Exhibit
10.24


 


AMENDED AND RESTATED DOMESTIC PLEDGE AGREEMENT


 


AMENDED AND
RESTATED DOMESTIC PLEDGE AGREEMENT dated as of November 21, 2005 (as it
may be amended, restated, supplemented or modified from time to time, this “Agreement”),
among the entities listed on the signature page hereof (collectively referred
to as the “Pledgors” and individually as a “Pledgor”) and GENERAL
ELECTRIC CAPITAL CORPORATION, as Collateral Agent (in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement
referred to below).


 


W
I  T  N  E  S  S  E  T  H:


 


WHEREAS, the
Parent Borrower and certain Subsidiaries of the Parent Borrower are parties to
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 “Prior Credit Agreement”) among Parent Borrower, Uniplast
Industries Co., a Nova Scotia corporation (“Canadian Subsidiary Borrower”),
certain Domestic Subsidiary Borrowers party thereto, the Lenders party thereto
(the “Prior 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, as Syndication
Agent; and


 


WHEREAS, the Pledgors
and the Prior Administrative Agent are parties to that certain Domestic Pledge Agreement
dated as of February 17, 2004 (as amended, restated, supplemented or otherwise
modified from time to time prior to the date hereof, the “Prior Pledge
Agreement”), pursuant to which the Pledgors pledged to the Collateral Agent
the Collateral (as defined therein) in order to secure the due and punctual
payment and performance of the Obligations; and


 


WHEREAS, the
Prior Collateral Agent and the trustees for the holders of the Senior Secured
Discount Notes and the Existing Senior Secured Notes entered into an
Intercreditor Agreement dated as of February 17, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), which confirms the relative priority of the security interests
of the Secured Parties, the holders of the Senior Secured Discount Notes and
the holders of the Existing Senior Secured Notes in the Collateral; and


 


WHEREAS, prior
to the execution of this Agreement, the Prior Collateral Agent resigned as “Collateral
Agent” under the Prior Credit Agreement, the Security Documents (as defined in
the Prior Credit Agreement) and the other Loan Documents (as defined in the
Prior 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 among the Prior Administrative
Agent, the Prior Collateral Agent, Deutsche Bank Trust Company Americas, as
replaced Issuing Bank, LaSalle Business Credit, LLC, as replacement Issuing
Bank, the Borrowers and the Prior Lenders; and


 


WHEREAS, the
parties wish to amend and restate the Prior Credit Agreement in the form of that
certain Amended and Restated Credit Agreement dated as of even date herewith
(as amended, restated, supplemented or otherwise modified from time to time,
the “Credit 


 

















 


Agreement”),
among the Parent Borrower, the Canadian Subsidiary Borrower, the Domestic
Subsidiary Borrowers party thereto, the Lenders party thereto, Morgan Stanley
Senior Funding, Inc., as Domestic B Agent, the Collateral Agent and General
Electric Capital Corporation, as Domestic A Agent and Administrative Agent; and


 


WHEREAS, in
connection with the amendment and restatement of the Prior Credit Agreement,
the parties hereto desire to amend and restate the Prior Pledge Agreement in
its entirety as set forth herein; and


 


WHEREAS, the
Lenders have agreed to make Loans to the Borrowers and the Issuing Bank has
agreed to issue Letters of Credit for the account of the Parent Borrower,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement; and


 


WHEREAS,
pursuant to the Amended and Restated Guarantee Agreement dated as of even date
herewith (as amended, restated supplemented or otherwise modified from time to
time, the “Guarantee Agreement”), certain of the Pledgors have agreed to
guarantee, among other things, all the obligations of the Borrowers under the
Credit Agreement; and


 


WHEREAS, the
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned upon, among other things, the execution and
delivery by the Pledgors of a Pledge Agreement in the form hereof to secure (a)
the due and punctual payment by the Borrowers of (i) the 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, (ii) each payment required to be made by the
Borrowers under the Credit 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 (iii) 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
the Credit Agreement and the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of each
Loan Party under or pursuant to the Credit Agreement and the other Loan
Documents, (c) the due and punctual payment and performance of all obligations
of the Borrowers, 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 and (d) the due
and punctual payment and performance of all monetary obligations of each Loan
Party in respect of overdrafts and related liabilities owed to any of the
Lenders (or any Affiliates thereof) or Wachovia Bank, National Association (or
any Affiliates thereof) arising from treasury, depositary and cash management
services or in connection with any automated clearinghouse transfers of funds
(all the monetary and other obligations referred to in the preceding clauses
(a) through (d) being referred to collectively as the “Obligations”).


 


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ACCORDINGLY,
each of the Pledgors and the Collateral Agent, on behalf of itself and each
Secured Party (and each of their respective successors or assigns), hereby
agrees that capitalized terms used herein and not defined herein shall have
meaning assigned to such terms in the Credit Agreement and agrees to amend and
restate the Prior Pledge Agreement in its entirety as follows:


 


SECTION 1.           Pledge. As security for the
payment and performance, as the case may be, in full of the Obligations, each
Pledgor hereby transfers, grants, bargains, sells, conveys, hypothecates,
pledges, sets over and delivers, unto the Collateral Agent, its successors and
assigns, and hereby grants to the Collateral Agent, its successors and assigns,
for the ratable benefit of the Secured Parties, a security interest in all of
the Pledgor’s right, title and interest in, to and under (a) the shares of
capital stock and other Equity Interests owned by it and listed on Schedule II
hereto and any Equity Interests obtained in the future by the Pledgor and the
certificates representing all such shares (the “Pledged Stock”);
(b)(i) the debt securities listed opposite the name of the Pledgor on Schedule II
hereto, (ii) any debt securities in the future issued to the Pledgor and (iii)
the promissory notes and any other instruments evidencing such debt securities
(the “Pledged Debt Securities”); (c) subject to Section 5,
all payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed, in
respect of, in exchange for or upon the conversion of the securities referred
to in clauses (a) and (b) above; (d) subject to Section 5,
all rights and privileges of the Pledgor with respect to the securities and
other property referred to in clauses (a), (b), (c) and (d) above, including
any interest of such Pledgor in the entries on the books of the issuer of the
Pledged Stock or any financial intermediary pertaining to the Pledged Shares;
and (e) all proceeds of any of the foregoing (the items referred to in
clauses (a) through (e) above being collectively referred to as the “Collateral”).
Notwithstanding any of the foregoing, the Pledged Stock shall not include
(i) more than 65% of the issued and outstanding shares of common stock of
any Foreign Subsidiary that is not a Loan Party or (ii) to the extent that
applicable law requires that a Subsidiary of the Pledgor issue directors’ or
nominee’s qualifying shares, such qualifying shares.


 


Upon delivery
to the Collateral Agent, (a) any stock certificates, notes or other
securities now or hereafter included in the Collateral (the “Pledged
Securities”) shall be accompanied by stock powers duly executed in blank or
other instruments of transfer satisfactory to the Collateral Agent and by such
other instruments and documents as the Collateral Agent may reasonably request
and (b) all other property comprising part of the Collateral shall be
accompanied by proper instruments of assignment duly executed by the applicable
Pledgor and such other instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing the securities then being pledged hereunder, which schedule shall be
attached hereto as Schedule II and made a part hereof. Each
schedule so delivered shall supplement any prior schedules so delivered.


 


TO HAVE AND TO
HOLD the Collateral, in accordance
with, and to the extent consistent with, the Intercreditor Agreement, together
with all right, title, interest, powers, privileges and preferences pertaining or
incidental thereto, unto the Collateral Agent, its successors and assigns, for
the ratable benefit of the Secured Parties, forever; subject, however, to the
terms, covenants and conditions hereinafter set forth.


 


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SECTION 2.           Delivery of the Collateral.


 


(a)  Each
Pledgor agrees promptly to deliver or cause to be delivered to the Collateral
Agent any and all Pledged Securities and any and all certificates or other
instruments or documents representing the Collateral that have not been
provided to the Prior Collateral Agent prior to the date hereof.


 


(b)           Each Pledgor will cause any
Indebtedness for borrowed money owed to the Pledgor by the Borrower or any
Subsidiary to be evidenced by a duly executed promissory note that is pledged
and delivered to the Collateral Agent pursuant to the terms hereof.


 


SECTION 3.           Representations, Warranties and
Covenants. Each Pledgor hereby represents, warrants and covenants, as to
itself and the Collateral pledged by it hereunder, to and with the Collateral
Agent that:


 


(a)           the Pledged Stock represents that
percentage as set forth on Schedule II of the issued and
outstanding shares of each class of the capital stock of the issuer with
respect thereto;


 


(b)           except for the security interest
granted hereunder and except as permitted by the Credit Agreement, the Pledgor
(i) is and will at all times continue to be the direct owner, beneficially
and of record, of the Pledged Securities indicated on Schedule II,
(ii) holds the same free and clear of all Liens, (iii) will make no
assignment, pledge, hypothecation or transfer of, or create or permit to exist
any security interest in or other Lien on, the Collateral, other than pursuant
hereto and (iv) subject to Section 5, will cause any and all
Collateral, whether for value paid by the Pledgor or otherwise, to be forthwith
deposited with the Collateral Agent and pledged or assigned hereunder;


 


(c)           the Pledgor (i) has the power
and authority to pledge the Collateral in the manner hereby done or
contemplated and (ii) will defend its title or interest thereto or therein
against any and all Liens (other than the Lien created by this Agreement),
however arising, of all Persons whomsoever;


 


(d)           no consent which has not been
obtained of any other Person (including stockholders or creditors of any
Pledgor) and no consent or approval which has not been obtained of any
Governmental Authority or any securities exchange is necessary to the validity
of the pledge effected hereby;


 


(e)           by virtue of the execution and
delivery by the Pledgors of this Agreement and the Intercreditor Agreement,
when the Pledged Securities, certificates or other documents representing or
evidencing the Collateral are delivered to the Collateral Agent in accordance
with this Agreement, the Collateral Agent will obtain a valid and perfected
first lien upon and security interest in such Pledged Securities as security
for the payment and performance of the Obligations;


 


(f)            the pledge effected hereby is
effective to vest in the Collateral Agent, on behalf of the Secured Parties,
the rights of the Collateral Agent in the Collateral as set forth herein;


 


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(g)           all of the Pledged Stock has been
duly authorized and validly issued and is fully paid and nonassessable;


 


(h)           all information set forth herein
relating to the Pledged Stock is accurate and complete in all material respects
as of the date hereof; and


 


(i)            the pledge of the Pledged Stock
pursuant to this Agreement does not violate Regulation U or X of the
Federal Reserve Board or any successor thereto as of the date hereof.


 


SECTION 4.           Registration in Nominee Name;
Denominations. The Collateral Agent, on behalf of the Secured Parties,
shall have the right (in its sole and absolute discretion) to hold the Pledged
Securities in its own name as pledgee, the name of its nominee (as pledgee or
as sub-agent) or the name of the Pledgors, endorsed or assigned in blank or in
favor of the Collateral Agent. Each Pledgor will promptly give to the
Collateral Agent copies of any notices or other communications received by it
with respect to Pledged Securities registered in the name of such Pledgor. The
Collateral Agent shall at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement and the
Intercreditor Agreement.


 


The applicable
Pledgor shall, for each interest in any limited liability company or limited
partnership controlled by such Pledgor and pledged hereunder that is
represented by a certificate, in the organizational documents of such limited
liability company or limited partnership, cause the issuer of such interests to
elect to treat such interests as a “security” within the meaning of Article 8
of the Uniform Commercial Code of its jurisdiction of organization or
formation, as applicable, by including in its organizational documents language
substantially similar to the following and, accordingly, such interests shall
be governed by Article 8 of the Uniform Commercial Code:


 


“The Partnership/Company hereby irrevocably elects that all membership
interests in the Partnership/Company shall be securities governed by
Article 8 of the Uniform Commercial Code of [jurisdiction of organization
or formation, as applicable]. Each certificate evidencing
partnership/membership interests in the Partnership/Company shall bear the
following legend:  “This certificate
evidences an interest in [name of Partnership/LLC] and shall be a security for
purposes of Article 8 of the Uniform Commercial Code.”  No change to this provision shall be
effective until all outstanding certificates have been surrendered for
cancelation and any new certificates thereafter issued shall not bear the foregoing
legend.


 


For each
interest in any limited liability company or limited partnership controlled by
any Pledgor and pledged hereunder that is not represented by a certificate, the
applicable Pledgor agrees that it shall not, (a) at any time, elect to treat
any such interest as a “security” within the meaning of Article 8 of the
Uniform Commercial Code of its jurisdiction of organization or formation, as
applicable, or (b) issue any certificate representing such interest,
unless (i) in the case of clause (a), such Pledgor provides prior written
notification to the Collateral Agent of such election and (ii) in the case
of clause (b), such Pledgor immediately complies with the 


 


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requirements
of the second paragraph of this Section 4 with respect to such
interest and immediately pledges any such certificate to the Collateral Agent
pursuant to the terms hereof.


 


If any
securities, whether certificated or uncertificated, or other investment
property now or hereafter acquired by any Pledgor (other than Securities or
other investment property held in the Notes Collateral Account (as defined in
the Intercreditor Agreement)) are held by such Pledgor or its nominee through a
securities intermediary or commodity intermediary, such Pledgor shall promptly
notify the Collateral Agent thereof and, at the Collateral Agent’s request and
option, pursuant to an agreement in form and substance reasonably satisfactory
to the Collateral Agent, either (i) cause such securities intermediary or (as
the case may be) commodity intermediary to agree to comply with entitlement
orders or other instructions from the Collateral Agent to such securities
intermediary as to such security entitlements, or (as the case may be) to apply
any value distributed on account of any commodity contract as directed by the
Collateral Agent to such commodity intermediary, in each case without further
consent of any Pledgor or such nominee, or (ii) in the case of Financial Assets
or other Investment Property (each as defined in the NY UCC) held through a
securities intermediary, arrange for the Collateral Agent to become the
entitlement holder with respect to such investment property, with the Pledgor
being permitted, only with the consent of the Collateral Agent, to exercise
rights to withdraw or otherwise deal with such investment property. The
Collateral Agent agrees with each Pledgor that the Collateral Agent shall not
give any such entitlement orders or instructions or directions to any such
issuer, securities intermediary or commodity intermediary, and shall not
withhold its consent to the exercise of any withdrawal or dealing rights by any
Pledgor, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights would occur. The
provisions of this paragraph shall not apply to any financial assets credited
to a securities account for which the Collateral Agent is the securities
intermediary.


 


SECTION 5.           Voting Rights; Dividends and
Interest, etc.  (a)  In
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, unless and until an Event of Default shall have
occurred and be continuing:


 


(i)            Each Pledgor shall
be entitled to exercise any and all voting and/or other consensual rights and
powers inuring to an owner of Pledged Securities or any part thereof for any
purpose consistent with the terms of this Agreement, the Credit Agreement and
the other Loan Documents; provided, however, that such Pledgor
will not be entitled to exercise any such right if the result thereof could
materially and adversely affect the rights inuring to a holder of the Pledged
Securities or the rights and remedies of any of the Secured Parties under this
Agreement or the Credit Agreement or any other Loan Document or the ability of
the Secured Parties to exercise the same.


 


(ii)           The Collateral
Agent shall execute and deliver to each Pledgor, or cause to be executed and
delivered to each Pledgor, all such proxies, powers of attorney and other
instruments as such Pledgor may reasonably request for the purpose of enabling
such Pledgor to exercise the voting and/or consensual rights and powers it is
entitled to exercise pursuant to subparagraph (i) above and to receive the
cash dividends it is entitled to receive pursuant to subparagraph (iii) below.


 


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(iii)          Each Pledgor shall
be entitled to receive and retain any and all cash dividends, interest and
principal paid on the Pledged Securities to the extent and only to the extent
that such cash dividends, interest and principal are permitted by, and
otherwise paid in accordance with, the terms and conditions of the Credit
Agreement, the other Loan Documents and applicable laws. All noncash dividends,
interest and principal, and all dividends, interest and principal paid or
payable in cash or otherwise in connection with a partial or total liquidation
or dissolution, return of capital, capital surplus or paid-in surplus, and all
other distributions (other than distributions referred to in the preceding
sentence) made on or in respect of the Pledged Securities, whether paid or
payable in cash or otherwise, whether resulting from a subdivision, combination
or reclassification of the outstanding capital stock of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Collateral, and, if received by any
Pledgor, shall not be commingled by such Pledgor with any of its other funds or
property but shall be held separate and apart therefrom, shall be held in trust
for the benefit of the Collateral Agent and shall be forthwith delivered to the
Collateral Agent in the same form as so received (with any necessary
endorsement).


 


(b)           In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, all rights of any Pledgor to
dividends, interest or principal that such Pledgor is authorized to receive
pursuant to paragraph (a)(iii) above shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall have the
sole and exclusive right and authority to receive and retain such dividends,
interest or principal. All dividends, interest or principal received by the Pledgor
contrary to the provisions of this Section 5 shall be held in trust
for the benefit of the Collateral Agent, shall be segregated from other
property or funds of such Pledgor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any necessary
endorsement).  Any and all money and
other property paid over to or received by the Collateral Agent pursuant to the
provisions of this paragraph (b) shall, subject
to the provisions of the Intercreditor Agreement, be retained by the Collateral
Agent, in an account to be established by the Collateral Agent upon receipt of
such money or other property and shall be applied in accordance with the
provisions of Section 7. After all Events of Default have been
cured or waived, the Collateral Agent shall, within [five] Business Days after
all such Events of Default have been cured or waived, repay to each Pledgor all
cash dividends, interest or principal (without interest), that such Pledgor
would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii)
above and which remain in such account.


 


(c)           In accordance with, and to the extent
consistent with, the terms of, the Intercreditor Agreement, upon the occurrence
and during the continuance of an Event of Default, all rights of any Pledgor to
exercise the voting and consensual rights and powers it is entitled to exercise
pursuant to paragraph (a)(i) of this Section 5, and the
obligations of the Collateral Agent under paragraph (a)(ii) of this Section 5,
shall cease, and all such rights shall thereupon become vested in the
Collateral Agent, which shall have the sole and exclusive right and authority
to exercise such voting and consensual rights and powers, provided that,
and to the extent consistent with the Intercreditor Agreement, unless otherwise
directed by the Required Lenders, the Collateral Agent shall have the right
from time to time following and during the continuance 


 


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of an Event of Default to
permit the Pledgors to exercise such rights. After all Events of Default have
been cured or waived, such Pledgor will have the right to exercise the voting
and consensual rights and powers that it would otherwise be entitled to
exercise pursuant to the terms of paragraph (a)(i) above.


 


SECTION 6.           Remedies upon Default. In
accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, upon the
occurrence and during the continuance of an Event of Default, subject to
applicable regulatory and legal requirements, the Collateral Agent may sell the
Collateral, or any part thereof, at public or private sale or at any broker’s
board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to persons who will represent
and agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely free from any claim or right on the part of any
Pledgor, and, to the extent permitted by applicable law, the Pledgors hereby
waive all rights of redemption, stay, valuation and appraisal any Pledgor now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted.


 


The Collateral
Agent shall give a Pledgor 10 days’ prior written notice (which each Pledgor
agrees is reasonable notice within the meaning of Section 9-611 of the
Uniform Commercial Code as in effect in the State of New York or its equivalent
in other jurisdictions) of the Collateral Agent’s intention to make any sale of
such Pledgor’s Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker’s
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice of such sale. At any such sale, the Collateral, or portion thereof, to
be sold may be sold in one lot as an entirety or in separate parcels, as the
Collateral Agent may (in its sole and absolute discretion) determine. The Collateral
Agent shall not be obligated to make any sale of any Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by the Collateral Agent until the sale price is paid in full by the
purchaser or purchasers thereof, but the Collateral Agent shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by applicable law, private) sale made pursuant to this Section 6,
any Secured Party may bid for or purchase, free from any right of redemption,
stay or appraisal on the part of any Pledgor (all said rights being also hereby
waived and released), the Collateral or any part thereof offered for sale and
may make payment on account thereof by using any claim then due and payable to
it from 


 


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such Pledgor as a credit
against the purchase price, and it may, upon compliance with the terms of sale,
hold, retain and dispose of such property without further accountability to
such Pledgor therefor. For purposes hereof, (a) a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof, (b) the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and (c) such Pledgor shall not be entitled to the
return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered
into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may, in accordance with, and to
the extent consistent with, the terms of the Intercreditor Agreement, proceed
by a suit or suits at law or in equity to foreclose upon the Collateral and to
sell the Collateral or any portion thereof pursuant to a judgment or decree of
a court or courts having competent jurisdiction or pursuant to a proceeding by
a court-appointed receiver. Any sale pursuant to the provisions of this Section 6
shall be deemed to conform to the commercially reasonable standards as provided
in Section 9-611 of the Uniform Commercial Code as in effect in the State
of New York or its equivalent in other jurisdictions.


 


SECTION 7.           Application of Proceeds of Sale.
In accordance with, and to the extent consistent with, the terms of the
Intercreditor Agreement, the proceeds of any sale of Collateral pursuant to Section 6,
as well as any Collateral consisting of cash, shall be applied by the
Collateral Agent pursuant to Section 2.17(b) of the Credit Agreement.


 


SECTION 8.           Reimbursement of Collateral Agent.


 


(a)           In accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, the Pledgors agree
to pay upon demand to the Collateral Agent the amount of any and all reasonable
expenses, including the reasonable fees, other charges and disbursements of its
counsel and of any experts or agents, that the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Collateral Agent hereunder or (iv) the failure
by such Pledgor to perform or observe any of the provisions hereof.


 


(b)           Without limitation of its
indemnification obligations under the other Loan Documents, each Pledgor agrees
to indemnify the Collateral Agent and the Indemnitees (as defined in
Section 10.03 of the Credit Agreement) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, other charges and disbursements,
incurred by or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this
Agreement or any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the performance by the parties hereto of their
respective obligations thereunder or the consummation of the Transactions and
the other transactions contemplated thereby or (ii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not
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 resulted from the gross negligence or
wilful misconduct of such Indemnitee.


 


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(c)           Any amounts payable as provided
hereunder shall be additional Obligations secured hereby and by the other
Security Documents. The provisions of this Section 8 shall remain
operative and in full force and effect regardless of the termination of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 8 shall be payable on
written demand therefor and shall bear interest at the rate specified in
Section 2.12(c) of the Credit Agreement.


 


SECTION 9.           Collateral Agent Appointed
Attorney-in-Fact. Each Pledgor hereby appoints the Collateral Agent the
attorney-in-fact of such Pledgor, upon the occurrence and during the
continuance of a Default, for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instrument that the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest. Without
limiting the generality of the foregoing, the Collateral Agent shall have the
right, upon the occurrence and during the continuance of an Event of Default,
with full power of substitution either in the Collateral Agent’s name or in the
name of such Pledgor, to ask for, demand, sue for, collect, receive and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral, to endorse checks, drafts, orders and other instruments for the
payment of money payable to the Pledgor representing any interest or dividend
or other distribution payable in respect of the Collateral or any part thereof
or on account thereof and to give full discharge for the same, to settle,
compromise, prosecute or defend any action, claim or proceeding with respect
thereto, and to sell, assign, endorse, pledge, transfer and to make any
agreement respecting, or otherwise deal with, the same; provided, however,
that nothing herein contained shall be construed as requiring or obligating the
Collateral Agent to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent, or to present
or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. The Collateral Agent and the other
Secured Parties shall be accountable only for amounts actually received as a
result of the exercise of the powers granted to them herein, and neither they
nor their officers, directors, employees or agents shall be responsible to any
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or wilful misconduct.


 


Notwithstanding
anything in this Section 9 to the contrary, the Collateral Agent agrees
that it will not exercise any rights under the power of attorney provided for
in this Section 9 unless it does so in accordance with, and to the
extent consistent with, the terms of the Intercreditor Agreement.


 


SECTION 10.         Waivers; Amendment.


 


(a)           No failure or delay of the Collateral
Agent in exercising any power or right hereunder 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 the Collateral Agent hereunder and
of the other Secured Parties under 


 


10

















 


the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or consent to any
departure by any Pledgor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any Pledgor in any case shall entitle
such Pledgor to any other or further notice or demand in similar or other
circumstances.


 


(b)           Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to a
written agreement entered into between the Collateral Agent and the Pledgor or
Pledgors with respect to which such waiver, amendment or modification is to
apply, subject to (i) any consent required in accordance with Section 10.02 of
the Credit Agreement and (ii) the limitations in the Intercreditor Agreement.


 


SECTION 11.         Securities Act, etc. In view of
the position of the Pledgors in relation to the Pledged Securities, or because
of other current or future circumstances, a question may arise under the
Securities Act of 1933, as now or hereafter in effect, or any similar statute
hereafter enacted analogous in purpose or effect (such Act and any such similar
statute as from time to time in effect being called the “Federal Securities
Laws”) with respect to any disposition of the Pledged Securities permitted
hereunder. Each Pledgor understands that compliance with the Federal Securities
Laws might very strictly limit the course of conduct of the Collateral Agent if
the Collateral Agent were to attempt to dispose of all or any part of the
Pledged Securities, and might also limit the extent to which or the manner in
which any subsequent transferee of any Pledged Securities could dispose of the
same. Similarly, there may be other legal restrictions or limitations affecting
the Collateral Agent in any attempt to dispose of all or part of the Pledged
Securities under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect. Each Pledgor recognizes that in light of
such restrictions and limitations the Collateral Agent may, with respect to any
sale of the Pledged Securities, limit the purchasers to those who will agree,
among other things, to acquire such Pledged Securities for their own account,
for investment, and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, in its discretion, (a) may proceed to
make such a sale whether or not a registration statement for the purpose of
registering such Pledged Securities or part thereof shall have been filed under
the Federal Securities Laws and (b) may approach and negotiate with a
single potential purchaser to effect such sale. Each Pledgor acknowledges and
agrees that any such sale might result in prices and other terms less favorable
to the seller than if such sale were a public sale without such restrictions. In
the event of any such sale, the Collateral Agent shall incur no responsibility
or liability for selling all or any part of the Pledged Securities at a price
that the Collateral Agent, in its discretion, may in good faith deem reasonable
under the circumstances, notwithstanding the possibility that a substantially
higher price might have been realized if the sale were deferred until after
registration as aforesaid or if more than a single purchaser were approached. The
provisions of this Section 11 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.


 


SECTION 12.         Registration, etc. Each Pledgor
agrees that, upon the occurrence and during the continuance of an Event of
Default, if, in accordance with, and to the extent 


 


11

















 


consistent with, the terms of
the Intercreditor Agreement, for any reason the Collateral Agent desires to
sell any of the Pledged Securities at a public sale, it will, at any time and
from time to time, upon the written request of the Collateral Agent, use its
best efforts to take or to cause the issuer of such Pledged Securities to take
such action and prepare, distribute and/or file such documents, as are required
or advisable in the reasonable opinion of counsel for the Collateral Agent to
permit the public sale of such Pledged Securities. Each Pledgor further agrees
to indemnify, defend and hold harmless the Collateral Agent, each other Secured
Party, any underwriter and their respective officers, directors, affiliates and
controlling persons from and against all loss, liability, expenses, costs of
counsel (including, without limitation, reasonable fees and expenses to the
Collateral Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any untrue statement of a material fact
contained in any prospectus (or any amendment or supplement thereto) or in any
notification or offering circular, or arises out of or is based upon any
omission to state a material fact required to be stated therein or necessary to
make the statements in any thereof not misleading, except insofar as the same
may have been caused by any untrue statement or omission based upon information
furnished to such Pledgor or the issuer of such Pledged Securities by the Collateral
Agent or any other Secured Party expressly for use therein. Each Pledgor
further agrees, upon such written request referred to above, to use its best
efforts to qualify, file or register, or cause the issuer of such Pledged Securities
to qualify, file or register, any of the Pledged Securities under the Blue Sky
or other securities laws of such states as may be requested by the Collateral
Agent and keep effective, or cause to be kept effective, all such
qualifications, filings or registrations. The Pledgors will bear all costs and
expenses of carrying out their obligations under this Section 12. Each
Pledgor acknowledges that there is no adequate remedy at law for failure by it
to comply with the provisions of this Section 12 and that such
failure would not be adequately compensable in damages, and therefore agrees
that its agreements contained in this Section 12 may be
specifically enforced.


 


SECTION 13.         Security Interest Absolute. All
rights of the Collateral Agent hereunder, the grant of a security interest in
the Collateral and all obligations of each Pledgor hereunder, shall be absolute
and unconditional irrespective of (a) any lack of validity or
enforceability of the Credit Agreement, any other Loan Document, any agreement
with respect to any of the Obligations or any other agreement or instrument
relating to any of the foregoing, (b) any change in the time, manner or
place of payment of, or in any other term of, all or any of the Obligations, or
any other amendment or waiver of or any consent to any departure from the
Credit Agreement, any other Loan Document or any other agreement or instrument
relating to any of the foregoing, (c) any exchange, release or
nonperfection of any other collateral, or any release or amendment or waiver of
or consent to or departure from any guaranty, for all or any of the Obligations
or (d) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Pledgor in respect of the Obligations or
in respect of this Agreement (other than the indefeasible payment in full of
all the Obligations).


 


SECTION 14.         Termination or Release.


 


(a)           This Agreement and the pledge of
Pledged Securities shall continue in effect (notwithstanding the fact that from
time to time there may be no Obligations outstanding) until (i) the Credit
Agreement has terminated pursuant to its express terms and (ii) all of the 


 


12

















 


Obligations (other than contingent
obligations for which no claims has been made) have been indefeasibly paid and
performed in full (or with respect to any outstanding Letters of Credit, a cash
deposit has been delivered to the Administrative Agent as required by the
Credit Agreement) and no commitments of the Agents or the Lenders which would
give rise to any Obligations are outstanding. Upon payment in full in cash of
the outstanding Obligations and the expiration or termination of the
Commitments, the security interest granted hereby shall terminate and all right
to the Collateral shall revert to the Pledgors or any other Person entitled
thereto. Upon such termination, the Administrative Agent will authorize the
filing of appropriate UCC termination statements to terminate such security
interests and shall, at the expense of the Pledgors, execute and deliver to
such Pledgor such documents as such Pledgor shall reasonably request to
evidence the termination of such security interests or the release of such
Collateral, as applicable.


 


(b)           A Pledgor shall automatically be
released from its obligations hereunder and the pledge of the Collateral of
such Pledgor shall be automatically released in the event that all capital
stock of such Pledgor shall be sold, transferred or otherwise disposed of to a
Person that is not an Affiliate of the Parent Borrower in accordance with the
terms of the Credit Agreement; provided that the Required Lenders shall
have consented to such sale, transfer or other disposition (to the extent
required by the Credit Agreement) and the terms of such consent did not provide
otherwise.


 


(c)           Upon any sale or other transfer by
any Pledgor of any Collateral that is permitted under the Credit Agreement, provided
that the Required Lenders shall have consented to such transaction (to the
extent required by the Credit agreement) and the terms of such consent did not
provide otherwise, or upon the effectiveness of any written consent to the
release of the security interest granted hereby in any Collateral pursuant to
Section 10.02 of the Credit Agreement, the security interest in such Collateral
shall be automatically released.


 


(d)           If any of the 2004 Notes First Lien
Collateral (as defined in the Intercreditor Agreement) shall become subject to
the release provisions set forth in Section 5.1(c) of the Intercreditor
Agreement, such Collateral shall be automatically released from the Security
Interest to the extent provided in Section 5.1(c) of the Intercreditor
Agreement.


 


(e)           In connection with any termination or
release pursuant to paragraph (a), (b), (c) or (d) above, the Collateral Agent
shall execute and deliver to the Pledgors, at the Pledgors’ expense, all UCC
termination statements and similar documents which the Pledgor shall reasonably
request to evidence such termination or release. Any execution and delivery of
termination statements or release documents pursuant to this Section 14
shall be without recourse to or warranty by the Collateral Agent.


 


SECTION 15.         Notices. All communications and
notices hereunder shall be in writing and given as provided in Section 10.01
of the Credit Agreement. All communications and notices hereunder to any
Subsidiary Pledgor shall be given to it at the address for notices set forth on
Schedule I.


 


SECTION 16.         Further Assurances. Each Pledgor
agrees to do such further acts and things, and to execute and deliver such
additional conveyances, assignments, agreements and 


 


13

















 


instruments, as the Collateral
Agent, in accordance with, and to the extent
consistent with, the terms of the Intercreditor Agreement, may at any time
reasonably request in connection with the administration and enforcement of
this Agreement or with respect to the Collateral or any part thereof or in
order better to assure and confirm unto the Collateral Agent its rights and
remedies hereunder.


 


SECTION 17.         Binding Effect; Several Agreement;
Assignments. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of any Pledgor that are contained in this Agreement shall bind and inure
to the benefit of its successors and assigns. This Agreement shall become
effective as to any Pledgor when a counterpart hereof executed on behalf of
such Pledgor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Pledgor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Pledgor, the Collateral Agent and the other Secured Parties, and their
respective successors and assigns, except that no Pledgor shall have the right
to assign its rights hereunder or any interest herein or in the Collateral (and
any such attempted assignment shall be void), except as expressly contemplated
by this Agreement or the other Loan Documents. If all of the capital stock of a
Pledgor is sold, transferred or otherwise disposed of to a Person that is not
an Affiliate of the Borrower pursuant to a transaction permitted by
Section 6.06 of the Credit Agreement, such Pledgor shall be released from
its obligations under this Agreement without further action. This Agreement
shall be construed as a separate agreement with respect to each Pledgor and may
be amended, modified, supplemented, waived or released with respect to any
Pledgor without the approval of any other Pledgor and without affecting the
obligations of any other Pledgor hereunder.


 


SECTION 18.         Survival of Agreement; Severability.


 


(a)           All covenants, agreements,
representations and warranties made by each Pledgor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans and the issuance of the
Letters of Credit by the Issuing Bank, regardless of any investigation made by
the Secured Parties or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or the LC Exposure does not equal zero and as long
as the Commitments have not been terminated.


 


(b)           In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.


 


14

















 


SECTION
19.       Governing Law. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.


 


SECTION 20.         Counterparts. This Agreement may
be executed in any number of counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute a single
contract, and shall become effective as provided in Section 17. Delivery
of an executed counterpart of a signature page to this Agreement by facsimile
transmission or other electronic transmission shall be effective as delivery of
a manually executed counterpart of this Agreement.


 


SECTION 21.         Rules of Interpretation. The
rules of interpretation specified in Section 1.03 of the Credit Agreement
shall be applicable to this Agreement. Section headings used herein are for
convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.


 


SECTION 22.         Jurisdiction; Consent to Service of
Process.


 


(a)           Each Pledgor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or Federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that,
to the extent permitted by applicable law, 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 shall affect
any right that the Collateral Agent or any other Secured Party may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against any Pledgor or its properties in the courts of any
jurisdiction.


 


(b)           Each Pledgor 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
the other Loan Documents in any New York State or Federal court. 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.


 


(c)           Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 15. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by
law.


 


SECTION 23.         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
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION 


 


15

















 


WITH THIS AGREEMENT. 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, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


 


SECTION 24.         Additional Pledgors. Pursuant to
Section 5.12 of the Credit Agreement, each Loan Party (other than a
Foreign Subsidiary) that was not in existence or not a Loan Party on the date
of the Credit Agreement is required to enter in this Agreement as a Subsidiary
Pledgor upon becoming a Loan Party. Upon execution and delivery by the
Collateral Agent and a Subsidiary of an instrument in the form of Annex 1,
such Subsidiary shall become a Subsidiary Pledgor hereunder with the same force
and effect as if originally named as a Subsidiary Pledgor herein. The execution
and delivery of such instrument shall not require the consent of any Pledgor
hereunder.


 


The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Subsidiary Pledgor as a party to this
Agreement.


 


SECTION 25.         Subject to Intercreditor Agreement.
Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Collateral Agent pursuant to this Agreement and the exercise of
any right or remedy by the Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern.


 


SECTION 26.         Nova Scotia Unlimited Liability
Companies. Notwithstanding anything else contained in this Agreement or any
other document or agreement among all or some of the parties hereto, Uniplast
Holdings Inc. is the sole registered and beneficial owner of all Collateral
which is comprised of shares of the Canadian Subsidiary Borrower or any other
Person whose securities are the subject hereof and which is an unlimited
liability company (a “ULC”) and will remain so until such time as such
shares are effectively transferred into the name of the Collateral Agent, any
other Secured Party or any other Person on the books and records of such ULC. Accordingly
Uniplast Holdings Inc. shall be entitled to receive and retain for its own
account any dividend on or other distribution, if any, in respect of such
Collateral (except insofar as Uniplast Holdings Inc. has granted a security
interest therein) and shall have the right to vote such Collateral and to
control the direction, management and policies of the Canadian Subsidiary
Borrower to the same extent as Uniplast Holdings Inc. would if such Collateral
were not pledged to the Collateral Agent (for its own benefit and for the
benefit of the Secured Parties) pursuant hereto. Nothing in this Agreement or
any other document or agreement among all or some of the parties hereto is
intended to, and nothing in this Agreement or any other document or agreement
among all or some of the parties hereto shall, constitute the Collateral Agent,
any Secured Party or any Person other than Uniplast Holdings Inc. a member of a
ULC for the purposes of the Companies Act
(Nova Scotia) until such time as notice is given to Uniplast Holdings Inc. and
further steps are taken thereunder so as to register the Collateral 


 


16

















 


Agent , any Secured Party or
any other Person as holder of shares of the ULC. To the extent any provision
hereof would have the effect of constituting the Collateral Agent or any
Secured Party as a member of any ULC prior to such time, such provision shall
be severed herefrom and ineffective with respect to Collateral which are shares
of a ULC without otherwise invalidating or rendering unenforceable this
Agreement or invalidating or rendering unenforceable such provision insofar as
it relates to Collateral which are not shares of a ULC.


 


SECTION 27.         Reaffirmation of Pledgor Obligations.
This Agreement constitutes an amendment and restatement of the Prior Pledge
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 Pledgors under
the Prior Pledge Agreement. Each of the parties hereto further acknowledges and
agrees that this Agreement supercedes and replaces the Prior Pledge 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
pledge granted to the Prior Administrative Agent for the benefit of itself and
the parties entitled to benefits of the Prior Pledge Agreement (including,
without limitation, each Lender, the Issuing Bank or any Agent party to the
Prior Credit Agreement, and their respective successors and assigns) shall
remain outstanding 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.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


17

















 


IN WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first above written.


 


	
  PLEDGORS:

  	
  PLIANT
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  PLIANT
  SOLUTIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  PLIANT
  CORPORATION INTERNATIONAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  PLIANT
  FILM PRODUCTS OF MEXICO, 

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  PLIANT
  PACKAGING OF CANADA, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


AMENDED AND RESTATED DOMESTIC
PLEDGE AGREEMENT


 

















 


	
   

  	
  UNIPLAST
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  UNIPLAST
  U.S., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  COLLATERAL
  AGENT:

  	
  GENERAL
  ELECTRIC CAPITAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


Schedule I to
the 


Amended and Restated Domestic
Pledge Agreement


 


SUBSIDIARY
PLEDGORS


 


	
  Name

  	
   

  	
  Address

  
	
  Pliant Corporation

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Pliant Solutions Corporation

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Pliant Corporation International

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Pliant Film Products of Mexico, Inc.

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Pliant Packaging of Canada, LLC 

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173 

  
	
   

  	
   

  	
   

  
	
  Uniplast Holdings, Inc.

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Uniplast U.S., Inc.

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  



 

















 


Schedule II to
the 


Amended and Restated Domestic
Pledge Agreement


 


CAPITAL STOCK


 


	
  Issuer

  	
   

  	
  Number of 

  Certificate

  	
   

  	
  Registered Owner

  	
   

  	
  Number 

  and 

  Class of 

  Shares

  	
   

  	
  Percentage of 

  Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


DEBT SECURITIES


 


	
   

  	
   

  	
  Intercompany Note

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


Annex 1 to the



Amended and
Restated Pledge Agreement


 


SUPPLEMENT NO.      dated
as of       , 20   , to the AMENDED
AND RESTATED DOMESTIC PLEDGE AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, the “Domestic Pledge Agreement”) dated
as of November 21, 2005, among each of the parties listed on the signature
pages thereto and those additional entities that thereafter become parties
thereto (each a “Pledgor” and collectively, the “Pledgors”) and GENERAL
ELECTRIC CAPITAL CORPORATION, as Collateral Agent (in such capacity, the “Collateral
Agent”) for the Secured Parties (as defined in the Credit Agreement
referred to below)


 


A.            Reference is made to (a) the Amended
and Restated Credit Agreement dated as of November 21, 2005 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Parent Borrower, the subsidiaries of the Parent Borrower party
thereto as domestic subsidiary borrowers, Uniplast Industries Co., a Nova
Scotia company, the lenders from time to time party thereto (the “Lenders”),
Morgan Stanley Senior Funding, Inc., as Domestic B Agent, General Electric
Capital Corporation, as Domestic A Agent and Administrative Agent for the
Lenders, and the Collateral Agent and (b) the Amended and Restated Guarantee
Agreement dated as of November 21, 2005 (as amended, supplemented or otherwise
modified from time to time, the “Guarantee Agreement”), among the certain
of the Pledgors and the Administrative Agent.


 


B.            Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.


 


C.            The Pledgors have entered into the Amended
and Restated Domestic Pledge Agreement in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit. Pursuant to Section 5.12
of the Credit Agreement, each Loan Party (other than a Foreign Subsidiary) that
was not in existence or not a Loan Party on the date of the Credit Agreement is
required to enter into the Amended and Restated Domestic Pledge Agreement as a
Subsidiary Pledgor upon becoming a Loan Party. Section 24 of the Domestic
Pledge Agreement provides that such Subsidiaries may become Subsidiary Pledgors
under the Domestic Pledge Agreement by execution and delivery of an instrument
in the form of this Supplement. The undersigned Subsidiary (the “New Pledgor”)
is executing this Supplement in accordance with the requirements of the Credit
Agreement to become a Subsidiary Pledgor under the Amended and Restated Domestic
Pledge Agreement in order to induce the Lenders to make additional Loans and
the Issuing Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.


 


Accordingly,
the Collateral Agent and the New Pledgor agree as follows:


 


SECTION 1. In
accordance with Section 24 of the Amended and Restated Domestic Pledge
Agreement, the New Pledgor by its signature below becomes a Pledgor under the Amended
and Restated Domestic Pledge Agreement with the same force and effect as if
originally named therein as a Pledgor and the New Pledgor hereby agrees
(a) to all the terms and 


 

















 


provisions of the Amended and
Restated Domestic Pledge Agreement applicable to it as a Pledgor thereunder and
(b) represents and warrants that the representations and warranties made
by it as a Pledgor thereunder are true and correct on and as of the date hereof.
In furtherance of the foregoing, the New Pledgor, as security for the payment
and performance in full of the Obligations (as defined in the Amended and
Restated Domestic Pledge Agreement), does hereby create and grant to the Collateral
Agent, its successors and assigns, for the benefit of the Secured Parties,
their successors and assigns, a security interest in and lien on all of the New
Pledgor’s right, title and interest in and to the Collateral (as defined in the
Amended and Restated Domestic Pledge Agreement) of the New Pledgor. Each
reference to a “Subsidiary Pledgor” or a “Pledgor” in the Domestic Pledge
Agreement shall be deemed to include the New Pledgor. The Domestic Pledge
Agreement is hereby incorporated herein by reference.


 


SECTION 2. The
New Pledgor represents and warrants to the Collateral Agent and the other
Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.


 


SECTION 3. This
Supplement may be executed in counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Supplement shall become effective when the Collateral Agent shall
have received counterparts of this Supplement that, when taken together, bear
the signatures of the New Pledgor and the Collateral Agent. Delivery of an
executed signature page to this Supplement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually signed
counterpart of this Supplement.


 


SECTION 4. The
New Pledgor hereby represents and warrants that set forth on Schedule I
attached hereto is a true and correct schedule of all its Pledged Securities.


 


SECTION 5. Except
as expressly supplemented hereby, the Amended and Restated Domestic Pledge
Agreement shall remain in full force and effect.


 


SECTION
6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.


 


SECTION 7. In
case any one or more of the provisions contained in this Supplement should be
held invalid, illegal or unenforceable in any respect, neither party hereto
shall be required to comply with such provision for so long as such provision
is held to be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein and in the Amended
and Restated Domestic Pledge Agreement shall not in any way be affected or
impaired. The parties hereto shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.


 


SECTION 8. All
communications and notices hereunder shall be in writing and given as provided
in Section 15 of the Amended and Restated Domestic Pledge Agreement. All 


 


2

















 


communications and notices
hereunder to the New Pledgor shall be given to it at the address set forth
under its signature hereto.


 


SECTION 9. The
New Pledgor agrees to reimburse the Collateral Agent for its reasonable
out-of-pocket expenses in connection with this Supplement, including the
reasonable fees, other charges and disbursements of counsel for the Collateral
Agent.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


3

















 


Annex 1 to the



Amended and Restated Pledge Agreement


 


IN WITNESS
WHEREOF, the New Pledgor and the Collateral Agent  have duly executed this Supplement to the Amended
and Restated Domestic Pledge Agreement as of the day and year first above
written.


 


 


	
   

  	
  [Name of New Pledgor],

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title: 

  
	
   

  	
  Address:

  
					



 


 


 


	
   

  	
  GENERAL ELECTRIC CAPITAL 

  CORPORATION, as Collateral Agent,

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Name: 

  
	
   

  	
  Title:

  
					



 

















 


Schedule I to


Supplement No
  .


to the Amended and Restated Domestic Pledge Agreement 


 


Pledged Securities of the New Pledgor


 


CAPITAL STOCK


 


	
  Issuer

  	
   

  	
  Number of 

  Certificate

  	
   

  	
  Registered 

  Owner

  	
   

  	
  Number and 

  Class of 

  Shares

  	
   

  	
  Percentage 

  of Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


DEBT SECURITIES


 




	
  Issuer

  	
   

  	
  Principal 

  Amount

  	
   

  	
  Date of 

  Note

  	
   

  	
  Maturity 

  Date