under the Senior First Lien Note
Documents, the Senior Second Lien Note Documents, the Senior Subordinated Note
Documents or the terms of the Existing Preferred Stock.  If, at any time, any of the members of the
board of directors of the Parent Borrower shall have more than one vote per
Person, then any determination of a majority of the board of directors shall be
based on a majority of the voting power of the members thereof rather than a
majority of the members or seats.


 


“Change in Law” means
(a) the adoption of any law, rule or regulation after the Effective Date,
(b) any change in any law, rule or regulation or in the interpreta­tion or
application thereof by any Governmental Authority after the Effective Date or
(c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.14(b),
by any lending office of


 


9

















 


such Lender or by such Lender’s
or the Issuing Bank’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority made or issued after the Effective Date.


 


“Class”, when used in
reference to any Loan or Borrowing, refers to whether such Loan, or the Loans
comprising such Borrowing, are Domestic A Revolving Loans, Domestic B Revolving
Loans, Domestic Revolving Loans, Canadian Revolving Loans, Swingline Loans or
Protective Advances.  “Class”,
when used in reference to any Lender, refers to whether such Lender has a Loan
or Commitment with respect to a particular Class.


 


“Class of Eligible
Inventory” means each of Eligible Finished Goods and Eligible Raw
Materials.


 


“Code” means the
Internal Revenue Code of 1986, as amended from time to time.


 


“Collateral” means
any and all “Collateral”, as defined in any applicable Security Document.


 


“Collateral Agent”
means General Electric Capital Corporation, in its capacity as Collateral Agent
for the Secured Parties under the Security Documents.


 


“Commitment” means a
Domestic Commitment or a Canadian Commitment.


 


“Consolidated EBITDA”
means, for any period, Consolidated Net Income for such period, plus,
without duplication and to the extent deducted from revenues in determining
Consolidated Net Income, the sum of (a) the aggregate amount of
Consolidated Interest Expense for such period, (b) the aggregate amount of
income tax expense for such period, (c) all amounts attributable to
depreciation, amortization and other non-cash charges or losses for such period
(but excluding any such charge that requires an accrual of, or a cash reserve
for, anticipated cash charges for any future period); provided that any
non-cash charges or losses that are added-back to Consolidated Net Income
pursuant to this clause (c) shall be treated as cash charges or losses in
any subsequent period during which cash disbursements attributable thereto are
made; (d) non-cash expenses resulting from the grant of stock options or
other equity-related incentives to any director, officer or employee of the
Parent Borrower or any Subsidiary pursuant to a written plan or agreement,
(e) all non-recurring transaction and financing expenses resulting from
the Transactions, (f) all losses during such period resulting from the
sale or other disposition of any asset of the Parent Borrower or any Subsidiary
outside the ordinary course of business and (g) any Excluded Charges
during such period, and minus, without duplication and to the extent
added to revenues in determining Consolidated Net Income for such period,
(a) all extraordinary gains during such period and (b) all gains
during such period resulting from the sale or other disposition of any asset of
the Parent Borrower or any Subsidiary outside the ordinary course of business,
all as determined on a consolidated basis with respect to the Parent Borrower
and the Subsidiaries in accordance with GAAP. 
If the Parent Borrower or any Subsidiary has made any sale, transfer,
lease or other disposition of assets outside of the ordinary course of business
permitted by Section 6.06 during the relevant period for
determining Consolidated EBITDA, Consolidated EBITDA for the relevant period
shall be calculated after giving pro forma effect thereto, as if such sale,
transfer, lease or other disposition of assets (and


 


10

















 


any related incurrence,
repayment or assumption of Indebtedness, with any new Indebtedness being deemed
to be amortized over the relevant period in accordance with its terms, and assuming
that any Loans borrowed in connection with such acquisition are repaid with
excess cash balances when available) had occurred on the first day of the
relevant period for determining Consolidated EBITDA.


 


“Consolidated Interest
Expense” means, for any period, the interest expense, both expensed and
capitalized (including the interest component in respect of Capital Lease
Obligations), accrued by the Parent Borrower and the Subsidiaries during such
period (net of payments made or received under interest rate protection
agreements and net of interest income), determined on a consolidated basis in
accordance with GAAP; provided that “Consolidated Interest Expense”
shall not include non-cash interest expense in respect of the Senior
Subordinated Notes arising because (i) the Senior Subordinated Notes and
the Warrants were issued at a discount to their face value or (ii) a
portion of the issue price of the Senior Subordinated Notes and the Warrants
was allocated to the Warrants.


 


“Consolidated Net Income”
means, for any period, net income or loss of the Parent Borrower and the
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded (a) the income of
any unconsolidated Subsidiary and any Person in which any other Person (other
than the Parent Borrower or any of the Subsidiaries or any director holding
qualifying shares in compliance with applicable law or any other third party
holding a de minimus number of shares in order to comply with other similar
requirements) has an Equity Interest, except to the extent of the amount of
dividends or other distributions actually paid by such Subsidiary or other
Person during such period to the Parent Borrower or any other Subsidiary that
is not subject to the restrictions set forth in clause (a) or (b) hereof (provided
that the Parent Borrower’s or any other Subsidiary’s equity in the net loss of
any such Subsidiary or Person for such period shall be included in determining
Consolidated Net Income), (b) the income (but not the loss) of any
Subsidiary to the extent that such Subsidiary is contractually or legally
prohibited from paying dividends, except to the extent of the amount of
dividends or other distributions actually paid by such Subsidiary during such
period to the Parent Borrower or any other Subsidiary that is not subject to
the restrictions set forth in clause (a) or (b) hereof and (c) the
income (or loss) of any Person accrued prior to the date it becomes (or, for
pro forma purposes, is deemed to have become) a Subsidiary or is merged into or
consolidated with the Parent Borrower or any of the Subsidiaries or the date
that Person’s assets are acquired by the Parent Borrower or any of the
Subsidiaries.


 


“Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.


 


“Control Group” means
collectively the Sponsor and all Persons Controlled by the Sponsor (other than
any operating company Controlled by the Sponsor).


 


“Credit Exposure”
means, as to any Lender at any time, the sum of (a) such Lender’s Revolving
Exposure at such time, plus (b) an amount equal to its Applicable


 


11

















 


Percentage, if any, of the
aggregate principal amount of Protective Advances outstanding at such time.


 


“Default” means any
event or condition that constitutes an Event of Default or that upon notice,
lapse of time or both would, unless cured or waived, become an Event of
Default.


 


“Depository Banks”
has the meaning assigned to such term in Section 4.01(s).


 


“Dilution Factors”
means, without duplication, with respect to any period, the aggregate amount of
all deductions, credit memos, returns, adjustments, allowances, bad debt
write-offs and other non-cash credits that are recorded to reduce accounts
receivable of the Loan Parties in a manner consistent with current and
historical accounting practices of the Parent Borrower or the Canadian
Subsidiary Borrower, as applicable.


 


“Dilution Ratio”
means, at any date, (a) the amount (expressed as a percentage) equal to
(i) the aggregate amount of the applicable Dilution Factors for the
12 most recently ended fiscal months of the Parent Borrower divided
by (ii) total gross sales of the Loan Parties for the 12 most
recently ended fiscal months of the Parent Borrower, minus (b) 5%; provided
that the Dilution Ratio shall not be less than zero.


 


“Dilution Reserve” means, at any date, the Dilution Ratio on
such date multiplied  by the amount of Eligible Accounts
Receivable on such date.


 


“dollars” or “$”
refers to lawful money of the United States of America.


 


“Domestic A Agent”
means General Electric Capital Corporation, in its capacity as agent for the
Domestic A Lenders and Canadian Lenders hereunder.


 


“Domestic A Commitment”
means, with respect to each Domestic A Lender, the commitment of such Domestic
A Lender to make Domestic A Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Domestic A Lender’s Domestic
A Revolving Exposure hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Domestic A Lender
pursuant to Section 10.04, together with the commitment of such
Lender to acquire participations in Protective Advances hereunder.  The initial amount of each Domestic A
Lender’s Domestic A Commitment is set forth on Schedule 2.01(a) (i),
or in the Assignment and Assumption pursuant to which such Domestic A Lender
shall have assumed its Domestic A Commitment, as applicable.  The initial aggregate amount of the Domestic
A Lenders’ Domestic A Commitments is $90,000,000.


 


“Domestic A Lender”
means the Persons listed on Schedule 2.01(a)(i) and any other
Person that shall have become a party hereto as a Domestic A Lender pursuant to
an Assignment and Assumption, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term
“Domestic A Lenders” includes the Swingline Lender.


 


12

















 


“Domestic A Revolving
Exposure” means, with respect to any Domestic A Lender at any time, the sum
of the outstanding principal amount of such Domestic A Lender’s Domestic A
Revolving Loans and its LC Exposure and Swingline Exposure at such time.


 


“Domestic A Revolving
Loan” means a Loan made by a Domestic A Lender pursuant to Section 2.01(a)(i).  Each Domestic A Revolving Loan shall be a
Eurodollar Loan or an ABR Loan.


 


“Domestic B Agent” means
Morgan Stanley Senior Funding, Inc., in its capacity as agent for the Domestic
B Lenders hereunder.


 


“Domestic B Availability
Reserve” means, as of any date of determination, to the extent positive, an
amount equal to the aggregate Domestic B Revolving Exposure of all Domestic B
Lenders minus the Borrowing Base B as of such date of
determination.  For the avoidance of
doubt, no amendment or other modification to the definition of the “Domestic B
Availability Reserve” (including adjustments or new criteria or changes in
advance rates in the calculation of Domestic B Borrowing Base B) which has the
effect of eliminating or decreasing the amount of the Domestic B Availability
Reserve shall be effective without the prior written consent of the Required B
Lenders.


 


“Domestic B Commitment”
means, with respect to each Domestic B Lender, the commitment of such Domestic
B Lender to make Domestic B Revolving Loans, expressed as an amount
representing the maximum aggregate amount of such Domestic B Lender’s Domestic
B Revolving Exposure hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Domestic B Lender
pursuant to Section 10.04, together with the commitment of such
Lender to acquire participations in Protective Advances hereunder.  The initial amount of each Domestic B
Lender’s Domestic B Commitment is set forth on Schedule 2.01(a)(ii),
or in the Assignment and Assumption pursuant to which such Domestic B Lender
shall have assumed its Domestic B Commitment, as applicable.  The initial aggregate amount of the Domestic
B Lenders’ Domestic B Commitments is $20,000,000.


 


“Domestic B Lender”
means the Persons listed on Schedule 2.01(a)(ii) and any other
Person that shall have become a party hereto as a Domestic B Lender pursuant to
an Assignment and Assumption, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption.


 


“Domestic B Revolving
Exposure” means, with respect to any Domestic B Lender at any time, the sum
of the outstanding principal amount of such Domestic B Lender’s Domestic B
Revolving Loans.


 


“Domestic B Revolving
Loan” means a Loan made by a Domestic B Lender pursuant to Section 2.01(a)(ii).  Each Domestic B Revolving Loan shall be a
Eurodollar Loan or an ABR Loan.


 


“Domestic Commitment”
means a Domestic A Commitment or a Domestic B Commitment.


 


13

















 


“Domestic Perfection
Certificate” has the meaning assigned to the term “Perfection Certificate”
in the Domestic Security Agreement.


 


“Domestic Pledge
Agreement” means the Domestic Pledge Agreement, substantially in the form
of Exhibit C-1, among each Loan Party (other than the Canadian
Subsidiary Borrower and any other Loan Party that is a Foreign Subsidiary) and
the Collateral Agent.


 


“Domestic Revolving
Exposure” means Domestic A Revolving Exposure and Domestic B Revolving
Exposure.


 


“Domestic Security
Agreement” means the Domestic Security Agreement, substantially in the form
of Exhibit D-1, among each Loan Party (other than the Canadian
Subsidiary Borrower and any other Loan Party that is a Foreign Subsidiary) and
the Collateral Agent.


 


“Domestic Subsidiary
Borrower” means each Subsidiary of the Parent Borrower listed on Schedule 1.01(c).


 


“Effective Date”
means the date on which the conditions specified in Section 4.01
are satisfied (or waived in accordance with Section 10.02).


 


“Eligible Accounts
Receivable” means, at any time of determination, the aggregate of the
amounts (determined as provided in the second succeeding sentence) for each
Account of the Borrowers that satisfies the following criteria at the time of
creation and continues to meet the same at such time of determination:  such Account (i) has been invoiced to,
and represents the bona fide amounts due to any Borrower from, the purchaser of
goods or services, in each case originated in the ordinary course of business
of such Borrower, and (ii) is not ineligible for inclusion in the calculation
of the Borrowing Bases pursuant to any of clauses (a) through (t) below or
otherwise deemed, solely at the discretion of the Administrative Agent, or any
time after the Domestic A Revolving Loans and the Canadian Revolving Loans have
been paid in full and the Domestic A Commitments and the Canadian Commitments
have been terminated, solely at the discretion of the Domestic B Agent, to be
ineligible for inclusion in the calculation of the Borrowing Bases.  Without limiting the foregoing, to qualify as
Eligible Accounts Receivable, an Account shall indicate no Person other than a
Borrower as payee or remittance party. 
The amount to be so included in Eligible Accounts Receivable at any time
with respect to Accounts shall be the face amount of Accounts, reduced by,
without duplication and to the extent not reflected in such face amount,
(i) the amount of all accrued and actual discounts, claims, credits or
credits pending, debit memos, promotional program allowances, price
adjustments, finance charges or other allowances (including any amount that the
applicable Borrower may be obligated to rebate to a customer pursuant to the
terms of any agreement or understanding (written or oral)), (ii) the
aggregate amount of all limits and deductions provided for in this definition
and elsewhere in this Agreement, (iii) the aggregate amount of all cash
received in respect of such Account but not yet applied by the
applicable Borrower to reduce the amount
of such Account and (iv) with respect to an Account of the Canadian
Subsidiary Borrower or any Subsidiary of the Canadian Subsidiary Borrower that
is a Borrower, the amount of all goods and services taxes, harmonized taxes and
sales taxes payable in respect of such


 


14

















 


Account.  Standards of eligibility may be fixed from
time to time solely at the discretion of the Administrative Agent, or any time
after the Domestic A Revolving Loans and the Canadian Revolving Loans have been
paid in full and the Domestic A Commitments and the Canadian Commitments have
been terminated, the Domestic B Agent, with any changes in such standards to be
effective immediately after delivery of notice thereof to the Parent
Borrower.  Unless otherwise approved from
time to time in writing by the Administrative Agent or the Domestic B Agent, as
applicable, no Account shall be an Eligible Account Receivable if:


 


(a) the applicable
Borrower does not have sole lawful and absolute title to such Account; or


 


(b) such Account
(i) is unpaid more than 90 days from the original date of invoice or
60 days from the original due date or (ii) has been written off the
books of the applicable Borrower or has been otherwise designated on such books
as uncollectible; or


 


(c) more than 50% in face
amount of all Accounts of the Account Debtor with respect to such Account are
ineligible pursuant to clause (b) above; or


 


(d) the Account Debtor
with respect to such Account is insolvent or the subject of any bankruptcy case
or insolvency proceeding of any kind; or


 


(e) such Account is not
payable in dollars or the applicable Account Debtor is either not organized
under the laws of the United States of America or any State thereof or the
District of Columbia or is located or has its principal place of business or
substantially all its assets outside the United States; provided that,
with respect to an Account of the Canadian Subsidiary Borrower or any
Subsidiary of the Canadian Subsidiary Borrower that is a Borrower, such Account
may be payable in Canadian Dollars and the applicable Account Debtor may be
organized under the laws of Canada or any province thereof and be located or
have its principal place of business or substantially all its assets in Canada;
or


 


(f) the applicable
Account Debtor is the United States of America or Canada or any department,
agency or instrumentality thereof, unless the relevant Borrower duly assigns
its rights to payment of such Account to the Administrative Agent pursuant to
the Assignment of Claims Act of 1940, as amended, or the Financial Administration
Act (Canada), as amended, as applicable, which assignment and related documents
and filings shall be in form and substance satisfactory to the Collateral
Agent; or


 


(g) such Account is
subject to any adverse security deposit, progress payment, retainage or other
similar advance made by or for the benefit of the applicable Account Debtor, in
each case to the extent thereof; or


 


(h) such Account is not
subject to a valid and perfected first-priority Lien in favor of the Collateral
Agent for the benefit of the Secured Parties to secure the Obligations, subject
to no other Liens, other than Liens described under clauses (a) and (e) of
the definition of “Permitted Encumbrances”; or


 


15

















 


(i) (A) such Account
was invoiced (1) in advance of goods or services provided or
(2) twice or more or (B) income associated with such Account has not
been earned; or


 


(j) such Account is a
non-trade Account, or relates to payments for interest; or


 


(k) the sale to the applicable
Account Debtor in respect of such Account is on a bill-and-hold, guarantee
sale, sale-and-return, ship-and-return, sale on approval, extended terms or
consignment or other similar basis or made pursuant to any other agreement
providing for repurchase or return of any merchandise that has been claimed to
be defective or otherwise unsatisfactory; or


 


(l) the goods giving rise
to such Account have not been shipped or title has not been transferred to the
applicable Account Debtor, or such Account represents a progress-billing or
otherwise does not represent a complete sale; provided that, for
purposes hereof, “progress-billing” means any invoice for goods sold or leased
or services rendered under a contract or agreement pursuant to which such
Account Debtor’s obligation to pay such invoice is conditioned upon the
applicable Borrower’s completion of any further performance under the contract
or agreement; or


 


(m) such Account arises
out of a sale made by the applicable Borrower to an employee, officer, agent,
director, stockholder, subsidiary or Affiliate of any Borrower; or


 


(n) such Account was
created as a new receivable for the unpaid portion of an outstanding Account
(including chargebacks, debit memos or other adjustments for unauthorized
deductions); or


 


(o) the applicable
Account Debtor (i) is a creditor of any Borrower, (ii) has, or has
asserted, a right of set-off against any Borrower (unless such Account Debtor
has entered into a written agreement reasonably acceptable to the Collateral
Agent to waive such set-off rights) or (iii) has disputed its liability
(whether by chargeback or otherwise) or made any asserted or unasserted claim
with respect to such Account or any other Account of any Borrower that has not
been resolved, in each case, without duplication, to the extent of (A) the
amount owed by such Borrower to such Account Debtor, (B) the amount of
such actual or asserted right of set-off or (C) the amount of such dispute
or claim, as the case may be; or


 


(p) such Account does not
comply in all material respects with the requirements of all applicable laws
and regulations, whether Federal, state, local or foreign, including the
Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and
Regulation Z of the Board; or


 


(q) as to all or any part
of such Account, a check, promissory note, draft, trade acceptance or other
Instrument for the payment of money has been received, presented for payment
and returned uncollected for any reason; or


 


(r) such Account is for
goods that have been sold under a purchase order or pursuant to the terms of a
contract or other agreement or understanding (written or oral)


 


16

















 


that indicates that any Person other than the
applicable Borrower has or has had or has purported to have or have had an
ownership interest in such goods; or


 


(s) such Account is an
extended terms account that is due and payable more than 60 days from the
original date of invoice; or


 


(t) such Account is
created on cash in advance terms.


 


Notwithstanding the
forgoing, all Accounts of any single Account Debtor and its Affiliates that, in
the aggregate, exceed (i) 20% in respect of an Account Debtor whose
securities are rated Investment Grade or (ii) 10% in respect of all other
Account Debtors, in either case of the total amount of all Accounts of the
Borrowers at any time of determination, shall be deemed not to be Eligible
Accounts Receivable to the extent of such excess.


 


“Eligible Finished Goods” means, on any date, the amount of Eligible
Inventory defined as Finished Goods by each Borrower on such date as shown on
its perpetual inventory records in accordance with its current and historical
accounting practices.


 


“Eligible Inventory” means, at any time of determination,
without duplication, the Inventory Value of the Inventory of the Borrowers at
such time that is not ineligible for inclusion in the calculation of the
Borrowing Bases pursuant to any of clauses (a) through (o) below or
otherwise deemed, at the sole discretion of the Administrative Agent, to be
ineligible for inclusion in the calculation of the Borrowing Bases.  Without limiting the foregoing, to qualify as
“Eligible Inventory”, no Person other than a Borrower shall have any direct or
indirect ownership, interest or title to such Inventory and no Person other
than a Borrower shall be indicated on any purchase order or invoice with
respect to such Inventory as having or purporting to have an interest
therein.  Standards of eligibility may be
fixed from time to time solely at the discretion of the Administrative Agent,
or any time after the Domestic A Revolving Loans and the Canadian Revolving
Loans have been paid in full and the Domestic A Commitments and the Canadian
Commitments have been terminated, solely at the discretion of the Domestic B
Agent, with any changes in such standards to be effective immediately after
delivery of notice thereof to the Parent Borrower.  Unless otherwise approved from time to time
in writing by the Administrative Agent or the Domestic B Agent, as applicable,
no Inventory shall be deemed Eligible Inventory if:


 


(a) such Inventory is not
owned solely by a Borrower or a Borrower does not have sole and good, valid and
unencumbered title thereto; or


 


(b) such Inventory is not
located in the United States or Canada; or


 


(c) such Inventory is not
either (i) located in a third party warehouse or in another location not
owned by a Borrower and either (A) covered by a Landlord Lien Waiver or
Bailee Letter, as applicable, in each case in form and substance acceptable to
the Collateral Agent, or (B) a Rent Reserve has been taken with respect to
such Inventory or (ii) located on property owned by a Borrower; or


 


(d) such Inventory
constitutes goods returned or rejected due to quality issues by a customer of
the applicable Borrower, or constitutes goods in transit to third parties; or


 


17

















 


(e) such Inventory
constitutes operating supplies, packaging or shipping materials, cartons,
repair parts, labels or miscellaneous spare parts or other such materials not
considered for sale in the ordinary course of business; or


 


(f) such Inventory is not
subject to a valid and perfected first-priority Lien in favor of the Collateral
Agent, subject to no other Liens, other than Liens described under
clauses (a), (b) and (e) of the definition of “Permitted Encumbrances”; or


 


(g) such Inventory is
consigned or at a customer location but still accounted for in the perpetual
inventory balance of the Parent Borrower or the Canadian Subsidiary Borrower,
as applicable; or


 


(h) such Inventory is
being processed offsite at a third party location or outside processor, or is
in transit to or from the such third party location or outside processor, or is
located at a closed facility; or


 


(i) such Inventory is
seconds or thirds or stale or is scrap, obsolete or slow moving or
unmerchantable or is identified as overstock or excess by the Parent Borrower
or the Canadian Subsidiary Borrower, as applicable; or


 


(j) such Inventory is
used as a sample or prototype, displays or display items, not first-quality or
non-saleable in the ordinary course of business or has been returned by a
customer; or


 


(k) such Inventory is a
discontinued product or component thereof; or


 


(l) any portion of the
Inventory Value of such Inventory is attributable to intercompany profit
between any Borrower and any of its Affiliates; or


 


(m) such Inventory is
damaged, returned or marked for return to vendor; or


 


(n) such Inventory is not
in good condition, does not meet all material standards imposed by any
Governmental Authority having regulatory authority over it, is repair or
replacement parts for machinery and equipment, is rejected, defective or
undergoing quality review.


 


“Eligible Raw Materials” means, on any date, the amount of Eligible
Inventory defined as Raw Materials by each Borrower on such date as shown on
its perpetual inventory records in accordance with its current and historical
accounting practices.


 


“Environmental Laws”
means all laws (including common law), rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
handling, treatment, storage, disposal, Release or threatened Release of any
Hazardous Material or to health and safety matters.


 


18

















 


“Environmental Liability”
means any liability, obligation, claim, action, suit, judgment or order,
contingent or otherwise (including, but not limited to, any liability for
damages, natural resource damage, costs of environmental remediation,
administrative oversight costs, fines, penalties or indemnities), of the Parent
Borrower or any Subsidiary directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release
or threatened release of any Hazardous Materials into the environment or
(e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.


 


“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights entitling
the holder thereof to purchase or acquire any such equity interest.


 


“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time.


 


“ERISA Affiliate”
means any trade or business (whether or not incorporated) that, together with
the Parent Borrower, is treated as a single employer under Section 414(b)
or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.


 


“ERISA Event” means
(a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event
for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the
Parent Borrower or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Parent Borrower or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by the Parent Borrower or any of its ERISA Affiliates
of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (g) the receipt by the Parent Borrower or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan
from the Parent Borrower or any ERISA Affiliate of any notice, concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.


 


“Eurodollar”, when
used in reference to any Loan or Borrowing, refers to whether such Loan, or the
Loans comprising such Borrowing, are bearing interest at a rate determined by
reference to the LIBO Rate.


 


“Event of Default”
has the meaning assigned to such term in Article VII.


 


19

















 


“Excluded Charges”
means non-recurring charges incurred in respect of restructurings, plant
closings, headcount reductions or other similar actions, including severance
charges in respect of employee terminations; provided that the aggregate
amount of Excluded Charges shall not exceed (a) $15,000,000 during the
term of this Agreement and (b) $7,500,000 during any one fiscal year.


 


“Excluded Subsidiaries”
means the Subsidiaries of the Canadian Subsidiary Borrower set forth on Schedule 1.01(d);
provided, however, that any Subsidiary shall cease to be a
Excluded Subsidiary at such time as such Subsidiary (a) engages in any
business or business activity, other than activities incidental to the
liquidation or dissolution of such Subsidiary in accordance with applicable law
or (b) has total assets with an aggregate book value or fair market value
in excess of $100,000.


 


“Excluded Taxes”
means, with respect to the Administrative Agent, any Lender, the Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located, (b) any branch profits
taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction described in clause (a) above and (c) in
the case of a Foreign Lender with respect to any Borrower (other than an
assignee pursuant to a request by the Parent Borrower under Section 2.18(b)
or by operation of the CAM), any withholding tax that is imposed on amounts
payable by such Borrower to such Foreign Lender at the time such Foreign Lender
becomes a party to this Agreement (or designates a new lending office) or is
attributable to such Foreign Lender’s failure to comply with Section 2.16(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from such Borrower with respect to such
withholding tax pursuant to Section 2.16(a).


 


“Existing Credit
Agreement” has the meaning assigned to such term in the recitals hereto.


 


“Existing Letters of
Credit” means the letters of credit issued under the Existing Credit
Agreement and outstanding as of the Effective Date, which are listed on Schedule 1.01(b).


 


“Existing Mortgage”
means a mortgage, deed of trust, assignment of leases and rents, leasehold
mortgage or other security document, including any amendment thereto, granting
a Lien on any Mortgaged Property to secure the Obligations executed in
connection with the Existing Credit Agreement.


 


“Existing Preferred Stock”
means the Series A Cumulative Exchangeable Redeemable Preferred Stock of the
Parent Borrower having the terms specified in the form of the Parent Borrower’s
Fourth Amended and Restated Articles of Incorporation attached as Exhibit A to
the Amendment and Waiver dated as of August 13, 2004, among the Parent Borrower
and the Lenders party thereto, as such terms may be amended or modified from
time to time pursuant to Section 6.12(a).


 


20

















 


“Existing Security
Documents” has the meaning assigned to such term in the recitals hereto.


 


“Federal Funds Effective
Rate” means, for any day, a floating rate equal to the weighted average of
the rates on overnight Federal funds transactions among members of the Federal
Reserve System, as determined by the Administrative Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).


 


“Fee Letter” means
that certain Fee Letter dated November 14, 2005 between the Parent Borrower and
the Administrative Agent, in form and substance satisfactory to the Agents.


 


“Financial Officer”
means the chief financial officer, principal accounting officer, treasurer,
assistant treasurer or controller of the Parent Borrower.


 


“Finished Goods” means completed goods that require no
additional processing or manufacturing to be sold to customers (other than
customers that are Affiliates of any Borrower) by a Borrower in the ordinary
course of business.


 


“First-Priority Assets”
means (a) at all times prior to the 2004 Notes First Lien Transition Date
(as defined in the Intercreditor Agreement), the assets referred to in
clauses (a)(i) through (xi) of the definition of “Senior Lender First Lien
Collateral” in the Intercreditor Agreement, and (b) at all times on and
after the 2004 Notes First Lien Termination Date, any assets.


 


“First-Priority
Collateral” has the meaning assigned to the term “Senior Lender First Lien
Collateral” in the Intercreditor Agreement.


 


“Fixed Charge Coverage
Ratio” means, as of the end of any period of twelve consecutive fiscal
months of the Parent Borrower, the ratio of (a) Consolidated EBITDA for
such period to (b) the sum of (i) the aggregate amount of scheduled
principal or similar payments made during such period in respect of Long-Term
Indebtedness of the Parent Borrower and the Subsidiaries (other than
(A) payments made by the Parent Borrower or any Subsidiary to the Parent
Borrower or a Subsidiary, (B) payments made by the Parent Borrower or a
Subsidiary in respect of loans under the Existing Credit Agreement and
(C) payments made by the Parent Borrower or a Subsidiary in respect of any
of the Loans) plus (ii) the aggregate amount of payments made
during such period in respect of Long-Term Indebtedness of the Parent Borrower
and the Subsidiaries, to the extent that such payments reduced any scheduled
principal or similar payments referred to in clause (i) above that would
have become due within one year after the date of the applicable payment, plus
(iii) Cash Interest Expense during such period plus (iv) cash
dividends or other distributions paid by the Parent Borrower in respect of its
Equity Interests during such period, plus (v) the aggregate amount
of Taxes paid in cash during such period, plus (vi) Capital
Expenditures made during such period (excluding Capital Expenditures funded
with the Net Proceeds from any sale, transfer or disposition of assets pursuant
to Section 6.06(a), (d), (e), (f) or (g)
(other than a sale, transfer or disposition of inventory pursuant to Section 6.06(a)),
all as determined on a consolidated basis with respect to the Parent Borrower
and the Subsidiaries in accordance with GAAP. 
For purposes of calculating the Fixed Charge Coverage Ratio for any
period, if the Parent Borrower has made an election to make cash interest
payments


 


21

















 


in respect of the Senior First
Lien Notes on or prior to June 15, 2007, the Fixed Charge Coverage Ratio
as of the last day of such period shall be calculated on a pro forma basis as
if all interest accruing in respect of the Senior First Lien Notes since the
beginning of such period, to the extent not already accrued as cash interest,
had instead been paid in cash.


 


“Foreign Assets”
means the assets of or shares or other ownership interests in the Foreign
Subsidiaries (other than any Foreign Subsidiary that is a Loan Party).


 


“Foreign Lender”
means, (a) with respect to the Parent Borrower or any Domestic Subsidiary
Borrower, any Lender that is organized under the laws of a jurisdiction other
than the United States of America, any State thereof or the District of
Columbia and (b) with respect to the Canadian Subsidiary Borrower, any
Lender that is a non-resident of Canada for Canadian tax purposes and not an
“authorized foreign bank” under Section 2 of the Bank Act (Canada).


 


“Foreign Subsidiary”
means any Subsidiary that is organized under the laws of a jurisdiction other
than the United States of America or any State thereof or the District of
Columbia.


 


“GAAP” means, subject
to Section 1.04, generally accepted accounting principles in the
United States of America.


 


“GECC-Led DIP Agreement”
has the meaning assigned to such term in Section 2.08(b).


 


“Governmental Authority”
means the government of the United States of America or Canada, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or other
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.


 


“Guarantee” of or by
any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
or other obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or obligation; provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.


 


“Guarantee Agreement”
means the Guarantee Agreement, substantially in the form of Exhibit B,
among each Loan Party (other than a Foreign Subsidiary that is not organized
under the laws of Canada or any province thereof) and the Collateral Agent.


 


22

















 


“Guarantor Payment”
has the meaning assigned to such term in Section 11.07(a).


 


“Hazardous Materials”
means all explosive, radioactive, hazardous or toxic substances, wastes or
other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes, and all other substances or wastes of any nature regulated
pursuant to any Environmental Law, including any material listed as a hazardous
substance under Section 101(14) of CERCLA.


 


“Indebtedness” of any
Person means, without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
accounts payable incurred in the ordinary course of business that are not
overdue by more than 90 days, unless the payment thereof is being contested
in good faith) (it being understood that “deferred purchase price” in
connection with any purchase of property or assets shall include only that
portion of the purchase price that shall be deferred beyond the date on which
the purchase is actually consummated), (e) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others,
(g) all Capital Lease Obligations of such Person, (h) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all
obligations, contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.  Notwithstanding the foregoing, “Indebtedness”
shall not include (i) deferred taxes or (ii) unsecured indebtedness
of the Parent Borrower or any Subsidiary to finance insurance premiums in a
principal amount not in excess of the casualty and other insurance premiums to
be paid by the Parent Borrower or any Subsidiary for a three-year period
beginning on the date of any incurrence of such indebtedness.


 


“Indemnified Taxes”
means Taxes other than Excluded Taxes.


 


“Instrument” has the
meaning assigned to such term in the New York Uniform Commercial Code.


 


“Intercompany Obligations”
has the meaning assigned to such term in Section 11.09(a).


 


“Intercreditor Agreement”
means the intercreditor agreement entered into among the Parent Borrower, the
Collateral Agent, the Senior First Lien Note Trustee and the Senior Second Lien
Note Trustee (or any other trustee or agent to which Liens are granted under
the Senior First Lien Security Documents or the Senior Second Lien Security
Documents), providing for, among other things, (a) the relative priorities
of the Liens granted pursuant to the Security


 


23

















 


Documents, the Senior First
Lien Security Documents and the Senior Second Lien Security Documents and
(b) restrictions on the exercise of remedies under the Security Documents,
the Senior First Lien Security Documents and the Senior Second Lien Security
Documents.


 


“Interest Election
Request” means a request by a Borrower to convert or continue a Revolving
Loan in accordance with Section 2.07.


 


“Interest Payment Date”
means (a) with respect to any ABR Loan (including any Swingline Loan), the
first Business Day of each month and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Loan with an Interest
Period of more than one month’s duration, each day prior to the last day of
such Interest Period that occurs at intervals of one month’s duration after the
first day of such Interest Period.


 


“Interest Period”
means, with respect to any Eurodollar Borrowing, the period commencing on the
date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is, (a) on or before December 31, 2005, seven days
thereafter or (b) at any time thereafter, one, two or three months thereafter,
as the applicable Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.


 


“Inventory” has the
meaning assigned to such term in Article 9 of the New York Uniform Commercial
Code.


 


“Inventory Reserves” means reserves against Inventory equal to
the sum of the following (with each reserve (other than the reserve described
in clause (h) below) determined by the Parent Borrower but subject to
adjustment solely at the discretion of the Administrative Agent (subject to the
consent of the Domestic B Agent if the effect of such adjustment would be to
increase the Borrowing Bases or the Availability Amount), or any time after the
Domestic A Revolving Loans and the Canadian Revolving Loans have been paid in
full and the Domestic A Commitments and the Canadian Commitments have been
terminated, solely at the discretion of the Domestic B Agent:


 


(a)  a reserve
for shrink that arises from discrepancies between the perpetual accounting
system of the Parent Borrower or the Canadian Subsidiary Borrower, as
applicable, and physical counts of the Inventory pertaining to inventory
quantities on hand; and


 


(b)  a reserve
for royalties; and


 


24

















 


(c)  a reserve
for Inventory that is designated to be returned to vendors or that is
recognized as damaged, off-quality or not to customer specifications by the
applicable Borrower; and


 


(d)  to the
extent not included in the calculation of Inventory Value, a revaluation
reserve whereby capitalized favorable variances shall be deducted from Eligible
Inventory and unfavorable variances shall not be added to Eligible Inventory;
and


 


(e)  a lower of
the cost or market reserve for any differences between the applicable
Borrower’s actual cost to produce versus its selling price to third parties
determined on a product line basis; and


 


(f)  a reserve
for prepaid freight; and


 


(g)  a reserve
for vendor rebates; and


 


(h)  any other
reserve as deemed appropriate from time to time.


 


“Inventory Value”
means, with respect to any Inventory of any Borrower at any time of
determination, the lesser of (a) the standard cost of such Inventory as shown
on the perpetual inventory records of each Borrower stated on a basis
consistent with its current and historical accounting practices, in dollars,
determined in accordance with the standard cost method of accounting, less
(i) any markup on such Inventory from an Affiliate and (ii) in the
event variances under the standard cost method (A) are capitalized,
favorable variances shall be deducted from Eligible Inventory, and unfavorable
variances shall not be added to Eligible Inventory, and (B) are expensed,
a reserve shall be established by the Parent Borrower (but shall be subject to
adjustment at the sole discretion of the Administrative Agent (subject to the
consent of the Domestic B Agent if the effect of such adjustment would be to
increase the Borrowing Bases or the Availability Amount), or any time after the
Domestic A Revolving Loans and the Canadian Revolving Loans have been paid in
full and the Domestic A Commitments and the Canadian Commitments have been
terminated, at the sole discretion of the Domestic B Agent) as appropriate in
order to adjust the standard cost of Eligible Inventory to approximate actual
cost and (b) the market value of such Inventory.


 


“Investment Grade”
means, in the case of S&P, a rating of BBB- or better and, in the case of
Moody’s, a rating of Baa3 or better.


 


“IPO” means the issuance
by the Parent Borrower of shares of its common stock to the public pursuant to
a bona fide underwritten public offering.


 


“Issuing Bank” means
General Electric Capital Corporation, in its capacity as the issuer of Letters
of Credit hereunder, and its successors in such capacity as provided in Section 2.05(i)
and such other financial institutions as may become Issuing Banks as provided
in Section 2.05(i).  The
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of the Issuing Bank or a bank or other legally
authorized Person selected by or acceptable to the Administrative Agent in its
sole discretion, in each case subject to the consent of the Parent Borrower
which shall not be unreasonably withheld or delayed, in which case the term
“Issuing Bank” shall include any such Affiliate or bank or Person with


 


25

















 


respect to Letters of Credit
issued by such Affiliate or bank or Person. 
In the event that there is more than one Issuing Bank at any time,
references herein and in the other Loan Documents to the Issuing Bank shall be
deemed to refer to the Issuing Bank in respect of the applicable Letter of
Credit or to all Issuing Banks, as the context requires.


 


“Joint Venture”
means, as to a Person, any corporation, partnership or other legal entity or
arrangement in which such Person has any direct or indirect equity interest and
that is not a subsidiary of such Person.


 


“Landlord Lien Waiver”
means a written agreement reasonably acceptable to the Collateral Agent,
pursuant to which a Person shall waive or subordinate its rights and claims as
landlord in any Inventory of the applicable Loan Party for unpaid rents, grant
access to the Collateral Agent for the repossession and sale of such Inventory
and make other agreements relative thereto.


 


“LaSalle” has the
meaning assigned to such term in Section 4.01(s).


 


“LC Availability Period”
means the period from and including the Effective Date to but excluding the earlier
of (a) the date that is five Business Days prior to the Maturity Date and
(b) the date of termination of the Domestic A Commitments.


 


“LC Disbursement”
means a payment made by the Issuing Bank pursuant to a Letter of Credit.


 


“LC Exposure” means,
at any time, the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on
behalf of the Parent Borrower at such time. 
The LC Exposure of any Domestic A Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.


 


“Lenders” means the
Domestic A Lenders, the Domestic B Lenders and the Canadian Lenders.


 


“Letter of Credit”
means any letter of credit issued pursuant to this Agreement.


 


“LIBO Rate” means,
with respect to any Eurodollar Borrowing for any Interest Period, the rate per
annum determined by the Administrative Agent equal to:


 


(a)           the offered rate for deposits in dollars for
the applicable Interest Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full Business Day next preceding the first
day of such Interest Period; divided  by


 


(b)           a number equal to 1.0 minus the
aggregate (but without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on the day that is 2 Business Days
prior to the beginning of such Interest Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal Reserve
Board or other Governmental Authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurodollar funding (currently
referred to as “Eurocurrency Liabilities” in


 


26

















 


Regulation D of the Federal
Reserve Board that are required to be maintained by a member bank of the
Federal Reserve System.


 


If such interest rates shall
cease to be available from Telerate News Service (or its successor satisfactory
to the Administrative Agent), the LIBO Rate shall be determined from such
financial reporting service or other information as shall be mutually
acceptable to the Administrative Agent and the Parent Borrower.


 


“Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.


 


“Loan Documents”
means this Agreement, the Fee Letter, the Work Fee Letter, the Guarantee
Agreement, the Intercreditor Agreement and the Security Documents.


 


“Loan Parties” means
the Parent Borrower, the Domestic Subsidiary Borrowers, the Canadian Subsidiary
Borrower and the other Subsidiary Loan Parties.


 


“Loans” means the
loans made by the Lenders to the Borrowers pursuant to this Agreement,
including Swingline Loans and Protective Advances.


 


“Long-Term Indebtedness”
means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred,
constituted) a long-term liability; provided, however, that all
Obligations hereunder shall be for purposes of this Agreement at all times
constitute Long-Term Indebtedness.


 


“Margin Stock” has
the meaning assigned to such term in Regulation U.


 


“Mark-to-Market Value”
has the meaning assigned to such term in the Intercreditor Agreement.


 


“Material Adverse Effect”
means a material adverse effect on (a) the business, operations,
properties, assets, prospects or condition (financial or otherwise) or contingent
or other liabilities of the Parent Borrower and the Subsidiaries, taken as a
whole, (b) the ability of the Loan Parties to perform any material
obligations under any Loan Document or (c) the rights of or benefits
available to the Lenders under any Loan Document.


 


“Material Indebtedness”
means Indebtedness (other than the Loans and Letters of Credit), or obligations
in respect of one or more Swap Agreements, of any one or more of the Parent
Borrower and the Subsidiaries in an aggregate principal or similar amount
exceeding $10,000,000.  For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
the Parent Borrower or any Subsidiary in respect of any Swap Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Parent Borrower or such Subsidiary would be required to pay if such
Swap Agreement were terminated at such time.


 


27

















 


“Maturity Date” means
May 21, 2007.


 


“Minimum Availability
Reserve” means at all times $10,000,000.


 


“Moody’s” means
Moody’s Investors Service, Inc.


 


“Mortgage” means a
mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or
other security document, including any amendment thereto, granting a Lien on
any Mortgaged Property to secure the Obligations.


 


“Mortgaged Property”
means, initially, each parcel of real property and the improvements thereto
owned by a Loan Party and identified on Schedule 1.01(a), and
includes each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.


 


“Multiemployer Plan”
means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.


 


“Net Proceeds” means,
with respect to any event (a) the cash proceeds received by the Parent
Borrower and the Subsidiaries in respect of such event including (i) any
cash received in respect of any non-cash proceeds (excluding interest
payments), but only as and when received, (ii) in the case of a casualty,
insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the Parent Borrower
and the Subsidiaries to third parties (other than to the Parent Borrower or a
Subsidiary) in connection with such event, (ii) in the case of a sale,
transfer or other disposition of an asset (including pursuant to a sale and
leaseback transaction or a casualty or other insured damage or condemnation or
similar proceeding), the amount of all payments required to be made by the
Parent Borrower and the Subsidiaries as a result of such event to repay
Indebtedness (other than Loans) secured by such asset or otherwise subject to
mandatory prepayment as a result of such event (including in order to obtain
any consent required therefor), (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Parent Borrower and the
Subsidiaries, and the amount of any reserves established by the Parent Borrower
and the Subsidiaries to fund contingent liabilities reasonably estimated to be
payable, and that are directly attributable to such event (as determined
reasonably and in good faith by the chief financial officer of the Parent
Borrower) and (iv) all distribu­tions and other payments required to be
made to minority interest holders in Subsidiaries or Joint Ventures as a result
of such event (provided that such distribution or payment is
proportionate to such minority interest holders’ share of net income (or
dividends and distribution made in respect of the capital stock or other equity
interests) of such Subsidiary or Joint Venture as provided in the certificate
of incorporation or other governing documents of such Subsidiary or Joint
Venture).  In the case of Net Proceeds
denominated in a currency other than dollars, the amount of such Net Proceeds
shall be the dollar equivalent thereof based upon the exchange rates prevailing
at the time of the transaction giving rise to such Net Proceeds.


 


“Non-Consenting Lender”
has the meaning assigned to such term in Section 10.02(c).


 


28

















 


“Obligations” means
(a) all principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment, or otherwise, (b) each
payment required to be made by the Borrowers under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (c) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of each Loan
Party to the Secured Parties under this Agreement and the other Loan Documents,
(d) all covenants, agreements, obligations and liabilities of each Loan Party
under or pursuant to this Agreement and the other Loan Documents, (e) all Swap
Obligations and (f) the due and punctual payment and performance of all Banking
Services Obligations.


 


“Other Taxes” means
any and all current or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made under
any Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, any Loan Document.


 


“Parent Borrower”
means Pliant Corporation, a Utah corporation.


 


“PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA and any
successor entity performing similar functions.


 


“Perfection Certificate”
means the Domestic Perfection Certificate or the Canadian Perfection
Certificate.


 


“Permitted Encumbrances”
means:


 


(a) Liens imposed by law
for Taxes that are not yet due or are being contested in compliance with Section 5.05;


 


(b) carriers’,
warehousemen’s, mechanics’, materialmen’s, processors’, landlords’, repairmen’s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 60 days or are
being contested in compliance with Section 5.05;


 


(c) pledges and deposits
made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;


 


(d) (i) Liens incurred on
assets of any Foreign Subsidiary that is not a Loan Party to secure the
obligations of the Parent Borrower or any of its Subsidiaries under trade
contracts in the ordinary course of business; provided that the
aggregate amount of such obligations (other than obligations constituting
Indebtedness incurred pursuant to clauses (v), (viii) or (ix) of Section
6.01) that may be secured pursuant to this subclause (i) and


 


29

















 


outstanding at any time shall not exceed $35,000,000 minus
the aggregate amount of Indebtedness that has been incurred pursuant to clauses
(v), (viii) and (ix) of Section 6.01 and that is outstanding at such
time, or (ii) deposits made to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;


 


(e) judgment liens in
respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII;


 


(f) Liens of a collection
bank arising in the ordinary course of business under § 4-208 of the
Uniform Commercial Code in effect in the relevant jurisdiction;


 


(g) Liens disclosed on title
policies delivered to the Administrative Agent prior to the Effective Date in
respect of any Mortgaged Property and easements, zoning restrictions,
rights-of-way and similar restrictions and encumbrances (including minor title
and survey defects) on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the Parent Borrower or any Subsidiary; and


 


(h) Liens in respect of
real property that become Mortgaged Property after the Effective Date pursuant
to Section 5.13 to the extent such Lien is permitted by the
applicable Mortgage and reasonably acceptable to the Collateral Agent;


 


provided that the term “Permitted Encumbrances” shall
not include any Lien securing Indebtedness.


 


“Permitted Investments”
means: (i) a marketable obligation, maturing within two years after
issuance thereof, issued or guaranteed by the United States of America or
an instrumentality or agency thereof, (ii) a certificate of deposit or
banker’s acceptance, maturing within one year after issuance thereof, issued by
any Lender, or a national or state bank or trust company or a European,
Canadian or Japanese bank in each case having capital, surplus and undivided
profits of at least $100,000,000 and whose long-term unsecured debt has a
rating of “A” or better by S&P or A2 or better by Moody’s or the equivalent
rating by any other nationally recognized rating agency (provided that the
aggregate face amount of all investments in certificates of deposit or banker’s
acceptances issued by the principal offices of or branches of such European or
Japanese banks located outside the United States shall not at any time
exceed 33-1/3% of all investments described in this definition),
(iii) open market commercial paper, maturing within 270 days after
issuance thereof, which has a rating of A1 or better by S&P or P1 or better
by Moody’s, or the equivalent rating by any other nationally recognized rating
agency, (iv) repurchase agreements and reverse repurchase agreements with
a term not in excess of one year with any financial institution that has been
elected a primary government securities dealer by the Federal Reserve Board or
whose securities are rated AA-or better by S&P or Aa3 or better by Moody’s
or the equivalent rating by any other nationally recognized rating agency
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States of America or any agency or instrumentality thereof
and backed by the full faith and credit of the


 


30

















 


United States of America,
(v) “money market” preferred stock maturing within six
months after issuance thereof or municipal bonds issued by a corporation
organized under the laws of any state of the United States, which has a
rating of “A” or better by S&P or Moody’s or the equivalent rating by any
other nationally recognized rating agency, (vi) tax exempt floating rate
option tender bonds backed by letters of credit issued by a national or state
bank whose long-term unsecured debt has a rating of AA or better by S&P or
Aa2 or better by Moody’s or the equivalent rating by any other nationally
recognized rating agency, (vii) ”money market” funds that invest in the
investments specified in clauses (i) through (vi) above and
(viii) demand deposit accounts with commercial banks.


 


“Permitted Notes
Refinancing Indebtedness” means the 2004 Notes (after giving effect to the
2004 Notes Restatement) and any Indebtedness of the Parent Borrower issued to
refinance, redeem, repurchase or otherwise replace (collectively with the
amendment and restatement expressly contemplated by the 2004 Notes Restatement,
“refinance”) all or any portion of any of the Senior First Lien Notes,
Senior Second Lien Notes or Senior Subordinated Notes (or previous
refinancings, redemptions, repurchases or replacements thereof constituting
Permitted Notes Refinancing Indebtedness); provided that (a) except as
otherwise expressly contemplated by the 2004 Notes Restatement, the aggregate
principal amount at maturity of such Permitted Notes Refinancing Indebtedness
does not exceed the aggregate principal amount at maturity of the Indebtedness
being refinanced (plus unpaid accrued interest and premium thereon), (b) if the
aggregate principal amount at maturity of the Indebtedness being refinanced
exceeds the accreted value of such Indebtedness, the accreted value of such
Permitted Notes Refinancing Indebtedness does not exceed the accreted value of
the Indebtedness being refinanced (plus unpaid accrued interest (not included
in the accreted value) and premium thereon), (c) such Permitted Notes
Refinancing Indebtedness has a rate of interest at a market rate determined at
the time of pricing, but in any event, except as otherwise expressly
contemplated by the 2004 Notes Restatement, at no time greater than the rate of
interest of any of the Indebtedness being refinanced, (d) except as otherwise
expressly contemplated by the 2004 Notes Restatement, the stated maturity of
such Permitted Notes Refinancing Indebtedness is no earlier than the later of
(i) 180 days after the Maturity Date and (ii) the date on which the
Indebtedness being refinanced would otherwise come due in accordance with its
terms, (e) except as otherwise expressly contemplated by the 2004 Notes
Restatement, such Permitted Notes Refinancing Indebtedness does not require any
scheduled amortization, principal or sinking fund payments earlier than the
later of (i) 180 days after the Maturity Date and (ii) the date on which the
Indebtedness being refinanced would otherwise come due in accordance with its
terms, (i) with respect to any refinancing of the Senior Subordinated Notes,
such Permitted Notes Refinancing Indebtedness is unsecured and subordinated in
right of payment to the Obligations on terms no less favorable to the Lenders
than those contained in the Senior Subordinated Note Documents, (g) such
Permitted Notes Refinancing Indebtedness does not have different obligors or
guarantors than those with respect to the Senior First Lien Notes, Senior
Second Lien Notes or Senior Subordinated Notes, as applicable, being refinanced
and (h) all other terms and conditions (including, as applicable, any
collateral and intercreditor provisions) of such Permitted Notes Refinancing
Indebtedness are not less favorable to the Lenders or the Parent Borrower and
its subsidiaries in any material respect than those contained in (i) except in
the case of Permitted Notes Refinancing Indebtedness referred to in clause (ii)
below, the Senior First Lien Notes, Senior Second Lien Notes or Senior
Subordinated Notes, as applicable, being refinanced or (ii) if such Permitted
Notes Refinancing Indebtedness is


 


31

















 


refinancing any 2004 Notes
(other than the Amended 2004 Notes), the 2004 Notes outstanding immediately
prior to the 2004 Notes Restatement Date.


 


“Person” means any
natural person, corporation, limited liability company, trust, joint venture,
association, company, partnership, Governmental Authority or other entity.


 


“Plan” means any
employee pension benefit plan (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA, Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Parent Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.


 


“Pledge Agreements” means
the Domestic Pledge Agreement and the Canadian Pledge Agreement.


 


“Prepayment Fee”
means a fee payable to the Administrative Agent, for the benefit of the
Lenders, in connection with reduction in all or a portion of the Commitment or
termination of all or a portion of the Commitment in an amount equal to the
Commitment so reduced or terminated so prepaid multiplied  by
1.00%.


 


“Prime Rate” means
the rate publicly quoted from time to time by The Wall Street Journal as
the “prime rate” (or, if The Wall Street Journal ceases quoting a prime
rate, the highest per annum rate of interest published by the Federal Reserve
Board in Federal Reserve statistical release H.15 (519) entitled “Selected
Interest Rates” as the Bank prime loan rate or its equivalent); each change in
the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.


 


“Priority Payables
Reserve” means, with respect to any Person at any time, any amount payable
by such Person that is secured by a Lien in favor of a Governmental Authority
that ranks or is capable of ranking prior to or pari  passu with
the Liens created by the Security Documents in respect of any Eligible Accounts
Receivable or Eligible Inventory, including, if applicable, amounts owing for
wages, vacation pay, severance pay, employee deductions, sales tax, excise tax,
Taxes payable pursuant to Part IX of the Excise
Tax Act (Canada) (net of GST input credits), income tax, workers
compensation, government royalties, pension fund obligations, overdue rents or
Taxes, and other statutory or other claims.


 


“Pro Forma Opening
Borrowing Base” means the Borrowing Bases, calculated as of October 31,
2005.


 


“Projections” has the
meaning assigned to such term in Section 4.01(j).


 


“Protective Advances”
has the meaning assigned to such term in Section 2.19(a).


 


“Purchase Notice” has
the meaning assigned to such term in Section 12.02(a).


 


“Purchase Price” has
the meaning assigned to such term in Section 12.02(b)(i).


 


“Purchased Interests”
has the meaning assigned to such term in Section 12.02(a).


 


32

















 


“Purchasers” has the
meaning assigned to such term in Section 12.02(a).


 


“Qualified Preferred
Stock” means, with respect to any Person, any preferred Equity Interest
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable or exercisable) or upon the happening of any
event does not (a) (i) mature or becomes mandatorily redeemable
pursuant to a sinking fund obligation or otherwise; (ii) become
convertible or exchangeable at the option of the holder thereof for
Indebtedness or preferred stock that is not Qualified Preferred Stock; or
(iii) become redeemable at the option of the holder thereof (other than as
a result of a change of control event), in whole or in part, in each case on or
prior to the first anniversary of the Maturity Date and (b) provide
holders thereunder with rights upon the occurrence of a “change of control”
event or have other terms relating to “change of control” events that are less
favorable to the Lenders than the applicable terms set forth in the Existing
Preferred Stock.  Notwithstanding
anything to the contrary, the Existing Preferred Stock shall be deemed to be
Qualified Preferred Stock.


 


“Qualifying Foreign
Subsidiary” means any Foreign Subsidiary other than (a) a Foreign
Subsidiary that is treated as a corporation for U.S. federal income tax
purposes or (b) any direct or indirect subsidiary of a Foreign Subsidiary
described in clause (a).  The
Canadian Subsidiary Borrower is a Qualifying Foreign Subsidiary.


 


“Raw Materials” means items or materials used or consumed
in the manufacturing of goods to be sold by the applicable Borrower in the
ordinary course of business.


 


“Real Estate” has the
meaning assigned to such term in Section 3.05.


 


“Recovery Rate”
means, with respect to any Class of Eligible Inventory, (a) the estimated
net recovery of all Eligible Inventory of the Borrowers of such Class of
Eligible Inventory stated in dollars as determined on a net orderly liquidation
basis by the most recent analysis conducted by outside inventory
consultants/appraisers retained or approved by the Agents and disclosed to the
Parent Borrower divided  by (b) the Inventory Value of all
Eligible Inventory of the Borrowers of such Class of Eligible Inventory, as of
the date of such most recent analysis.


 


“Register” has the
meaning assigned to such term in Section 10.04.


 


“Regulation U”
means Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.


 


“Regulation X”
means Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.


 


“Regulation Z”
means Regulation Z of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.


 


“Related Parties”
means, with respect to any specified Person, such Person’s Affiliates and the
respective directors, officers, employees, agents and advisors of such Person
and such Person’s Affiliates.


 


33

















 


“Release” means any
release, spill, emission, leaking, dumping, injection, pouring, deposit,
disposal, discharge, dispersal, leaching or migration into or through the
environment.


 


“Rent Reserve” means,
with respect to any location that is not owned by a Loan Party where any
Inventory (to the extent subject to Liens arising by operation of law or
otherwise to secure rent, warehousing fees or similar payment obligations
payable by any Loan Party in respect of such location) is located and with
respect to which no Landlord Lien Waiver or Bailee Letter, as applicable, is in
effect, a reserve equal to three months’ rent, warehousing fees or similar payment
obligations at such location.


 


 “Required Canadian Lenders” means, at
any time, Canadian Lenders having Canadian Revolving Exposures and unused
Canadian Commitments representing more than 50% of the sum of the total
Canadian Revolving Exposures and unused Canadian Commitments at such time.


 


“Required Domestic A
Lenders” means, at any time, Domestic A Lenders having Domestic A Revolving
Exposures and unused Domestic A Commitments representing more than 50% of the
sum of the total Domestic A Revolving Exposures and unused Domestic A
Commitments at such time.


 


“Required Domestic B
Lenders” means, at any time, Domestic B Lenders having Domestic Revolving B
Exposures and unused Domestic B Commitments representing more than 50% of the
sum of the total Domestic Revolving B Exposures and unused Domestic B
Commitments at such time.


 


“Required Lenders”
means, at any time, Lenders having Credit Exposure and unused Commitments
representing more than 50% of the sum of the total Credit Exposure and unused
Commitments at such time.


 


“Reserves” means any
reserves against Eligible Accounts Receivable, Eligible Finished Goods or
Eligible Raw Materials of any Borrower or the Availability Amount that the
Administrative Agent may, or any time after the Domestic A Revolving Loans and
the Canadian Revolving Loans have been paid in full and the Domestic A
Commitments and the Canadian Commitments have been terminated, the Domestic B
Agent may, in its reasonable credit judgment, establish from time to time
(subject to the consent of the Domestic B Agent if the Administrative Agent
alters a Reserve, the effect of which would be to increase the Borrowing Bases
or the Availability Amount).  Without
limiting the generality of the foregoing, Reserves established to ensure the
payment of accrued Consolidated Interest Expenses or Indebtedness shall be
deemed to be a reasonable exercise of the applicable Agent’s credit judgment.


 


“Restricted Payment”
means any dividend or other distribution (whether in cash, securities or other
property) with respect to any Equity Interests in the Parent Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in the Parent Borrower or any Subsidiary or any option,
warrant or other right to acquire any such Equity Interests in the Parent
Borrower


 


34

















 


or any Subsidiary.  For the avoidance of doubt, the receipt by
the Parent Borrower of its Equity Interests in settlement of any claim made by
the Parent Borrower pursuant to the Uniplast Purchase Agreement as in effect on
June 15, 2001, shall not be a Restricted Payment.


 


“Revolving Availability
Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the
Commitments.


 


“Revolving Exposure”
means, with respect to any Lender at any time, the sum of the Domestic
Revolving Exposure of such Lender and the Canadian Revolving Exposure of such
Lender at such time.


 


“Revolving Loan”
means a Domestic Revolving Loan or a Canadian Revolving Loan.


 


“S&P” means
Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc.


 


“SEC” means the
Securities and Exchange Commission.


 


“Second-Priority
Collateral” has the meaning assigned to the term “2004 Notes First Lien
Collateral” in the Intercreditor Agreement.


 


“Secured Obligations
Reserve” means, at any time, the sum of (a) the Mark-to-Market Value
of the Swap Obligations and Secured Swap Obligations of the Loan Parties that
constitute Senior Lender Claims (as defined in the Intercreditor Agreement) at
such time, (b) if, at such time, any Cash Management Arrangement is in
effect that could give rise to Banking Services Obligations or Cash Management
Obligations that would constitute Senior Lender Claims (as defined in the
Intercreditor Agreement), the actual amount of Banking Services Obligations and
Cash Management Obligations that constitute Senior Lender Claims (as defined in
the Intercreditor Agreement) at such time and (c) any amount payable by a Loan
Party that ranks pari passu with or senior to the Obligations.


 


“Secured Parties” means
the “Secured Parties” as defined in the Domestic Security Agreement.


 


“Secured Swap Obligations”
has the meaning assigned to the term “Senior Lender Hedging Obligations” in the
Intercreditor Agreement.


 


 “Security Agreements” means the
Domestic Security Agreement and the Canadian Security Agreement.


 


“Security Documents”
means the Security Agreements, the Pledge Agreements, the Mortgages and each
other security agreement or other instrument or document executed and delivered
pursuant to Section 5.12 or 5.13 to secure any of the
Obligations.


 


“Sellers” has the
meaning assigned to such term in Section 12.02(a).


 


35

















 


“Senior First Lien Note
Documents” means the Senior First Lien Notes, the Senior First Lien Note
Indenture, the Senior First Lien Security Documents, the Intercreditor
Agreement and all other instruments, agreements and documents evidencing,
guaranteeing or otherwise governing the terms of the Senior First Lien Notes.


 


“Senior First Lien Note
Indenture” means the indenture dated as of February 17, 2004, or any other
indenture or similar agreement or instrument, in each case pursuant to which
any Senior First Lien Notes are issued.


 


“Senior First Lien Notes”
means the $306,000,000 principal amount at maturity of 11-1/8% senior secured
discount notes due 2009 of the Parent Borrower issued in exchange for the
substantially identical notes of like tenor privately issued on the Effective
Date and any Permitted Notes Refinancing Indebtedness in respect thereof.


 


“Senior First Lien Note
Trustee” means the trustee under the Senior First Lien Note Indenture, or
any successor thereto.


 


“Senior First Lien
Security Documents” means any and all security agreements, pledge
agreements, mortgages and other agreements and documents pursuant to which any
Liens are granted to secure any Indebtedness or other obligations in respect of
the Senior First Lien Notes.


 


“Senior Second Lien Note
Documents” means the Senior Second Lien Notes, the Senior Second Lien Note
Indenture, the Senior Second Lien Security Documents, the Intercreditor
Agreement and all other instruments, agreements and documents evidencing,
guaranteeing or otherwise governing the terms of the Senior Second Lien Notes.


 


“Senior Second Lien Note
Indenture” means the indenture dated as of May 30, 2003, between the Parent
Borrower and Wilmington Trust Company, as trustee, or any other indenture or
similar agreement or instrument, in each case pursuant to which any Senior
Second Lien Notes are issued.


 


“Senior Second Lien Notes”
means the $250,000,000 aggregate principal amount of 11-1/8% senior secured
notes due 2009 of the Parent Borrower outstanding on the Effective Date and any
Permitted Notes Refinancing Indebtedness in respect thereof.


 


“Senior Second Lien Note
Trustee” means the trustee under the Senior Second Lien Note Indenture, or
any successor thereto.


 


“Senior Second Lien
Security Documents” means any and all security agreements, pledge
agreements, mortgages and other agreements and documents pursuant to which any
Liens are granted to secure any Indebtedness or other obligations in respect of
the Senior Second Lien Notes.


 


“Senior Subordinated Note
Documents” means the Senior Subordinated Notes, the Senior Subordinated
Note Indenture and all other instruments, agreements and documents evidencing,
guaranteeing or otherwise governing the terms of the Senior Subordinated Notes.


 


36

















 


“Senior Subordinated Note
Indenture” means collectively, (a) the indenture dated as of May 31, 2000,
between the Parent Borrower and The Bank of New York, as trustee, (b) the
indenture dated as of April 10, 2002, between the Parent Borrower and The Bank
of New York, as trustee, and (c) any other indenture or similar agreement or
instrument, in each case pursuant to which any Senior Subordinated Notes are
issued.


 


“Senior Subordinated
Notes” means the $320,000,000 aggregate principal amount of 13% senior
subordinated notes due 2010 of the Parent Borrower outstanding on the Effective
Date and any Permitted Notes Refinancing Indebtedness in respect thereof.


 


“Series B Preferred Stock”
means the Series B Redeemable Preferred Stock of the Parent Borrower having the
terms specified in the form of the Parent Borrower’s Fourth Amended and Restated
Articles of Incorporation attached as Exhibit A to the Amendment and Waiver
dated as of August 13, 2004, among the Parent Borrower and the Lenders party
thereto, as such terms may be amended or modified from time to time pursuant to
Section 6.12(a).


 


“Settlement Date” has
the meaning assigned to such term in Section 12.02(a).


 


“Sponsor” means J.P.
Morgan Partners, LLC.


 


“Standstill Period”
has the meaning assigned to such term in Section 12.02.


 


“Statutory Reserve Rate”
means a fraction (expressed as a decimal), the numerator of which is the number
one and the denominator of which is the number one minus the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board to
which the Administrative Agent is subject with respect to the LIBO Rate, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board).  Such
reserve percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. 
The Statutory Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.


 


“Stockholders Agreement”
means the Stockholders Agreement dated as of May 31, 2000, among Huntsman
Packaging Corporation, a Utah corporation, and the stockholders party thereto.


 


“subsidiary” means,
with respect to any Person (the “parent”) at any date, any corporation,
limited liability company, partnership, association or other entity the
accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other corporation,
limited liability company, partnership, association or other entity of which
securities or other ownership interests representing more than 50% of the
equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held.


 


37

















 


“Subsidiary” means
any subsidiary of the Parent Borrower.


 


“Subsidiary Loan Party”
means any Subsidiary of the Parent Borrower; provided that
(a) Pliant Investment Inc., a Utah corporation, shall not be a Subsidiary
Loan Party and (b) a Foreign Subsidiary shall not be a Subsidiary Loan
Party unless such Foreign Subsidiary is a Qualifying Foreign Subsidiary.


 


“Swap Agreement”
means any agreement with respect to any swap, spot, forward, future or
derivative transaction or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no
phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Parent Borrower or the Subsidiaries shall be a Swap
Agreement.


 


“Swap Obligations” of
each Loan Party means all obligations, monetary or otherwise, under each Swap
Agreement that (i) is effective on the Effective Date with a counterparty that
is a Lender (or an Affiliate of a Lender) as of the Effective Date or (ii) is
entered into after the Effective Date with any counterparty that is a Lender
(or an Affiliate thereof) at the time such Swap Agreement is entered into.


 


“Swingline Exposure”
means, at any time, the aggregate principal amount of all Swingline Loans
outstanding at such time.  The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.


 


“Swingline Lender”
means General Electric Capital Corporation, in its capacity as lender of
Swingline Loans hereunder.


 


“Swingline Loan” has
the meaning assigned to such term in Section 2.04.


 


“Taxes” means any and
all present or future taxes, levies, imposts, duties, deductions, charges or
withholdings imposed by any Governmental Authority.


 


“Transactions” means
(a) the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is to be a party, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder, (b) the
execution, delivery and performance by each Loan Party of the Senior First Lien
Note Documents to which it is to be a party, the issuance of the Senior First
Lien Notes and the use of the proceeds thereof, (c) modifications to the
Senior Subordinated Note Indenture entered into in connection with the
consummation of this Agreement, (d) ongoing discussions and negotiations with
the holders of the Senior Subordinated Notes regarding a possible restructuring
of their claims with respect thereto and (e) the payment of the Transaction
Costs.


 


“Transaction Costs”
means the fees and expenses incurred by, or required to be reimbursed or paid
by, the Parent Borrower and the Subsidiaries in connection with the
Transactions.


 


38

















 


“Trigger Notice” has
the meaning assigned to such term in Section 12.01.


 


“2004 Notes” has the
meaning assigned to such term in the definition of “2004 Notes Restatement”


 


“2004 Notes Refinancing
Percentage” means the amount (expressed as a percentage) equal to (a) the
aggregate accreted value of the Amended 2004 Notes divided  by
(b) the aggregate accreted value of the 2004 Notes, in each case on the
2004 Notes Restatement Date.


 


“2004 Notes Restatement”
means (a) the amendment and restatement on or before May 15, 2005, of the
Senior First Lien Note Indenture by the Parent Borrower and the Senior First
Lien Note Trustee to (i) amend and restate the terms of the Senior First Lien
Notes that (A) are outstanding on the effective date (the “2004 Notes
Restatement Date”) of such amendment and restatement (the “2004 Notes”)
and (B) were, on the record date established by the Parent Borrower for the
purpose of consenting to such amendment and restatement (the “Record Date”),
held of record by holders (the “Consenting Holders”) that delivered to
the Senior First Lien Note Trustee an effective consent (which has not been
validly withdrawn) to such amendment and restatement (the Senior First Lien
Notes that satisfy the requirements of this clause (B) and clause (A) above,
together with any identical notes issued in payment of interest thereon or on
any such additional notes in accordance with their terms, the “Amended 2004
Notes”); provided that (1) the 2004 Notes Refinancing Percentage is
not less than 51%, (2) the terms of the Amended 2004 Notes as of the 2004
Notes Restatement Date (other than the interest rate, the pay-in-kind interest
requirements, the cash interest requirements, the voluntary redemption premiums
(which shall be market premiums on the 2004 Notes Restatement Date) and the
principal amount at maturity in respect thereof) shall be substantially
identical to the terms of the 2004 Notes immediately prior to the 2004 Notes
Restatement Date, (3) the Amended 2004 Notes shall not require the payment of
any interest (other than through the issuance of additional Amended 2004 Notes
and, to the extent permitted by clause (B) of the proviso to Section 6.09(b),
in cash in accordance with the terms thereof), (4) the rate of interest on the
Amended 2004 Notes shall be a fixed rate that is a market rate on the 2004
Notes Restatement Date (which may be greater than the rate of interest on the
2004 Notes immediately prior to the 2004 Notes Restatement Date) and in any
event shall not exceed the per annum rate separately agreed upon by the Parent
Borrower and the Administrative Agent, (5) the maturity date of the Amended
2004 Notes shall be June 15, 2009, and (6) such amendment and restatement shall
otherwise be effected on terms reasonably acceptable to the Administrative
Agent, and (ii) amend and restate the terms of the 2004 Notes (other than
the Amended 2004 Notes) to eliminate the material restrictive covenants with
respect thereto that can be eliminated by majority consent under the terms
thereof, (b) in connection with the amendment and restatement described above
in clause (a) of this definition and as soon as practicable after the 2004
Notes Restatement Date, the payment by the Parent Borrower to each Consenting
Holder that consents to such amendment and restatement no later than the
deadline established by the Parent Borrower for such purpose of a consent fee
(which shall be a market amount) in cash in respect of each $1,000 in principal
amount at maturity of Amended 2004 Notes held by such Consenting Holder on the
Record Date; provided that the aggregate amount of such consent fees
shall not exceed the aggregate amount separately agreed upon by the Parent
Borrower and the Administrative Agent, and (c) the execution and delivery by
the Parent Borrower, the Collateral Agent, the Senior First


 


39

















 


Lien Note Trustee and the
Senior Second Lien Note Trustee of any amendment, amendment and restatement or
reaffirmation of the Intercreditor Agreement in effect immediately prior to the
2004 Notes Restatement Date that the Administrative Agent and the Collateral
Agent determine is reasonably necessary or desirable to effect the treatment
under the Intercreditor Agreement of the 2004 Amended Notes in a manner
substantially identical to the manner in which the 2004 Notes are treated under
the Intercreditor Agreement as in effect at such time; provided, however,
that the transactions described above in clauses (a), (b) and (c) of this
definition will not satisfy the requirements for the 2004 Notes Restatement
unless, no later than the 2004 Notes Restatement Date, the Parent Borrower
shall have delivered to the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent, one or more opinions of
counsel to the Parent Borrower as are reasonably requested by the
Administrative Agent with respect to the Parent Borrower and the authorization
and consummation of the transactions described above in clauses (a), (b) and
(c).


 


“2004 Notes Remaining
Amount” means (a) $306,000,000 minus (b) an amount equal to (i) the
2004 Notes Refinancing Percentage multiplied  by (ii) $306,000,000.


 


“2004 Notes Restatement
Date” has the meaning assigned to such term in the definition of “2004
Notes Restatement”.


 


“Type”, when used in
reference to any Loan or Borrowing, refers to whether the rate of interest on
such Loan, or on the Loans comprising such Borrowing, is determined by
reference to the LIBO Rate or the Alternate Base Rate.


 


“USA Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001.


 


“US Lending Office” means, as to any Canadian Lender, the
applicable branch, office or Affiliate of such Canadian Lender designated by
such Canadian Lender to make Canadian Revolving Loans to the Parent Borrower or
any Domestic Subsidiary Borrower.


 


“Wachovia” has the
meaning assigned to such term in Section 4.01(s).


 


“Warrants” means the
warrants of the Parent Borrower to acquire common stock of the Parent Borrower
issued as units with the Senior Subordinated Notes.


 


“Wholly Owned Subsidiary”
means a Subsidiary of which securities (except for directors’ qualifying shares
or other de minimus shares) or other ownership interests representing 100% of
the equity are at the time owned, directly or indirectly, by the Parent
Borrower.


 


“Withdrawal Liability”
means liability of the Parent Borrower or any ERISA Affiliate to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as such terms are defined in Part I of Subtitle E
of Title IV of ERISA.


 


“Work Fee Letter”
means that certain Work Fee Letter dated November 14, 2005 between the Parent
Borrower and the Administrative Agent, in form and substance satisfactory to
the Administrative Agent.


 


40

















 


SECTION 1.02.  Classification
of Loans and Borrowings.  For
purposes of this Agreement, Loans may be classified and referred to by Class (e.g.,
a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class
and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and
referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g.,
a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar
Revolving Loan”).


 


SECTION 1.03.  Terms
Generally.  The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation”.  The word “will”
shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns,
(c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.  To the extent that any of the Loan Documents
executed in connection with the closing of the Existing Credit Agreement have
not been amended or amended and restated in connection with the transactions
contemplated by this Agreement, the parties hereby acknowledge that all
references contained therein to (a) the “Credit Agreement” shall be references
to this Agreement, (b) the “Administrative Agent” shall be references to the
Administrative Agent as defined herein, (c) the “Collateral Agent” shall be
referenced to the Collateral Agent as defined herein and (d) the “Loan Parties”
shall be deemed to include all of the Loan Parties.


 


SECTION 1.04.  Accounting
Terms; GAAP.  Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Parent Borrower notifies the Administrative Agent that the Parent
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Parent Borrower that the Required Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.


 


41

















 


ARTICLE II


 


The Credits


 


SECTION 2.01.  Commitments; Loans Outstanding on
Effective Date.


 


(a)  (i) Subject
to the terms and conditions set forth herein, each Domestic A Lender agrees to
make loans in dollars to the Parent Borrower and the Domestic Subsidiary
Borrowers from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in (i) such Lender’s
Domestic A Revolving Exposure exceeding such Lender’s Domestic A Commitment
(after giving effect to the application of any proceeds being applied
contemporaneously with the advance of such Domestic A Revolving Loans),
(ii) the total Domestic A Revolving Exposures exceeding the total amount
of the Domestic A Commitments, (iii) the total Revolving A Exposures exceeding
the lesser of (A) the total amount of the Domestic A Commitments plus
the Canadian Commitments and (B) the Borrowing Base A then in effect,
subject to the Administrative Agent’s authority, in its sole discretion, to
make Protective Advances pursuant to the terms of Section 2.19  and (iv) the total Revolving Exposures
exceeding the lesser of (A) the total amount of the Commitments and
(B) the Aggregate Borrowing Base then in effect, subject to the
Administrative Agent’s authority, in its sole discretion, to make Protective
Advances pursuant to the terms of Section 2.19.


 


(ii)  Subject to
the terms and conditions set forth herein, each Domestic B Lender agrees to
make its Domestic B Revolving Loan in dollars to the Parent Borrower and the
Domestic Subsidiary Borrowers on the Effective Date in the amount of the
Domestic B Lender’s Domestic B Commitment. 
No payment with respect to the Domestic B Revolving Loans may be
reborrowed.


 


(b)  Subject to
the terms and conditions set forth herein, each Canadian Lender agrees to make
its Canadian Revolving Loan in loans in dollars from its Canadian Lending
Office to the Canadian Subsidiary Borrower on the Effective Date in the amount
of the Canadian Lender’s Canadian Commitment and will make loans in dollars
from its Canadian Lending Office to the Canadian Subsidiary Borrower from time
to time during the Revolving Availability Period in an aggregate principal
amount that will not result in (i) such Lender’s Canadian Revolving
Exposure exceeding such Lender’s Canadian Commitment (after giving effect to
the application of any proceeds being applied contemporaneously with the
advance of such Canadian Revolving Loans), (ii) the total Canadian Revolving
Exposures exceeding the total amount of the Canadian Commitments and
(iii) the total Revolving Exposures exceeding the lesser of (A) the
total amount of the Commitments and (B) the Aggregate Borrowing Base then
in effect.


 


(c) 
Notwithstanding anything in this Agreement to the contrary, no Lender
shall make any Loan to any Domestic Subsidiary Borrower unless
(i) immediately after giving effect to such Loan (after giving effect to
the application of any proceeds being applied contemporaneously with the
advance of such Loan), the aggregate amount of Loans made to Uniplast U.S.,
Inc.  does not exceed $9,400,000 and
(ii) such Loan constitutes “Permitted Debt” under Section 4.03(b)(iv)
of each of the Senior Second Lien Notes Indenture and the Senior Subordinated
Notes Indenture.


 


42

















 


(d)  Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Parent Borrower, the Domestic Subsidiary Borrowers and the Canadian Borrower
may borrow, prepay and reborrow Domestic A Revolving Loans and Canadian
Revolving Loans during the Revolving Availability Period.


 


SECTION 2.02.  Loans
and Borrowings.  (a)  Each Domestic A Revolving Loan (other than a
Swingline Loan)  shall be made as part of
a Borrowing consisting of Domestic A Revolving Loans of the same Type made by
the Domestic A Lenders (or their Affiliates as provided in paragraph (b)
below) ratably in accordance with their respective Domestic A Commitments.  Each Domestic B Revolving Loan shall be made
as part of a Borrowing consisting of Domestic B Revolving Loans of the same
Type made by the Domestic B Lenders (or their Affiliates as provided in
paragraph (b) below) ratably in accordance with their respective Domestic
B Commitments.  Each Canadian Revolving
Loan shall be made as part of a Borrowing consisting of Canadian Revolving
Loans of the same Type made by the Canadian Lenders (or their Affiliates as
provided in paragraph (b) below) ratably in accordance with their
respective Canadian Commitments.  The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.  Any Protective Advance and any Swingline Loan
shall be made in accordance with the procedures set forth in Sections 2.19
and 2.04.


 


(b)  Subject to Section 2.13,
each Revolving Loan shall be comprised entirely of ABR Loans or Eurodollar
Loans as the Parent Borrower may request in accordance herewith; provided
that all Borrowings made on the Effective Date must be made as ABR Loans but
may be converted into Eurodollar Loans after November 30, 2006 in accordance
with Section 2.07.  Each Swingline
Loan shall be an ABR Loan.  Each Lender
at its option may make any Canadian Revolving Loan or any Eurodollar Loan by
causing any Canadian branch or Canadian Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the
obligation of any Borrower to repay such Loan in accordance with the terms of
this Agreement and shall not result in any increased costs under Section 2.14
or any obligation by any Borrower to make any payment under Section 2.16
in excess of the amounts, if any, that such Lender would be entitled to claim
under Section 2.14 or 2.16, as applicable, without giving
effect to such change in lending office.


 


(c)  At the
commencement of each Interest Period for any Eurodollar Revolving Loan, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. 
At the time that each ABR Revolving Loan is made, such Borrowing shall
be in an aggregate amount that is an integral multiple of $500,000 and not less
than $1,000,000; provided that an ABR Revolving Loan of any Class may be
in an aggregate amount that is equal to the entire unused balance of the total
amount of the Commitments of such Class or that is equal to the amount required
to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).  Each Swingline Loan shall be in an amount
that is an integral multiple of $100,000 and not less than $500,000.  Borrowings of more than one Type and Class may
be outstanding at the same time; provided that there shall not at any
time be more than a total of eight Eurodollar Borrowings outstanding.


 


43

















 


(d) 
Notwithstanding any other provision of this Agreement, no Borrower shall
be entitled to request, or to elect to convert or continue, any Borrowing if
the Interest Period requested with respect thereto would end after the Maturity
Date.


 


SECTION 2.03.  Requests
for Borrowings.  To request a
Revolving Loan, the Parent Borrower shall notify the Administrative Agent (on
behalf of itself or another Borrower) of such request by telephone (a) in
the case of a Eurodollar Borrowing, not later than 12:00 noon,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than
1:00 p.m., New York City time, one Business Day before the date
of the proposed Borrowing; provided that any such notice of an ABR
Revolving Loan to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e) may be given not later than
10:00 a.m., New York City time, on the date of the proposed
Borrowing.  Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Parent
Borrower (on behalf of itself or another Borrower).  Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:


 


(i) whether the Parent
Borrower is requesting such Borrowing on behalf of itself or for another
Borrower (and, if on behalf of another Borrower, the identity of such
Borrower);


 


(ii) whether the
requested Borrowing is a Domestic A Revolving Loan or a Canadian Revolving Loan
or, in the case of the Effective Date, a Domestic B Revolving Loan;


 


(iii) the aggregate
amount of such Borrowing;


 


(iv) the date of such
Borrowing, which shall be a Business Day;


 


(v) whether such
Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;


 


(vi) in the case of a
Eurodollar Borrowing, the initial Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of “Interest Period”;
and


 


(vii) the location and
number of the relevant Borrower’s account to which funds are to be disbursed,
which shall comply with the requirements of Section 2.06.


 


If no election as to the Type of Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with
respect to any requested Eurodollar Revolving Loan, then the Parent Borrower
shall be deemed to have selected (on behalf of itself or the applicable
Borrower) an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing
Request with respect to a Borrowing of any Class in accordance with this
Section, the Administrative Agent shall advise each Lender with respect to such
Class of the details thereof and of the amount of such Lender’s Loan to be made
as part of the requested Borrowing.


 


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SECTION 2.04.  Swingline
Loans.  (a)  Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make loans (“Swingline Loans”) to
the Parent Borrower from time to time during the Revolving Availability Period,
in an aggregate principal amount at any time outstanding that will not result
in (i) the aggregate principal amount of outstanding Swingline Loans
exceeding $10,000,000, (ii) the total Domestic A Revolving Exposures
exceeding the total amount of the Domestic A Commitments, (iii) the total
Revolving A Exposures exceeding the lesser of (A) the total amount of the
Domestic A Commitments plus the Canadian Commitments and (B) the
Borrowing Base A then in effect and (iv) the total Revolving Exposures
exceeding the lesser of (A) the total amount of the Commitments and
(B) the Aggregate Borrowing Base then in effect; provided that the
Swingline Lender shall not be required to make a Swingline Loan to refinance an
outstanding Swingline Loan.  Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Parent Borrower may borrow, prepay and reborrow Swingline Loans.


 


(b)  To request
a Swingline Loan, the Parent Borrower shall notify the Administrative Agent of
such request by telephone (confirmed by telecopy), not later than
12:00 noon, New York City time, on the day of a proposed Swingline
Loan.  Each such notice shall be irrevocable
and shall specify the requested date (which shall be a Business Day), the
amount of the requested Swingline Loan and the wire transfer instructions for
the account of the Parent Borrower to which the proceeds of such Swingline Loan
should be transferred.  The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Parent Borrower. 
The Swingline Lender shall make each Swingline Loan available to the
Parent Borrower by wire transfer to the account specified by the Parent
Borrower in the request for such Swingline Loan (or, in the case of a Swingline
Loan made to finance the reimbursement of an LC Disbursement as provided
in Section 2.05(e), by remittance to the Issuing Bank) by
2:00 p.m., New York City time, on the requested date of such
Swingline Loan.


 


(c)  The
Swingline Lender may by written notice given to the Administrative Agent not
later than 10:00 a.m., New York City time, on any Business Day
require the Domestic A Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate
amount of Swingline Loans in which Domestic A Lenders will participate.  Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Domestic A Lender,
specifying in such notice such Domestic A Lender’s Applicable Percentage of
such Swingline Loan or Loans.  Each
Domestic A Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account
of the Swingline Lender, such Domestic A Lender’s Applicable Percentage of such
Swingline Loan or Loans.  Each Domestic A
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Domestic A
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. 
Each Domestic A Lender shall comply with its obligation under this
paragraph by making a wire transfer to the Administrative Agent for the benefit
of the Swingline Lender of immediately available funds, in the same manner as
provided in Section 2.06 with respect to Domestic A Revolving Loans
made by such Domestic A Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Domestic A Lenders), and the
Administrative Agent shall promptly pay to the Swingline


 


45

















 


Lender the amounts so received
by it from the Lenders.  The
Administrative Agent shall notify the Parent Borrower of any participations in
any Swingline Loan acquired pursuant to this paragraph, and thereafter payments
in respect of such Swingline Loan shall be made to the Administrative Agent and
not to the Swingline Lender.  Any amounts
received by the Swingline Lender from the Parent Borrower (or other party on
behalf of the Parent Borrower) in respect of a Swingline Loan after receipt by
the Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Domestic A Lenders that shall have made their payments pursuant to this
paragraph and to the Swingline Lender, as their interests may appear.  The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve the Parent Borrower of any
default in the payment thereof.


 


SECTION 2.05.  Letters
of Credit.  (a)  General.  Subject to the terms and conditions set forth
herein, the Parent Borrower may request the issuance of Letters of Credit for
its own account or the account of any other Loan Party (provided that
the Parent Borrower shall be a co-applicant with respect to each Letter of
Credit issued for the account of or in favor of such other Loan Party, and the
issuance of any such Letter of Credit shall constitute a Guarantee by the
Parent Borrower of Indebtedness of such Loan Party pursuant to Section 6.05(e)),
in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, at any time and from time to time during the LC Availability Period.  All Letters of Credit shall be denominated in
U.S. dollars.  In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Parent Borrower to, or entered into by the Parent Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.


 


(b)  Notice
of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the Parent Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the Parent
Borrower also shall submit a letter of credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of Credit.  Subject to the requirements of the next sentence,
upon such request, the Administrative Agent shall cause the Issuing Bank to
issue the Letter of Credit, which Letter of Credit, if the Issuing Bank thereof
is not a Lender, shall be guaranteed by the Administrative Agent.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Parent Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or extension
(i) the LC Exposure shall not exceed $25,000,000, (ii) the total
Domestic A


 


46

















 


Revolving Exposures shall not
exceed the total amount of the Domestic A Commitments, (iii) the total
Revolving A Exposures exceeding the lesser of (A) the total amount of the
Domestic A Commitments plus the Canadian Commitments and (B) the
Borrowing Base A then in effect and (iv) the total Revolving Exposures
shall not exceed the lesser of (A) the total amount of the Commitments and (B)
the Aggregate Borrowing Base then in effect.


 


(c)  Expiration
Date.  Each Letter of Credit shall
expire at or prior to the close of business on the earlier of (i) the date
one year after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the
Maturity Date.


 


(d)  Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, (i) if the
Issuing Bank is a Lender, hereby grants to each Domestic A Lender, and each
Domestic A Lender hereby acquires from the Issuing Bank, a participation in
such Letter of Credit equal to such Domestic A Lender’s Applicable Percentage
of the aggregate amount available to be drawn under such Letter of Credit or
(ii) if the Issuing Bank is not a Lender, the Administrative Agent hereby grants
to each Domestic A Lender, and each Domestic A Lender hereby acquires from the
Administrative Agent, a participation in the guarantee of such Letter of Credit
equal to such Domestic A Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration and in furtherance of the
foregoing, each Domestic A Lender hereby absolutely and unconditionally agrees
to pay to the Administrative Agent, for the account of the Issuing Bank, such
Domestic A Lender’s Applicable Percentage of each LC Disbursement made by
the Issuing Bank and not reimbursed by the Parent Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Parent Borrower for any reason.  Each Domestic A Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a
Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.


 


(e)  Reimbursement.  If the Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, the Parent Borrower
shall reimburse such LC Disbursement by paying to the Administrative Agent
an amount equal to such LC Disbursement not later than 12:00 noon,
New York City time, on the date that such LC Disbursement is made, if
the Parent Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Parent Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on
(i) the Business Day that the Parent Borrower receives such notice, if
such notice is received prior to 10:00 a.m., New York City time, on
the day of receipt, or (ii) the Business Day immediately following the day
that the Parent Borrower receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that, if the Parent
Borrower does not otherwise elect by notice to the Administrative Agent to make
such payment, the Parent Borrower shall be deemed to have requested in
accordance with Section 2.03 (but without regard to the minimum
borrowing amounts specified in Section 2.02) that such LC Disbursement
be financed with an 


 


47

















 


ABR Domestic A Revolving Loan
in an amount equal to such LC Disbursement, the Administrative Agent shall
notify the Domestic A Lenders thereof, the Domestic A Lenders shall (subject to
the conditions to borrowing herein) advance their respective ABR Domestic A
Revolving Loans (which shall be applied to reimburse such LC Disbursement)
and, to the extent such ABR Domestic A Revolving Loans are so advanced and
applied, the Parent Borrower’s obligation to make such payment shall be deemed
discharged as of the date due and replaced by the resulting ABR Domestic A
Revolving Loans.  If and to the extent
that the Parent Borrower’s obligation to make such payment is not fully
discharged and replaced by ABR Domestic A Revolving Loans as aforesaid (whether
as a result of the failure to satisfy any condition to borrowing or otherwise)
and if the Parent Borrower otherwise fails to make such payment when due, the
Administrative Agent shall notify each Domestic A Lender of the applicable
LC Disbursement, the payment then due from the Parent Borrower in respect
thereof and such Domestic A Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice,
each Domestic A Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Parent Borrower, in the same manner
as provided in Section 2.06 with respect to Domestic A Revolving
Loans made by such Domestic A Lender (and Section 2.06 shall apply,
mutatis  mutandis, to the payment obligations of the Domestic A
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank
the amounts so received by it from the Domestic A Lenders.  Promptly following receipt by the Administrative
Agent of any payment from the Parent Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Domestic A Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Domestic A Lenders and
the Issuing Bank as their interests may appear. 
Any payment made by a Domestic A Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding
of ABR Domestic A Revolving Loans as contemplated above) shall not constitute a
Loan and shall not relieve the Parent Borrower of its obligation to reimburse
such LC Disbursement.


 


(f)  Obligations
Absolute.  The Parent Borrower’s
obligation to reimburse LC Disbursements as provided in paragraph (e)
of this Section shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity
or enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect,
(iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms
of such Letter of Credit or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Parent Borrower’s obligations hereunder.  Neither the Administrative Agent, the Lenders
nor the Issuing Bank, nor any of their Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of


 


48

















 


the Issuing Bank; provided
that nothing in this Section 2.05 shall be construed to excuse the
Issuing Bank from liability to the Parent Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Parent Borrower to the extent permitted by applicable law)
suffered by the Parent Borrower that are caused by the Issuing Bank’s failure
to exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in
the absence of gross negligence or willful misconduct on the part of the
Issuing Bank, the Issuing Bank shall be deemed to have exercised care in each
such determination.  In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.


 


(g)  Disbursement
Procedures.  The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit.  The Issuing Bank shall promptly notify the
Administrative Agent and the Parent Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Parent Borrower of
its obligation to reimburse the Issuing Bank and the Domestic A Lenders with
respect to any such LC Disbursement.


 


(h)  Interim
Interest.  If the Issuing Bank shall
make any LC Disbursement, then, unless the Parent Borrower shall reimburse
such LC Disbursement in full on the date such LC Disbursement is
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date
that the Parent Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Domestic A Revolving Loans; provided that,
if the Parent Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then Section 2.12(d)
shall apply.  Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Domestic A Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.


 


(i)  Replacement
of the Issuing Bank; Additional Issuing Banks.  The Issuing Bank may be replaced at any time
by written agreement among the Parent Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the
Domestic A Lenders of any such replacement of the Issuing Bank or any such
additional Issuing Bank.  At the time any
such replacement shall become effective, the Parent Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.11(b).  From and after the effective date of any such
replacement or addition, as applicable, (i) the successor or additional
Issuing Bank shall have all the rights and obligations of the Issuing Bank
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to the term “Issuing Bank” shall be 


 


49

















 


deemed to refer to such
successor or such addition or to any previous Issuing Bank, or to such
successor or such addition and all previous Issuing Banks, as the context shall
require.  After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of
Credit.  If at any time there is more
than one Issuing Bank hereunder, the Parent Borrower may, in its discretion,
select which Issuing Bank is to issue any particular Letter of Credit.


 


(j)  Cash
Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Parent
Borrower receives notice from the Administrative Agent or the Required Lenders
(or, if the maturity of the Loans has been accelerated, Domestic A Lenders with
LC Exposure representing greater than 50% of the total LC Exposure) demanding
the deposit of cash collateral pursuant to this paragraph, the Parent Borrower
shall deposit in an account with the Administrative Agent, in the name of the
Administrative Agent and for the benefit of the Domestic A Lenders, an amount
in cash equal to 105% of the LC Exposure as of such date plus any accrued
and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Parent Borrower
described in clause (h) or (i) of Article VII.  The Parent Borrower also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by Section 2.10(b),
and any such cash collateral so deposited and held by the Administrative Agent
hereunder shall constitute part of the Borrowing Base A for purposes of
determining compliance with Section 2.10(b).  Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Parent Borrower under this Agreement.  The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Parent
Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Parent Borrower for the
LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Domestic A Lenders with
LC Exposure representing greater than 50% of the total LC Exposure),
be applied to satisfy other obligations of the Parent Borrower under this
Agreement.  If the Parent Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Parent Borrower within three Business Days
after all Events of Default have been cured or waived.  If the Parent Borrower is required to provide
an amount of cash collateral hereunder pursuant to Section 2.10(b),
such amount (to the extent not applied as aforesaid) shall be returned to the
Parent Borrower as and to the extent that, after giving effect to such return,
the Parent Borrower would remain in compliance with Section 2.10(b)
and no Default shall have occurred and be continuing.


 


50

















 


SECTION 2.06.  Funding
of Borrowings.  (a)  Each Lender shall make each Loan of any Class
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the
account of the Administrative Agent most recently designated by it for such
purpose for such Class by notice to the Lenders; provided that Swingline
Loans shall be made as provided in Section 2.04.  The Administrative Agent will make such Loans
available to the applicable Borrower by promptly transferring the amounts so
received, in like funds, to the account of such Borrower designated by the
Parent Borrower in the applicable Borrowing Request; provided that ABR
Domestic A Revolving Loans made to finance the reimbursement of (i) an
LC Disbursement as provided in Section 2.05(e) shall be
remitted by the Administrative Agent to the Issuing Bank and (ii) a Protective
Advance shall be made by the Administrative Agent.


 


(b)  Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may, in its sole discretion, assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the
applicable Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to such Borrower
to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of
any Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan included
in such Borrowing.


 


SECTION 2.07.  Interest
Elections.  (a)  Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request.  Thereafter, the
Parent Borrower may elect (on behalf of itself or another Borrower) to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as
provided in this Section.  The Parent
Borrower (on behalf of itself or another Borrower) may elect different options
with respect to different portions of the affected Borrowing, in which case
each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. 
This Section shall not apply to Swingline Loans or Protective Advances,
which may not be converted or continued.


 


(b)  To make an
election pursuant to this Section, the Parent Borrower shall notify the
Administrative Agent of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Parent Borrower
were requesting a Revolving Borrowing of the Class and Type resulting from such
election to be made on the effective date of such election.  Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written


 


51

















 


Interest Election Request in a
form approved by the Administrative Agent and signed by the Parent Borrower.


 


(c)  Each
telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:


 


(i) the Borrowing
(including the identity of the applicable Borrower) to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);


 


(ii) the effective date
of the election made pursuant to such Interest Election Request, which shall be
a Business Day;


 


(iii) whether the
resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and


 


(iv) if the resulting
Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period
contemplated by the definition of “Interest Period”.


 


If any such Interest Election Request
requests a Eurodollar Borrowing but does not specify an Interest Period, then
the Parent Borrower (on behalf of itself or the applicable Borrower) shall be
deemed to have selected an Interest Period of one month’s duration.


 


(d)  Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender’s portion of
each resulting Borrowing.


 


(e)  If the
Parent Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing.  Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Parent Borrower, then, so long as an Event of Default is continuing (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.


 


SECTION 2.08.  Termination
and Reduction of Commitments. 
(a)  Unless previously terminated,
the Commitments shall terminate on the Maturity Date.


 


(b)  The Parent
Borrower may at any time terminate, or from time to time reduce, the
Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000, (ii) the Parent Borrower shall
not terminate or reduce the Commitments of any Class if (A) the total
Domestic A Revolving Exposures would exceed the total amount of the Domestic


 


52

















 


A Commitments, (B) the total
Domestic Revolving B Exposures would exceed the total amount of the Domestic B
Commitments, (C)  the total Canadian Revolving Exposures would exceed the
total amount of the Canadian Commitments, (D) the total Revolving Exposures
would exceed the total amount of the Commitments or (E) after giving pro forma
effect to such reduction, the Availability Amount would be less than
$10,000,000 and (iii) the Parent Borrower shall not terminate or reduce the
Domestic B Commitments if (A) any Domestic A Commitments are still
outstanding or (B) any Canadian Commitments are still outstanding.  In connection with such termination or
reduction, the Borrowers shall pay the applicable Prepayment Fee (if any).  No Prepayment Fee shall be payable on the
Domestic Revolving A Commitments or the Canadian Revolving Commitments in the
event this Agreement is terminated in connection with a refinancing of the
Obligations in a transaction in which General Electric Capital Corporation (or
its Affiliates), together with certain co-lenders selected by General Electric
Capital Corporation,  provides for the
Borrowers, as debtors-in-possession, a senior secured, superpriority, priming
debtor-in-possession credit facility pursuant to Section 364(d)(1) of the
Bankruptcy Code; provided that the order approving such facility
provides, pursuant to Section 364(d)(1) of the Bankruptcy Code, that the liens
and security interests securing such facility are superior in priority to the
liens and security interests granted (x) to secure the obligations evidenced by
the Credit Agreement, (y) to secure the obligations evidenced by the Senior
First Lien Notes, and (z) to secure the obligations evidenced by the Senior
Second Lien Notes (such credit facility, the “GECC-Led DIP Agreement”).  No Prepayment Fee shall be payable on the
Domestic Revolving B Commitments in the event this Agreement is terminated in
connection with the GECC-Led DIP Agreement, so long as the Domestic B Agent is
a lender under such GECC-Led DIP Agreement.


 


(c)  The Parent
Borrower shall notify the Administrative Agent of any election to terminate or
reduce the Commitments of any Class under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders with respect to such Class of
Commitments of the contents thereof. 
Each notice delivered by the Parent Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the
Commitments of any Class delivered by the Parent Borrower under
paragraph (b) of this Section may state that such notice is conditioned
upon the effectiveness of other borrowings or the completion of the sale or
issuance of stock of the Parent Borrower or the sale of assets of the Parent
Borrower, in which case such notice may be revoked by the Parent Borrower (by
notice to the Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied.  Any
termination or reduction of the Commitments of any Class shall be permanent.  Each reduction of the Commitments of any
Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.


 


SECTION 2.09.  Repayment
of Loans; Evidence of Debt.  (a)  Each Borrower, jointly and severally, hereby
unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
of such Lender on the Maturity Date, (ii) to the Administrative Agent the then
unpaid amount of each Protective Advance on the earlier of the Maturity Date and
demand by the Administrative Agent and (ii) to the Swingline Lender the
then unpaid principal amount of each Swingline Loan on the Maturity Date.


 


53

















 


(b)  Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of each Borrower to such Lender resulting from each
Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.


 


(c)  The
Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Class and Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal
or interest due and payable or to become due and payable from each Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.


 


(d)  The entries
made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be conclusive evidence (absent manifest error) of the existence
and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of any Borrower
to repay the Loans in accordance with the terms of this Agreement.


 


(e)  Any Lender
may request that Loans made by it be evidenced by a promissory note.  In such event, the applicable Borrower shall
prepare, execute and deliver to such Lender a promissory note payable to the
order of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a customary form approved by the Administrative
Agent and the Parent Borrower. 
Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 10.04)
be represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).


 


SECTION 2.10.  Prepayment
of Loans.  (a)  The Borrowers shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to the requirements of this Section.


 


(b)  (i) If at
any time (A) the total Domestic A Revolving Exposures exceed the total
amount of the Domestic A Commitments, (B) the total Canadian Revolving
Exposures exceed the total amount of the Canadian Commitments, (C) the total
Revolving Exposures exceed the lesser of (1) the total amount of the
Commitments at such time and (2) the Aggregate Borrowing Base then in
effect, or (D) the total outstanding principal amount of Loans made to
Uniplast U.S., Inc. by all Lenders exceeds $9,400,000, then in any such case
the Borrowers shall immediately prepay first, Protective Advances, second,
Swingline Loans third, Domestic A Revolving Loans and fourth,
Canadian Revolving Loans, without demand or notice of any kind, to the extent
necessary to eliminate such excess.  If
any such excess remains after all Domestic A Revolving Loans, Canadian
Revolving Loans, Protective Advances and Swingline Loans are prepaid, the
Borrowers shall deposit cash collateral pursuant to Section 2.05(j)
in an amount equal to such remaining excess.


 


(ii) If at any time after the Domestic A Revolving
Loans and the Canadian Revolving Loans have been paid in full and the Domestic
A Commitments and the Canadian


 


54

















 


Commitments have been
terminated (A) the total Domestic B Revolving Exposures exceed the Borrowing
Base B or (B) the total outstanding principal amount of Loans made to Uniplast
U.S., Inc. by all Lenders exceeds $9,400,000, then in any such case the
Borrowers shall immediately prepay the Domestic B Revolving Loans, without
demand or notice of any kind, to the extent necessary to eliminate such excess.


 


(c)  So long as
no Event of Default shall have occurred and be continuing, on each Business
Day, at or before 12:00 p.m., New York City time, the Administrative Agent will
apply cash deposited in the Collateral Proceeds Account on such Business Day to
prepay, first, Protective Advances, second, Swingline Loans, third,
Domestic A Revolving Loans, fourth, Canadian Revolving Loans and fifth,
after the Domestic A Revolving Loans and the Canadian Revolving Loans have been
paid in full and the Domestic A Commitments and the Canadian Commitments have
been terminated, Domestic B Revolving Loans. 
Unless otherwise directed by the Parent Borrower, the Administrative
Agent will apply any prepayment of Revolving Borrowings made pursuant to this
clause (c) to each Class of Revolving Borrowings on a pro rata basis, with
each prepayment of Revolving Borrowings within any Class applied to prepay ABR
Borrowings before any other Borrowings, with any excess prepayment amount
applied to prepay Eurodollar Borrowings in order of expiration of their
respective Interest Periods (and applied on a pro rata basis in respect of
Eurodollar Borrowings with Interest Periods expiring on the same date).


 


(d)  Prior to
any optional or mandatory prepayment of Borrowings hereunder (other than a
mandatory prepayment made pursuant to clause (c) above), the Parent Borrower
shall, subject to the requirements of clause (b) above, select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (e) of this Section; provided that (i)
the Parent Borrower may elect not to provide notice, or select the Borrowing or
Borrowings to be prepaid, in connection with a mandatory prepayment pursuant to
clause (b) above and, in such an event, (A), such prepayment shall be applied
to outstanding Borrowings in such manner as the Administrative Agent deems
appropriate to comply with the terms of clause (b) above and (B) to the extent
that the terms of clause (b) above and subclause (A) of this clause (i) do not
require any prepayment to be allocated to any specific Class of Borrowings, the
Administrative Agent shall apply such prepayment to each Class of Revolving
Borrowings on a pro rata basis, and (ii) each prepayment of Revolving
Borrowings within any Class shall be applied to prepay ABR Borrowings before
any other Borrowings, with any excess prepayment amount applied to prepay
Eurodollar Borrowings in order of expiration of their respective Interest
Periods (and applied on a pro rata basis in respect of Eurodollar Borrowings
with Interest Periods expiring on the same date).


 


(e)  The Parent
Borrower shall notify the Administrative Agent (and, in the case of prepayment
of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York
City time, one Business Day before the date of prepayment or (iii) in the
case of prepayment of a Swingline Loan, not later than 12:00 noon,
New York City time, on the date of prepayment.  Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a mandatory prepayment, a


 


55

















 


reasonably detailed calculation
of the amount of such prepayment; provided that (A) no notice shall
be required in respect of any mandatory prepayment made pursuant to
clause (c) above, (B) in the event the Parent Borrower elects to
provide notice of a mandatory prepayment pursuant to clause (b) above to
identify the Borrowings to be prepaid in connection therewith, such notice
shall be given to the Administrative Agent on the same day that the applicable
prepayment is required to be made pursuant to such clause, it being understood
that any failure or delay on the part of the Parent Borrower in providing such
notice to the Administrative Agent shall not affect the obligations of the
Parent Borrower to make such prepayment, and (C) if a notice of optional
prepayment is given in connection with a conditional notice of termination of
the Commitments of any Class as contemplated by Section 2.08, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08.  Promptly following receipt of any such notice
(other than a notice relating solely to Swingline Loans), the Administrative
Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowing
shall be in an amount such that the remaining amount of such Borrowing not so
prepaid would be permitted in the case of an advance of a Borrowing of the same
Type as provided in Section 2.02, except as necessary to apply
fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.12.


 


SECTION 2.11.  Fees.  (a) 
(i) The Parent Borrower agrees to pay to the Administrative Agent for
the account of the office (or Affiliate) of each Domestic A Lender from which
such Domestic Lender would make Domestic A Revolving Loans of any Class to the
Borrowers hereunder (which office or Affiliate shall be specified by each
Domestic A Lender for each Class of such Domestic A Lender’s Domestic A
Commitments in a notice to the Administrative Agent prior to the initial
payment to such Domestic A Lender under this paragraph) a commitment fee, which
shall accrue at a per annum rate of 0.50% on the average daily unused amount of
the Domestic A Commitment of such Domestic A Lender during the period from and
including the Effective Date to but excluding the date on which such Domestic A
Commitment terminates.  Accrued
commitment fees with respect to each Domestic A Commitment shall be payable in
arrears on the first Business Day of each month and on the date on which such
Domestic A Commitment terminates, commencing on the first such date to occur
after the date hereof.  All commitment
fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  For purposes of
determining the unused amount of the Domestic A Commitment of any Class of each
Domestic A Lender for purposes of computing commitment fees with respect to
Domestic A Commitments, a Domestic A Commitment of a Domestic A Lender shall be
deemed to be used to the extent of the outstanding Domestic A Revolving Loans
and LC Exposure of such Domestic A Lender (and the Swingline Exposure of such
Domestic A Lender shall be disregarded for such purpose).


 


(ii)
The Canadian Subsidiary Borrower agrees to pay to each Canadian Lender a
commitment fee, which shall accrue at a per annum rate of 0.50% on the average
daily unused amount of the Canadian Commitment of such Canadian Lender during the
period from and including the Effective Date to but excluding the date on which
such Canadian Commitment terminates. 
Accrued commitment fees with respect to each Canadian Commitment shall
be payable in arrears on the first Business Day of each month and on the date
on which such


 


56

















 


Canadian Commitment terminates,
commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).  For purposes of determining the unused amount
of the Canadian Commitment of any Class of each Canadian Lender for purposes of
computing commitment fees with respect to Canadian Commitments, a Canadian
Commitment of a Canadian Lender shall be deemed to be used to the extent of the
outstanding Canadian Revolving Loans of such Canadian Lender..


 


(b)  The Parent
Borrower agrees to pay (i) to the Administrative Agent for the account of
each Domestic A Lender a participation fee with respect to its participations
in Letters of Credit, which shall accrue at 2.75% per annum on the average
daily amount of such Domestic A Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on
which such Domestic A Lender’s Domestic A Commitment terminates and the date on
which such Domestic A Lender ceases to have any LC Exposure, and (ii) to
the Issuing Bank a fronting fee, which shall accrue at the rate or rates per
annum separately agreed upon between the Parent Borrower and the Issuing Bank
on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Domestic A Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. 
Participation fees and fronting fees accrued through and including the
first Business Day of each month of each year shall be payable on such first
Business Day, commencing on the first such date to occur after the Effective
Date; provided that all such fees shall be payable on the date on which
the Domestic A Commitments terminate and any such fees accruing after the date
on which the Domestic A Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after
demand.  All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).


 


(c)  The Parent
Borrower agrees to pay to each of the Administrative Agent and the Collateral
Agent, for its own account, fees payable in the amounts and at the times
separately agreed upon between the Parent Borrower and the Administrative Agent
or the Collateral Agent, as applicable.


 


(d)  All fees
payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the Issuing Bank or the Collateral
Agent, as applicable, in the case of fees payable to it) for distribution, in
the case of commitment fees and participation fees, to the Lenders entitled
thereto.  Fees paid shall not be
refundable under any circumstances.


 


SECTION 2.12.  Interest.  (a) 
(i) The Loans made by the Domestic A Lenders and the Canadian Lenders
comprising each ABR Borrowing (including each Swingline Loan) shall bear
interest at the Alternate Base Rate plus 1.50% per annum and (ii) the
Loans made by


 


57

















 


the Domestic B Lenders
comprising each ABR Borrowing shall bear interest at the Alternate Base
Rate plus 5.25% per annum.


 


(b)  (i) The
Loans comprising each Eurodollar Borrowing made by the Domestic A Lenders and
the Canadian Lenders shall bear interest at the LIBO Rate for the Interest
Period in effect for such Borrowing plus 2.75% per annum and (ii) the
Loans comprising each Eurodollar Borrowing made by the Domestic B Lenders shall
bear interest at the LIBO Rate for the Interest Period in effect for such
Borrowing plus 6.50% per annum.


 


(c)  Each
Protective Advance shall bear interest at the Alternate Base Rate plus
1.50% per annum plus 2%.


 


(d) 
Notwithstanding the foregoing, so long as any Event of Default has
occurred and is continuing under Article VII (a) or (b) or so
long as any other Event of Default has occurred and is continuing and at the
election of the Administrative Agent (or upon the written request of the
Required Lenders excluding for this calculation, Domestic B Revolving Exposures
and unused Domestic B Commitments from the total Revolving Exposures and unused
Commitments), in the case of Domestic A Revolving Exposures and the Canadian
Revolving Exposures, or the Required Domestic B Lenders, in the case of the
Domestic B Revolving Exposures) confirmed by written notice to the Parent, the
interest rates applicable to Loans and any fee or other amount payable by any
Borrower hereunder shall bear interest, after as well as before judgment, at a
rate per annum equal to (i) in the case of overdue principal of any Loan,
2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Revolving Loans as provided
in paragraph (a)(i) of this Section.


 


(e)  Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and, in the case of Domestic A Revolving Loans, Domestic B
Revolving Loans and Canadian Revolving Loans, upon termination of the Domestic
A Commitments, Domestic B Commitments or Canadian Commitments, as the case may
be; provided that (A) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (B) in the
event of any repayment or prepayment of any Loan (other than a prepayment of an
ABR Revolving Loan prior to the end of the Revolving Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (C) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.


 


(f)  All
interest hereunder shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).  The
applicable Alternate Base Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.  Solely for purposes of
the Interest Act (Canada), (i)
whenever interest is to be computed or expressed at any rate (the “Specified
Rate”), the annual rate of interest to which each such Specified Rate is
equal is such Specified Rate multiplied  by a fraction, the
numerator of which is the actual number of days in the relevant year and the
denominator of which is 360; (ii) the principle of deemed reinvestment of
interest shall not apply to any interest calculation hereunder; and (iii) the


 


58

















 


rates of interest stipulated
herein are intended to be nominal rates and not effective rates or yields.


 


SECTION 2.13.  Alternate
Rate of Interest.  If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:


 


(a) the Administrative
Agent determines (which determination shall be conclusive absent manifest
error) that adequate and reasonable means do not exist for ascertaining the
LIBO Rate for such Interest Period; or


 


(b) the Administrative
Agent is advised by the Required Domestic A Lenders, the Required Domestic B Lenders
or the Required Canadian Lenders that the LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;


 


then the Administrative Agent shall give
notice thereof to the Parent Borrower and the Domestic A Lenders, the Domestic
B Lenders or the Canadian Lenders, as applicable, by telephone or telecopy as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Parent Borrower and such Lenders that the circumstances giving rise to such
notice no longer exist, (i) any Interest Election Request that requests
the conversion of any Domestic Revolving Borrowing or Canadian Revolving Borrowing,
as applicable, to, or continuation of any such Borrowing as, a Eurodollar
Borrowing shall be ineffective and (ii) if any Borrowing Request with
respect to any Domestic Revolving Borrowing or Canadian Revolving Borrowing, as
applicable, requests a Eurodollar Borrowing, such Borrowing shall be made as an
ABR Borrowing.


 


SECTION 2.14.  Increased
Costs.  (a)  If any Change in Law shall:


 


(i) impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the LIBO Rate) or the
Issuing Bank; or


 


(ii) impose on any Lender
or the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein;


 


and the result of any of the foregoing shall
be to increase the cost to such Lender of making or maintaining any Eurodollar
Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to such Lender or the Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Bank hereunder (whether of principal,
interest or otherwise), then the Borrowers will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate (on an after-tax basis) such Lender or the Issuing Bank, as the case
may be, for such additional costs incurred or reduction suffered.


 


59

















 


(b)  If any
Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s
or the Issuing Bank’s holding company, if any, as a consequence of this
Agreement or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the
Issuing Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or the Issuing Bank’s policies and the
policies of such Lender’s or the Issuing Bank’s holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or the Issuing Bank, as the case may be, following receipt by the Parent
Borrower of the certificate referred to in clause (c) below, such
additional amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender’s or the Issuing Bank’s holding company for any such reduction
suffered.


 


(c)  A
certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in paragraph (a) or (b) of this Section
(and setting forth the underlying calculations) shall be delivered to the
Parent Borrower and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender or the
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.


 


(d)  Failure or
delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the
Issuing Bank’s right to demand such compensation; provided that the
Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Parent Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender’s or the Issuing
Bank’s intention to claim compensation therefor; provided  further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.


 


SECTION 2.15.  Break
Funding Payments.  In the event of
(a) the payment of any principal of any Eurodollar Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified
in any notice delivered pursuant hereto (regardless of whether such notice may
be revoked under Section 2.10(e) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Parent Borrower pursuant to Section 2.18 or the CAM Exchange,
then, in any such event, the Borrowers shall compensate each Lender for the
loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss,
cost or expense to any Lender shall be deemed to include an amount reasonably
determined by such Lender to be the excess, if any, of (i) the amount of
interest that would have accrued on the principal amount of such Loan had such
event not occurred, at the LIBO Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then current
Interest Period therefor (or, in the case of a failure to


 


60

















 


borrow, convert or continue,
for the period that would have been the Interest Period for such Loan), over
(ii) the amount of interest that would accrue on such principal amount for
such period at the interest rate that such Lender would bid were it to bid, at
the commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section (and setting forth the underlying calculations) shall be delivered to
the Parent Borrower and shall be conclusive absent manifest error.  The Borrowers shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.


 


SECTION 2.16.  Taxes.  (a) 
Any and all payments by or on account of any obligation of the Borrowers
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided
that if any Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.


 


(b)  In
addition, the Borrowers shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.


 


(c)  The
Borrowers shall indemnify the Administrative Agent, each Lender and the Issuing
Bank, within 10 days after written demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrowers hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability (and setting forth the underlying calculations) delivered
to the Parent Borrower by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.


 


(d)  As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by a Borrower
to a Governmental Authority, such Borrower shall deliver to the Administrative
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.


 


(e)  Any Foreign
Lender that is entitled to an exemption from or reduction of withholding Tax
under the laws of the jurisdiction in which a Borrower is located, or any treaty
to which such jurisdiction is a party, with respect to payments under this
Agreement made by such Borrower, shall deliver to the Parent Borrower (with a
copy to the Administrative Agent), at


 


61

















 


the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Parent Borrower as will permit
such payments to be made without withholding or at a reduced rate.  Notwithstanding any other provision of this Section 2.16,
no such Foreign Lender shall be required to deliver any form pursuant to this Section 2.16(e)
that such Foreign Lender is not legally able to deliver.


 


(f)  If the
Administrative Agent or a Lender (or transferee) determines, in its reasonable
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by a Borrower or with respect to which a Borrower
has paid additional amounts pursuant to this Section 2.16, it shall
pay over such refund to such Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by such Borrower under this Section 2.16
with respect to the Taxes or Other Taxes giving rise to such refund), net of
all out-of-pocket expenses of the Administrative Agent or such Lender (or
transferee) and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, however,
that the Borrowers, upon the request of the Administrative Agent or such Lender
(or transferee), agree to repay the amount paid over to such Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority), to the Administrative Agent or such Lender (or transferee) in the
event the Administrative Agent or such Lender (or transferee) is required to
repay such refund to such Governmental Authority.  Nothing contained in this Section 2.16(f)
shall require the Administrative Agent or any Lender to make available its Tax
returns (or any other information relating to its Taxes which it deems
confidential) to any Borrower or any other Person.


 


SECTION 2.17.  Payments
Generally; Pro Rata Treatment; Sharing of Setoffs.  (a) 
(i) The Parent Borrower and each Domestic Subsidiary Borrower shall make
each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest, fees or reimbursement of
LC Disbursements, or of amounts payable under Section 2.14, 2.15
or 2.16, or otherwise) prior to 2:00 p.m., New York City time,
on the date when due, in immediately available funds, without setoff or
counterclaim.  Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon.  All
such payments shall be made to the Administrative Agent at its offices at 201
Merritt 7, Norwalk, Connecticut, except payments to be made directly to the
Issuing Bank, Swingline Lender or Collateral Agent as expressly provided herein
and except that payments pursuant to Sections 2.14, 2.15, 2.16
and 10.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons
specified therein.  The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof.  If any payment under any Loan Document shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension.  All payments under each Loan
Document shall be made in dollars.


 


(ii)  The Canadian Subsidiary Borrower shall make
each payment required to be made by it hereunder or under any other Loan
Document (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.14, 2.15, 2.16
or 10.03, or otherwise) prior to 2:00 p.m., New York City time, on the
date when due, in


 


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immediately available funds,
without setoff or counterclaim.  Any
amounts received after such time on any date may, in the discretion of the
Canadian Lender, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Canadian
Lender at its offices at 11 King West 1500, Toronto, Ontario and except that
payments pursuant to other Loan Documents shall be made to the Persons
specified therein.  If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for
the period of such extension.  All
payments under each Loan Document shall be made in dollars.


 


(b)  Any
proceeds of Collateral received by the Administrative Agent (i) not
constituting either (A) a specific payment of principal, interest, fees or
other sum payable under the Loan Documents (which shall be applied as specified
by the Borrowers), (B) a mandatory prepayment (which shall be applied in
accordance with Section 2.10) or (C) amounts to be applied from the
Collateral Proceeds Account (which shall be applied in accordance with Section 2.10(c))
or (ii) after an Event of Default has occurred and is continuing and the
Administrative Agent so elects or the Required Lenders so direct, such funds
shall be applied ratably as follows:


 


first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Agents and the Issuing Bank
from the Borrowers (other than in connection with Banking Services or Swap
Obligations);


 


second, to pay any fees or expense reimbursements
then due to the Lenders from the Borrowers (other than in connection with
Banking Services or Swap Obligations);


 


third, to pay interest due in respect of the
Protective Advances and any amounts owing with respect to Banking Services;


 


fourth, to pay the principal of the Protective
Advances;


 


fifth, to pay interest then due and payable on the
Swingline Loans;


 


sixth, to pay the principal of the Swingline
Loans;


 


seventh, if the Administrative Agent has declared
the Loans then outstanding to be due and payable (in whole) pursuant to Article
VII and is not longer permitting the Borrowers to request Domestic A
Revolving Loans or Canadian Revolving Loans (other than Protective Advances),
then as follows:


 


(1) 
to pay interest on the Domestic A Revolving Loans and the Canadian Revolving
Loans;


 


(2)
to pay the principal of the Domestic A Revolving Loans and Canadian Revolving
Loans and unreimbursed LC Disbursements;


 


(3)
to pay an amount to the Administrative Agent equal to 105% of the aggregate
undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of any unpaid LC Disbursements, to be held as cash collateral for such
Obligations;


 


63

















amount of any unpaid LC
Disbursements, to be held as cash collateral for such Obligations;


 


(4) to pay any amounts owing with respect to Swap Obligations;


 


(5) to pay interest due in respect of the Domestic B Revolving Loans;
and


 


(6) to pay the principal of the Domestic B Revolving Loans;


 


eighth, if the
Administrative Agent has not declared the Loans then outstanding to be due and
payable (in whole or in part) pursuant to Article VII or has declared
the Loans then outstanding to be due and payable but is permitting the
Borrowers to request Domestic A Revolving Loans or Canadian Revolving Loans,
then as follows:


 


(1) first, to pay interest on the Loans;


 


(2) to pay the principal of the Domestic A Revolving Loans and Canadian
Revolving Loans and unreimbursed LC Disbursements;


 


(3) to pay an amount to the Administrative Agent equal to 105% of the
aggregate undrawn face amount of all outstanding Letters of Credit and the
aggregate amount of any unpaid LC Disbursements, to be held as cash collateral
for such Obligations;


 


(4) to pay any amounts owing with respect to Swap
Obligations; and


 


(5) to pay the principal of the Domestic B Revolving
Loans; and


 


ninth, to the
payment of any other Obligation due to the Agents or any Lender by the
Borrowers.


 


Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrowers, or unless a Default is in existence, neither the Administrative
Agent nor any Lender shall apply any payment which it receives to any
Eurodollar Loan of a Class, except (a) on the expiration date of the Interest
Period applicable to any such Eurodollar Loan or (b) in the event, and only to
the extent, that there are no outstanding ABR Loans of the same Class and, in
any event, the Borrowers shall pay the break funding payment required in
accordance with Section 2.15. The Administrative Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the
Obligations in accordance with the payment priorities established hereby.


 


(c)  At the election of the Administrative Agent,
all payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for
fees and expenses pursuant to Section 10.03), and other sums payable
under the Loan Documents, may be paid from the proceeds of Borrowings made
hereunder whether made following a request by the Borrower pursuant to Section
2.03 or a deemed request as provided in this Section or may be deducted
from any deposit account of the Borrower maintained with the Administrative
Agent. The Borrower hereby irrevocably


 


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authorizes
(i) the Administrative Agent to make a Borrowing for the purpose of paying each
payment of principal, interest and fees as it becomes due hereunder or any
other amount due under the Loan Documents and agrees that all such amounts
charged shall constitute Loans (including Swingline Loans, but such a Borrowing
may only constitute a Protective Advance if it is to reimburse costs, fees and
expenses as described in Section 10.03) and that all such Borrowings
shall be deemed to have been requested pursuant to Section 2.03, 2.04
or 2.19, as applicable and (ii) the Administrative Agent to charge any
deposit account of the Borrower maintained with the Administrative Agent for
each payment of principal, interest and fees as it becomes due hereunder or any
other amount due under the Loan Documents. If at any time insufficient funds
are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees
then due hereunder, such funds shall be applied (i) first, towards
payment of interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due
to such parties, and (ii) second, towards payment of principal and
unreimbursed LC Disbursements then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.


 


(d)  If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Domestic A Revolving Loans, Canadian
Revolving Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Domestic A Revolving Loans, Canadian Revolving Loans
and participations in LC Disbursements and Swingline Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Domestic A Revolving Loans, Canadian Revolving
Loans and participations in LC Disbursements and Swingline Loans of other
Lenders to the extent necessary so that the benefit of all such payments shall be
shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Domestic A Revolving
Loans, Canadian Revolving Loans and participations in LC Disbursements and
Swingline Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by any Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Domestic A Revolving
Loans, Canadian Revolving Loans or participations in LC Disbursements to
any assignee or participant, other than to a Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply). Each
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against any Borrower rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of such Borrower in the amount of such
participation.


 


(e)  Unless the Administrative Agent shall have
received notice from the Parent Borrower prior to the date on which any payment
is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the applicable Borrower will not make


 


65

















 


such
payment, the Administrative Agent may assume, in its sole discretion, that such
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if no Borrower has in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to
but excluding the date of payment to the Administrative Agent, at the greater
of the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.


 


(f)  If any Lender shall fail to make any payment
required to be made by it pursuant to Section 2.04(c), 2.05(d),
2.05(e), 2.06(b), 2.17(e) or 10.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.


 


SECTION 2.18. Mitigation
Obligations; Replacement of Lenders. (a) 
If any Lender requests compensation under Section 2.14, or
if any Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates (provided
that, if such compensation or additional amounts relate to a particular Class
of Loans, such designation or assignment may relate only to such Class of
Loans), if, in the reasonable judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.14
or 2.16, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. Each Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.


 


(b)  If any Lender requests compensation under Section 2.14,
or if any Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Parent Borrower may, at its sole expense and effort, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) the Parent Borrower shall have received the prior written consent
of the Administrative Agent, the Issuing Bank and Swingline Lender, which
consent shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts), (iii) in the
case of any such assignment resulting


 


66

















 


from a
claim for compensation under Section 2.14 or payments required to
be made pursuant to Section 2.16, such assignment will result in a
reduction in such compensation or payments and (iv) with respect to
compensation or additional amounts (but not defaults) in respect of a
particular Class of Loans, such assignment may be limited to such Class of
Loans. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Parent Borrower to require such
assignment and delegation cease to apply.


 


SECTION 2.19. Protective
Advances. (a)  Subject to the
limitations set forth below, the Administrative Agent is authorized by the
Borrowers and the Lenders, from time to time in the Administrative Agent’s sole
discretion (but shall have absolutely no obligation to), to make Loans to the
Borrowers, on behalf of all Lenders, which the Administrative Agent, in its
reasonable discretion, deems necessary or desirable (i) to preserve or protect
the Collateral, or any portion thereof, (ii) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (iii)
to pay any other amount chargeable to or required to be paid by the Borrowers
pursuant to the terms of this Agreement, including payments of reimbursable
expenses (including costs, fees, and expenses as described in Section 10.03)
and other sums payable under the Loan Documents (any of such Loans are herein
referred to as “Protective Advances”); provided that, the
aggregate amount of Protective Advances outstanding at any time shall not at
any time exceed $10,000,000; and provided  further that, the
aggregate amount of outstanding Protective Advances plus the aggregate
Revolving Exposure shall not exceed (i) the aggregate unused Commitments or
(ii) any applicable limitation set forth in the Senior First Lien Note
Indenture, the Senior Second Lien Note Indenture and the Senior Subordinated
Note Indenture. Protective Advances may be made even if the conditions
precedent set forth in Section 4.03 have not been satisfied. The
Protective Advances shall be secured by the Liens in favor of the Collateral
Agent in and to the Collateral and shall constitute Obligations hereunder. All
Protective Advances shall be ABR Borrowings. The Administrative Agent’s
authorization to make Protective Advances may be revoked at any time by the
Required Lenders. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent’s receipt thereof. At any
time that the Availability Amount is greater than $0 and the conditions
precedent set forth in Section 4.03 have been satisfied, the
Administrative Agent may request the Domestic A Revolving Lenders and Canadian
Revolving Lenders to make a Domestic A Revolving Loan or Canadian Revolving
Loan, as applicable, to repay a Protective Advance. At any other time the
Administrative Agent may require the Lenders to fund their risk participations
described in Section 2.19(b).


 


(b)  Upon the making of a Protective Advance by
the Administrative Agent (whether before or after the occurrence of a Default),
each Domestic A Lender and Canadian Lender shall be deemed, without further
action by any party hereto, to have unconditionally and irrevocably purchased
from the Administrative Agent without recourse or warranty, an undivided
interest and participation in such Protective Advance in proportion to its
Applicable Percentage. From and after the date, if any, on which any Domestic A
Lender or Canadian Lender is required to fund its participation in any
Protective Advance purchased hereunder, the Administrative Agent shall promptly
distribute to such Lender, such Lender’s Applicable Percentage of all payments
of principal and interest and all proceeds of Collateral received by the
Administrative Agent in respect of such Protective Advance.


 


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ARTICLE III


 


Representations and Warranties


 


The
Parent Borrower represents and warrants to the Lenders that:


 


SECTION 3.01. Organization;
Powers. Each of the Parent Borrower and the Subsidiaries is duly organized,
validly existing and, where applicable, in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.


 


SECTION 3.02. Authorization;
Enforceability. The Transactions entered into and to be entered into by
each Loan Party are within such Loan Party’s corporate powers and have been
duly authorized by all necessary corporate and, if required, stockholder action.
This Agreement has been duly executed and delivered by each Borrower and
constitutes, and each other Loan Document to which any Loan Party is to be a
party, when executed and delivered by such Loan Party, will constitute, a
legal, valid and binding obligation of such Borrower or such Loan Party (as the
case may be), enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.


 


SECTION 3.03. Governmental
Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by,
any Governmental Authority or any other Person, except such as have been
obtained or made and are in full force and effect or, if not obtained or made,
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect and except filings necessary to perfect Liens created
under the Loan Documents, (b) will not violate any applicable law or regulation
or the charter, by-laws or other organizational documents of the Parent
Borrower or any of the Subsidiaries or any order of any Governmental Authority,
except, with respect to any violation of applicable law or regulation or any
order of any Governmental Authority, to the extent any such violation would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect, (c) will not violate or result in a default under any
material indenture, agreement or other instrument binding upon the Parent
Borrower or any of the Subsidiaries or its assets, except to the extent any
such violation, default or right would not, individually or in the aggregate,
be reasonably likely to have a Material Adverse Effect, or give rise to a right
thereunder to require any payment to be made by the Parent Borrower or any of
the Subsidiaries, and (d) will not result in the creation or imposition of
any Lien on any asset of the Parent Borrower or any of the Subsidiaries, except
Liens created under the Loan Documents, the Senior First Lien Security
Documents and the Senior Second Lien Security Documents.


 


SECTION 3.04. Financial
Condition; No Material Adverse Change. (a) 
The Parent Borrower has heretofore furnished to the Lenders its
consolidated balance sheet and statements of income, stockholders’ equity and
cash flows (i) as of and for the fiscal year ended December 31, 2004,
reported on by Ernst & Young LLP, independent public accountants and


 


68

















 


(ii) as
of and for the fiscal quarter ended June 30, 2005, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
the Parent Borrower and its consolidated Subsidiaries, as of such dates and for
such periods in accordance with GAAP and in the case of clause (ii) above,
subject to normal year-end audit adjustments and the absence of footnotes.


 


(b)  The Parent Borrower has heretofore made available
to the Lenders its pro forma consolidated balance sheet as of September 30,
2005, prepared giving effect to the Transactions as if the Transactions had
occurred on such date. Such pro forma consolidated balance sheet (i) has
been prepared in good faith based on the same assumptions used to prepare the
applicable pro forma financial statements, which were simultaneously made
available to the Lenders (which assumptions are believed by the Parent Borrower
to be reasonable), (ii) is based on the best information available to the
Parent Borrower after due inquiry, (iii) accurately reflects all material
adjustments necessary to give effect to the Transactions and (iv) presents
fairly, in all material respects, the pro forma financial position of the
Parent Borrower and its consolidated Subsidiaries as of September 30, 2005, as
if the Transactions had occurred on such date.


 


(c)  Except as disclosed in the financial
statements referred to above or the notes thereto, after giving effect to the
Transactions, none of the Parent Borrower or any of the Subsidiaries has, as of
the Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.


 


(d)  Since June 30, 2005 or as otherwise disclosed
to the Agents on or before the Effective Date, there has been no material
adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or contingent or other liabilities of the Parent
Borrower and the Subsidiaries, taken as a whole.


 


SECTION 3.05. Properties.
(a)  Each of the Parent Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business (including its Mortgaged
Properties), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and other Permitted Encumbrances.


 


(b)  Each of the Parent Borrower and the
Subsidiaries owns, or is licensed or otherwise permitted to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to the business of the Parent Borrower and the Subsidiaries, taken as
a whole, and the use thereof by the Parent Borrower and the Subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.


 


(c)  Schedule 3.05 sets forth the
address of each parcel of real property that is owned or leased (the “Real
Estate”) by the Parent Borrower or any of the Subsidiaries as of the
Effective Date.


 


(d)  As of the Effective Date, neither the Parent
Borrower nor any of the Subsidiaries has received notice of, or has knowledge
of, any pending or contemplated


 


69

















 


condemnation
proceeding affecting any Mortgaged Property or any sale or disposition thereof
in lieu of condemnation. Neither any Mortgaged Property nor any interest
therein is subject to any right of first refusal, option or other contractual
right to purchase such Mortgaged Property or interest therein held by any
Person, other than the Parent Borrower or any Subsidiary Loan Party.


 


SECTION 3.06. Litigation
and Environmental Matters. (a)  There
are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Parent
Borrower, threatened against or affecting the Parent Borrower or any of the
Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any of the Loan Documents or the Transactions.


 


(b)  Except with respect to any matters that,
individually or in the aggregate, would not be reasonably likely to result in a
Material Adverse Effect, neither the Parent Borrower nor any of the
Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.


 


SECTION 3.07. Compliance
with Laws and Agreements. Each of the Parent Borrower and the Subsidiaries
is in compliance with all laws, regulations and orders of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding upon it or its property, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect. No Default has occurred and is continuing.


 


SECTION 3.08. Investment
Company Status. Neither the Parent Borrower nor any of the Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the Investment
Company Act of 1940.


 


SECTION 3.09. Taxes.
Each of the Parent Borrower and the Subsidiaries has timely filed or caused to
be filed all Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Parent Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.


 


SECTION 3.10. ERISA.
No ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably expected
to occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan
individually (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent audited financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Plan individually,
and the present value of all accumulated benefit obligations of all underfunded



 


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Plans
(based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
audited financial statements reflecting such amounts, exceed by more than
$28,000,000 the fair market value of the assets of all such underfunded Plans.


 


SECTION 3.11. Disclosure.
The Parent Borrower has disclosed to the Lenders all agreements, instruments
and corporate or other restrictions to which the Parent Borrower or any of the
Subsidiaries is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. The reports, financial statements, certificates and
other written information furnished by or on behalf of any Loan Party to any
Agent, either Arranger or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished), when made or
delivered, did not contain any material misstatement of fact or omit to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Parent Borrower represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.


 


SECTION 3.12. Subsidiaries.
Schedule 3.12 sets forth the name of, the jurisdiction of
organization of, and the direct or indirect ownership interest of the Parent
Borrower in, each Subsidiary of the Parent Borrower and identifies each
Subsidiary that is a Loan Party, in each case as of the Effective Date.


 


SECTION 3.13. Insurance.
Schedule 3.13 sets forth a description of all insurance maintained
by or on behalf of the Parent Borrower and the Subsidiaries as of the Effective
Date. As of the Effective Date, all premiums that are due and payable in
respect of such insurance have been paid. The Parent Borrower believes that the
insurance maintained by or on behalf of the Parent Borrower and the
Subsidiaries is adequate.


 


SECTION 3.14. Labor
Matters. As of the Effective Date, there are no strikes, lockouts or
slowdowns against the Parent Borrower or any Subsidiary pending or, to the
knowledge of the Parent Borrower, threatened that could reasonably be expected
to result in a Material Adverse Effect. All material payments due from the
Parent Borrower or any Subsidiary, or for which any claim may be made against
the Parent Borrower or any Subsidiary, on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a liability
on the books of the Parent Borrower or such Subsidiary. The consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining
agreement to which the Parent Borrower or any Subsidiary is bound.


 


SECTION 3.15. Solvency.
Immediately after the consummation of the Transactions to occur on the
Effective Date and immediately following the making of each Loan (if any) made
on the Effective Date and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of each Loan
Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value
of the property of each Loan Party will be greater than the amount that will be
required to pay the


 


71

















 


probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(c) each Loan Party will be able to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) each Loan Party will not have unreasonably
small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the
Effective Date.


 


SECTION 3.16. Security
Documents. (a)  The Pledge Agreements
are effective to create in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral described therein (and the proceeds thereof) and,
when such Collateral is delivered to the Collateral Agent, the Collateral Agent
shall have a fully perfected first-priority Lien on, and security interest in,
all right, title and interest of the Loan Parties in such Collateral and the
proceeds thereof as security for the Obligations, as applicable, in each case
prior and superior in right to any other Person.


 


(b)  The Security Agreements are effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral described
therein (and the proceeds thereof) and, when financing statements (and/or other
filings, notices and registrations, in the case of Collateral under the
Canadian Security Agreement) in appropriate form are filed with the appropriate
offices in each relevant jurisdiction (including those specified on
Schedule 6 to the Domestic Perfection Certificate and those specified on
Schedule 6 to the Canadian Perfection Certificate), the Collateral Agent
shall have a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral (other than the
Intellectual Property (as defined in the Domestic Security Agreement) and,
subject to Section 9-315 of the New York Uniform Commercial Code (and
the equivalent legislation in other jurisdictions), the proceeds thereof, as
security for the Obligations, in each case prior and superior in right to any
other Person, other than with respect to Liens expressly permitted by Section 6.03.


 


(c)  When the Domestic Security Agreement (or a
summary thereof) is filed in the United States Patent and Trademark Office
and the United States Copyright Office, the Collateral Agent shall have a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Intellectual Property (as defined in the
Domestic Security Agreement) in which a security interest may be perfected by
filing, recording or registering a security agreement, financing statement or
analogous document in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, in each case prior and
superior in right to any other Person (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a lien on registered trademarks,
trademark applications and copyrights acquired by the Loan Parties after the
Effective Date), other than with respect to Liens permitted by Section 6.03.


 


(d)  The Mortgages are effective to create,
subject to the exceptions listed in each title insurance policy covering such
Mortgage, in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable Lien on all of the Loan Parties’
right, title and interest in and to the Mortgaged Properties thereunder and the
proceeds thereof, and when the Mortgages are filed in the offices specified on Schedule 3.16(d),
the Collateral


 


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Agent
shall have a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Mortgaged Properties and, to the
extent applicable, subject to Section 9-315 of the New York Uniform
Commercial Code (and the equivalent legislation in other jurisdictions), the
proceeds thereof, in each case prior and superior in right to any other Person,
other than with respect to the rights of Persons pursuant to Liens expressly
permitted by Section 6.03.


 


SECTION 3.17. Federal
Reserve Regulations. (a)  Neither the
Parent Borrower nor any of the Subsidiaries is engaged principally, or as one
of its important activities, in the business of extending credit for the
purpose of buying or carrying Margin Stock.


 


(b)  No part of the proceeds of any Loan or any
Letter of Credit will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, (i) to purchase or carry Margin
Stock or any security convertible into or exchangeable for Margin Stock, or
extend credit to others for the purpose of purchasing or carrying Margin Stock
or any security convertible into or exchangeable for Margin Stock, or to refund
Indebtedness originally incurred for such purpose, or (ii) for any purpose
that entails a violation of the provisions of the Regulations of the Board,
including Regulation U or Regulation X.


 


SECTION 3.18. Senior
Secured Obligations. All the Obligations constitute (a) ”Credit
Agreement Obligations” under and as defined in the Senior First Lien Note
Indenture and the Senior Second Lien Note Indenture (in each case with respect
to the First-Priority Collateral), (b) ”Second-Priority Obligations” under
and as defined in the Senior First Lien Note Indenture and “Other Second-Lien
Obligations” under and as defined in the Senior Second Lien Note Indenture (in
each case with respect to the Second-Priority Collateral) and (c) ”Senior
Indebtedness” and “Designated Senior Indebtedness” under and as defined in the
Senior Subordinated Note Indenture. The Liens granted pursuant to the Security
Documents (a) in respect of the First-Priority Collateral, are prior to
the Liens granted pursuant to the Senior First Lien Note Documents and the
Senior Second Lien Note Documents in respect of such Collateral and (b) in
respect of the Second-Priority Collateral, are equal in priority to the Liens
granted pursuant to the Senior Second Lien Note Documents in respect of such
Collateral.


 


SECTION 3.19. Related
Names. None of Huntsman Corporation Canada Inc.,  Huntsman Chemical Company of Canada Inc.,
Tioxide Canada Inc., Huntsman ICI (Canada) Corp., La Corporation Huntsman
Canada Inc., Huntsman Corporation Canada Inc./La Corporation Huntsman Canada
Inc., La Corporation Huntsman Canada Inc./Huntsman Corporation Canada Inc. or
Huntsman - Tioxide Canada Inc. are subsidiaries of any Loan Party.


 


SECTION 3.20. Permanent
Establishment in Canada. Neither the Parent Borrower nor Pliant Solutions
Corporation (a) maintains any location in Canada, (b) has any income
attributable to a permanent establishment in Canada or (c) is required to pay
any income taxes in Canada.


 


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ARTICLE IV


 


Conditions


 


SECTION 4.01. Effective
Date. The obligations of the Lenders to make Loans and of the Issuing Bank
to issue Letters of Credit hereunder shall not become effective until the date
on which each of the following conditions is satisfied (or waived in accordance
with Section 10.02):


 


(a) The Agents (or their
respective counsel) shall have received from the Parent Borrower, the Domestic
Subsidiary Borrowers, the Canadian Subsidiary Borrower and each Lender, a
counterpart of this Agreement signed on behalf of such party.


 


(b) The Agents shall have
received a favorable written opinion (addressed to the Agents, the Issuing Bank
and the Lenders and dated the Effective Date) of each of (i) Sidley Austin
Brown & Wood LLP, counsel for the Parent Borrower, the Domestic Subsidiary
Borrowers and the Guarantors, in form and substance satisfactory to the Agents,
(ii) General Counsel of the Parent Borrower, the Domestic Subsidiary Borrowers
and the Guarantors, in form and substance satisfactory to the Agents,
(iii) Van Cott, Bagley, Cornwall & McCarthy, P.C., Utah counsel for
the Parent Borrower, the Guarantors and certain Domestic Subsidiary Borrowers,
in form and substance satisfactory to the Agents, (iv) Fasken Martineau
Dumoulin LLP, Canadian counsel for the Canadian Subsidiary Borrower and Pliant
Packaging of Canada Ltd., in form and substance satisfactory to the Agents, and
(v) Stewart McKelvey Stirling Scales, Nova Scotia counsel for the Canadian
Subsidiary Borrower, in form and substance satisfactory to the Agents, and, in
the case of each such opinion required by this paragraph, covering such other
matters relating to the Loan Parties, the Loan Documents or the Transactions as
the Agents shall reasonably request (including that the Administrative Agent
will be entitled to all of the rights and benefits of the “Credit Agent” under
the Intercreditor Agreement). Each Borrower hereby requests such counsel to
deliver such opinions.


 


(c) The Agents shall have
received such documents and certificates as the Agents or their respective
counsel may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and any
other legal matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Agents and their
respective counsel.


 


(d) The Agents shall have
received a certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Parent Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.03.


 


(e) The Agents shall have
received all fees and other amounts due and payable on or prior to the
Effective Date, including, to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses required to be reimbursed or paid by any Loan Party
hereunder or under any other Loan Document.


 


(f) The Agents shall have
received counterparts of the Domestic Pledge Agreement signed on behalf of each
Loan Party (other than the Canadian Subsidiary Borrower) and the Canadian
Pledge Agreement signed on behalf of the Canadian Subsidiary Borrower, together
with certificates (if any) representing all the outstanding


 


74

















 


Equity Interests of each Subsidiary owned by or on
behalf of any Loan Party as of the Effective Date after giving effect to the
Transactions (except that such delivery of certificates representing Equity
Interests of a Foreign Subsidiary that is not a Loan Party may be limited to
65% of the outstanding voting Equity Interests of a first-tier Foreign
Subsidiary), promissory notes evidencing all intercompany Indebtedness (other
than the intercompany Indebtedness set forth on Schedule 4.01(f)) owed
to any Loan Party by the Parent Borrower or any Subsidiary as of the Effective
Date after giving effect to the Transactions and stock powers and instruments
of transfer, endorsed in blank, with respect to such certificates and
promissory notes.


 


(g) The Agents shall have
received counterparts of the Domestic Security Agreement signed on behalf of
each Loan Party (other than the Canadian Subsidiary Borrower) and the Canadian
Security Agreement signed on behalf of the Canadian Subsidiary Borrower,
together with the following:


 


(i)
all documents and instruments, including Uniform Commercial Code (or
equivalent) financing statements, required by the Security Agreements or by law
or reasonably requested by the Agents to be filed, registered or recorded to
create or perfect the Liens intended to be created under the Security
Agreements, in proper form for filing, registration or recordation; and


 


(ii)
completed Perfection Certificates dated the Effective Date and signed by an
executive officer or Financial Officer of the Parent Borrower or the Canadian
Subsidiary Borrower, as applicable, together with all attachments contemplated
thereby, including the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in the jurisdictions
contemplated by the Perfection Certificates other than the jurisdictions set
forth on Schedule 4.01(g) and copies of the financing statements (or
similar documents) disclosed by such search and evidence reasonably
satisfactory to the Agents that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 6.03 or
have been released.


 


(h) The Agents shall have
received a counterpart of the Guarantee Agreement signed on behalf of each Loan
Party which is not a Borrower.


 


(i) The Lenders shall
have received the financial statements described in Section 3.04,
which financial statements shall not be materially inconsistent with the
financial statements or forecasts previously provided to the Lenders.


 


(j) The Lenders shall
have received projections of the Parent Borrower and the Subsidiaries through
the fiscal year ending December 31, 2008, presented on a monthly basis
through December 31, 2006 and annually thereafter (the “Projections”),
which Projections shall not be materially inconsistent with the projections
previously provided to the Agents and the Arrangers.


 


(k) The Agents shall have
received evidence satisfactory to them that the insurance required by Section 5.07
is in effect.


 


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(l) The Agents shall have
received copies of the Senior First Lien Note Documents, Senior Second Lien
Note Documents and the Senior Subordinated Note Documents, each certified by a
Financial Officer as complete and correct. The Agents and the Arrangers shall
be satisfied with the terms of the Senior First Lien Note Documents, the Senior
Second Lien Note Documents, the Senior Subordinated Note Documents and the
Intercreditor Agreement.


 


(m) The Agents shall have
received an agreement executed by each Loan Party under the Existing Credit
Agreement reaffirming its obligations under each Loan Document to which such Loan
Party is a party thereto, in form and substance satisfactory to the Agents.


 


(n) The Lenders shall
have received a pro forma consolidated balance sheet of the Parent Borrower as
of September 30, 2005 reflecting all pro forma adjustments as if the Transactions
had been consummated on such date, and such pro forma consolidated balance
sheet shall be consistent in all material respects with the forecasts and other
information previously provided to the Lenders. After giving effect to the
Transactions, the Parent Borrower and the Subsidiaries shall not have any
outstanding Indebtedness or preferred stock other than (i) Indebtedness
incurred under the Loan Documents, (ii) the Senior First Lien Notes,
(iii) the Senior Second Lien Notes, (iv) the Senior Subordinated
Notes, (v) the Existing Preferred Stock and (vi) the Indebtedness
permitted pursuant to Section 6.01(ii).


 


(o) The Agents shall be
reasonably satisfied as to the amount and nature of any contingent liabilities
relating to environmental and employee health and safety exposures to which the
Parent Borrower and the Subsidiaries may be subject, and with the plans of the
Parent Borrower and the Subsidiaries with respect thereto.


 


(p) Each Agent shall have
received all documentation and other information requested by it to satisfy the
requirements of bank regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA
Patriot Act.


 


(q) The Agents shall have
received a completed Borrowing Base Certificate that sets forth the Pro Forma
Opening Borrowing Base.


 


(r) The Agents shall have
(i) received the results of a field examination with respect to the accounts
receivable and inventory of the Parent Borrower and the Subsidiaries and an
inventory appraisal with respect to the inventory of the Parent Borrower and
the Subsidiaries, in each case in form and substance reasonably satisfactory to
the Agents and (ii) otherwise have completed its business and legal due
diligence, with results satisfactory to the Agents.


 


(s) The Agents shall have
received a fully executed copy of the Notice of Change of Collateral Agent’s
Account from the Existing Collateral Agent to (A) Wachovia Bank, National
Association (“Wachovia”), (B) LaSalle Bank National Association (“LaSalle”)


 


76

















 


and (C) The Bank of Nova Scotia (“BONS” and
together with Wachovia and LaSalle, the “Depository Banks”).


 


(t) After giving effect
to all Borrowings to be made on the Effective Date and the issuance of any
Letters of Credit on the Effective Date and payment of all fees and expenses
due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and
obligations current, the Availability Amount shall not be less than $7,000,000.


 


(u) The corporate capital
and ownership structure of each Loan Party and the terms and conditions of all
Indebtedness of each Loan Party shall be acceptable to the Agents in their sole
discretion.


 


(v) The Agents shall have
received evidence in form and substance satisfactory to them in their sole
discretion that the holders of the Senior Subordinated Notes shall have
consented to the structure of the Domestic A Revolver, the Canadian Revolver
and Domestic B Revolver.


 


(w) The Administrative
Agent shall have received such other documents as any Agent, the Issuing Bank,
any Lender or their respective counsel may have reasonably requested.


 


The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 10.02)
at or prior to 5:00 p.m., New York City time, on November 21,
2005. The Administrative Agent shall notify the Parent Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.


 


SECTION 4.02. Subsequent
to the Effective Date. The obligation of the Lenders to continue to make or
maintain Loans (or otherwise extend credit hereunder) and of the Issuing Bank
to continue to issue Letters of Credit is subject to the fulfillment, on or
before the date applicable thereto, if any, of each of the conditions
subsequent set forth below (unless waived in accordance with Section 10.02):


 


(a) Within 10 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Agents shall have received the results of
a search of the Uniform Commercial Code (or equivalent) filings made with
respect to the Loan Parties in the jurisdictions set forth on Schedule
4.01(g)  and copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Agents that the Liens indicated by such
financing statements (or similar documents) are permitted by Section 6.03
or have been released;


 


(b) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Collateral Agent shall have received:


 


(i)
counterparts of an amendment to each Existing Mortgage signed on behalf of the
record owner of such Mortgaged Property, in form and substance satisfactory to
the Collateral Agent;


 


77

















 


(ii)
endorsements to the Existing Title Policies, insuring the Lien of each such
Mortgage as a valid first Lien on the Mortgaged Property described therein,
free of any other Liens except as permitted by Section 6.03, in form and
substance satisfactory to the Collateral Agent, together with such coinsurance
and reinsurance as the Collateral Agent or the Required Lenders may reasonably
request;


 


(iii)
copies of all existing surveys and such other information and documents with
respect to the Mortgaged Properties as shall be necessary for the aforesaid
title insurance policies to be issued without a survey exception;


 


(iv) a
UCC amendment to the fixture financing statement for the Mortgaged Property in
Pittsburgh County, Oklahoma to be filed in the appropriate jurisdiction as
necessary, in the Collateral Agent’s sole discretion, to continue the
perfection of the Collateral Agent’s Lien on such Mortgaged Property;


 


(v) a
favorable written opinion (addressed to Agents, the Issuing Bank and the
Lenders) of local counsel for each of the Mortgaged Properties located in Tennessee,
Virginia and Oklahoma, substantially in a form agreed to by the Agents,
covering such matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Agents shall reasonably request; and


 


(vi)
such other customary documentation with respect to the Mortgaged Properties as
the Collateral Agent may reasonably require; and


 


(c) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Collateral Agent shall have received duly
executed copies of amended and restated deposit account control agreements with
each Depository Bank covering the Loan Parties’ accounts at such Depository
Bank, each in form and substance satisfactory to the Collateral Agent.


 


(d) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Administrative Agent shall have received
evidence that (i) the name on account number 1014-770 at The Bank of Montreal
has been changed from the Parent Borrower to Pliant Corporation of Canada Ltd.
and (ii) the judgments against the Parent Borrower in King County, Washington
in favor of Infonet Inc. and Arrow Financial Services have been satisfied.


 


(e) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Agents shall have received a favorable
written opinion (addressed to Agents, the Issuing Bank and the Lenders) of
foreign counsel in each jurisdiction listed on Schedule 4.02,
substantially in a form agreed to by the Agents, covering such matters relating
to the Loan Parties, the Loan Documents or the Transactions as the Agents shall
reasonably request.


 


(f) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Administrative Agent shall have received
evidence or the documentation required by Section 5.12, as applicable,
that (i)


 


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Pliant Investment, Inc.
has either (A)(1) merged into or consolidated with a Loan Party or (2)
liquidated or dissolved or (B) become a Borrower or Guarantor pursuant to Section 5.12
and (ii) Alliant Company LLC has either (A)(1) merged into or consolidated with
a Loan Party or (2) liquidated or dissolved or (B) had its membership interests
pledged to the Collateral Agent by Pliant Investment Inc. pursuant to Section
5.12.


 


(g) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Collateral Agent shall have received a
duly executed copy of a deposit account control agreement between the
Collateral Agent, the Canadian Subsidiary Borrower and the applicable
depository bank, in form and substance satisfactory to the Collateral Agent.


 


(h) Within 30 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Administrative Agent shall have received
(i) evidence that the PPSA filings referred to in the Canadian Filings
Certificate have been (A) modified to reflect the appropriate description of
assets covered thereby or (B) terminated or (ii) an estoppel letter from the
applicable secured party of record on the PPSA filings referred to in the
Canadian Filings Certificate which letter shall indicate that notwithstanding
the description of the assets covered by the such PPSA filing, the Lien
evidenced by such PPSA filing is limited to a Lien permitted by Section 6.02.


 


(i) within 10 days of the
Effective Date (or such longer period of time as may be acceptable to the
Agents in their sole discretion), the Collateral Agent shall have received a
master promissory note evidencing all intercompany Indebtedness set forth on Schedule 4.01(f)
together with a note power, endorsed in blank.


 


SECTION 4.03. Each
Credit Event. The obligation of each Lender to make a Loan on the occasion
of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any
Letter of Credit, is subject to the satisfaction of the following conditions:


 


(a) The representations
and warranties of each Loan Party set forth in the Loan Documents qualified as
to materiality shall be true and correct and those not so qualified shall be
true and correct in all material respects on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent such representations and
warranties expressly relate to an earlier date in which case such
representations and warranties shall be true and correct as of such earlier
date.


 


(b) At the time of and
immediately after giving effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, no Default shall
have occurred and be continuing.


 


(c) At the time of, and
after giving effect to, such Borrowing or the issuance, amendment, renewal or
extension of such Letter of Credit, (i) the total Domestic A Revolving
Exposures shall not exceed the total amount of the Domestic A Commitments, (ii)
the total Domestic B Revolving Exposures shall not exceed the total amount of
the Domestic B Commitments, (iii) the total Canadian Revolving Exposures
shall not exceed


 


79

















 


the total amount of the
Canadian Commitments, (iv) the total Revolving A Exposures exceeding the lesser
of (A) the total amount of the Domestic A Commitments plus the Canadian
Commitments and (B) the Borrowing Base A then in effect and (v) the total
Revolving Exposures shall not exceed the lesser of (A) the total amount of
the Commitments and (B) the Aggregate Borrowing Base then in effect.


 


(d) The Administrative
Agent shall have received an Officers’ Certificate (as defined in the Senior
First Lien Note Indenture, the Senior Second Lien Note Indenture and the Senior
Subordinated Note Indenture) of the Parent Borrower, dated the date of such
Borrowing, or the issuance, amendment, renewal or extension of such Letter of
Credit (delivered, and containing a statement that it was delivered, in good
faith after reasonable investigation) to the effect that such Borrowing, or the
issuance, amendment, renewal or extension of such Letter of Credit, does not
violate the provisions of the Senior First Lien Note Indenture, the Senior
Second Lien Note Indenture and the Senior Subordinated Note Indenture
(including a reasonably detailed summary as to the calculations necessary to
determine the absence of any such violation).


 


The
making of any Loan on the occasion of each Borrowing and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Parent Borrower on the date
thereof as to the matters specified in paragraphs (a), (b) and (c) of this
Section.


 


ARTICLE V


 


Affirmative Covenants


 


Until
the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all
LC Disbursements shall have been reimbursed, each Borrower covenants and
agrees with the Lenders that:


 


SECTION 5.01. Financial
Statements and Other Information. The Parent Borrower will furnish to the
Administrative Agent, which will deliver to each other Agent and each Lender:


 


(a) within 90 days
after the end of each fiscal year of the Parent Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by Ernst & Young LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Parent Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;


 


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(b) within 45 days
after the end of each of the first three fiscal quarters of each fiscal year of
the Parent Borrower, its consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Parent Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;


 


(c) within 30 days
after the end of each fiscal month of each fiscal year (or within 45 days after
the end of each final fiscal month of each fiscal quarter) of the Parent
Borrower, (i) its consolidated balance sheet and related statements of operations
as of the end of and for such fiscal month and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) (A) the previous fiscal year and (B) the Projections, all certified
by one of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Parent Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes and (ii) information to support the calculation of the
Fixed Charge Coverage Ratio as of the end of and for such fiscal month,
certified by one of its Financial Officers;


 


(d) concurrently with any
delivery of financial statements under clause (a), (b) or (c) above, a
certificate of a Financial Officer of the Parent Borrower (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations with respect
to compliance with Section 6.09, (iii) setting forth reasonably
detailed calculations of the Fixed Charge Coverage Ratio as of the last day of
the last fiscal period covered by such financial statements and
(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the Parent Borrower’s audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;


 


(e) concurrently with any
delivery of financial statements under clause (a) above, a certificate of
the accounting firm that reported on such financial statements stating whether
they obtained knowledge during the course of their examination of such
financial statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);


 


(f) no later than
12:00 noon, New York City time, on Wednesday of each week, and at any
time an Event of Default has occurred and is continuing, at such other times as
may be requested by any Agent, a completed Borrowing Base Certificate
calculating and certifying the Borrowing Bases as of the last day of the prior
week and accompanied by such supporting detail and documentation as shall be
reasonably requested by any Agent;


 


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provided, however, that (A) the unit cost
for Eligible Raw Materials may be calculated as of the last day of the
immediately preceding calendar month and (B) the cost for polyvinyl chloride
(PVC) resin, polyethylene (PE) resin and polypropylene (PP) resin may be
calculated on a weekly average basis;


 


(g) to the extent
requested by any Agent at any time when it reasonably believes that the
then-existing Borrowing Base Certificate is materially inaccurate or that
either Borrowing Base at such time would, if calculated at such time, be
materially different than such Borrowing Base reflected in such then-existing
Borrowing Base Certificate, within 10 Business Days of such request, a
completed Borrowing Base Certificate that satisfies the requirements of Section 5.01(f)
showing such Borrowing Base as of the date so requested, accompanied by the
reports and supporting information contemplated thereby or otherwise requested
by any Agent;


 


(h) within two Business
Days of any request therefor, such other information concerning the amount,
composition and manner of computation of the Borrowing Bases as any Agent may
reasonably request (in such detail as may reasonably be requested by any
Agent);


 


(i) not later than
45 days following the commencement of each fiscal year of the Parent
Borrower, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and related statements of projected
operations and cash flow as of the end of and for such fiscal year), presented
on a monthly basis, and, promptly when available, any significant revisions of
such budget;


 


(j) promptly after the
same become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent Borrower or any Subsidiary
with the SEC, or any Governmental Authority succeeding to any or all of the
functions of the SEC, or with any national securities exchange, as the case may
be;


 


(k) promptly following
any request therefor, such other information regarding the operations, business
affairs and financial condition of the Parent Borrower or any Subsidiary, or
compliance with the terms of any Loan Document, as the Administrative Agent,
the Collateral Agent or any Lender may reasonably request;


 


(l) as soon as available
but in any event within five Business Days of after the end of each calendar
month, and at such other times as may be requested by any Agent, as of the
period then ended:


 


(i)
with respect to each Borrower, a summary of Inventory by location and type and,
if requested by any Agent, a supporting perpetual Inventory report, in each
case accompanied by such supporting detail and documentation as may be
reasonably requested by any Agent;


 


(ii)
with respect to each Borrower, a monthly trial balance showing Accounts
outstanding aged from invoice date as follows: 
1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
accompanied by such supporting detail and documentation as may be reasonably
requested by any Agent;


 


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(iii)
with respect to each Borrower, a schedule and aging of such Borrower’s accounts
payable; and


 


(iv)
with respect to each Borrower, a report from the resin integration purchase
system (RIPS) listing all resin payments due as of the date of delivery of such
report; and


 


(m) as soon as available
but in any event within five Business Days of after the end of each calendar
month, and at such other times as may be requested by any Agent, a report setting
forth additions and reductions (cash and non-cash) with respect to Accounts of
each Borrower, as of the period then ended.


 


SECTION 5.02. Notices
of Material Events. The Parent Borrower will furnish to each Agent and each
Lender prompt written notice of the following:


 


(a) the occurrence of any
Default;


 


(b) the filing or
commencement of any action, suit or proceeding by or before any arbitrator or
Governmental Authority against or, to the knowledge of an executive officer or
a Financial Officer of the Parent Borrower, affecting the Parent Borrower or
any Affiliate thereof that would reasonably be expected to result in a Material
Adverse Effect;


 


(c) any downgrade of the
ratings of the Parent Borrower’s senior secured indebtedness for borrowed money
by S&P, Moody’s or any other rating agency;


 


(d) the occurrence of any
ERISA Event that, alone or together with any other ERISA Events that have
occurred, would reasonably be expected to result in liability of the Parent
Borrower and the Subsidiaries in an aggregate amount exceeding $5,000,000; and


 


(e) any other development
that results in, or would reasonably be expected to result in, a Material
Adverse Effect.


 


Each
notice delivered under this Section shall be accompanied by a statement of a
Financial Officer or other executive officer of the Parent Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.


 


SECTION 5.03. Information
Regarding Collateral. (a)  The Parent
Borrower will furnish to the Agents 10 day’s prior written notice of any change
(i) in any Loan Party’s corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party’s chief executive
office, its principal place of business, any office in which it maintains books
or records relating to Collateral owned by it or any office or facility at
which Collateral owned by it having an aggregate fair value in excess of
$100,000 is located (including the establishment of any such new office or
facility), (iii) in any Loan Party’s identity or corporate structure,
(iv) in any Loan Party’s Federal Taxpayer Identification Number or other
organizational identification number (or, with respect to each Foreign
Subsidiary, any comparable identification numbers issued by


 


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any
Governmental Authority) or (v) in any Loan Party’s jurisdiction of
incorporation or organization. The Parent Borrower agrees not to effect or
permit any change referred to in the preceding sentence unless all filings have
been made under the Uniform Commercial Code (or the equivalent legislation of
other jurisdictions) or otherwise that are required in order for the Collateral
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral; provided that the
Collateral Agent shall take any action reasonably requested by the Parent
Borrower to maintain a valid, legal and perfected security interest in all the
Collateral.


 


(b)  Each quarter, at the time of delivery of
annual or quarterly financial statements with respect to the preceding fiscal
year or fiscal quarter pursuant to clause (a) or clause (b) of Section 5.01,
the Parent Borrower shall deliver to the Administrative Agent a certificate of
a Financial Officer and the chief legal officer of the Parent Borrower or the
Canadian Subsidiary Borrower, as applicable, (i) setting forth the information
required pursuant to Section 2 of the Domestic Perfection Certificate and
Section 2 of the Canadian Perfection Certificate or confirming that there
has been no change in such information since the date of the applicable
Perfection Certificate delivered on the Effective Date or the date of the most
recent certificate delivered pursuant to this Section and (ii) certifying
that all Uniform Commercial Code financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (i) above to the extent necessary to protect
and perfect the security interests under the Security Agreements for a period
of not less than 18 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within
such period).


 


SECTION 5.04. Existence;
Conduct of Business. The Parent Borrower will, and will cause each of the
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges, franchises, patents, copyrights, trademarks and trade
names material to the conduct of the business of the Parent Borrower and the
Subsidiaries, taken as a whole; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.04.


 


SECTION 5.05. Payment
of Obligations; Compliance with Leases. (a) 
The Parent Borrower will, and will cause each of the Subsidiaries to,
pay (i) all material Taxes and other charges of any Governmental Authority
imposed on it or any of its properties or assets or in respect of any of its
franchises, business, income or property before any material penalty or
interest accrues thereon and (ii) all claims (including claims for labor,
services, materials and supplies) for sums that have become due and payable and
that by law have or may become a Lien (other than a Lien permitted under Section 6.03)
upon any of the property or assets of the Parent Borrower or any of the
Subsidiaries, prior to the time when any penalty or fine shall be incurred with
respect thereto, except where (A) the validity or amount thereof is being
contested in good faith by appropriate procedures or proceedings, (B) the
Parent Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, (C) such contest effectively
suspends collection of the contested obligation and the


 


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enforcement
of any Lien securing such obligation and (D) the failure to make payment
pending such contest would not reasonably be expected to result in a Material
Adverse Effect.


 


(b)  The Parent Borrower will, and will cause each
of the Subsidiaries to, comply with all material terms of each lease under
which the Parent Borrower or any Subsidiary leases any property, as lessee, and
at which Accounts or Inventory that is included in the calculation of the
Borrowing Bases is located.


 


SECTION 5.06. Maintenance
of Properties. The Parent Borrower will, and will cause each of the
Subsidiaries to, keep and maintain all property material to the conduct of the
business of the Parent Borrower and the Subsidiaries taken as a whole in good
working order and condition, ordinary wear and tear excepted.


 


SECTION 5.07. Insurance.
The Parent Borrower will, and will cause each of the Subsidiaries to, maintain
insurance with respect to its material properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons. Such insurance shall
be maintained with financially sound and reputable insurers, except that a
portion of such insurance program (not to exceed that which is customary in the
case of companies engaged in the same or similar business or having similar
properties similarly situated) may be effected through self-insurance, provided
adequate reserves therefor, in accordance with GAAP, are maintained. All
insurance policies or certificates (or certified copies thereof) with respect
to such insurance (A) shall, subject to the terms of the Intercreditor
Agreement, be endorsed to the Collateral Agent’s reasonable satisfaction for
the benefit of the Lenders (including by naming the Collateral Agent as loss
payee or additional insured, as appropriate); and (B) shall state that
such insurance policy shall not be canceled without 30 days’ prior written
notice thereof (or, in connection with any cancellation resulting from the
non-payment of premiums, 10 days’ prior written notice thereof). The
Parent Borrower shall promptly notify the Administrative Agent of any material
change or revision, or notice of expiration or non-renewal, with respect to any
such insurance policy. The Parent Borrower shall furnish to the Administrative
Agent, on the Effective Date and on the date of delivery of each annual
financial statement, full information as to the insurance carried. At any time
that insurance at levels described in Schedule 5.07 is not being
maintained by or on behalf of the Parent Borrower or any of the Subsidiaries,
the Parent Borrower will notify the Lenders in writing within two Business Days
thereof and, if thereafter notified by the Administrative Agent or the Required
Lenders to do so, the Parent Borrower or any such Subsidiary, as the case may
be, shall obtain insurance at such levels at least equal to those set forth on Schedule 5.07;
provided that such insurance can be obtained at commercially reasonable
rates.


 


SECTION 5.08. Casualty
and Condemnation. (a)  The Parent
Borrower will furnish to each Agent and the Lenders prompt written notice of
any casualty or other insured damage to any portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding, where the fair market value of the
Collateral so affected in connection with any such casualty event or
condemnation is at least $1,000,000.


 


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(b)  If any event described in paragraph (a)
of this Section results in Net Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Collateral Agent is authorized to collect
such Net Proceeds and, if received by the Parent Borrower or any Subsidiary,
such Net Proceeds shall be paid over to the Collateral Agent; provided
that (i) if the aggregate Net Proceeds in respect of such event (other
than proceeds of business interruption insurance) are less than $5,000,000,
such Net Proceeds shall be paid over to the Parent Borrower unless a Default
has occurred and is continuing, (ii) all proceeds of business interruption
insurance shall be paid over to the Parent Borrower unless a Default has
occurred and is continuing and (iii) for so long as the Senior First Lien
Notes remain outstanding, all Net Proceeds in respect of Second-Priority Collateral
shall be paid over to the Senior First Lien Note Trustee to the extent required
by the terms of the Senior First Lien Note Documents. All such Net Proceeds
retained by or paid over to the Collateral Agent shall be held by the
Collateral Agent and released from time to time to pay the costs of repairing,
restoring or replacing the affected property or funding expenditures for assets
in any business permitted under Section 6.04(b), in each case in
accordance with the terms of the applicable Security Document, subject to the
provisions of the applicable Security Document regarding application of such
Net Proceeds during a Default.


 


SECTION 5.09. Books
and Records; Inspection and Audit Rights. (a)  The Parent Borrower will, and will cause each
of the Subsidiaries to, keep proper books of record and account in which full,
true and correct entries are made in all material respects of all dealings and
transactions in relation to its business and activities. The Parent Borrower
will, and will cause each of the Subsidiaries to, permit any representatives
designated by any Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants (and the Parent Borrower shall be provided the
opportunity to participate in any such discussions with such independent
accountants), all at such reasonable times and as often as reasonably requested.
The Parent Borrower shall pay the reasonable fees and expenses of any
representatives retained by the Administrative Agent (such representatives to
be reasonably acceptable to the Domestic B Agent), or any time after the
Domestic A Revolving Loans and the Canadian Revolving Loans have been paid in
full and the Domestic A Commitments and the Canadian Commitments have been
terminated, the Domestic B Agent, to conduct any such inspection; provided,
however that so long as no Event of Default shall have occurred and be
continuing, the Parent Borrower shall only be required to pay for one such
inspection per fiscal quarter of the Parent Borrower.


 


(b)  The Parent Borrower will, and will cause each
of the Subsidiaries to, permit any representatives designated by any Agent (including
any consultants, accountants, lawyers and appraisers retained by such Agent) to
conduct evaluations and appraisals of the Parent Borrower’s computation of the
Borrowing Bases and the assets included in the Borrowing Bases, all at such
reasonable times and as often as reasonably requested. The Parent Borrower
shall pay the reasonable fees and expenses of any representatives retained by
the Administrative Agent (such representatives to be reasonably acceptable to
the Domestic B Agent), or any time after the Domestic A Revolving Loans and the
Canadian Revolving Loans have been paid in full and the Domestic A Commitments
and the Canadian Commitments have been terminated, the Domestic B Agent, to
conduct any such evaluation or appraisal; provided, however that
so long as no Event of Default shall have occurred and be continuing, the
Parent Borrower shall only be


 


86

















 


required
to pay for one such evaluation or appraisal per calendar year. The Parent
Borrower also agrees to modify or adjust the computation of the Borrowing Bases
(which may include maintaining additional reserves or modifying the eligibility
criteria for the components of the Borrowing Base) to the extent required by
any Agent or the Required Lenders as a result of any such evaluation or
appraisal or otherwise.


 


(c)  In the event that historical accounting
practices, systems or reserves relating to the components of the Borrowing Base
A are modified in a manner that is adverse to the Domestic A Lenders, the
Domestic B Lenders or the Canadian Lenders in any material respect, the Parent
Borrower will agree to maintain such additional reserves (for purposes of
computing the Borrowing Base A and the Borrowing Base B) in respect of the
components of the Borrowing Base A and the Borrowing Base B and make such other
adjustments to its parameters for including the components of the Borrowing
Base A and the Borrowing Base B as the Administrative Agent or the Required
Lenders in their discretion shall require based upon such modifications.


 


(d)  In the event that historical accounting
practices, systems or reserves relating to the components of the Borrowing Base
B are modified in a manner that is adverse to the Domestic A Lenders, the
Domestic B Lenders or the Canadian Lenders in any material respect, the Parent
Borrower will agree to maintain such additional reserves (for purposes of
computing the Borrowing Base B) in respect of the components of the Borrowing
Base A and the Borrowing Base B and make such other adjustments to its
parameters for including the components of the Borrowing Base A and the
Borrowing Base B as the Administrative Agent, or any time after the Domestic A
Revolving Loans and the Canadian Revolving Loans have been paid in full and the
Domestic A Commitments and the Canadian Commitments have been terminated, the
Domestic B Agent or the Required Lenders in their discretion shall require
based upon such modifications.


 


SECTION 5.10. Compliance
with Laws. The Parent Borrower will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, including
Environmental Laws except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.


 


SECTION 5.11. Use of
Proceeds and Letters of Credit. The proceeds of the Loans will be used
solely for general corporate purposes of the applicable Borrower. No part of
the proceeds of any Loan will be used, whether directly or indirectly, and
whether immediately, incidentally or ultimately, (i) to purchase or carry
Margin Stock or any security convertible into or exchangeable for Margin Stock,
or extend credit to others for the purpose of purchasing or carrying Margin
Stock or any security convertible into or exchangeable for Margin Stock, or to
refund Indebtedness originally incurred for such purpose, or (ii) for any
purpose that entails a violation of any of the Regulations of the Board, including
Regulation U and Regulation X. Letters of Credit will be issued only
for general corporate purposes.


 


SECTION 5.12. Additional
Subsidiaries. If any
additional Subsidiary is formed or acquired after the Effective Date (or if any
Subsidiary ceases to be an Excluded Subsidiary after the Effective Date), the
Parent Borrower will notify the Agents and the Lenders thereof and


 


87

















 


(a) if
(i) such Subsidiary is a Loan Party (other than a Loan Party organized under
the laws of Canada or any province thereof), the Parent Borrower will cause
such Subsidiary to become a party to (x) this Agreement, as a Borrower, or the
Guarantee Agreement, as a Guarantor (y) the Domestic Security Agreement, the
Domestic Pledge Agreement and each other applicable Security Document in the
manner provided therein (or, if such Loan Party is a Foreign Subsidiary not
organized under the laws of Canada or any province thereof, such mortgages and
security, pledge, guarantee and subordination agreements as reasonably
requested by the Administrative Agent or the Collateral Agent to guarantee and
secure the Obligations) and (ii) if such Subsidiary is a Loan Party
organized under the laws of Canada or any province thereof, the Parent Borrower
will cause such Subsidiary to become a party to the Guarantee Agreement, the
Canadian Security Agreement, the Canadian Pledge Agreement and each other
applicable Security Document in the manner provided therein, in each case
within three Business Days after such Subsidiary is formed or acquired and
promptly take such actions to create and perfect Liens on such Subsidiary’s
assets to secure the Obligations as the Administrative Agent or the Collateral
Agent or the Required Lenders shall reasonably request and (b) if any
Equity Interests or Indebtedness of such Subsidiary are owned by or on behalf
of any Loan Party, the Parent Borrower will cause certificates and promissory
notes evidencing such Equity Interests and Indebtedness to be pledged to secure
the Obligations within three Business Days after such Subsidiary is formed or
acquired (except that, if such Subsidiary is a Foreign Subsidiary and is not a
Loan Party, Equity Interests of such Subsidiary that are owned by or on behalf
of the Parent Borrower or a Subsidiary Loan Party and that are to be pledged to
secure the Obligations may be limited to 65% of the outstanding voting Equity
Interests of such Subsidiary).


 


SECTION 5.13. Further
Assurances. (a)  The Parent Borrower
will, and will cause each other Loan Party to, execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions (including the filing and recording of financing statements,
fixture filings, mortgages, deeds of trust and other documents), that may be
required under any applicable law, or which any Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. The Parent Borrower also
agrees to provide to the Agents, from time to time upon request, evidence
reasonably satisfactory to the Agents as to the perfection and priority of the
Liens created or intended to be created by the Security Documents.


 


(b)  If any material assets (including any real
property or improvements thereto or any interest therein) are acquired by the
Parent Borrower or any other Loan Party after the Effective Date (other than
assets constituting Collateral that become subject to the Lien of the
appropriate Security Agreements upon acquisition thereof), the Parent Borrower
will notify the Agents and the Lenders thereof, and, if requested by any Agent
or the Required Lenders, the Parent Borrower will cause such assets to be
subjected to a Lien securing the Obligations and will take, and cause the other
Loan Parties to take, such actions as shall be necessary or reasonably
requested by any Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section, all at the expense of the Loan
Parties; provided that the following property shall not be covered by
this Section 5.13(b): 
(i) intellectual property a security interest in which would
require filings or recordations under laws other than the laws of the
United States, Canada (in the case of intellectual property of the
Canadian Subsidiary


 


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Borrower
or another Loan Party organized under the laws of Canada or any province
thereof) or any jurisdiction thereof, (ii) owned real estate or leasehold
interests with an aggregate fair market value of less than $5,000,000,
(iii) any other items of tangible personal property with, in each case, a
fair market value of less than $500,000 and (iv) items explicitly excluded
by exceptions in any Security Agreement, Pledge Agreement or other Security
Document.


 


SECTION 5.14. Supplemental
Disclosure. From time to time as may be reasonably requested by the
Administrative Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of an Event of Default) or at
the Loan Parties’ election, the Parent Borrower shall supplement each Schedule,
or any representation herein or in any other Loan Document, with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described in such
Schedule or as an exception to such representation or that is necessary to
correct any information in such Schedule or representation which has been
rendered inaccurate thereby (and, in the case of any supplements to any
Schedule, such Schedule shall be appropriately marked to show the changes made
therein); provided that (a) no such supplement to any such Schedule or
representation shall amend, supplement or otherwise modify any Schedule or
representation, or be or be deemed a waiver of any Default or Event of Default
resulting from the matters disclosed therein, except as consented to by Agent
and Requisite Lenders in writing, and (b) no supplement shall be required or
permitted as to representations and warranties that relate solely to the
Closing Date.


 


SECTION 5.15. Intellectual
Property. The Parent Borrower will, and will cause each of the Subsidiaries
to, conduct its business and affairs without infringement of or interference
with any Intellectual Property (as defined in the Domestic Security Agreement)
of any other Person in any material respect and shall comply in all material
respects with the terms of its Licenses (as defined in the Domestic Security
Agreement).


 


SECTION 5.16. Landlord
Lien Waivers, Mortgagee Agreements and Bailee Letters. As reasonably
requested by the Collateral Agent, the Parent Borrower will, and will cause
each of the Subsidiaries to, use commercially reasonable efforts to obtain a
Landlord Lien Waiver, mortgagee agreement or Bailee Letter, as applicable, from
the lessor of each leased property, mortgagee of owned property or bailee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall contain
a waiver or subordination of all Liens or claims that the landlord, mortgagee
or bailee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the Collateral
Agent. Each Loan Party shall timely and fully pay and perform its obligations
under all leases and other agreements with respect to each leased location or
public warehouse where any Collateral is or may be located.


 


SECTION 5.17. Depository
Banks. The Parent Borrower will, and will cause each of the Subsidiaries
to, maintain a bank reasonably acceptable to the Administrative Agent as its
principal depository bank, including for the maintenance of operating,
administrative, cash management, collection activity, and other deposit
accounts for the conduct of its business.


 


SECTION 5.18. ERISA.
The Parent Borrower will, and will cause each of the Subsidiaries to,
establish, maintain and operate all Plans to comply in all material respects
with


 


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the
provisions of ERISA, the Code, and all other applicable laws, and the
regulations and interpretations thereunder other than to the extent that the
Loan Parties are in good faith contesting by appropriate proceedings the
validity or implication of any such provision, law, rule, regulation or
interpretation.


 


ARTICLE VI


 


Negative Covenants


 


Until
the Commitments have expired or terminated and the principal of and interest on
each Loan and all fees payable hereunder have been paid in full and all Letters
of Credit have expired or terminated and all LC Disbursements shall have
been reimbursed, the Parent Borrower covenants and agrees with the Lenders
that:


 


SECTION 6.01. Indebtedness.
The Parent Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Indebtedness, except:


 


(i) Indebtedness
created under the Loan Documents;


 


(ii) Indebtedness
existing on the Effective Date and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof;


 


(iii) Indebtedness
of the Parent Borrower to any Subsidiary and of any Subsidiary to the Parent
Borrower or any other Subsidiary; provided that Indebtedness of any
Subsidiary that is not a Loan Party to any Loan Party shall be subject to Section 6.05;


 


(iv) Guarantees by
the Parent Borrower of Indebtedness of any Subsidiary or Joint Venture and by
any Subsidiary of Indebtedness of the Parent Borrower, any other Subsidiary or
any Joint Venture; provided that (i) Guarantees by (A) any
Loan Party of Indebtedness of any Subsidiary that is not a Loan Party and
(B) the Parent Borrower or any Subsidiary of Indebtedness of a Joint
Venture, in each case shall be subject to Section 6.05,
(ii) any Guarantee of the Senior Subordinated Notes by a Subsidiary shall
be subordinated on the same terms as the Senior Subordinated Notes and (iii)
any Guarantee of the Senior Subordinated Notes, the Senior First Lien Notes or
the Senior Second Lien Notes shall be given only by a Subsidiary that is a Loan
Party;


 


(v) Indebtedness
of the Parent Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, including Capital Lease Obligations incurred pursuant
to transactions permitted by Section 6.07, and extensions, renewals
and replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof; provided that (A) such Indebtedness is
incurred prior to or within 120 days after such acquisition or the
completion of such construction or improvement and (B) the aggregate
principal amount of Indebtedness permitted by this clause (v) shall not
exceed $10,000,000 at any time outstanding;


 


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(vi) the Senior
First Lien Notes in an aggregate principal amount at maturity not exceeding (A)
prior to the 2004 Notes Restatement Date, $306,000,000 plus the amount
of additional Permitted Notes Refinancing Indebtedness in respect thereof
incurred in respect of unpaid accrued interest (not included in the accreted
value) and premium thereon and (B) on and after the 2004 Notes Restatement
Date, an amount equal to the sum of (1) the aggregate accreted value of the
Amended 2004 Notes on the 2004 Notes Restatement Date plus the aggregate
principal amount of additional Senior First Lien Notes issued in payment of
interest thereon plus the amount of additional Permitted Notes Refinancing
Indebtedness in respect thereof incurred in respect of unpaid accrued interest
and premium thereon and (2) the 2004 Notes Remaining Amount plus the
amount of additional Permitted Notes Refinancing Indebtedness in respect
thereof incurred in respect of unpaid accrued interest (not included in the
accreted value) and premium thereon;


 


(vii) Indebtedness
with respect to surety, appeal and performance bonds obtained by the Parent
Borrower or any of the Subsidiaries in the ordinary course of business;


 


(viii) other
Indebtedness of any Loan Party; provided that (A) the aggregate
principal amount of Indebtedness that may be incurred pursuant to this
clause (viii) shall not exceed $5,000,000 at any time outstanding and
(B) any such Indebtedness shall be unsecured (other than Indebtedness
secured by a Lien permitted by Section 6.03(d));


 


(ix) other
Indebtedness of any Subsidiary that is not a Loan Party; provided that
the aggregate amount of Indebtedness that may be incurred pursuant to this
clause (ix) and outstanding at any time shall not exceed $35,000,000, minus
(A) the aggregate amount of Indebtedness that has been incurred pursuant to
clauses (v) and (viii) above and that is outstanding at such time and (B) the
aggregate amount of other obligations that have been secured pursuant to
subclause (i) of clause (d) of the definition of “Permitted Encumbrances” and
that are outstanding at such time;


 


(x) the Senior
Second Lien Notes in an aggregate principal amount not exceeding $250,000,000 plus
the amount of additional Permitted Notes Refinancing Indebtedness in respect
thereof incurred in respect of unpaid accrued interest and premium thereon;


 


(xi) the Senior
Subordinated Notes in an aggregate principal amount not exceeding $320,000,000 plus
the amount of additional Permitted Notes Refinancing Indebtedness in respect
thereof incurred in respect of unpaid accrued interest and premium thereon;


 


(xii) the Existing
Preferred Stock and all additional shares of such Preferred Stock permitted to
be issued under Section 6.09(a)(ii), in each case to the extent that
such Preferred Stock is or may subsequently become characterized as
Indebtedness in the consolidated financial statements of the Parent Borrower in
accordance with GAAP and other applicable financial accounting standards;


 


(xiii)
[Intentionally Omitted];


 


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(xiv)
[Intentionally Omitted];


 


(xv) the Series B
Preferred Stock permitted to be issued under this Agreement, to the extent that
such Series B Preferred Stock is or may subsequently become characterized as
Indebtedness in the consolidated financial statements of the Parent Borrower in
accordance with GAAP and other applicable accounting standards; and


 


(xvi) unsecured
Indebtedness of the Parent Borrower in an aggregate principal amount not
exceeding $10,000,000 pursuant to an overdraft line of credit in form and
substance reasonably satisfactory to each Agent (which shall line of credit
shall include subordination terms and conditions that are acceptable to the
Agents); provided, however, that to the extent a legal opinion is
delivered by counsel to the Parent Borrower in connection with such overdraft
line of credit, the Administrative Agent shall receive concurrently therewith a
reliance letter in favor of the Agents, the Lenders and the Issuing Bank.


 


SECTION 6.02. Certain
Equity Securities. The Parent Borrower will not, nor will it permit any
Subsidiary to, issue any preferred stock (other than Qualified Preferred Stock
of the Parent Borrower) or be or become liable in respect of any obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any
other payment in respect of any Equity Interests of the Parent Borrower or any
Subsidiary, except for (i) the warrants issued in connection with the
Existing Preferred Stock, (ii) the Warrants, (iii) actions otherwise
permitted under Section 6.09, (iv) Series B Preferred Stock, to the
extent issued pursuant to Section 6.10(e), and (v) Qualified
Preferred Stock of the Parent Borrower.


 


SECTION 6.03. Liens.
The Parent Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:


 


(a) Liens created under
the Loan Documents;


 


(b) Permitted
Encumbrances;


 


(c) any Lien on any
property or asset of the Parent Borrower or any Subsidiary existing on the
Effective Date and set forth in Schedule 6.03; provided that
(i) such Lien shall not apply to any other property or asset of the Parent
Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations that it secures on the Effective Date and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;


 


(d) any Lien existing on
any property or asset prior to the acquisition thereof by the Parent Borrower
or any Subsidiary or existing on any property or asset of any Person that
becomes a Subsidiary after the Effective Date prior to the time such Person
becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any
other property or assets of the Parent Borrower or any Subsidiary and
(iii) such Lien shall secure only those obligations that it secures on


 


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the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be
and extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;


 


(e) Liens on fixed or
capital assets acquired, constructed or improved by the Parent Borrower or any
Subsidiary; provided that (i) such Liens secure Indebtedness
permitted by clause (v) of Section 6.01, (ii) such Liens
and the Indebtedness secured thereby are incurred prior to or within
120 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100%
of the cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other
property or assets of the Parent Borrower or any Subsidiary other than property
directly related to such fixed or capital assets and of a type customarily covered
by such Liens, except that such security interests may not apply to any
accounts receivable or inventory;


 


(f) Liens securing
Indebtedness incurred pursuant to Section 6.01(ix); provided
that such Liens shall apply only to properties and assets of Foreign Subsidiaries
that are not Loan Parties;


 


(g) leases and subleases
of real property and tangible personal property and licenses and sublicenses of
intellectual property rights, in each case granted in the ordinary course of
business and not interfering individually or in the aggregate (with all such
licenses and subleases being taken as a whole) in any material respect with the
conduct of the business of the Parent Borrower and the Subsidiaries;


 


(h) Liens to secure
compensation and indemnity obligations to the trustee under the indenture for
the Senior Subordinated Notes and the warrant agent under the warrant agreement
for the Warrants;


 


(i) Liens granted under
the Senior First Lien Security Documents or the Senior Second Lien Security
Documents; provided that (i) such Liens secure only obligations
under the Senior First Lien Note Documents and the Senior Second Lien Note
Documents, respectively, except that such obligations shall not include
obligations under any Indebtedness (or obligations under any Swap Agreements)
except to the extent incurred pursuant to Section 6.01(x), with
respect to the Senior Second Lien Notes, or Section 6.01(vi), with
respect to the Senior First Lien Notes, (ii) such Liens do not apply to
any asset other than Collateral that is subject to a Lien granted under a
Security Document to secure the Obligations, (iii) any Liens on any
First-Priority Collateral that secure obligations in respect of the Senior
First Lien Notes or Senior Second Lien Notes are subordinated to the Liens on
such First-Priority Collateral that secure the Obligations, (iv) any Liens
on any Second-Priority Collateral that secure obligations in respect of the
Senior Second Lien Notes rank equally and ratably with the Liens on such
Second-Priority Collateral that secure the Obligations and (v) all such
Liens granted under the Senior First Lien Security Documents and Senior Second
Lien Security Documents shall be subject to the terms of the Intercreditor
Agreement; and


 


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(j) Liens on cash
deposited with the issuing bank for any Existing Letter of Credit to cash
collateralize such Existing Letter of Credit (including with respect to
interest, fees and expenses associated therewith); provided that
(i) the amount of such cash subject to such Lien at any time shall not
exceed 105% of the face amount of such Existing Letter of Credit and
(ii) upon the termination or expiration of such Existing Letter of Credit,
to the extent there has been no drawing under such Existing Letter of Credit
that has not been reimbursed at such time, an amount of cash equal to 105% of
the face amount of such Existing Letter of Credit (less any amounts retained to
pay interest, fees and expenses associated therewith) shall be promptly
released from such Lien.


 


SECTION 6.04. Fundamental
Changes. (a)  The Parent Borrower
will not and will not permit any Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Subsidiary (other than the Canadian Subsidiary
Borrower) may merge into the Parent Borrower in a transaction in which the
Parent Borrower is the surviving corporation, (ii) any Subsidiary (other
than the Canadian Subsidiary Borrower) may merge into any Subsidiary that is a
Loan Party; provided that if any Subsidiary that is party to such
transaction is (A) a Loan Party, the surviving entity must be a Loan Party
or (B) a Domestic Subsidiary Borrower, the surviving entity must be a
Domestic Subsidiary Borrower, (iii) any Subsidiary that is not a Loan
Party may merge into any Subsidiary that is not a Loan Party, (iv)  any Subsidiary
(other than any Domestic Subsidiary Borrower or the Canadian Subsidiary
Borrower) may liquidate or dissolve if the Parent Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Parent Borrower and is not materially disadvantageous to the Lenders; provided
that any such merger involving a Person that is not a Wholly Owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted
by Section 6.05 and (v) the Parent Borrower may merge with an
Affiliate incorporated under the laws of the State of Delaware solely for the
purpose of incorporating or organizing the Parent Borrower under the laws of
the State of Delaware; provided that such merger does not adversely
affect the Lenders in any material respect.


 


(b)  The Parent Borrower will not, and will not
permit any of the Subsidiaries to, engage to any material extent in any
business other than businesses of the type conducted by the Parent Borrower and
the Subsidiaries on the Effective Date and businesses reasonably related,
ancillary or complementary thereto.


 


SECTION 6.05. Investments,
Loans, Advances, Guarantees and Acquisitions. The Parent Borrower will not,
and will not permit any of the Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a Wholly Owned
Subsidiary prior to such merger) any Equity Interests, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the forgoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any
other Person constituting a business unit, except:


 


(a) Permitted
Investments;


 


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(b) investments existing
on the date hereof and set forth on Schedule 6.05(b), to the extent
such investments would not be permitted under any other clause of this Section 6.05;


 


(c) investments by the
Parent Borrower and the Subsidiaries in the Equity Interests of their
respective Subsidiaries (that are Subsidiaries prior to such Investment); provided
that (i) any such Equity Interests owned by a Loan Party shall be pledged
to secure the Obligations and (ii)(A) the amount of any such investment by a
Loan Party in a Subsidiary that is not a Loan Party shall be automatically
added to the Accumulated Investment Balance and (B) the Accumulated Investment
Balance shall not exceed $7,000,000 during any fiscal year of the Parent
Borrower;


 


(d) loans or advances
made by the Parent Borrower to any Subsidiary and made by any Subsidiary to the
Parent Borrower or any other Subsidiary; provided (i) that any such
loans and advances made by a Loan Party shall be evidenced by a promissory note
pledged to secure the Obligations and (ii)(A) the amount of any such loan or
advance by a Loan Party to a Subsidiary that is not a Loan Party shall be
automatically added to the Accumulated Investment Balance and (B) the
Accumulated Investment Balance shall not exceed $7,000,000 during any fiscal
year of the Parent Borrower;


 


(e) Guarantees by the
Parent Borrower of Indebtedness and other obligations of any Subsidiary or any
Joint Venture and Guarantees by any Subsidiary of Indebtedness or other
obligations of the Parent Borrower or any Subsidiary or any Joint Venture; provided
that (i) a Subsidiary shall not Guarantee the Senior First Lien Notes,
Senior Second Lien Notes or Senior Subordinated Notes unless (A) such
Subsidiary also has Guaranteed the Obligations and (B) with respect to any
Guarantee of the Senior Subordinated Notes, such Guarantee is subordinated to
such Guarantee of the Obligations on terms no less favorable to the Lenders
than the subordination provisions of the Senior Subordinated Notes,
(ii) any such Guarantee constituting Indebtedness is permitted by Section 6.01
and (iii) in the event of any Guarantee by a Loan Party of Indebtedness of
a Person that is not a Loan Party, (A) the aggregate principal amount of
such Indebtedness shall be automatically added to the Accumulated Investment
Balance and (B) the Accumulated Investment Balance shall not exceed $7,000,000
during any fiscal year of the Parent Borrower;


 


(f) investments received
in connection with the bankruptcy or reorganization of, or settlement of
delinquent accounts and disputes with, customers and suppliers, in each case in
the ordinary course of business;


 


(g) [Intentionally
Omitted];


 


(h) [Intentionally
Omitted];


 


(i) payroll, travel and
similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses for accounting purposes and that
are made in the ordinary course of business;


 


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(j) investments of any
Person existing at the time such Person becomes a Subsidiary or at the time
such Person merges or consolidates with the Parent Borrower or any of the
Subsidiaries, in either case in compliance with the terms of this Agreement; provided
that such investments were not made by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary or such
merger or consolidation;


 


(k) Swap Agreements
entered into in compliance with Section 6.08;


 


(l) other loans, advances
and investments; provided that (i) the amount of any such loan, advance
or investment made pursuant to this clause (l) shall be automatically added to
the Accumulated Investment Balance and (ii) the Accumulated Investment Balance
shall not exceed $7,000,000 during any fiscal year of the Parent Borrower; and


 


(m) notes or other
evidences of Indebtedness acquired as consideration in connection with a sale,
transfer, lease or other disposition of any asset by the Parent Borrower or any
of the Subsidiaries.


 


SECTION 6.06. Asset
Sales. The Parent Borrower will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including
any Equity Interest owned by it (other than any such sale, transfer, lease or
other disposition resulting from any casualty or condemnation of any assets of
the Parent Borrower or any of the Subsidiaries), nor will the Parent Borrower
permit any of the Subsidiaries to issue any additional Equity Interest in such
Subsidiary, except:


 


(a) sales of inventory,
used or surplus tangible property and Permitted Investments in the ordinary
course of business;


 


(b) sales, transfers,
issuances and dispositions to the Parent Borrower or a Subsidiary; provided
that any such sales, transfers or dispositions involving a Subsidiary that is
not a Loan Party shall be made in compliance with Section 6.10;


 


(c) leases and licenses
entered into in the ordinary course of business;


 


(d) sales in connection
with sale-leasebacks permitted under Section 6.07;


 


(e) sales of investments
referred to in clauses (b), (f), (l) and (m) of Section 6.05;


 


(f) sales, transfers and
dispositions of assets (other than Equity Interests of a Subsidiary) that are
not permitted by any other clause of this Section; provided that the
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this clause (f) shall not, in the aggregate,
exceed $5,000,000 during the term of this Agreement;


 


(g) sales, transfers and
dispositions of Foreign Assets;


 


(h) transfers and
dispositions constituting investments permitted under Section 6.05;
and


 


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(i) sales, transfers and
dispositions of the assets set forth in Schedule 6.06; provided
that the Parent Borrower provides the Administrative Agent, the Collateral
Agent with written notice of any such sale, transfer or disposition not less
than five Business Days prior to the consummation thereof;


 


provided that all sales, transfers, leases and other
dispositions permitted hereby shall be made for an amount not less than fair
value (as determined in good faith by the Board of Directors of the Parent
Borrower), or, in the case of clause (d) above, for an amount, if less,
equal to the aggregate cost expended for the property that is the subject of
such sale-leaseback (except that those permitted by clause (a) above shall
be made on terms that are customary in the ordinary course) and for
consideration in cash. For purposes of this Section 6.06, the
following shall be deemed to be cash: 
(a) the assumption of any liabilities of the Parent Borrower or any
Subsidiary with respect to, and the release of the Parent Borrower or such Subsidiary
from all liability in respect of, any Indebtedness of the Parent Borrower or
the Subsidiaries permitted hereunder (in the amount of such Indebtedness) in
connection with a sale, transfer, lease or other disposition of Second-Priority
Collateral permitted under Section 6.06 and (b) securities
received by the Parent Borrower or any Subsidiary from the transferee that are
immediately convertible into cash without breach of their terms or the
agreement pursuant to which they were purchased and that are promptly converted
by the Parent Borrower or such Subsidiary into cash.


 


For
purposes of this Section 6.06 and for so long as any Senior First
Lien Notes that are secured by a first-priority Lien on the Second-Priority
Collateral remain outstanding, (a) any sale, transfer, lease or other
disposition of the Equity Interests of any Loan Party that owns assets
constituting First-Priority Collateral or Second-Priority Collateral shall be
deemed to be a sale, transfer, lease or disposition of such First-Priority
Collateral or Second-Priority Collateral, (b) any sale, transfer, lease or
other disposition of Equity Interests of a Loan Party that owns both
First-Priority Collateral and Second-Priority Collateral shall be deemed to be
a separate sale, transfer, lease or disposition of such First-Priority
Collateral and such Second-Priority Collateral) and (c) the proceeds
received by the Parent Borrower or any Subsidiary in respect of any such sale,
transfer, lease or disposition referred to in clause (b) above (or any
sale, transfer, lease or other disposition of assets (other than those
described in clause (b) above) including both First-Priority Collateral
and Second-Priority Collateral without allocating the purchase price between
First-Priority Collateral and Second-Priority Collateral) shall be allocated to
the First-Priority Collateral and the Second-Priority Collateral pursuant to
the terms of the Intercreditor Agreement.


 


SECTION 6.07. Sale and
Lease-Back Transactions. The Parent Borrower will not, and will not permit
any Subsidiary to, enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any property, real or personal, used
or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property being sold or
transferred, except for any such sale of fixed or capital assets that is
consummated within 120 days after the date the Parent Borrower or such
Subsidiary acquires or finishes construction of such fixed or capital asset.


 


SECTION 6.08. Swap
Agreements. The Parent Borrower will not, and will not permit any of the
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements



 


97

















 


entered
into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of the
Parent Borrower or any of the Subsidiaries) and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate,
to a fixed rate or otherwise) with respect to any interest-bearing liability or
investment of the Parent Borrower or any Subsidiary.


 


SECTION 6.09. Restricted
Payments; Certain Payments of Indebtedness. (a)  The Parent Borrower will not, and will not
permit any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except (i) Wholly Owned Subsidiaries may declare and
pay dividends with respect to their Equity Interests and Subsidiaries that are
not Wholly Owned Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests, (ii) the Parent Borrower may, subject
to Section 6.02, make dividends with respect to its Equity
Interests consisting solely of additional Equity Interests permitted hereunder
and (iii) the Parent Borrower may make Restricted Payments to management
or employees of the Parent Borrower and the Subsidiaries or their Permitted
Transferees (as defined in the Stockholders Agreement) in an aggregate amount
not to exceed $1,000,000 during the term of this Agreement, pursuant to and in
accordance with the Stockholders Agreement, employment agreements, stock option
plans or agreements or other benefit plans or agreements; provided that
no Default has occurred and is continuing or would result therefrom; and provided
further that no Restricted Payments shall be permitted pursuant to this
clause (iii) in respect of shares of the Series B Preferred Stock, other than
in connection with the repurchase by the Parent Borrower of unvested shares of
Series B Preferred Stock under the terms of the 2004 Restricted Stock Incentive
Plan of the Parent Borrower; (iv) the Parent Borrower may repurchase or
otherwise acquire from any holder thereof shares of Qualified Preferred Stock
for consideration consisting solely of (x) Qualified Preferred Stock,
(y) cash in an aggregate amount not greater than the amount of Net
Proceeds received from a substantially concurrent issuance of Qualified
Preferred Stock or (z) a combination of the Qualified Preferred Stock
described in clause (x) and the cash described in clause (y); provided
that no Default has occurred and is continuing or would result therefrom; and
(v)  the Parent Borrower may issue shares
of the Series B Preferred Stock as provided in Section 6.02(iv) (insofar
as such issuance constitutes the agreement to make the Restricted Payments
contemplated by the terms of the Series B Preferred Stock); provided that this
clause (v) shall not permit the making of any Restricted Payment in respect of
the Series B Preferred Stock.


 


(b)  The Parent Borrower will not, and will not
permit any Subsidiary to, make or agree to pay or make, directly or indirectly,
any payment or other distribution (whether in cash, securities or other
property) of or in respect of principal of or interest on any Senior First Lien
Note, Senior Second Lien Note or Senior Subordinated Note, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Senior First Lien
Note, Senior Second Lien Note or Senior Subordinated Note, except (i) payment
of regularly scheduled interest payments as and when due in respect of the
Senior First Lien Notes; provided that the Parent Borrower shall not be
permitted to make cash interest payments (A) on and prior to June 15, 2007, in
respect of any Senior First Lien Notes (other than the Amended 2004 Notes and
any initial or successive Permitted Notes Refinancing Indebtedness in respect
thereof) unless (x) such payment is made after the date that


 


98

















 


is 18 months after the Effective Date, (y) no
Default has occurred and is continuing or would result therefrom and (z) the
Fixed Charge Coverage Ratio as of the last day of the most recently completed
fiscal month for which financial statements have been delivered pursuant to Section 5.01(a),
(b) or (c) is equal to or greater than 1.15 to 1.00 or (B) at any
time, in respect of any Amended 2004 Notes (or any initial or successive
Permitted Notes Refinancing Indebtedness in respect thereof), except (in the case
of this clause (B)) for any cash interest payment made in lieu of any payment
of interest in-kind in an amount less than the minimum denomination of the
applicable notes in accordance with the terms thereof, (ii) payment of
regularly scheduled interest payments as and when due in respect of the Senior
Second Lien Notes and Senior Subordinated Notes and (iii) payment of principal
or accreted value of or interest on any Senior First Lien Note, Senior Second
Lien Note or Senior Subordinated Note in connection with the incurrence of any
Permitted Notes Refinancing Indebtedness in respect thereof (including payment
of cash in respect of the Senior First Lien Notes as expressly contemplated by
clause (b) of the definition of “2004 Notes Restatement”).


 


SECTION
6.10.  Transactions with Affiliates.  The Parent Borrower will not, and will not
permit any Subsidiary to, sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from,
or otherwise engage in any other transactions with, any of its Affiliates
(including any Subsidiary), except (a) transactions in the ordinary course
of business that are at prices and on terms and conditions not less favorable
to the Parent Borrower or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties (as determined in good faith by members of
the board of directors of the Parent Borrower having a majority of the voting
power held by all disinterested members of the board of directors of the Parent
Borrower), (b) transactions between or among the Loan Parties and not
involving any other Affiliate (except to the extent the involvement with the
other Affiliate otherwise complies with this Section 6.10),
(c) any Restricted Payment permitted by Section 6.09,
(d) transactions expressly contemplated by Schedule 6.10 and
(e) the issuance of shares of the Series B Preferred Stock to “Eligible Persons”
pursuant to the terms of the 2004 Restricted Stock Incentive Plan of the Parent
Borrower, to the extent such issuance has been approved in good faith by
members of the board of directors of the Parent Borrower having a majority of
the voting power held by all disinterested members of the board of directors of
the Parent Borrower.


 


SECTION
6.11.  Restrictive Agreements.  The Parent Borrower will not and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Parent Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any of its
property or assets or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any of its Equity Interests (it being
understood that the priority of any preferred stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions being
paid on common stock shall not be deemed a restriction on the ability to make
distributions on capital stock) or to make or repay loans or advances to the
Parent Borrower or any other Subsidiary (it being understood that the
subordination of loans or advances made to the Parent Borrower or any
Subsidiary to other Indebtedness incurred by the Parent Borrower or such
Subsidiary shall not be deemed a restriction on the ability to make loans or
advances) or to Guarantee Indebtedness of the Parent Borrower or any other
Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by


 


99

















 


any Loan
Document, (ii) the foregoing shall not apply to restrictions and
conditions existing on the Effective Date identified on Schedule 6.11,
(iii) the foregoing shall not apply to any restriction or condition with
respect to a Subsidiary pursuant to an agreement relating to any Equity
Interests or Indebtedness of such Subsidiary, in each case incurred by such
Subsidiary prior to the date on which such Subsidiary was acquired by the
Parent Borrower (other than Equity Interests or Indebtedness incurred as
consideration in, in contemplation of, or to provide all or any portion of the
funds or credit support utilized to consummate the transaction or series of
related transactions pursuant to which such Subsidiary became a Subsidiary or
was otherwise acquired by the Parent Borrower) and outstanding on such date;
(iv) the foregoing shall not apply to any restriction or condition
pursuant to an agreement refinancing an agreement referred to in
clause (i), (ii) or (iii) or this clause (iv) or contained in any
amendment to an agreement referred to in clause (i), (ii) or (iii) or this
clause (iv); provided, however, that the conditions and
restrictions contained in any such refinancing agreement or amendment are no
more restrictive, taken as a whole, than the encumbrances and restrictions
contained in the applicable predecessor agreement; (v) the foregoing shall
not apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary or assets pending such sale; provided such
restrictions and conditions apply only to the Subsidiary or assets that are to
be sold and such sale is permitted hereunder, (vi) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness or other secured obligations permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness or other obligations,
(vii) clause (a) of the foregoing shall not apply to customary
provisions in contracts restricting the assignment thereof, or the subletting,
assignment or transfer of any property or asset that is subject to a lease,
license or similar contract; (viii) the foregoing shall not apply to
restrictions imposed by any agreement relating to Indebtedness of a Foreign
Subsidiary (other than a Foreign Subsidiary that is a Loan Party) that applies
only to such Foreign Subsidiary and its assets (including its subsidiaries);
(ix) the foregoing shall not apply to customary provisions in Joint
Venture agreements and other similar agreements entered into in the ordinary
course of business; (x) the foregoing shall not apply to net worth
provisions in lease and other agreements entered into by the Parent Borrower or
any Subsidiary in the ordinary course of business; and (xi) the foregoing
shall not apply to restrictions imposed by the Senior First Lien Note Documents,
the Senior Second Lien Note Documents and the Senior Subordinated Note
Documents.


 


SECTION
6.12.  Amendment of Material Documents.  The Parent Borrower will not, and will not
permit any Subsidiary to, amend, modify or waive any of its rights under
(a) its certificate of incorporation, by-laws or other organizational
documents, including the terms related to the Existing Preferred Stock (other
than amendments and modifications that are not adverse to the interests of the
Lenders and do not impair the exercise of remedies under any Security Document
or the Intercreditor Agreement) or (b) the Senior First Lien Note
Documents, the Senior Second Lien Note Documents or the Senior Subordinated
Note Documents (other than amendments to the Senior First Lien Security
Documents or the Senior Second Lien Security Documents permitted by the
Intercreditor Agreement, amendments to the Senior First Lien Note Documents in
respect of the 2004 Notes that are expressly contemplated by the 2004 Notes
Restatement and other amendments and modifications that are not adverse to the interests
of the Lenders and do not impair the exercise of remedies under any Security
Document or the Intercreditor Agreement).


 


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SECTION
6.13.  Designated Senior Debt.  The Parent Borrower shall not designate any
Indebtedness (other than indebtedness under the Loan Documents, indebtedness in
respect of the Senior First Lien Notes incurred in compliance with Section 6.01(vi)
and indebtedness in respect of the Senior Second Lien Notes incurred in
compliance with Section 6.01(x)) as “Designated Senior Debt” for
purposes of and as defined in the Senior Subordinated Note Documents.


 


SECTION
6.14.  Cash Held by Foreign
Subsidiaries.  The Parent Borrower
will not permit at any time on any day (a) the aggregate amount of “cash
and cash equivalents” and “marketable securities” of the Foreign Subsidiaries
(other than Foreign Subsidiaries that are Loan Parties), in each case that
would be required to be reflected on a consolidated balance sheet of the Parent
Borrower and the Subsidiaries prepared as of such time in accordance with GAAP,
minus (b) the aggregate amount of payments in such cash and cash
equivalents that the Parent Borrower reasonably and in good faith determines
will be made by the Foreign Subsidiaries that are not Loan Parties (and will
reduce such cash and cash equivalents) on such day to exceed $10,000,000.


 


SECTION
6.15.  ERISA.  The Parent Borrower will not, and will not
permit any Subsidiary to, cause or permit any ERISA Affiliate to, cause or
permit to occur (i) an event that could result in the imposition of a Lien
under Section 412 of the Code or Section 302 or 4068 of ERISA or (ii) an ERISA
Event to the extent such ERISA Event would reasonably be expected to result in
taxes, penalties and other liabilities in an aggregate amount in excess of
$250,000 in the aggregate.


 


SECTION
6.16.  Cancellation of Indebtedness.  The Parent Borrower will not, and will not
permit any Subsidiary to, cancel any claim or debt owing to it, except for
reasonable consideration negotiated on an arm’s length basis and in the
ordinary course of its business consistent with past practices.


 


SECTION
6.17.  Change in Fiscal Year;
Accounting Policies.  The Parent
Borrower will not, and will not permit any Subsidiary to, change its fiscal
year from a year ending December 31 unless required by law, in which case such
Loan Party will give the Administrative Agent at least thirty (30) days prior
written notice thereof.  Subject to Section 1.04,
the Parent Borrower will not, and will not permit any Subsidiary to, change its
accounting policies from those used to prepare the financial statements
delivered pursuant to Section 4.01(i) without the prior written consent
of the Administrative Agent


 


SECTION
6.18.  Financial Covenants.  The Parent Borrower shall have at the end of
each fiscal month set forth below, a Fixed Charge Coverage Ratio for the
12-month period then ended of not less than:


 


	
  Fiscal Month Ending

  	
   

  	
  Minimum Fixed Charge Coverage Ratio

  	
   

  
	
  December 31, 2005

  	
   

  	
  0.78:1.00

  	
   

  
	
  January 31, 2006

  	
   

  	
  0.75:1.00

  	
   

  
	
  February 28, 2006

  	
   

  	
  0.74:1.00

  	
   

  
	
  March 31, 2006

  	
   

  	
  0.74:1.00

  	
   

  
	
  April 30, 2006

  	
   

  	
  0.74:1.00

  	
   

  



 


 


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  May 31, 2006

  	
   

  	
  0.76:1.00

  	
   

  
	
  June 30, 2006

  	
   

  	
  0.90:1.00

  	
   

  
	
  July 31, 2006

  	
   

  	
  0.94:1.00

  	
   

  
	
  August 31, 2006

  	
   

  	
  0.96:1.00

  	
   

  
	
  September 30, 2006

  	
   

  	
  0.96:1.00

  	
   

  
	
  October 31, 2006

  	
   

  	
  1.00:1.00

  	
   

  
	
  November 30, 2006

  	
   

  	
  1.02:1.00

  	
   

  
	
  December 31, 2006

  	
   

  	
  1.09:1.00

  	
   

  
	
  each fiscal month thereafter

  	
   

  	
  1.10:1.00

  	
   

  



 


102

















 


SECTION 6.19.  No Additional
Deposit Accounts.  No Loan Party
shall open, maintain or otherwise have any deposit accounts at any bank or
other financial institution, or any other account where money is or may be
deposited or maintained with any Person, other than (a) the accounts set
forth on Schedule 6.19, each of which shall (i) on the Effective Date, be
subject to a deposit account control agreement in form and substance reasonably
satisfactory to the Collateral Agent or (ii) (A) within 30 days of the Effective
Date (subject to extension as provided in Section 4.02(c)), be subject
to a deposit account control agreement in form and substance reasonably
satisfactory to the Collateral Agent, and (B) until such time as a deposit
account control agreement has been executed by the relevant Loan Party pursuant
to Section 4.02(c), the applicable Depository Bank and the
Collateral Agent, shall not at any time have (1) with respect to account number
5800949322 in the name of the Parent Borrower at LaSalle, a balance in such
account which exceeds $100,000 and (2) with respect to account number
92312-0001414 in the name of the Canadian Borrower at BONS, a balance in such
account which exceeds $100,000, (b) deposit accounts established after the
Effective Date that are subject to a deposit account control agreement, in form
and substance reasonably satisfactory to the Collateral Agent, (c) other
deposit accounts established solely as payroll and other zero balance accounts.


 


SECTION
6.20.  Pliant Investment, Inc. and
Alliant Company LLC.  (a) Pliant
Investment, Inc. shall not hold any assets other than the membership interest
of Alliant Company LLC and may not have any liabilities other than (i) if Pliant
Investment, Inc. becomes a Borrower or a Guarantor pursuant Section 5.12,
the liabilities under the Loan Documents and (ii) tax and routine
administrative liabilities in the ordinary course of business and (b) Alliant
Company LLC shall not hold any assets and may not have any liabilities other than
(i) tax and routine administrative liabilities in the ordinary course of
business and (ii) assets and liabilities related to the indemnity escrow
established in connection with the sale of its assets; provided, that to
the extent Alliant Company LLC receives and recovery from such indemnity
escrow, such proceeds shall be promptly transferred to the Parent Borrower.


 


ARTICLE VII


 


Events of Default


 


If any of the following events (“Events of Default”) shall
occur:


 


(a)  any Borrower shall fail to pay any principal
of any Loan or any reimbursement obligation in respect of any
LC Disbursement when and as the same shall become


 


 


103

















 


due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;


 


(b)  any Borrower shall fail to (i) pay any
interest on any Loan or any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement or
any other Loan Document, when and as the same shall become due and payable, or
(ii) fail to deliver any Borrowing Base Certificate required to be
delivered pursuant to the terms of this Agreement, and, in the case of clause
(ii), such failure shall continue unremedied for a period of three Business
Days;


 


(c)  any representation or warranty made or deemed
made by or on behalf of the Parent Borrower or any Subsidiary in or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall have been
incorrect in any material respect when made or deemed made;


 


(d)  any Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 4.02, 5.02,
5.04 (with respect to the existence of such Borrower) or 5.11 or
in Article VI;


 


(e)  any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in any Loan Document
(other than those specified in clause (a), (b) or (d) of this Article),
and if such failure is capable of being cured, such failure shall continue
unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Parent Borrower (which notice will be given at the
request of any Lender);


 


(f)  the Parent Borrower or any Subsidiary shall
fail to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable, including any applicable grace period;


 


(g)  any event or condition occurs that results in
any Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided
that this clause (g) shall not apply to secured Indebtedness that becomes
due as a result of the voluntary sale, transfer or other disposition (including
as a result of a casualty or condemnation event) of the property or assets
securing such Indebtedness in a manner not prohibited by this Agreement;


 


(h)  an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Parent Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Parent
Borrower or any Subsidiary or for a substantial part of its assets, and, in any
such


 


104

















 


case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering
any of the foregoing shall be entered;


 


(i)  the Parent Borrower or any Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of
this Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Parent Borrower or any Subsidiary or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any proceeding described in clause (h) of this Article, (v) make a
general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;


 


(j)  the Parent Borrower or any Subsidiary (other
than Immaterial Subsidiaries) shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;


 


(k)  one or more judgments for the payment of
money in an aggregate amount in excess of $5,000,000 (net of amounts covered by
insurance as to which the insurer has not denied liability) shall be rendered
against the Parent Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the Parent
Borrower or any Subsidiary to enforce any such judgment;


 


(l)  an ERISA Event shall have occurred that, in
the reasonable opinion of the Required Lenders, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result
in liability of the Parent Borrower and the Subsidiaries in an aggregate amount
exceeding (i) $7,000,000 in any year or (ii) $10,000,000 for all
periods;


 


(m)  (i) any Loan Document shall for any
reason be asserted by the Parent Borrower or any of the Subsidiaries (or, in
the case of the Intercreditor Agreement, any of the other parties thereto) not
to be a legal, valid and binding obligation of any party thereto, (ii) any
Lien purported to be created under any Security Document shall cease to be, or
shall be asserted by any Loan Party not to be, a valid and perfected Lien on
any Collateral, with the priority required by the Loan Documents, except
(A) as a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents, (B) as a
result of (1) the Collateral Agent’s failure to take any action reasonably
requested by the Parent Borrower in order to maintain a valid and perfected
Lien on any Collateral or (2) any action taken by the Collateral Agent to
release any Lien on any Collateral or (C) Liens on any item of Collateral
with a fair market value not exceeding $500,000, (iii) the Guarantees
pursuant to the Guarantee Agreements by the Loan Parties of any of the
Obligations shall cease to be in full force and effect (other than in
accordance with the terms thereof), or shall be asserted by any Loan Party not
to be in effect or not to be legal, valid and binding obligations,
(iv) the Obligations of any Borrower or the Guarantees thereof by the Loan
Parties pursuant to the Security Documents, shall cease to constitute “Senior
Indebtedness” under the subordination provisions of the Senior


 


105

















 


Subordinated Note Documents, or such
subordination provisions shall be invalidated or otherwise cease, or shall be
asserted by any Loan Party to be invalid or to cease, to be legal, valid and
binding obligations of the parties thereto or (v) the Intercreditor
Agreement shall cease to be a legal, valid and binding agreement of the parties
thereto;


 


(n)  a Change in Control shall occur; or


 


(o)  any information contained in any Borrowing
Base Certificate is untrue or incorrect in any respect (other than (i)
inadvertent, immaterial errors not exceeding $250,000 in the aggregate in any
Borrowing Base Certificate) and (ii) errors understating the Borrowing Bases);


 


then, and in
every such event (other than an event with respect to any Borrower described in
clause (h) or (i) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders (or such other Lenders as and when provided in the
Security Documents) shall, by notice to the Parent Borrower, take either or
both of the following actions, at the same or different times:  (i) terminate the Commitments, and
thereupon the Commitments shall terminate immediately, and (ii) declare
the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable (the “remaining
Loans”) may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations (other than any
remaining Loans) of each Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Borrower; and in case of any
event with respect to any Borrower described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of each Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by each Borrower. If any Event of
Default has occurred and is continuing under clause (a) or (b) of this Article
then the Administrative Agent shall, or if any other Event of Default has
occurred and is continuing, the Administrative Agent may (and at the written
request of the Required Lenders shall), increase the rate of interest
applicable to the Loans and any fee or other amount payable by any Borrower hereunder
to the rate set forth in Section 2.12(d).


 


ARTICLE VIII


 


The Agents


 


Each of the
Lenders and the Issuing Bank hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.


 


The bank
serving as the Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the
same as


 


106

















 


though it were not the Administrative Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Parent Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.


 


The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. 
Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circum­stances as provided in Section 10.02), and
(c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Parent
Borrower or any of the Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall
not be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section 10.02)
or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall not be deemed
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the Parent Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document,
(iv) the validity, enforce­ability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere
in any Loan Document, other than to confirm receipt of items expressly required
to be delivered to the Administrative Agent.


 


The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to be made
by the proper Person, and shall not incur any liability for relying
thereon.  The Administrative Agent may
consult with legal counsel (who may be counsel for any of the Borrowers),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.


 


The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise
its rights and powers through their respective Related Parties.  The exculpatory 


 


107

















 


provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with
the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.


 


Subject to the
appointment and acceptance of a successor to the Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the other Agents, the Lenders, the Issuing Bank and the Parent
Borrower.  Upon any such resignation, the
Required Lenders shall have the right, with the consent of the Parent Borrower
(such consent not to be unreasonably withheld), to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within
30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent that
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank.  Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Parent Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Parent Borrower and such
successor.  After the Administrative
Agent’s resignation hereunder, the provisions of this Article and Section 10.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.


 


Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.


 


The provisions
of this Article shall apply to the Collateral Agent, the Domestic A Agent and
the Domestic B Agent as though named herein as the Administrative Agent.    Notwithstanding any other provision contained
herein, neither Arranger shall, in its capacity as such, have any
responsibilities under this Agreement or the other Loan Documents.


 


ARTICLE IX


 


Collection Allocation Mechanism


 


SECTION
9.01.  Implementation of CAM.  (a)  On
the CAM Exchange Date, (i) the Commitments shall automatically and without
further act be terminated as provided in Article VII, (ii) each Domestic
A Lender shall immediately be deemed to have acquired (and shall promptly make
payment therefor to the Administrative Agent in accordance with


 


108

















 


Section 2.04(c))
participations in the Swingline Loans in an amount equal to such Lender’s
ratable share (based on the respective Domestic A Commitments of the Lenders
immediately prior to the CAM Exchange Date) of each Swingline Loan outstanding
on such date and (iii) the Lenders shall automatically and without further
act (and without regard to the provisions of Section 10.04) be deemed to
have exchanged interests in the Loans (other than the Swingline Loans) and, in
the case of a Domestic A Lender or Canadian Lender, participations in Swingline
Loans and Letters of Credit, such that in lieu of the interest of each Lender
in each Loan and, as applicable, Letter of Credit in which it shall participate
as of such date (including the Obligations of each Loan Party in respect of
each such Loan and Letter of Credit), such Lender shall hold an interest in
every one of the Loans (other than the Swingline Loans) and, in the case of a
Domestic A Lender or Canadian Lender, a participation in every one of the
Swingline Loans and Letters of Credit (including the Obligations of each Loan
Party in respect of each such Loan and each Reserve Account established
pursuant to Section 9.02), whether or not such Lender shall previously
have participated therein, equal to such Lender’s CAM Percentage thereof.  Each Lender and each Loan Party hereby
consents and agrees to the CAM Exchange, and each Lender agrees that the CAM
Exchange shall be binding upon its successors and assigns and any person that
acquires a participation in its interests in any Loan.  Each Loan Party agrees from time to time to
execute and deliver to the Administrative Agent all such promissory notes and
other instruments and documents as the Administrative Agent shall reasonably
request to evidence and confirm the respective interests of the Lenders after
giving effect to the CAM Exchange, and each Lender agrees to surrender any
promissory notes originally received by it in connection with its Loans
hereunder to the Administrative Agent against delivery of any promissory notes
evidencing its interests in the Loans so executed and delivered; provided,
however, that the failure of any Loan Party to execute or deliver or of
any Lender to accept any such promissory note, instrument or document shall not
affect the validity or effectiveness of the CAM Exchange.


 


(b)  As a result of the CAM Exchange, upon and
after the CAM Exchange Date, each payment received by any Agent pursuant to any
Loan Document in respect of the Obligations, and each distribution made by the Collateral
Agent pursuant to any Security Document in respect of the Obligations, shall,
subject to the terms of the Intercreditor Agreement, be distributed to the
Lenders pro rata in accordance with their respective CAM Percentages.  Any direct payment received by a Lender upon
or after the CAM Exchange Date, including by way of set-off, in respect of an
Obligation shall be paid over to the Administrative Agent for distribution to
the Lenders in accordance herewith.


 


SECTION
9.02.  Letters of Credit.  (a)  In
the event that on the CAM Exchange Date any Letter of Credit shall be
outstanding and undrawn in whole or in part, or any LC Disbursement shall not
have been reimbursed either by the Parent Borrower or with the proceeds of a
Revolving Borrowing or Swingline Loan, each Domestic A Lender shall promptly
pay over to the Administrative Agent, in immediately available funds, an amount
in dollars equal to such Domestic A Lender’s Applicable Percentage of such
undrawn face amount or (to the extent it has not already done so) such
unreimbursed drawing, as applicable, together with interest thereon from the
CAM Exchange Date to the date on which such amount shall be paid to the
Administrative Agent at the rate that would be applicable at the time to an ABR
Revolving Loan in a principal amount equal to such undrawn face amount or
unreimbursed drawing, as applicable.  The
Administrative Agent shall establish a separate account (each, a “Reserve
Account”) or accounts for each Lender for the amounts received with respect
to each such Letter


 


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of Credit
pursuant to the preceding sentence.  The
Administrative Agent shall deposit in each Domestic A Lender’s and Canadian
Lender’s Reserve Account such Lender’s CAM Percentage of the amounts received
from the Lenders as provided above.  The
Administrative Agent shall have sole dominion and control over each Reserve
Account, and the amounts deposited in each Reserve Account shall be held in
such Reserve Account until withdrawn as provided in paragraph (b), (c), (d) or
(e) below.  The Administrative Agent
shall maintain records enabling it to determine the amounts paid over to it and
deposited in the Reserve Accounts in respect of each Letter of Credit and the
amounts on deposit in respect of each Letter of Credit attributable to each
Lender’s CAM Percentage.  The amounts
held in each Lender’s Reserve Account shall be held as a reserve against the LC
Exposures, shall be the property of such Lender, shall not constitute Loans to
or give rise to any claim of or against any Loan Party and shall not give rise
to any obligation on the part of any Borrower to pay interest to such Lender,
it being agreed that the reimbursement obligations in respect of Letters of
Credit shall arise only at such times as drawings are made thereunder, as provided
in Section 2.05.


 


(b)  In the event that after the CAM Exchange Date
any drawing shall be made in respect of a Letter of Credit, the Administrative
Agent shall, at the request of the applicable Issuing Bank, withdraw from the
Reserve Account of each Domestic A Lender and Canadian Lender any amounts, up
to the amount of such Lender’s CAM Percentage of such drawing or payment,
deposited in respect of such Letter of Credit and remaining on deposit and
deliver such amounts to such Issuing Bank in satisfaction of the reimbursement
obligations of the Lenders under Section 2.05(d) (but not of the Parent
Borrower under Section 2.05(e)). 
In the event that any Domestic A Lender or Canadian Lender shall default
on its obligation to pay over any amount to the Administrative Agent as
provided in this Section 9.02, the applicable Issuing Bank shall have a
claim against such Lender to the same extent as if such Lender had defaulted on
its obligations under Section 2.05(d), but shall have no claim against
any other Lender in respect of such defaulted amount, notwithstanding the
exchange of interests in the Parent Borrower’s reimbursement obligations
pursuant to Section 9.01.  Each
other Domestic A Lender and Canadian Lender shall have a claim against such
defaulting Lender for any damages sustained by it as a result of such default,
including, in the event that such Letter of Credit shall expire undrawn, its
CAM Percentage of the defaulted amount.


 


(c)  In the event that after the CAM Exchange Date
any Letter of Credit shall expire undrawn, the Administrative Agent shall
withdraw from the Reserve Account of each Domestic A Lender and Canadian Lender
the amount remaining on deposit therein in respect of such Letter of Credit and
distribute such amount to such Lender.


 


(d)  With the prior written approval of the
Administrative Agent (not to be unreasonably withheld), any Domestic A Lender or
Canadian Lender may withdraw the amount held in its Reserve Account in respect
of the undrawn amount of any Letter of Credit. 
Any Domestic A Lender or Canadian Lender making such a withdrawal shall
be unconditionally obligated, in the event there shall subsequently be a
drawing under such Letter of Credit, to pay over to the Administrative Agent,
for the account of the applicable Issuing Bank, on demand, its CAM Percentage
of such drawing or payment.


 


(e)  Pending the withdrawal by any Domestic A Lender
or Canadian Lender of any amounts from its Reserve Account as contemplated by
the above paragraphs, the


 


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Administrative Agent will, at the direction
of such Lender and subject to such rules as the Administrative Agent may
prescribe for the avoidance of inconvenience, invest such amounts in Permitted
Investments.  Each Domestic A Lender or Canadian
Lender that has not withdrawn its amounts in its Reserve Account as provided in
paragraph (d) above shall have the right, at intervals reasonably specified by
the Administrative Agent, to withdraw the earnings on investments so made by
the Administrative Agent with amounts in its Reserve Account and to retain such
earnings for its own account.


 


ARTICLE X


 


Miscellaneous


 


SECTION
10.01.  Notices.  (a)  Except
in the case of notices and other communications expressly permitted to be given
by telephone, all notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:


 


(i) if to any Borrower, to the Parent Borrower at 1475 Woodfield Road,
Suite 700, Schaumberg, Illinois 60173, Attention: Chief Financial Officer
(Telecopy No. (847) 969-3338), with a copy to Sidley, Austin, Brown &
Wood LLP, Bank One Plaza, 10 South Dearborn Street, Chicago, Illinois 60603,
Attention: Michael L. Gold, (Telecopy No. (312) 853-7036);


 


(ii) if to the Administrative Agent, the Collateral Agent, the Domestic
A Agent or the Swingline Lender, to General Electric Capital Corporation, 500
West Monroe Street, Chicago, Illinois 60661, Attention: Account Manager -
Pliant Corporation (Telecopy No. (312) 463-3840), with copies to General
Electric Capital Corporation, 201 Merritt 7, Norwalk, Connecticut 06856,
Attention: Corporate Counsel — Commercial Finance (Telecopy No. (203) 956-4001)
and Paul, Hastings, Janofsky & Walker LLP, 600 Peachtree Street, Suite
2400, Atlanta, Georgia 30308, Attention: Jesse H. Austin, III (Telecopy No.
(404) 815-2424);


 


(iii) if to the Issuing Bank, c/o General Electric Capital Corporation,
500 West Monroe Street, Chicago, Illinois 60661, Attention: Account Manager -
Pliant Corporation (Telecopy No. (312) 463-3840), with a copy to General
Electric Capital Corporation, 201 Merritt 7, Norwalk, Connecticut 06856,
Attention: Corporate Counsel — Commercial Finance (Telecopy No. (203) 956-4001);


 


(iv) if to the Domestic B Agent, to Morgan Stanley Senior Funding,
Inc., 1585 Broadway, New York, New York 10036, Attention: Jason Colodne
(Telecopy No.  (212) 507-3444), with a
copy to Sullivan & Cromwell LLP, 125 Broad Street, New York, New York
10004, Attention: Erik D. Lindauer (Telecopy No. (212) 558-3588); and


 


(v) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.


 


(b)  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the


 


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Administrative Agent; provided that
the foregoing shall not apply to notices pursuant to Article II
unless otherwise agreed by the Administrative Agent and the applicable Lender
or Issuing Bank.  The Administrative
Agent or the Parent Borrower may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.


 


(c)  Any party hereto may change its address or
telecopy number for notices and other communications hereunder by notice to the
other parties hereto.  All notices and
other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of
receipt.


 


SECTION
10.02.  Waivers; Amendments.  (a)  No
failure or delay by any Agent, the Issuing Bank or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power.  The rights and
remedies of Agents, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. 
No waiver of any provision of any Loan Document or consent to any
departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.  Without
limiting the generality of the foregoing, the making of a Loan or issuance or a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether any Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.


 


(b)  Neither this Agreement nor any other Loan
Document nor any provision hereof or thereof may be waived, amended or modified
except, in the case of this Agreement, pursuant to an agreement or agreements
in writing entered into by the Parent Borrower and the Required Lenders or, in
the case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the Administrative Agent or Collateral Agent, as
applicable, and the Loan Party or Loan Parties that are parties thereto, in
each case with the consent of the Required Lenders; provided that no
such agreement shall have the effect of:


 


(i)  increasing the Commitment of
any Lender without the consent of each Lender (provided that the Administrative
Agent may make Protective Advances as set forth in Section 2.15);


 


(ii) reducing the principal amount of any Loan or LC Disbursement
or reducing the rate of interest thereon, or reducing any fees payable
hereunder, without the written consent of each Lender affected thereby and the
Agents;


 


(iii) postponing the maturity of any Loan, or any scheduled date of
payment of the principal amount of any Loan, or the required date of
reimbursement of any LC Disbursement, or any date for the payment of any
interest thereon, or any fees payable hereunder, or reducing the amount of,
waiving or excusing any such payment, or 


 


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postponing the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby and the Agents;


 


(iv) changing Section 2.17(b), (c) or (d) in
a manner that would alter the way that payments are shared, without the written
consent of each Lender;


 


(v) changing any of the provisions of this Section or the definition of
“Required Lenders” or any other provision of any Loan Document specifying the
number or percentage of Lenders (or Lenders of any Class, including as
contemplated by the term “Required Domestic A Lenders”, “Required Domestic B
Lenders” or the term “Required Canadian Lenders”) required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender (or each Lender of such
Class, as the case may be);


 


(vi) releasing any Loan Party from its Guarantee under any Guarantee
Agreement (except with respect to the dissolution, consolidation or merger of
such Guarantor in accordance with the terms of Section 6.04 or as
expressly provided in the applicable Guarantee Agreement), or limiting its
liability in respect of such Guarantee, without the written consent of each
Lender; provided, however, that if the Required Lenders have
approved the sale of the Equity Interests of such Loan Party, the consent of
the Required Lenders (and not each Lender) shall be required for such release;


 


(vii) releasing all or substantially all the Collateral from the Liens
of the Security Documents (except as expressly provided therein or required by the
Intercreditor Agreement), without the written consent of each Lender;


 


(viii) changing any provision of any Loan Document to permit the Parent
Borrower or any of the Subsidiaries to enter into any accounts receivable or
inventory securitization transaction or other similar financing arrangement,
including any sale of, or any grant of a security interest in, accounts receivable
or inventory in connection with any asset securitization or other similar
financing arrangement, without the written consent of Lenders having
Commitments representing in the aggregate more than 66-2/3%
of the total amount of the Commitments at such time;


 


(ix) changing any provision of any Loan Document in a manner that by
its terms adversely affects the rights in respect of payments due to Lenders
holding Loans of any Class differently than those holding Loans of any other
Class without the written consent of Lenders holding a majority in interest of
the outstanding Loans and unused Commitments of each affected Class;


 


(x) amending, modifying or otherwise altering the eligibility
standards, advance rates or reserves used in determining the Borrowing Bases in
a manner that would increase the amount of the Borrowing Bases, without the
written consent of the Agents and Required Lenders;


 


(xi) amending, modifying or otherwise altering the definition of “Fixed
Charge Coverage Ratio” or the amounts set forth in Section 6.18, without
the written consent of the Agents and Required Lenders;


 


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(xii) amending, modifying or otherwise altering Section 4.03 or
waiving compliance with Section 4.03(a) (with respect to the
representation and warranty that the Borrowing Base Certificate is true,
correct and complete), (b), (c) or (d), without the
written consent of the Agents and Required Lenders (provided that the
Administrative Agent may make Protective Advances as set forth in Section
2.15);


 


(xiii) amending, modifying or otherwise altering Section 6.03, 6.04,
6.09, 6.12(b), or 6.13, or 6.19 or the requirement
the Collateral Agent have full dominion over the Loan Parties’ accounts,
without the written consent of the Agents and Required Lenders;


 


(xiv) releasing, substituting, modifying or altering the Liens of the
Security Documents (except as expressly provided therein on the Effective Date or
required by the Intercreditor Agreement) on (1) Accounts or Inventory of the
Loan Parties not sold or disposed of in the ordinary course of business, (2)
the Pledged Stock (as defined in the Security Agreements) or (3) cash in the
Collateral Proceeds Account, in each case, without the written consent of the
Agents and the Required Lenders; or


 


(xv) amending, modifying, waiving or otherwise altering Article XII,
without the written consent of the Required Domestic B Lenders; and


 


provided  further that no such agreement
shall amend, modify or otherwise affect the rights or duties of any Agent, the
Issuing Bank or the Swingline Lender without the prior written consent of such Agent,
the Issuing Bank or the Swingline Lender, as the case may be.


 


(c)  If, in connection with any proposed
amendment, waiver or consent requiring the consent of “each Lender” or “each
Lender affected thereby,” the consent of the Required Lenders is obtained, but
the consent of other necessary Lenders is not obtained (any such Lender whose
consent is necessary but not obtained being referred to herein as a “Non-Consenting
Lender”), then so long as no Agent is a Non-Consenting Lender, the Administrative
Agent may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Parent Borrower and the
Administrative Agent shall agree, as of such date, to purchase for cash the
Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of clause (b) of
Section 10.04, and (ii) the Borrowers shall pay to such Non-Consenting
Lender in same day funds on the day of such replacement (1) all interest, fees
and other amounts then accrued but unpaid to such Non-Consenting Lender by the
Borrower hereunder to and including the date of termination, including without
limitation payments due to such Non-Consenting Lender under Sections 2.14
and 2.16, and (2) an amount, if any, equal to the payment which would
have been due to such Lender on the day of such replacement under Section
2.15 had the Loans of such Non-Consenting Lender been prepaid on such date
rather than sold to the replacement Lender.


 


SECTION
10.03.  Expenses; Indemnity; Damage
Waiver; Joint and Several Obligations. 
(a)  The Borrowers shall pay
(i) all reasonable out-of-pocket expenses incurred by


 


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the Agents, the
Arrangers and their respective Affiliates (other than the Sponsor or any Person
Controlled by the Sponsor), including the reasonable fees, charges and
disbursements of counsel for the Agents and the Arrangers, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of the Loan Documents or any amendments, modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reason­able
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all out-of-pocket expenses incurred by
the Agents, the Issuing Bank, the Arrangers or any Lender, including the fees,
charges and disbursements of any counsel for the Agents, the Issuing Bank, the Arrangers
or any Lender, in connection with the enforcement or protection of its rights
in connection with the Loan Documents, including its rights under this Section,
or in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.


 


(b)  The Borrowers shall indemnify each Agent, the
Issuing Bank, each Arranger and each Lender, and each Related Party of any of
the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any other agreement
or instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged
presence or Release of Hazardous Materials on or from any Mortgaged Property or
any other property currently or formerly owned or operated by the Parent
Borrower or any of the Subsidiaries, or any Environmental Liability related in
any way to the Parent Borrower or any of the Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or any Affiliate of such Indemnitee (or of any officer,
director, employee, advisor or agent of such Indemnitee or any such Indemnitee’s
Affiliates) or to the extent such damages constitute special, indirect or
consequential damages (as opposed to direct or actual damages).


 


(c)  To the extent that the Borrowers fail to pay
any amount required to be paid by it to any Agent, the Issuing Bank, either Arranger
or the Swingline Lender under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to such Agent, the Issuing Bank, such Arranger
or the Swingline Lender, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage,


 


115

















 


liability or related expense, as the case may
be, was incurred by or asserted against such Agent, the Issuing Bank or the
Swingline Lender in its capacity as such; and provided, further,
that no Domestic B Lender shall have any reimbursement or indemnity obligations
in respect of any of the Issuing Bank, the Swingline Lender or the Domestic A
Agent in their capacities as such.  For
purposes hereof, a Lender’s “pro rata share” shall be determined based upon its
share of the sum of the total Revolving Exposures and unused Commitments at the
time.


 


(d)  To the extent permitted by applicable law,
the Borrowers shall not assert, and each of them hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any agreement
or instrument contemplated hereby, the Transactions, any Loan or Letter of
Credit or the use of the proceeds thereof.


 


(e)  All amounts due under this Section shall be
payable promptly after written demand therefor. 
Each Borrower shall be jointly liable for all expense reimbursement and
indemnification obligations under this Section 10.03, and all other
Obligations of the Borrowers under this Agreement.


 


SECTION
10.04.  Successors and Assigns.  (a)  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) no Borrower may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by any Borrower without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section.  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the Agents,
the Issuing Bank, the Arrangers and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.


 


(b)  (i) Subject to the conditions set forth
in paragraph (b)(ii) below, any Lender may assign to one or more assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it) with
the prior written consent (such consent not to be unreasonably withheld or
delayed) of:


 


(A) the Parent Borrower; provided
that no consent of the Parent Borrower shall be required (1) for an assignment
to a Lender, an Affiliate of a Lender or an Approved Fund or (2) if an Event of
Default has occurred and is continuing;


 


(B) the Administrative
Agent or, in the case of any assignment of Domestic B Commitments or Domestic B
Loans, the Domestic B Agent; and


 


(C) with respect to any
assignment of a Domestic A Commitment or a Domestic A Revolving Loan, the
Swingline Lender.


 


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(ii) Assignments shall be subject to the following additional
conditions:


 


(A) except in the case of
an assignment to a Lender, an Affiliate of a Lender or an Approved Fund or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 unless each of the
Parent Borrower and the Administrative Agent otherwise consents; provided
that no such consent of the Parent Borrower shall be required if an Event of
Default has occurred and is continuing;


 


(B) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement, except that this clause
(B) shall not be construed to prohibit the assignment of a proportionate part
of all the assigning Lender’s rights and obligations in respect of one Class of
Commitments or Loans;


 


(C) the parties to each
such assignment relating to the assignment of any Domestic A Commitments,
Domestic A Revolving Loans, Canadian Commitments or Canadian Revolving Loans shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500;


 


(D) the assignee, if it
shall not be a Lender, shall (1) deliver to the Administrative Agent an
Administrative Questionnaire and all applicable tax documentation and
(2) in the event of an assignment of Canadian Commitments and Canadian
Revolving Loans, notify the Administrative Agent of such assignee’s Canadian
Lending Office and US Lending Office; and


 


(E) such assignee shall
have consented to the GECC-Led Dip Agreement.


 


For the
purposes of this Section 10.04(b), the term “Approved Fund” has the
following meaning:


 


“Approved
Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered,
managed or controlled by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers, manages or
controls a Lender.


(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption 


 


117

















 


covering all
of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.14, 2.15, 2.16 and 10.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 10.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
paragraph (c) of this Section.


 


(iv) The Administrative Agent, acting for this purpose as an agent of
the Parent Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Parent Borrower, each Domestic Subsidiary Borrower, the
Canadian Subsidiary Borrower, the Administrative Agent, the Collateral Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Parent Borrower, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.


 


(v) Upon its receipt of a duly completed Assignment and Assumption and
all applicable tax documentation executed by an assigning Lender and an
assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in this Section and any written consent to such assignment
required by this Section, the Administrative Agent shall accept such Assignment
and Assumption and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.


 


(c)  (i) 
Any Lender may, without the consent of any Borrower, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment of any Class and the Loans owing to it); provided
that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) each
Borrower, the Administrative Agent, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in clauses (i) through (vii) of the first proviso to Section 10.02(b)
that affects such Participant.  Subject
to paragraph (c)(ii) of this Section, the Borrowers agree that each
Participant shall be entitled to the benefits of Sections 2.14, 2.15
and 2.16 to the same extent as if it were a Lender and had acquired its
interest by assignment 


 


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pursuant to paragraph (b) of this
Section.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender; provided such Participant agrees to be
subject to Section 2.17(d) as though it were a Lender.


 


(ii) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.16 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Parent Borrower’s prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.16
unless the Parent Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 2.16(e) as though it were a Lender.


 


(d)  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


(e)  Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a
special purpose funding vehicle (an “SPC”), identified as such in
writing from time to time by the Granting Lender to the Administrative Agent
and the Parent Borrower, the option to provide to the Borrowers all or any part
of any Loan that such Granting Lender would otherwise be obligated to make to
the Borrowers pursuant to this Agreement; provided, however, that
(i) nothing herein shall constitute a commitment by any SPC to make any Loan
and (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Lender shall be obligated to
make such Loan pursuant to the terms hereof. 
The making of a Loan by an SPC hereunder shall utilize the applicable
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender.  Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender).  In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against,
or join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof, or the laws of Canada or any
province or territory thereof.  In
addition, notwithstanding anything to the contrary contained in this Section
10.04, any SPC may (i) with notice to, but without the prior written
consent of, the Parent Borrower and the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions (consented to by
the Parent Borrower and the Administrative Agent) providing liquidity and/or
credit support to or for the account of such SPC to support the funding or
maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.


 


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SECTION
10.05.  Survival.  All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and delivery
of the Loan Documents and the making of any Loans and issuance of any Letters
of Credit, regardless of any investigation made by any such other party or on
its behalf and not­with­standing that any Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. 
The provisions of Sections 2.14, 2.15, 2.16, 10.03
and 10.13 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.


 


SECTION
10.06.  Counterparts; Integration;
Effectiveness.  This Agreement may be
executed in counter­parts (and by different parties hereto on different counter­parts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement, the other Loan Document and any separate letter agreements with
respect to fees payable to the Agents, the Arrangers or the Issuing Bank
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and under­standings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counter­part of a
signature page of this Agreement by telecopy or other electronic transmission shall
be effective as delivery of a manually executed counterpart of this Agreement.


 


SECTION
10.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.


 


SECTION
10.08.  Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any Borrower
against any of and all the obligations of the Borrowers now or hereafter
existing under this Agreement or any other Loan Document held by such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations


 


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may be
unmatured.  The rights of each Lender
under this Section are in addition to other rights and remedies (including
other rights of setoff) that such Lender may have.


 


SECTION
10.09.  Governing Law; Jurisdiction;
Consent to Service of Process.  (a)  This Agreement shall be construed in
accordance with and governed by the law of the State of New York.


 


(b)  Each of the Borrowers hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action
or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State or, to
the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Borrower or its properties in the courts of
any jurisdiction.


 


(c)  Each of the Borrowers hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.


 


(d)  Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section 10.01.  Nothing in this Agreement or any other Loan
Document will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.


 


SECTION
10.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,


 


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AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


 


SECTION
10.11.  Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.


 


SECTION
10.12.  Confidentiality.  Each of the Agents, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its
Affiliates’ investment advisors, directors, officers, employees and agents,
including accountants, legal counsel and other advisors (the “Representatives”)
and any direct or indirect contractual counterparty in swap agreements entered
into in connection with a Lender’s outstanding Loans from time to time or to
such contractual counterparty’s professional advisor (it being understood that
the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential and, in the case of any such contractual counterparty or its
professional advisor, such persons shall agree in writing to be bound by the
provisions of this Section 10.12), (b) to the extent requested
or demanded by any Governmental Authority or any self-regulatory organization
(including the National Association of Insurance Commissioners or other similar
organization), (c) to the extent required by applicable laws or
regulations or by any subpoena, order or similar legal process; provided
that, to the extent reasonably practicable and not prohibited by applicable
laws or regulations or by any judicial or administrative order, such Person
will provide the Parent Borrower with prior notice of such disclosure,
(d) any nationally recognized rating agency that requires access to
information about a Lender’s investment portfolio in connection with ratings
issued with respect to such Lender, (e) to any other party to this
Agreement, (f) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (g) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Parent Borrower
and its obligations, (h) with the consent of the Parent Borrower or
(i) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section or (ii) becomes
available to any Agent, the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Parent Borrower, any Subsidiary or any of
their Representatives that is not known to such Person to be subject to any
obligation of confidentiality to the Parent Borrower or any Subsidiary.  For the purposes of this Section, “Information”
means all information received from the Parent Borrower, any Subsidiary or any
of their Representatives relating to the Parent Borrower, the Subsidiaries or
their businesses, other than any such information that is available to any Agent,
the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure
by the Parent Borrower or any Subsidiary. 
Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.


 


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SECTION
10.13.  Conversion of Currencies.  (a)  If,
for the purpose of obtaining judgment in any court, it is necessary to convert
a sum owing hereunder in one currency into another currency, each party hereto
agrees, to the fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures in the relevant jurisdiction the first currency could be purchased
with such other currency on the Business Day immediately preceding the day on
which final judgment is given.


 


(b)  The obligations of the Borrowers in respect
of any sum due to any party hereto or any holder of the obligations owing
hereunder (the “Applicable Creditor”) shall, notwithstanding any
judgment in a currency (the “Judgment Currency”) other than the currency
in which such sum is stated to be due hereunder (the “Agreement Currency”),
be discharged only to the extent that, on the Business Day following receipt by
the Applicable Creditor of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency with
the Judgment Currency; if the amount of the Agreement Currency so purchased is
less than the sum originally due to the Applicable Creditor in the Agreement
Currency, each of the Borrowers agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss.  The obligations of the
Borrowers contained in this Section 10.13 shall survive the
termination of this Agreement and the payment of all other amounts owing
hereunder.


 


SECTION
10.14.  Interest Rate Limitation.  Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all
fees, charges and other amounts that are treated as interest on such Loan under
applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) that may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan but were not payable as a result of
the operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.


 


SECTION
10.15.  Reaffirmation.  This Agreement constitutes an amendment and
restatement of the Existing Credit Agreement. 
Each of the parties hereto acknowledges and agrees that the Obligations
represent, among other things, the amendment, restatement, renewal, extension,
consolidation and modification of the obligations of the Borrowers under the
Existing Credit Agreement.  Each of the
Parties hereto further acknowledges and agrees that this Agreement supercedes
and replaces the Existing Credit Agreement but does not extinguish the
obligations thereunder and that by entering into and performing its obligations
hereunder, this transaction shall not constitute a novation.  Each of the parties hereto further
acknowledges and agrees that the security interests granted to Prior Collateral
Agent for the benefit of itself and the parties entitled to the benefits of
Existing Credit Agreement (including, without limitation, the Issuing Bank or
the Administrative Agent, Collateral Agent, and each Lender party to the
Existing Credit Agreement, and their respective successors and assigns) shall
remain outstanding 


 


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and in full
force and effect in accordance with the terms hereof and the other Loan
Documents and shall continue to secure the Obligations without interruption or
impairment of any kind and all such security interests are hereby ratified,
confirmed and continued.


 


ARTICLE XI


 


Cross-Guaranty, Subrogation, Contribution and Subordination


 


SECTION
11.01.  Cross-Guaranty.  Each Borrower hereby agrees that such
Borrower is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to the Agents and Lenders and their respective
successors and assigns, the full and prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance of, all Obligations
owed or hereafter owing to the Agents and the Lenders by each other
Borrower.  Each Borrower agrees that its
guaranty obligation hereunder is a continuing guaranty of payment and
performance and not of collection, that its obligations under this Article
XI shall not be discharged until payment and performance, in full, of the
Obligations has occurred, and that its obligations under this Article XI
shall be absolute and unconditional, irrespective of, and unaffected by,


 


(a)  the genuineness, validity, regularity,
enforceability or any future amendment of, or change in, this Agreement, any
other Loan Document or any other agreement, document or instrument to which any
Borrower is or may become a party;


 


(b)  the absence of any action to enforce this
Agreement (including this Article XI) or any other Loan Document or
the waiver or consent by the Agents and the Lenders with respect to any of the
provisions thereof;


 


(c)  the existence, value or condition of, or
failure to perfect its Lien against, any security for the Obligations or any
action, or the absence of any action, by the Agents and Lenders in respect
thereof (including the release of any such security);


 


(d)  the insolvency of any Loan Party; or


 


(e)  any other action or circumstances that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor.


 


Each Borrower shall be regarded, and shall be
in the same position, as principal debtor with respect to the Obligations
guaranteed hereunder.


 


SECTION
11.02.  Waivers by the Borrowers.  Each Borrower expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel the Agents or the Lenders to marshal assets
or to proceed in respect of the Obligations guaranteed hereunder against any
other Loan Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower.  It is
agreed among each Borrower, the Agents and the Lenders that the foregoing
waivers are of the essence of the transaction contemplated by this Agreement
and the other Loan Documents and that, but for the


 


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provisions of
this Article XI and such waivers, the Agents and the Lenders would
decline to enter into this Agreement.


 


SECTION
11.03.  Benefit of Guaranty.  Each Borrower agrees that the provisions of
this Article XI are for the benefit of the Agents and Lenders and their
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any other Borrower and the Agents or the Lenders,
the obligations of such other Borrower under the Loan Documents.


 


SECTION
11.04.  Waiver of Subrogation, Etc.  Notwithstanding anything to the contrary in
this Agreement or in any other Loan Document, and except as set forth in Section 11.07,
each Borrower hereby expressly and irrevocably waives any and all rights at law
or in equity to subrogation, reimbursement, 
exoneration, contribution, indemnification or set off and any and all
defenses available to a surety, guarantor or accommodation co-obligor.  Each Borrower acknowledges and agrees that
this waiver is intended to benefit the Agents and the Lenders and shall not
limit or otherwise affect such Borrower’s liability hereunder or the
enforceability of this Article XI, and that the Agents, the Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 11.04.


 


SECTION
11.05.  Election of Remedies.  If any Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving such Agent or such Lender a Lien upon any Collateral, whether owned by
any Borrower or by any other Person, either by judicial foreclosure or by non
judicial sale or enforcement, any Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any
of its rights and remedies under this Article XI.  If, in the exercise of any of its rights and
remedies, any Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to “election of
remedies” or the like, each Borrower hereby consents to such action by such Agent
or such Lender and waives any claim based upon such action, even if such action
by such Agent or such Lender shall result in a full or partial loss of any
rights of subrogation that each Borrower might otherwise have had but for such
action by such Agent or such Lender.  Any
election of remedies that results in the denial or impairment of the right of any
Agent or any Lender to seek a deficiency judgment against any Borrower shall
not impair any other Borrower’s obligation to pay the full amount of the
Obligations.  In the event any Agent or
any Lender shall bid at any foreclosure or trustee’s sale or at any private
sale permitted by law or the Loan Documents, such Agent or such Lender may bid
all or less than the amount of the Obligations and the amount of such bid need
not be paid by such Agent or such Lender but shall be credited against the
Obligations.  The amount of the
successful bid at any such sale, whether any Agent, any Lender or any other
party is the successful bidder, shall be conclusively deemed to be the fair
market value of the Collateral and the difference between such bid amount and
the remaining balance of the Obligations shall be conclusively deemed to be the
amount of the Obligations guaranteed under this Article XI,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which any Agent
or any Lender might otherwise be entitled but for such bidding at any such
sale.


 


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SECTION
11.06.  Limitation.  Notwithstanding any provision herein
contained to the contrary, each Borrower’s liability under this Article XI
(which liability is in any event in addition to amounts for which such Borrower
is primarily liable under Article II) shall be limited to an amount not
to exceed as of any date of determination the greater of:


 


(a)  the net amount of all Loans advanced to any
other Borrower under this Agreement and then re-loaned or otherwise transferred
to, or for the benefit of, such Borrower; and


 


(b)  the amount that could be claimed by the Agents
and the Lenders from such Borrower under this Article XI without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law after
taking into account, among other things, such Borrower’s right of contribution
and indemnification from each other Borrower under Section 11.07.


 


SECTION
11.07.  Contribution with Respect to
Guaranty Obligations.


 


(a)  To the extent that any Borrower shall make a
payment under this Article XI of all or any of the Obligations (other
than Loans made to that Borrower for which it is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments then
previously or concurrently made by any other Borrower, exceeds the amount that
such Borrower would otherwise have paid if each Borrower had paid the aggregate
Obligations satisfied by such Guarantor Payment in the same proportion that
such Borrower’s “Allocable Amount” (as defined below) (as determined
immediately prior to such Guarantor Payment) bore to the aggregate Allocable
Amounts of each of the Borrowers as determined immediately prior to the making
of such Guarantor Payment, then, following indefeasible payment in full in cash
of the Obligations and termination of the Commitments, such Borrower shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.


 


(b)  As of any date of determination, the “Allocable
Amount” of any Borrower shall be equal to the maximum amount of the claim
that could then be recovered from such Borrower under this Article XI
without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common
law.


 


(c)  This Section 11.07 is intended only to
define the relative rights of the Borrowers and nothing set forth in this Section
11.07 is intended to or shall impair the obligations of the Borrowers,
jointly and severally, to pay any amounts as and when the same shall become due
and payable in accordance with the terms of this Agreement, including Section
11.01.  Nothing contained in this Section
11.07 shall limit the liability of any Borrower to pay the Loans made
directly or indirectly to that Borrower and accrued interest, fees and expenses
with respect thereto for which such Borrower shall be primarily liable.


 


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(d)  The parties hereto acknowledge that the
rights of contribution and indemnification hereunder shall constitute assets of
the Borrower to which such contribution and indemnification is owing.


 


(e)  The rights of the indemnifying Borrowers
against other Loan Parties under this Section 11.07 shall be exercisable
upon the full and indefeasible payment of the Obligations and the termination
of the Commitments.


 


SECTION
11.08.  Liability Cumulative.  The liability of the Borrowers under this Article
XI is in addition to and shall be cumulative with all liabilities of each
Borrower to the Agents and the Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrower, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.


 


SECTION
11.09.  Subordination.


 


(a)  Each Loan Party covenants and agrees that the
payment of any indebtedness and all obligations and liabilities owing by any Loan
Party in favor of any other Loan Party, whether now existing or hereafter
incurred (collectively, the “Intercompany Obligations”) is subordinated,
to the extent and in the manner provided in this Section 11.09, to
the prior payment in full of all Obligations owed or hereafter owing to the Agents
and the Lenders by the Borrowers and that such subordination is for the benefit
of the Agents for themselves and the Lenders.


 


(b)  Each Loan Party hereby (i) authorizes the Agents
on behalf of the Lenders to demand specific performance of the terms of this Section
11.09 at any time when any Loan Party shall have failed to comply with any
provisions of this Section 11.09 which are applicable to it and
(ii) irrevocably waives any defense based on the adequacy of a remedy at law,
which might be asserted as a bar to such remedy of specific performance.


 


(c)  Upon any distribution of assets of any Loan Party
in any dissolution, winding up, liquidation or reorganization (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):


 


(i) The Agents and Lenders shall first be entitled to receive payment
in full in cash of the Obligations before any Loan Party is entitled to receive
any payment on account of the Intercompany Obligations.


 


(ii) Any payment or distribution of assets of any Loan Party of any
kind or character, whether in cash, property or securities, to which any other Loan
Party would be entitled except for the provisions of this Section 11.09(c),
shall be paid by the liquidating trustee or agent or other Person making such
payment or distribution directly to the Administrative Agent for the benefit of
the Lenders in the manner set forth herein, to the extent necessary to make
payment in full of all Obligations remaining unpaid after giving effect to any
concurrent payment or distribution or provisions therefor to the Administrative
Agent for itself and Lenders.


 


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(iii) In the event that notwithstanding the foregoing provisions of
this Section 11.09(c), any payment or distribution of assets of any
Loan Party of any kind or character, whether in cash, property or securities,
shall be received by any other Loan Party on account of any Intercompany
Obligations before all Obligations are paid in full, such payment or
distribution shall be received and held in trust for and shall be paid over to the
Administrative Agent for itself and Lenders for application to the payment of
the Obligations until all of the Obligations shall have been paid in full,
after giving effect to any concurrent payment or distribution or provision therefor
to the Administrative Agent for itself and Lenders.


 


(d)  No right of the Administrative Agent, any
Lender or any other present or future holders of the Obligations to enforce subordination as
provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of any Loan Party or by any
act or failure to act, in good faith, by any Loan Party, or by any
noncompliance by any Loan Party with the terms of the Intercompany Obligations,
regardless of any knowledge thereof which any Loan Party may have or be
otherwise charged with.


 


ARTICLE XII


 


Purchase Right and Certain Intercreditor and Agency
Matters


 


SECTION
12.01.  Delay of Acceleration and
Enforcement.  The Administrative
Agent and each Lender (other than the Domestic B Lenders) agrees that it shall
not declare any Loan to be due and payable or terminate any Commitment as a
result of an Event of Default (other than as a result of an Event of Default
described under Article VII(h) or (i)) unless (a) the Administrative
Agent has received the prior written consent of Required B Lenders or (b) (i)
the Administrative Agent has delivered to the Domestic B Agent written notice
(a “Trigger Notice”) signed by Required Lenders stating the intention of
the Required Lenders to declare the Loans immediately due and payable and/or to
terminate Commitments, (ii) the Domestic B Agent has not delivered a Purchase
Notice to the Administrative Agent on or prior to 5:00 New York City time on
the fifth Business Day following the date of the Trigger Notice and (iii) all
Loans are declared due and payable and all Commitments are terminated
simultaneously.


 


SECTION
12.02.  Purchase Election of Domestic
B Lenders.


 


(a)  At any time on or after the date of delivery
of a Trigger Notice or the earlier acceleration of the Loans, the Required
Domestic B Lenders shall have the right, exercisable by written notice to the
Administrative Agent (a “Purchase Notice”), to purchase all, but not
part, of the right, title and interest of each Domestic A Lender and each
Canadian Lender (the “Sellers”) in the Loans, any Letter of Credit and
the Loan Documents (the “Purchased Interests”).  The Purchase Notice shall specify the
Domestic B Lenders that are committing to purchase the Purchased Interests (the
“Purchasers”), the percentage portion of the Purchased Interests to be
acquired by each Purchaser, and the date for consummation of the purchase (the “Settlement
Date”), which shall be a Business Day not less than two nor more than five
Business Days from the date of the Purchase Notice.


 


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(b)  The delivery of the Purchase Notice, together
with this Agreement, shall constitute a contract of sale pursuant to which each
Purchaser (severally but not jointly) agrees to acquire from the Sellers, and
each Seller (severally but not jointly) agrees to sell to the Purchasers, the
applicable Purchased Interests on the Settlement Date.  On the Settlement Date, as part of a simultaneous
transaction:


 


(i) the Domestic B Agent, on behalf of the Purchasers, shall pay in
cash to the Administrative Agent, on behalf of the Sellers, an amount equal to
the sum, without duplication, of: (A) 100% of the outstanding balance of the
Loans constituting the Purchased Interests then outstanding and unpaid,
(B) 105% of the aggregate undrawn amount of Letters of Credit provided by
any Domestic A Lender or Canadian Lender under the Loan Documents to be held as
cash collateral for the LC Exposure, (C) all accrued and unpaid interest on the
Loans constituting the Purchased Interests and (D) all accrued and unpaid
expenses under the Loan Documents due and payable to the other Agents or the
Domestic A Lenders or the Canadian Lenders (the sum of clauses (A), (B), (C) and
(D) are referred to herein as the “Purchase Price”); and


 


(ii) each Seller shall deliver to each Purchaser a completed Assignment
and Assumption and any other evidence of its right, title and interest in the
Purchased Interests as such Purchaser may reasonably request;


 


(c)  The Purchase Price shall be remitted by wire
transfer in federal funds to such account as the Administrative Agent shall
designate in writing to the Domestic B Agent for such purpose.  Interest shall be calculated to but excluding
the Business Day on which the Settlement Date occurs if the Purchase Price is
received prior to 2:00 p.m., New York City time, and interest shall be
calculated to and including the Settlement Date if the Purchase Price is
received later than 2:00 p.m., New York City time.


 


(d)  The purchase under this Article XII
shall be expressly made without representation or warranty of any kind by, and
without recourse to, the Administrative Agent, the Collateral Agent, the
Domestic A Agent, the Domestic A Lenders and the Canadian Lenders, except that
each Domestic A Lender and Canadian Lender shall represent and warrant:  (i) as to the amount of the Purchased
Interests being purchased from it, (ii) that such Lender owns its portion of
the Purchased Interests so purchased free and clear of any Liens or
encumbrances and (iii) such Lender has the right to assign such Purchased
Interests and the assignment is duly authorized by such Lender free and clear
of liens and adverse claims.


 


(e)  If Loans constituting part of the Purchased
Interests are prepaid within 90 days of the Settlement Date and any Purchaser
receives a Prepayment Fee, each such Purchaser agrees to pay to the
Administrative Agent for the ratable benefit of the Sellers the amount of such
Prepayment Fee within three Business Days after receipt thereof.


 


SECTION
12.03.  Rights After Purchase or
Standstill.  Notwithstanding any
contrary provision of any Loan Document, at all times on and after the delivery
of a Purchase Notice:


 


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(a)  the Administrative Agent and Collateral Agent
shall have no authority to take, and shall not take, any action that requires
the consent of any Lender without the written consent of Required Domestic B
Lenders;


 


(b)  where this Agreement or any Loan Document
provides that Required Lenders have any right or power to direct, instruct,
appoint, replace or remove the Administrative Agent and Collateral Agent, such
right or power may be exercised by Required Domestic B Lenders in the place of
Required Lenders to the same extent and subject to the same terms,
qualifications and conditions; and


 


(c)  upon payment of the Purchase Price, either
the Administrative Agent or the Collateral Agent may be removed and replaced
(in respect of all or an appropriate portion of their respective duties) by
written notice from Required Domestic B Lenders appointing a successor in
accordance with Article VIII, and such successor (which may be a
Required Domestic B Lender or any affiliate thereof) shall be entitled to all
of the rights and benefits provided to the Administrative Agent or Collateral
Agent, as applicable, under the Loan Documents.


 


SECTION
12.04.  Non-Discrimination by Agent.  In the performance of its duties and exercise
of its discretion under the Loan Documents, the Administrative Agent and
Collateral Agent will act in the interests of all Lenders and will not take any
action that would reasonably be expected to have a disproportionate effect on
the interests of any Lenders or any Class of Lenders in light of the terms of
their Loans and the calculation of the Borrowing Base A and Borrowing Base B.


 


SECTION
12.05.  Intercreditor Agreement.  Notwithstanding any contrary provision of the
Loan Documents, the Administrative Agent and Collateral Agent hereby agree that
they will not agree to any amendment, modification, waiver or consent with
respect to the Intercreditor Agreement without the prior written consent of
Required Domestic B Lenders.


 


SECTION
12.06.  Further Assurances.  Each Loan Party, Lender and Agent agrees to
take such actions and to execute such other or different writings as may be
requested by the Required B Lenders as may be necessary to evidence, perfect
and assure the Required B Lenders’ acquisition of the Purchased Interests,
including all security interests relating thereto.


 


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130

















 


IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their respective authorized officers as of the day and year first above
written.


 


	
  BORROWERS:

  	
  PLIANT CORPORATION 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  UNIPLAST HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  UNIPLAST U.S., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  UNIPLAST INDUSTRIES CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  PLIANT PACKAGING OF CANADA, LLC 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  



 


AMENDED AND RESTATED CREDIT AGREEMENT


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  AGENTS AND LENDERS:

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION, individually, as Domestic A

  
	
   

  	
  Agent, Administrative Agent, Collateral
  Agent,

  
	
   

  	
  Swingline Lender and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:  Duly Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
  MORGAN STANLEY SENIOR FUNDING, INC.,

  
	
   

  	
  individually, as Domestic B Agent and as a

  
	
   

  	
  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  GE CANADA FINANCE HOLDING COMPANY,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


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