Exhibit 4.2


 


FIRST SUPPLEMENTAL INDENTURE


 


FIRST SUPPLEMENTAL INDENTURE
(this “Supplemental Indenture”), dated as of July 18, 2006, among
Pliant Corporation, a corporation incorporated under the laws of the State of
Delaware (the “Company”), as issuer, the Note Guarantors listed on the
signature pages hereto (the “Guarantors”), as guarantors, and
Wilmington Trust Company, a banking corporation organized under the laws of the
State of Delaware (the “Trustee”), as trustee.


 


W I T N E S S E T H:


 


WHEREAS, Pliant
Corporation, a corporation incorporated under the laws of the State of Utah (“Pliant
Utah”), the Guarantors and the Trustee have heretofore entered into an
Amended and Restated Indenture, dated as of May 6, 2005 the (“Restated
Indenture”), relating to the Company’s outstanding 11 5/8% Senior Secured
Notes due 2009 (the “Senior Secured Notes”) and 11 1/8% Senior Secured
Discount Notes due 2009 (the “Senior Secured Discount Notes” and,
together with the Senior Secured Notes, the “Notes”);


 


WHEREAS, effective as
of the date hereof, pursuant to Section 5.01(c) of the Restated
Indenture, and in accordance with the Debtors’ Fourth Amended Joint Plan of
Reorganization dated June 19, 2006, as confirmed by order of the United
States Bankruptcy Court for the District of Delaware on June 23, 2006,
Pliant Utah has merged with and into the Company, with the Company surviving
such merger and becoming the obligor under the Restated Indenture, the Notes
and the security documents related thereto;


 


WHEREAS, the Company
and the Guarantors desire to amend the Restated Indenture and the Notes as set
forth in this Supplemental Indenture (the “Amendment”); and


 


WHEREAS, pursuant to Section 9.01(a)(vii) of
the Restated Indenture, consent to the Amendment from Holders of the outstanding
Notes is not required and the Company, the Guarantors and the Trustee are
authorized to execute and deliver this Supplemental Indenture;


 


NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto mutually
covenant and agree for the equal and ratable benefit of Holders of the Notes as
follows:


 


ARTICLE I


 


DEFINITIONS


 


Section 1.01.                         Definitions.


 


The Restated Indenture, as amended by this
Supplemental Indenture, is hereinafter sometimes referred to as the “Indenture.”  For the avoidance of doubt, references to 


 

















 


any “Section” of the “Indenture” refer to such Section of the
Restated Indenture as supplemented and amended by this Supplemental Indenture.  All capitalized terms which are used herein
and not otherwise defined herein are defined in the Restated Indenture and are
used herein with the same meanings as in the Restated Indenture.  If a capitalized term is defined in the
Restated Indenture and this Supplemental Indenture, the definition in this
Supplemental Indenture shall apply to the Indenture and the Notes.


 


ARTICLE II


 


AMENDMENT


 


Section 2.01.                         General
Amendment.


 


All references to “Utah”
in the Restated Indenture, the exhibits thereto and the Notes in reference to
the State under which laws the Company is incorporated are hereby deleted in
their entirety and replaced with “Delaware”.


 


Section 2.02.                         Amendments
to Definitions.


 


(a)                                  Section 1.01 of the Restated
Indenture is hereby amended by deleting the definition of “Accreted Value” in
its entirety and replacing it with the following:


 


“ “Accreted Value” as of any date (the “Specified Date”)
means, with respect to each $1,000 principal amount at maturity of the
Non-Consenting Securities (subject to the last sentence of this definition):


 


(i)                                     if the Specified Date is one of the
following dates (each a “Semi-Annual Accretion Date”), the amount set forth
opposite each date below:


 


	
  SEMI-ANNUAL ACCRETION DATE

  	
   

  	
  ACCRETED VALUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Original Issue Date

  	
   

  	
  $

  	
  736.27

  	
   

  
	
  June 15, 2004

  	
   

  	
  $

  	
  762.87

  	
   

  
	
  December 15, 2004

  	
   

  	
  $

  	
  805.31

  	
   

  
	
  June 15, 2005

  	
   

  	
  $

  	
  850.10

  	
   

  
	
  December 15, 2005

  	
   

  	
  $

  	
  897.39

  	
   

  
	
  June 15, 2006

  	
   

  	
  $

  	
  947.31

  	
   

  
	
  December 15, 2006

  	
   

  	
  $

  	
  1,000.88

  	
   

  



 


(ii)                                  if the Specified Date occurs between two
Semi-Annual Accretion Dates, the sum of (a) the Accreted Value for the
Semi-Annual Accretion Date immediately preceding the Specified Date and (b) an
amount equal to the product of (x) the Accreted Value for the immediately
following Semi-Annual Accretion Date less the Accreted Value of the immediately
preceding Semi-Annual Accretion Date and (y) the fraction, the numerator
of which is the number of days actually elapsed from the immediately preceding
Semi-Annual Accretion Date and the denominator of which is 180; PROVIDED, HOWEVER,
that if the Specified Date occurs between June 15, 2006 and December 15,
2006, Accreted Value means the sum of (a)


 


2

















 


$947.31, (b) an amount equal to the product of (x) $52.69 and (y)
the fraction, the numerator of which is the number of days actually elapsed
from June 15, 2006 or, if the Specified Date is on or after July 18,
2006, 32 days and the denominator of which is 180 and (c) an amount equal
to the product of (x) $53.76 and (y) the fraction, the numerator of which is
the number of days actually elapsed from the First Supplemental Indenture
Effective Date (inclusive thereof, but not to exceed 148 days) and the
denominator of which is 180; or


 


(iii)                               if the Specified Date is after December 15,
2006, all references in this document to Accreted Value in respect of any
Non-Consenting Security shall be to the aggregate principal amount of such
Non-Consenting Security, which shall be equal to the sum of (i) the
Accreted Value of such Non-Consenting Security on December 15, 2006 plus (ii) the
aggregate principal amount of Additional Securities issued on such
Non-Consenting Security after December 15, 2006 to effect the First
Supplemental Indenture Interest Rate Increase (such First Supplemental Indenture
Interest Rate Increase being compounded semi-annually on each June 15 and December 15).  For the avoidance of doubt, any Additional
Securities issued other than by adjustment to the aggregate principal amount of
such Non-Consenting Security shall not be included in clause (ii) for
purposes of the foregoing calculation.


 


For the purposes hereof,
if the Specified Date is prior to December 15, 2006 but on or after the
date on which the Company elects to commence to pay cash interest (the “Cash
Election Date”), all references in this document to Accreted Value in respect
of any Non-Consenting Security shall be to the aggregate principal amount of
such Non-Consenting Security, which shall be equal to the Accreted Value of
such Non-Consenting Security as of the Cash Election Date determined in
accordance with clauses (i) and (ii) above.”


 


(b)                                 Section 1.01 of the Restated
Indenture is hereby amended by deleting the definition of “Additional
Securities” in its entirety and replacing it with the following:


 


“ “Additional Securities”
means (a) any 11 5/8% Senior Secured Notes due 2009, issued under the
terms of this Indenture subsequent to the Closing Date and prior to the First
Supplemental Indenture Effective Date (other than the Exchange Notes or the
Private Exchange Notes issued in exchange for Consenting Securities or in
exchange for Additional Securities issued as Initial Securities) and (b) any
11.85% Senior Secured Notes due 2009 and 11.35% Senior Secured Discount Notes
due 2009, issued under the terms of this Indenture subsequent to the First
Supplemental Indenture Effective Date.”


 


(c)                                  Section 1.01 of the Restated
Indenture is hereby amended by adding the following definitions thereto in
alphabetical order:


 


“ “First Supplemental
Indenture” means the First Supplemental Indenture, dated as of July 18,
2006, by and among the Company, the Note Guarantors party thereto and the
Trustee.


 


“First Supplemental Indenture Effective Date” means July 18,
2006, the date on which this Indenture is amended by the First Supplemental
Indenture thereto.


 


3

















 


“First Supplemental
Indenture Interest Rate Increase” means 0.225% per annum.”


 


Section 2.03.                         Amendments
to Article II.


 


(a)                                  The last paragraph of Section 2.01
of the Restated Indenture is hereby deleted in its entirety and replaced with
the following:


 


“Notwithstanding the foregoing, Additional Securities
may be issued as payment of interest on the Securities from time to time in
accordance with the terms of the Securities and Section 2.14.”


 


(b)                                 The first paragraph of Section 2.02
of the Restated Indenture is hereby deleted in its entirety and replaced with
the following:


 


“Provisions relating to
the Existing Securities (consisting of the Consenting Securities and the
Non-Consenting Securities), the Additional Securities, the Private Exchange
Notes and the Exchange Notes are set forth in the Appendix, which is hereby
incorporated in and expressly made a part of this Indenture.  The (a) Consenting Securities and the
Trustee’s certificate of authentication, (b) Private Exchange Notes and
the Trustee’s certificate of authentication and (c) Additional Securities
(if issued as Transfer Restricted Securities), if any, and the Trustee’s
certificate of authentication shall each be substantially in the form of Exhibit A-1
hereto, which is hereby incorporated in and expressly made a part of this
Indenture.  The Exchange Notes and the
Additional Securities issued thereon, if any, and the Trustee’s certificate of
authentication and the Non-Consenting Securities and the Additional Securities
issued thereon, if any, and the Trustee’s certificate of authentication shall
each be substantially in the form of Exhibit B-1 or B-2, hereto, as
applicable, both of which are hereby incorporated in and expressly made a part
of this Indenture.  The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company or any Note Guarantor is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company).  Each
Security shall be dated the date of its authentication.  The Securities shall be issuable only in
registered form without interest coupons and only in denominations of $1,000
principal amount and integral multiples thereof; provided that (x) the
aggregate principal amount of the Consenting Securities shall equal the
aggregate Accreted Value as of the Closing Date of the Existing Securities with
respect to which consents to the Amendments were given and accepted by the
Company, which is $250,607,280 and (y) the aggregate principal amount of
the Exchange Notes and Private Exchange Notes issued in exchange for any
Consenting Securities shall equal the aggregate principal amount of such Consenting
Securities; provided further that Additional Securities issued as payment of
interest, including Additional Interest, if any, on the Securities shall be
issued in denominations of $0.01 and integral multiples of $0.01.”


 


(c)                                  Section 2.14 of the Restated
Indenture is hereby deleted in its entirety and replaced with the following:


 


4

















 


“SECTION 2.14. 
ISSUANCE OF ADDITIONAL SECURITIES AS PAYMENT OF INTEREST.  The Company shall be entitled to issue
Additional Securities under this Indenture as payment of interest, including
Additional Interest, if any, on the Securities, which shall have identical
terms as the underlying securities; PROVIDED that the Company may only issue
Additional Securities under this Indenture as payment of interest on the
Non-Consenting Securities with respect to that portion of the interest rate
thereon constituting the First Supplemental Indenture Interest Rate Increase,
and any balance of the interest payable on the Non-Consenting Securities shall
be payable in cash.  The Securities and
any Additional Securities issued as payment of interest, including Additional
Interest, if any, on the Securities shall be treated as a single class for all
purposes under this Indenture.


 


With respect to any such Additional Securities, the
Company shall deliver to the Trustee and the Paying Agent no later than two
Business Days prior to the relevant interest payment date, (i) with
respect to Securities that are in global form, an order to increase the principal
amount of such Global Securities by the relevant amount (or, if requested by
the Trustee or the Holder of such Global Securities, to authenticate a new
Global Security executed by the Company with such increased principal amounts)
or (ii) with respect to Securities that are in definitive form, the
required amount of new definitive Additional Securities and an order to
authenticate and deliver such Additional Securities to the registered Holder of
the definitive Securities.


 


Any such Additional Securities shall, after being
executed and authenticated pursuant to Section 2.03, be (i) deposited
into the account specified by the Holder or Holders thereof as of the relevant
record date if the Securities are held in global form or otherwise according to
the procedures of the Depositary or (ii) mailed to the person entitled
thereto as shown on the register for the definitive Securities as of the
relevant record date.  Alternatively, the
Company may direct the Paying Agent to make the appropriate amendments to the schedule of
principal amounts of the relevant Securities outstanding and arrange for
deposit into the account specified by the Holder or Holders thereof as of the
relevant record date.  Payment shall be
made in such form and upon such terms as specified herein and the Company shall
and Paying Agent may take additional steps as is necessary to effect such
payment.”


 


Section 2.04.                         Amendment
to Article IV.


 


(a)                                  Section 4.03(b)(iii) of
the Restated Indenture is hereby deleted in its entirety and replaced with the
following:


 


“(iii) Indebtedness (1) represented by the
Securities, (not including, except for clause (2) below, any Additional
Securities), the Exchange Notes and any replacement Securities issued pursuant
to this Indenture, (2) represented by Additional Securities issued from
time to time in payment of accrued interest on the Securities, including
payment of Additional Interest, (3) outstanding on the Closing Date (other
than the Indebtedness described in clauses (i) and (ii) above)
including, without limitation, the Senior Subordinated Notes and the May 2003
Notes, (4) consisting of Refinancing Indebtedness Incurred in respect of
any Indebtedness described in this clause (iii) (including Refinancing
Indebtedness) or Section 4.03(a) and (5) consisting of
Guarantees of any Indebtedness otherwise permitted by the terms of this
Indenture;”


 


5

















 


(b)                                 Section 4.03(c)(vii) of
the Restated Indenture is hereby deleted in its entirety and replaced with the
following:


 


“(vii) the accrual
of interest, accrual of dividends, the accretion of accreted value, the payment
of interest in the form of additional Indebtedness (including the issuance of
Additional Securities in payment of interest on the Securities) and the payment
of dividends or distributions in the form of additional Capital Stock shall not
be deemed an Incurrence of Indebtedness for purposes of this Section 4.03,”


 


Section 2.05.                         Amendment
to Article IX.


 


Section 9.01(a)(viii) of
the Restated Indenture is hereby deleted in its entirety and replaced with the
following:


 


“(viii) to provide for the issuance of the
Exchange Notes, Private Exchange Notes, or the Additional Securities which
shall have terms substantially identical in all material respects to the Securities
upon which they are issued, and which shall be treated, together with any
outstanding Securities upon which they are issued, as a single issue of
securities; and”


 


Section 2.06.                         Amendments
to Exhibit B-1.


 


(a)                                  Exhibit B-1 to the Restated
Indenture is hereby amended by deleting each reference to “11 5/8%” occurring
prior to Section 1 thereof and replacing it with “11.85%”.


 


(b)                                 The second paragraph of Section 1
of Exhibit B-1 to the Restated Indenture is hereby deleted in its entirety
and replaced with the following:


 


“Interest on the Consenting Securities will accrue
from the date of issuance at a rate of 11 5/8% per annum through and including
the day immediately preceding the First Supplemental Indenture Effective Date,
and from the First Supplemental Indenture Effective Date (inclusive thereof) at
a rate of 11.85% per annum until maturity, and will be payable, semiannually on
each June 15 and December 15 commencing June 15, 2005, to
Holders of record on the immediately preceding June 1 and December 1.  On each Interest Payment Date, the Company
shall, in lieu of the payment of interest on the Consenting Securities in cash,
pay interest on the Consenting Securities through the issuance of Additional
Securities in an aggregate principal amount equal to the aggregate amount of
interest (rounded to the nearest whole cent) that would be payable with respect
to the Consenting Securities if such interest were paid in cash.  On or before each such Interest Payment Date,
the Company shall deliver to the Trustee and the Paying Agent [an order to
increase the principal amount of this Consenting Security by the amount
required to pay such interest (or, if requested by the Trustee or the Holder of
this Consenting Security, to authenticate a new global Security executed by the
Company with such increased principal amounts)] (3) [new Additional
Securities in the amount required to pay such interest and an order to
authenticate and deliver such Additional Securities to the record Holder of
this Consenting Security] (4).  Any
Additional Securities so issued shall be dated the applicable Interest Payment
Date, shall bear interest from and after such date, shall 


 


6

















 


mature on June 15, 2009 and shall be governed by, and be subject
to the terms of the Indenture and shall have the same rights and benefits as
the Consenting Securities.  Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.”


 


(c)                                  The first paragraph of Section 4
of Exhibit B-1 to the Restated Indenture is hereby deleted in its entirety
and replaced with the following:


 


“The Company issued the Securities under an Indenture
dated as of February 17, 2004, as amended and restated as of May 6,
2005 and thereafter amended by a First Supplemental Indenture thereto dated as
of July 18, 2006 (as amended, the “Indenture”), among the Company, the
Note Guarantors and the Trustee.  The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and
provisions of the Indenture, and Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions.”


 


Section 2.07.                         Amendments
to Exhibit B-2.


 


(a)                                  Exhibit B-2 to the Restated
Indenture is hereby amended by deleting each reference to “11 1/8%” occurring
prior to Section 1 thereof and replacing it with “11.35%”.


 


(b)                                 Section 1 of Exhibit B-2
to the Restated Indenture is hereby deleted in its entirety and replaced with
the following:


 


“1.                                 ACCRETED VALUE; INTEREST


 


PLIANT CORPORATION, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the “Company”), promises to pay interest on
the principal amount of this Non-Consenting Security at the rate per annum
shown above.


 


Unless the Company elects to pay cash interest as
described below, no cash interest will accrue on the Non-Consenting Securities
prior to December 15, 2006. The Accreted Value of each Non-Consenting
Security will increase from the date of issuance until December 15, 2006,
at a rate of 11 1/8% per annum, commencing June 15, 2004 through and
including the day immediately preceding the First Supplemental Indenture
Effective Date and at a rate of 11.35% per annum commencing on the First
Supplemental Indenture Effective Date (inclusive thereof) through and including
December 15, 2006, in each case compounded semiannually on each June 15
and December 15 and reflecting the accrual of non-cash interest, such that
the Accreted Value will equal 100.088% of the stated principal amount at
maturity on December 15, 2006. 
Interest on the Non-Consenting Securities will accrue at the rate of
11.35% per annum from December 15, 2006, or from the most recent date to
which interest has been paid or provided for, and, except as set forth in the
immediately following sentence, will be payable in


 


7

















 


cash semiannually on June 15 and December 15 of each year
(each an “Interest Payment Date”), commencing on June 15, 2007, to holders
of record on the immediately preceding June 1 and December 1,
respectively.  On each Interest Payment
Date commencing with the Interest Payment Date on June 15, 2007, the
Company shall pay interest on the Non-Consenting Securities through the
issuance of Additional Securities in an aggregate principal amount equal to the
aggregate amount of interest (rounded to the nearest whole cent) payable with
respect to the First Supplemental Indenture Interest Rate Increase accruing on
the Non-Consenting Securities, and the Company shall pay the balance of the
interest payable on the Non-Consenting Securities in cash.  On or before each such Interest Payment Date,
the Company shall deliver to the Trustee and the Paying Agent [an order to
increase the principal amount of this Non-Consenting Security by the amount
required to pay the First Supplemental Indenture Interest Rate Increase  (or, if requested by the Trustee or the
Holder of this Consenting Security, to authenticate a new global Security
executed by the Company with such increased principal amounts)] (11)  [new Additional Securities in the amount
required to pay the First Supplemental Indenture Interest Rate Increase and an
order to authenticate and deliver such Additional Securities to the record
Holder of this Non-Consenting Security](12). 
Notwithstanding the foregoing, on any Interest Payment Date prior to December 15,
2005, the Company may elect to commence to pay cash interest (from and after
such Interest Payment Date), in which case (i) the Company will be
obligated to pay cash interest on each subsequent Interest Payment Date, (ii) the
Non-Consenting Securities  will cease to
accrete after such Interest Payment Date and (iii) the outstanding
principal amount at Stated Maturity of each Non-Consenting Security will be
equal to the Accreted Value of such Non-Consenting Security as of such Interest
Payment Date.  Interest and Accreted
Value will be computed on the basis of a 360-day year comprised of twelve 30-day
months.  The Company shall pay interest
on overdue principal at the rate borne by the Non-Consenting Securities, and it
shall pay interest on overdue installments of interest at the same rate to the
extent lawful.  Interest will be payable
as described in the foregoing paragraph, except as described under paragraph 14
of this Non-Consenting Security.


 


“Accreted Value” as of any date (the “Specified Date”)
means, with respect to each $1,000 principal amount at maturity of the
Non-Consenting Securities (subject to the last sentence of this definition):


 


(i)                                     if the Specified Date is one of the
following dates (each a “Semi-Annual Accretion Date”), the amount set forth
opposite each date below:


 


	
  SEMI-ANNUAL ACCRETION DATE

  	
   

  	
  ACCRETED VALUE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Original Issue Date

  	
   

  	
  $

  	
  736.27

  	
   

  
	
  June 15, 2004

  	
   

  	
  $

  	
  762.87

  	
   

  
	
  December 15, 2004

  	
   

  	
  $

  	
  805.31

  	
   

  
	
  June 15, 2005

  	
   

  	
  $

  	
  850.10

  	
   

  
	
  December 15, 2005

  	
   

  	
  $

  	
  897.39

  	
   

  
	
  June 15, 2006

  	
   

  	
  $

  	
  947.31

  	
   

  
	
  December 15, 2006

  	
   

  	
  $

  	
  1,000.88

  	
   

  



 


(ii)                                  if the Specified Date occurs between two
Semi-Annual Accretion Dates, the sum of (a) the Accreted Value for the
Semi-Annual Accretion Date immediately preceding the


 


8

















 


Specified Date and (b) an amount equal to the product of
(x) the Accreted Value for the immediately following Semi-Annual Accretion
Date less the Accreted Value of the immediately preceding Semi-Annual Accretion
Date and (y) the fraction, the numerator of which is the number of days
actually elapsed from the immediately preceding Semi-Annual Accretion Date and
the denominator of which is 180; PROVIDED, HOWEVER, that if the Specified Date
occurs between June 15, 2006 and December 15, 2006, Accreted Value
means the sum of (a) $947.31, (b) an amount equal to the product of
(x) $52.69 and (y) the fraction, the numerator of which is the number of days
actually elapsed from June 15, 2006 or, if the Specified Date is on or
after July 18, 2006, 32 days and the denominator of which is 180 and (c) an
amount equal to the product of (x) $53.76 and (y) the fraction, the numerator
of which is the number of days actually elapsed from the First Supplemental
Indenture Effective Date (inclusive thereof but not to exceed 148 days) and the
denominator of which is 180; or


 


(iii)                               if the Specified Date is after December 15, 2006,
all references in this document to Accreted Value in respect of any
Non-Consenting Security shall be to the aggregate principal amount of such
Non-Consenting Security, which shall be equal to the sum of (i) the
Accreted Value of such Non-Consenting Security on December 15, 2006 plus (ii) the
aggregate principal amount of Additional Securities issued on such
Non-Consenting Security after December 15, 2006 to effect the First
Supplemental Indenture Interest Rate Increase (such First Supplemental
Indenture Interest Rate Increase being compounded semi-annually on each June 15
and December 15).


 


For the purposes hereof, if the Specified Date is
prior to December 15, 2006 but on or after the date on which the Company
elects to commence to pay cash interest (the “Cash Election Date”), all
references in this document to Accreted Value in respect of any Non-Consenting
Security shall be to the aggregate principal amount of such Non-Consenting
Security, which shall be equal to the Accreted Value of such Non-Consenting
Security as of the Cash Election Date determined in accordance with clauses (i) and
(ii) above.


 






(11)  Insert if the Security is to be issued in
global form.


 


(12)  Insert if the Security is to be issued in
definitive form.”


 


(c)                                  Section 2 of Exhibit B-2
to the Restated Indenture is hereby deleted in its entirety and replaced with
the following:


 


“2.                                 METHOD
OF PAYMENT


 


The Company shall pay interest on the Non-Consenting
Securities (except defaulted interest) to the Persons who are registered
Holders at the close of business on the June 1 and December 1 next
preceding the Interest Payment Date even if the Non-Consenting Securities are
canceled after the record date and on or before the Interest Payment Date.  Holders must surrender Non-Consenting
Securities to a Paying Agent to collect principal payments.  The Company shall pay principal, premium, if
any, and, except as set forth in paragraph 1, interest in money of the United
States of America that at the time of payment is legal tender for payment of


 


9

















 


public and private debts. 
Payments in respect of the Non-Consenting Securities represented by a
Global Security (including principal, premium and interest) shall be made by
wire transfer of immediately available funds to the accounts specified by the
Depository Trust Company or any successor depositary; PROVIDED that any such
payment of interest in the form of Additional Securities shall be made in
accordance with paragraph 1.  The Company
will make all payments in respect of a certificated Non-Consenting Security
(including principal, premium, if any and interest), at the office of the
Paying Agent, except that, at the option of the Company, payment of interest
may be made by mailing a check to the registered address of each Holder
thereof; PROVIDED, HOWEVER, that payments on the Non-Consenting Securities may
also be made, in the case of a Holder of at least $1,000,000 aggregate
principal amount at maturity of Non-Consenting Securities by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the United States if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 30 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).”


 


(d)                                 The first paragraph of Section 4
of Exhibit B-2 to the Restated Indenture is hereby deleted in its entirety
and replaced with the following:


 


“The Company issued the Securities under an Indenture
dated as of February 17, 2004, as amended and restated on May 6, 2005
and thereafter amended by a First Supplemental Indenture thereto dated as of July 18,
2006 (as amended, the “Indenture”), among the Company, the Note Guarantors and
the Trustee.  The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb)
as in effect on the date of the Indenture (the “TIA”).  Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture.  The Securities are subject to all terms and
provisions of the Indenture, and Holders (as defined in the Indenture) are
referred to the Indenture and the TIA for a statement of such terms and
provisions.”


 


(e)                                  Section 9 of Exhibit B-2
to the Restated Indenture is hereby deleted in its entirety and replaced with
the following:


 


“9.                                 DENOMINATIONS;
TRANSFER; EXCHANGE


 


The Non-Consenting Securities are in registered form
without coupons in denominations of $1,000 principal amount at maturity and
whole multiples of $1,000 principal amount at maturity; PROVIDED that
Additional Securities issued as payment of interest on the Non-Consenting
Securities shall be issued in denominations of $0.01 and integral multiples of
$0.01.  A Holder may transfer or exchange
Non-Consenting Securities in accordance with the Indenture.  Upon any transfer or exchange, the Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture.  The
Registrar need not register the transfer of or exchange any Non-Consenting
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or to
transfer or


 


10

















 


exchange any non-Consenting Securities for a period of 15 days prior to
a selection of Non-Consenting Securities to be redeemed.”


 


Section 2.08.                         Amendments
to Outstanding Senior Secured Notes


 


(a)                                  The global Senior Secured Note
identified below, constituting all of the Senior Secured Notes outstanding on
the date hereof, is hereby amended to the same extent as set forth in Sections
2.01 and 2.06 of this Supplemental Indenture with the same force and effect as
if such amendments were set forth therein:


 


	
  Designation

  	
   

  	
  Certificate No.

  	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11 5/8% Senior Secured
  Note due 2009

  	
   

  	
  1

  	
   

  	
  729136 AM 3

  	
   

  



 


except that the third sentence of the second
paragraph of Section 1 of such Senior Secured Note shall read as follows:


 


“On or before each such Interest Payment Date, the
Company shall deliver to the Trustee and the Paying Agent an order to increase
the principal amount of this Consenting Security by the amount required to pay
such interest (or, if requested by the Trustee or the Holder of this Consenting
Security, to authenticate a new global Security executed by the Company with
such increased principal amounts).”


 


(b)                                 Pursuant to Section 9.05 of
the Restated Indenture, the Trustee shall make a notation on such Senior
Secured Note substantially as follows:


 


“The terms of this Senior Secured Note (this “Note”)  have been amended pursuant to that certain
First Supplemental Indenture, dated as of July 18, 2006 (the “Effective
Date”), among Pliant Corporation, the Note Guarantors listed on the signature pages thereto
and Wilmington Trust Company, as Indenture Trustee.  The primary effect of the amendments is to
increase the rate of interest accrual on this Note to 11.85% from and after the
Effective Date.”


 


Section 2.09.                         Amendments
to Outstanding Senior Secured Discount Notes.


 


(a)                                  The global Senior Secured
Discount Note identified below, constituting all of the Senior Secured Discount
Notes outstanding on the date hereof, is hereby amended to the same extent as
set forth in Sections 2.01 and 2.07 of this Supplemental Indenture with the same
force and effect as if such amendments were set forth therein:


 


11

















 


	
  Designation

  	
   

  	
  Certificate No.

  	
   

  	
  CUSIP No.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11 1/8% Senior Secured
  Discount Note due 2009

  	
   

  	
  1

  	
   

  	
  729136 AJ 0

  	
   

  



 


except that the fifth sentence of the second
paragraph of Section 1 of such Senior Secured Discount Note shall read as
follows:


 


“On or before each such Interest Payment Date, the
Company shall deliver to the Trustee and the Paying Agent an order to increase
the principal amount of this Non-Consenting Security by the amount required to
pay the First Supplemental Indenture Interest Rate Increase  (or, if requested by the Trustee or the
Holder of this Consenting Security, to authenticate a new global Security
executed by the Company with such increased principal amounts).”


 


(b)                                 Pursuant to Section 9.05 of
the Restated Indenture, the Trustee shall make a notation on such Senior
Secured Discount Note substantially as follows:


 


“The terms of this Senior Secured Discount Note (this “Note”)  have been amended pursuant to that certain
First Supplemental Indenture, dated as of July 18, 2006 (the “Effective
Date”), among Pliant Corporation, the Note Guarantors listed on the signature pages thereto
and Wilmington Trust Company, as Indenture Trustee.  The primary effect of the amendments is to
increase the accreted value of this Note by .225% per annum from the Effective
Date until December 15, 2006, and thereafter to increase the rate of
interest accrual on this Note to 11.35%. with .225% of such accrual to be paid
semi-annually through the issuance of Additional Securities.”


 


ARTICLE III


 


MISCELLANEOUS


 


Section 3.01.                                   Effectiveness and Operation of
Supplemental Indenture.


 


(a)                                  This Supplemental Indenture shall be
effective upon execution hereof by the Company, the Guarantors and the
Trustee.  From and after such date, the
Amendment set forth herein shall be deemed to have modified the applicable
sections, or portions thereof, or clauses of the Restated Indenture identified
in Sections 2.01 through 2.07 and the Notes identified in Sections 2.08 and
2.09 hereof.


 


(b)                                 The Restated
Indenture and the Notes shall be read together with this Supplemental Indenture
and shall have the same effect over the Restated Indenture and the Notes in the
same manner as if the provisions of this Supplemental Indenture were contained
in the Restated Indenture and the Notes.


 


12

















 


(c)                                  The Company
hereby expressly assumes the obligations of Pliant Utah under the Restated Indenture,
the Notes and the security documents related thereto and in all other respects,
the Restated Indenture and the Notes are confirmed by the parties hereto as
supplemented by the terms of this Supplemental Indenture.


 


(d)                                 In the event
that there is a conflict or inconsistency between the Restated Indenture or the
Notes and this Supplemental Indenture, the provisions of this Supplemental
Indenture shall control.


 


Section 3.02.                                   Trust Indenture Act Controls.


 


If
any provision of this Supplemental Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Supplemental
Indenture by the TIA, the required provision shall control.  If any provision of this Supplemental Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Supplemental Indenture as so modified.  If any provision of this Supplemental
Indenture excludes any TIA provision that may be so excluded, such TIA
provision shall be excluded from this Supplemental Indenture.


 


Section 3.03.                                   GOVERNING LAW.


 


THIS SUPPLEMENTAL INDENTURE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.


 


Section 3.04.                                   Counterparts.


 


The parties may sign any
number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.


 


Section 3.05.                                   Successors.


 


All agreements of the
Company and the Guarantors in this Supplemental Indenture shall bind their
respective successors.  All agreements of
the Trustee in this Supplemental Indenture shall bind its successors.


 


Section 3.06.                                   Severability.


 


In case any provision in
this Supplemental Indenture shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


 


Section 3.07.                                   Effect of Headings.


 


The headings of the Articles
and Sections of this Supplemental Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.


 


13

















 


Section 3.08.                                   Trustee.


 


The Trustee shall not be
responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals
contained herein, all of which recitals are made solely by the Company and the
Guarantors.


 


*   
*    *    *   
*


 


14

















 


IN WITNESS WHEREOF, the parties
hereto have caused this Supplemental Indenture to be duly executed as of the
date first above written.


 


	
   

  	
  PLIANT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Kwederis

  	
   

  
	
   

  	
   

  	
  Joseph Kwederis

  
	
   

  	
   

  	
  Senior Vice President and Chief Financial

  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLIANT CORPORATION INTERNATIONAL

  
	
   

  	
  PLIANT FILM PRODUCTS OF MEXICO,
  

  INC.

  
	
   

  	
  UNIPLAST HOLDINGS, INC.

  
	
   

  	
  UNIPLAST U.S., INC.

  
	
   

  	
  UNIPLAST INDUSTRIES CO.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Kwederis

  	
   

  
	
   

  	
   

  	
  Joseph Kwederis

  
	
   

  	
   

  	
  Executive Vice President and Chief Financial

  
	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PLIANT PACKAGING OF CANADA, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harold C. Bevis

  	
   

  
	
   

  	
   

  	
  Harold C. Bevis

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Suzanne J. MacDonald

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Suzanne J. MacDonald

  	
   

  
	
   

  	
   

  	
  Title:

  	
  V.P.

  	
   

  
							



 


15