**Exhibit10.2**

FIXED ASSET CREDITAGREEMENT

dated as of

July 18, 2006

among

PLIANTCORPORATION PTY LTD.,PLIANT CORPORATION OF CANADA LTD., PLIANT FILM PRODUCTS GMBHandASPEN INDUSTRIAL, S.A. DE C.V.,as Borrowers,

The Lenders Party Hereto,

and

MERRILL LYNCH BANKUSA,as Administrative Agent

*** * ***

**MERRILL LYNCH COMMERCIAL FINANCE CORP.,**as Sole Lead Arranger andBook Manager

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**TABLE OF CONTENTS**
|               | ** **                                                  | **Page** |
|---------------|-------------------------------------------------------------|----------|
|          |                                                        |     |
| ARTICLE I     | Definitions                                                 | 1        |
| Section 1.01. | Defined Terms                                               | 1        |
| Section 1.02. | Classification of Loans  and Borrowings                     | 36       |
| Section 1.03. | Terms Generally                                             | 36       |
| Section 1.04. | Accounting Terms; GAAP                                      | 36       |
| ARTICLE II    | The Credits                                                 | 37       |
| Section 2.01. | Commitments                                                 | 37       |
| Section 2.02. | Loans and Borrowings                                        | 38       |
| Section 2.03. | Requests for Borrowings                                     | 39       |
| Section 2.04. | [Intentionally Omitted]                                     | 39       |
| Section 2.05. | [Intentionally Omitted]                                     | 39       |
| Section 2.06. | Funding of Borrowings                                       | 39       |
| Section 2.07. | Interest Elections                                          | 40       |
| Section 2.08. | Termination and  Reduction of Commitments                   | 41       |
| Section 2.09. | Repayment of Loans;  Evidence of Debt                       | 41       |
| Section 2.10. | Prepayment of Loans                                         | 42       |
| Section 2.11. | [Intentionally Omitted]                                     | 46       |
| Section 2.12. | Interest                                                    | 46       |
| Section 2.13. | Alternate Rate of  Interest                                 | 47       |
| Section 2.14. | Increased Costs                                             | 47       |
| Section 2.15. | Break Funding Payments                                      | 48       |
| Section 2.16. | Taxes                                                       | 49       |
| Section 2.17. | Payments Generally; Pro  Rata Treatment; Sharing of Setoffs | 50       |
| Section 2.18. | Mitigation Obligations                                      | 53       |
| Section 2.19. | [Intentionally Omitted]                                     | 54       |
| Section 2.20. | The Administrative  Borrower                                | 54       |
| ARTICLE III   | Representations and  Warranties                             | 54       |
| Section 3.01. | Organization; Powers                                        | 54       |
| Section 3.02. | Authorization;  Enforceability                              | 55       |
| Section 3.03. | Governmental Approvals;  No Conflicts                       | 55       |
|               |                                                             |          |  |  |

 

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|               | ** **                                      | **Page** |
|---------------|-------------------------------------------------|----------|
|          |                                            |     |
| Section 3.04. | Financial Condition; No Material Adverse Change | 55       |
| Section 3.05. | Properties                                      | 56       |
| Section 3.06. | Litigation and  Environmental Matters           | 56       |
| Section 3.07. | Compliance with Laws  and Agreements            | 57       |
| Section 3.08. | Investment Company  Status                      | 57       |
| Section 3.09. | Taxes                                           | 57       |
| Section 3.10. | ERISA                                           | 57       |
| Section 3.11. | Disclosure                                      | 57       |
| Section 3.12. | Subsidiaries; Loan  Party Information           | 58       |
| Section 3.13. | Insurance                                       | 58       |
| Section 3.14. | Labor Matters                                   | 58       |
| Section 3.15. | Solvency                                        | 58       |
| Section 3.16. | Security Documents                              | 59       |
| Section 3.17. | Federal Reserve  Regulations                    | 59       |
| Section 3.18. | Senior Secured  Obligations                     | 60       |
| Section 3.19. | Related Names                                   | 60       |
| Section 3.20. | Permanent Establishment  in Canada              | 60       |
| Section 3.21. | Canadian Pension Plans                          | 60       |
| ARTICLE IV    | Conditions                                      | 61       |
| Section 4.01. | Effective Date                                  | 61       |
| Section 4.02. | Each Credit Event                               | 65       |
| Section 4.03. | Australian Effective  Date                      | 66       |
| ARTICLE V     | Affirmative Covenants                           | 68       |
| Section 5.01. | Financial Statements  and Other Information     | 68       |
| Section 5.02. | Notices of Material  Events                     | 70       |
| Section 5.03. | Information Regarding  Collateral               | 71       |
| Section 5.04. | Existence; Conduct of  Business                 | 71       |
| Section 5.05. | Payment of Obligations;  Compliance with Leases | 71       |
| Section 5.06. | Maintenance of  Properties                      | 72       |
|               |                                                 |          |  |  |

 

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|               | ** **                                                      | **Page** |
|---------------|-----------------------------------------------------------------|----------|
|          |                                                            |     |
| Section 5.07. | Insurance                                                       | 72       |
| Section 5.08. | Casualty and  Condemnation                                      | 73       |
| Section 5.09. | Books and Records;  Inspection and Audit Rights                 | 73       |
| Section 5.10. | Compliance with Laws                                            | 74       |
| Section 5.11. | Use of Proceeds                                                 | 74       |
| Section 5.12. | Additional Subsidiaries                                         | 74       |
| Section 5.13. | Further Assurances                                              | 74       |
| Section 5.14. | Supplemental Disclosure                                         | 75       |
| Section 5.15. | Intellectual Property                                           | 75       |
| Section 5.16. | Landlord Lien Waivers,  Mortgagee Agreements and Bailee Letters | 75       |
| Section 5.17. | Depository Banks.                                               | 76       |
| Section 5.18. | ERISA                                                           | 77       |
| Section 5.19. | Post-Closing Conditions                                         | 77       |
| Section 5.20. | Canadian Pension Plans                                          | 77       |
| ARTICLE VI    | Negative Covenants                                              | 78       |
| Section 6.01. | Indebtedness                                                    | 78       |
| Section 6.02. | Certain Equity  Securities                                      | 79       |
| Section 6.03. | Liens                                                           | 79       |
| Section 6.04. | Fundamental Changes                                             | 81       |
| Section 6.05. | Investments, Loans,  Advances, Guarantees and Acquisitions      | 82       |
| Section 6.06. | Asset Sales                                                     | 83       |
| Section 6.07. | Sale and Lease-Back  Transactions                               | 84       |
| Section 6.08. | Swap Agreements                                                 | 84       |
| Section 6.09. | Restricted Payments; Certain  Payments of Indebtedness          | 85       |
| Section 6.10. | Transactions with  Affiliates                                   | 85       |
| Section 6.11. | Restrictive Agreements                                          | 86       |
| Section 6.12. | Amendment of Material  Documents                                | 87       |
| Section 6.13. | Designated Senior Debt                                          | 87       |
|               |                                                                 |          |  |  |

 

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|               | ** **                                                         | **Page** |
|---------------|--------------------------------------------------------------------|----------|
|          |                                                               |     |
| Section 6.14. | Cash Held by Loan Parties                                          | 87       |
| Section 6.15. | ERISA                                                              | 87       |
| Section 6.16. | Cancellation of  Indebtedness                                      | 87       |
| Section 6.17. | Change in Fiscal Year;  Accounting Policies                        | 87       |
| Section 6.18. | Financial Covenants                                                | 88       |
| Section 6.19. | [Intentionally Omitted]                                            | 88       |
| Section 6.20. | [Intentionally Omitted]                                            | 88       |
| ARTICLE VII   | Events of Default                                                  | 88       |
| ARTICLE VIII  | The Administrative  Agent                                          | 91       |
| Section 8.01. | Authorization, Action,  Etc                                        | 91       |
| Section 8.02. | Declaration of Trust  (Treuhand) and Appointment as Administrator  | 93       |
| Section 8.03. | Quebec Security                                                    | 94       |
| ARTICLE IX    | Miscellaneous                                                      | 94       |
| Section 9.01. | Notices                                                            | 94       |
| Section 9.02. | Waivers; Amendments                                                | 95       |
| Section 9.03. | Expenses; Indemnity;  Damage Waiver; Joint and Several Obligations | 97       |
| Section 9.04. | Successors and Assigns                                             | 98       |
| Section 9.05. | Survival                                                           | 102      |
| Section 9.06. | Counterparts;  Integration; Effectiveness                          | 102      |
| Section 9.07. | Severability                                                       | 103      |
| Section 9.08. | Right of Setoff                                                    | 103      |
| Section 9.09. | Governing Law;  Jurisdiction; Consent to Service of Process        | 103      |
| Section 9.10. | WAIVER OF JURY TRIAL                                               | 104      |
| Section 9.11. | Headings                                                           | 104      |
| Section 9.12. | Confidentiality                                                    | 104      |
| Section 9.13. | Conversion of  Currencies                                          | 105      |
| Section 9.14. | Interest Rate  Limitation                                          | 106      |
| Section 9.15. | Parallel Obligations                                               | 106      |
|               |                                                                    |          |  |  |

 

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SCHEDULES:
| Schedule 1.01(a) |   | Mortgaged Properties                       |
|-----------------------|--------|--------------------------------------------|
| Schedule 1.01(b) |   | Existing Letters of Credit                 |
| Schedule 1.01(c) |   | Borrower Account                           |
| Schedule 2.01(a) |   | Commitments                                |
| Schedule 3.05    |   | Owned or Leased Property                   |
| Schedule 3.12(a) |   | Subsidiaries                               |
| Schedule 3.12(b)      |   | Loan Party Information                     |
| Schedule 3.13    |   | Insurance                                  |
| Schedule 3.16(d) |   | Mortgage Filing Offices                    |
| Schedule 5.07    |   | Insurance Levels                           |
| Schedule 5.17         |   | Deposit Accounts                           |
| Schedule 5.19    |   | Post-Closing Conditions                    |
| Schedule 6.01    |   | Existing Indebtedness                      |
| Schedule 6.03    |   | Existing Liens                             |
| Schedule 6.05(b) |   | Existing Investments                       |
| Schedule 6.06         |   | Asset Sales                                |
| Schedule 6.10    |   | Affiliate Transactions                     |
| Schedule 6.11    |   | Existing Restrictions                      |
|                  |   |                                       |
| EXHIBITS:             |   |                                       |
|                  |   |                                       |
| Exhibit A        |   | Form of Assignment and Assumption          |
| Exhibit B-1      |   | [Intentionally Omitted]                    |
| Exhibit B-2      |   | Form of Foreign Guarantee Agreement        |
| Exhibit C-1      |   | [Intentionally Omitted]                    |
| Exhibit C-2      |   | [Intentionally Omitted]                    |
| Exhibit C-3      |   | [Intentionally Omitted]                    |
| Exhibit C-4      |   | [Intentionally Omitted]                    |
| Exhibit C-5      |   | Form of Mexican Pledge Agreement           |
| Exhibit D-1      |   | [Intentionally Omitted]                    |
| Exhibit D-2      |   | [Intentionally Omitted]                    |
| Exhibit D-3      |   | Form of Canadian Security Agreement        |
| Exhibit D-4      |   | Form of German Global Assignment Agreement |
| Exhibit D-5      |   | Form of Mexican Security Agreement         |
| Exhibit E        |   | Form of Borrowing Base Certificate         |
| Exhibit F             |   | Form of Perfection Certificate             |
| Exhibit G             |   | Form of Borrowing Request                  |
| Exhibit H             |   | Form of Compliance Certificate             |
| Exhibit I             |   | [Intentionally Omitted]                    |

 

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| Exhibit J |   | [Intentionally Omitted]       |
|-----------|--------|-------------------------------|
| Exhibit K |   | Form of Revolving Credit Note |

 

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FIXED ASSET CREDIT AGREEMENT, dated as of July 18,2006 (this, “Agreement”), among PLIANT CORPORATION PTY LTD., PLIANT CORPORATION OF CANADA LTD., PLIANTFILM PRODUCTS GMBH and ASPEN INDUSTRIAL, S.A. DE C.V., as Borrowers(collectively, the “Borrowers”), the Lenders party hereto and MERRILLLYNCH BANK USA, as Administrative Agent (in such capacity, the “AdministrativeAgent”).

RECITALS

WHEREAS, the Borrowers have requested that the Lendersmake available for the purposes specified in this Agreement a revolving creditfacility; and

WHEREAS, the Lenders are willing to make available tothe Borrowers such revolving credit facility upon the terms and subject to theconditions set forth herein;

NOW THEREFORE, in consideration of the premises andother good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the parties hereto agree as follows:

ARTICLE IDEFINITIONS

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

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

“Administrative Agent” has the meaning assignedto such term in the preamble hereto.

“Administrative Borrower” has the meaningassigned to such term in Section 2.20.

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

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

“Agreement” has the meaning assigned to suchterm in the preamble hereto.

“Alternate Base Rate” means, for any day, arate per annum equal to the greater of (a) the Prime Rate in effect onsuch day and (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2of 1%.  Any change in the Alternate BaseRate due to a change in the Prime

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Rate or the Federal Funds Effective Rate shall beeffective from and including the effective date of such change in the PrimeRate or the Federal Funds Effective Rate, respectively.

“Applicable Percentage” means, (a) with respectto any Australian Lender, the percentage of the total amount of the AustralianRevolving Exposure represented by such Australian Lender’s Australian RevolvingExposure, (b) with respect to any Canadian Lender, the percentage of the totalamount of the Canadian Revolving Exposure represented by such Canadian Lender’sCanadian Revolving Exposure, (c) with respect to any German Lender, thepercentage of the total amount of the German Revolving Exposure represented bysuch German Lender’s German Revolving Exposure, and (d) with respect to anyMexican Lender, the percentage of the total amount of the Mexican RevolvingExposure represented by such Mexican Lender’s Mexican Revolving Exposure.  If the Commitments have terminated orexpired, the Applicable Percentages shall be determined based upon theCommitments most recently in effect, giving effect to any assignments.  If any of the Australian Revolving Exposure,Canadian Revolving Exposure, German Revolving Exposure or Mexican RevolvingExposure is $0, the Applicable Percentage with respect to any AustralianLender, Canadian Lender, German Lender or Mexican Lender shall be determinedbased upon the percentage of the total amount of the Commitments represented bysuch Australian Lender’s, Canadian Lender’s, German Lender’s or Mexican Lender’sCommitment, as applicable.

“Applicable Rate” means, as of each date ofdetermination, with respect to any ABR Loan or Eurodollar Loan, the applicablerate per annum set forth below under the caption “ABR Spread” or “EurodollarSpread”, as the case may be, based upon the Average Revolving Exposure for suchday (calculated as of the end of such day):
| **Average Revolving Exposure**                          | ** ** | **ABR Spread** | ** ** | **Eurodollar Spread** | ** ** |
|---------------------------------------------------------|------------|----------------|------------|-----------------------|------------|
| Category 1  Greater than 75% of Available Credit        |       | 2.00           | %          | 3.00                  | %          |
| Category 2Less than or equal to 75% of Available Credit |       | 1.75           | %          | 2.75                  | %          |

 

Each date of determination for the Applicable Rateshall be on each Interest Payment Date. Changes in the Applicable Rate resulting from a change in the AverageRevolving Exposure on any date of determination shall become effective as toall ABR Loans and Eurodollar Loans from and including the first day followingsuch date of determination. Notwithstanding the foregoing, the Applicable Rate with respect to anyABR Loan or Eurodollar Loan will be determined by reference to Category 1(i) at any time that an Event of Default has occurred and is continuing or(ii) if the Administrative Borrower fails to deliver any Borrowing BaseCertificate required to be delivered by it pursuant to Section 5.01(f),during the period from the expiration of the time for delivery thereof untilthe Administrative Borrower delivers such Borrowing Base Certificate.

“Approved Fund” means any Person (other than anatural person) that is engaged in making, purchasing, holding or investing inbank loans and similar extensions of credit in the ordinary course of itsbusiness and that is administered, managed or controlled by (a) a Lender,

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(b) an Affiliate of a Lender or (c) an entity or anAffiliate of an entity that administers, manages or controls a Lender.

“Arranger” means Merrill Lynch CommercialFinance Corp., as sole lead arranger and book manager for the Loans.

“Asset Disposition” means any sale, lease, saleand leaseback, assignment, conveyance, transfer or other disposition of assetsor property or series of related dispositions of assets or property (excludingany such disposition permitted by Section 6.06(a), (b), (c) and (g)) thatyields gross proceeds to the Parent or any of its Subsidiaries in excess of$1,000,000 in the aggregate for all such dispositions.

“Assignment and Assumption” means an assignmentand assumption entered into by a Lender and an assignee (with the consent ofany party whose consent is required by Section 9.04), and accepted bythe Administrative Agent, in the form of Exhibit A or any otherform approved by the Administrative Agent.

“Australian Availability Period” means theperiod from and including the Australian Effective Date to but excluding theearlier of the Maturity Date and the date of termination of the Commitments.

“Australian Borrowing Base” means, at any timeof determination, an amount equal to the sum, without duplication of:

(a)           (i) 75% of each Australian Loan Party’sEligible Real Estate valued at market value plus (ii) 85% of the NetOrderly Liquidation Value of each Australian Loan Party’s Eligible Machineryand Equipment, minus

(b)           the Rent Reserve with respect to eachAustralian Loan Party, minus

(c)           the Priority Payables Reserve withrespect to each Australian Loan Party, minus

(d)           the Secured Obligations Reserve withrespect to each Australian Loan Party, minus

(e)           any Reserves with respect to eachAustralian Loan Party.

The Australian Borrowing Base at any time shall bedetermined by reference to the most recent Borrowing Base Certificate deliveredto the Administrative Agent pursuant to this Agreement.  Standards of eligibility and reserves andadvance rates of the Australian Borrowing Base may be revised and adjusted fromtime to time solely at the commercially reasonable discretion of theAdministrative Agent, with any changes in such standards to be effectiveimmediately after delivery of notice thereof to the AdministrativeBorrower.  For purposes of calculatingthe Australian Borrowing Base on any date, all amounts reflected or outstandingin Australian Dollars shall be translated into dollars at the exchange rate ineffect on such date, as determined in good faith by the AdministrativeBorrower.

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“Australian Dollar” or “A$” refers tothe lawful money of Australia.

“Australian Effective Date” means the date onwhich the conditions specified in Section 4.03 are satisfied.

“Australian Lender” means each Lender or anyAffiliate of a Lender designated by such Lender to the Administrative Borroweras an “Australian Lender”.  TheAustralian Lender on the Effective Date shall be Merrill Lynch International(Australia) Limited.

“Australian Loan Party” means the AustralianSubsidiary Borrower and any other Loan Party organized under the laws ofAustralia or any state or province thereof.

“Australian Revolving Exposure” means, withrespect to any Australian Lender at any time, the sum of the outstandingprincipal amount of such Australian Lender’s Australian Revolving Loans.

“Australian Revolving Loan” means a Loan madeby an Australian Lender pursuant to Section 2.01(b).  Each Australian Revolving Loan shall be aEurodollar Loan or an ABR Loan.

“Australian Security Agreement” means anAustralian Security Agreement, in form and substance reasonably satisfactory tothe Administrative Borrower and the Administrative Agent, among the AustralianSubsidiary Borrower and the Administrative Agent, pursuant to which theAustralian Subsidiary Borrower will grant liens on its Foreign Fixed AssetCollateral and Foreign Working Capital Collateral in favor of Merrill LynchBank USA, for the ratable benefit of the Secured Parties, as security for theObligations, and each other security agreement or other instrument or documentexecuted and delivered by any Australian Loan Party to secure any of theObligations.

“Australian Sublimit” means $2,000,000.

“Australian Subsidiary Borrower” means PliantCorporation Pty Ltd., a company organized under the laws of Australia (ABN 36055 367 925).

“Availability Amount” means, at any time, anamount equal to (a) the lesser of (i) the total amount of theCommitments at such time and (ii) the Borrowing Base in effect at suchtime minus (b) the total Revolving Exposure at such time.

“Available Credit” means, at any time, anamount equal to the lesser of (a) the total amount of the Commitments atsuch time and (b) the Borrowing Base in effect at such time.

“Average Revolving Exposure” means, for anyperiod, the average daily Revolving Exposure during such period.

“Bailee Letter” means a written agreement reasonablyacceptable to the Administrative Agent, pursuant to which a bailee of Equipmentof any Loan Party agrees to hold such Equipment for the benefit of theAdministrative Agent, to waive or subordinate its rights and claims as baileein such Equipment, including warehouseman’s liens, processor’s liens,

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rights of levy and distraint for rent, grant access tothe Administrative Agent for the repossession and sale of such Equipment, andmake other agreements relative thereto.

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

“Bankruptcy Court” means the United StatesBankruptcy Court for the District of Delaware.

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

“Borrower Account” means, with respect to eachBorrower, such Borrower’s account set forth on Schedule 1.01(c), as suchSchedule may be amended from time to time on five Business Days’ prior writtennotice from the Administrative Borrower to the Administrative Agent.

“Borrowers” has the meaning specified in thepreamble.

“Borrowing” means Loans of the same Class andType made, converted or continued on the same date and, in the case ofEurodollar Loans, as to which a single Interest Period is in effect.

“Borrowing Base” means, at any time ofdetermination, an amount equal to the sum, without duplication of theAustralian Borrowing Base, the Canadian Borrowing Base, the German BorrowingBase and the Mexican Borrowing Base.

“Borrowing Base Certificate” means a certificatesubstantially in the form of Exhibit E (with such changes thereinas may be required by the Administrative Agent, to reflect the components of,and reserves against, the Borrowing Base as provided for hereunder from time totime), executed and certified as accurate and complete by a Financial Officerof the Administrative Borrower, which certificate shall include appropriateexhibits, schedules, supporting documentation and reports as reasonablyrequested by the Administrative Agent.

“Borrowing Request” means a request by aBorrower for a Borrowing in substantially the form of Exhibit G hereto.

“Business Day” means any day that is not aSaturday, Sunday or other day on which commercial banks in New York Cityare authorized or required by law to remain closed; provided that (a)when used in connection with a Eurodollar Loan, the term “Business Day”shall also exclude any day on which banks generally are not open for dealingsin dollar deposits in the London interbank market, (b) when used in connectionwith any Australian Revolving Loan, the term “Business Day” shall also excludeany day on which banks are not open for deposits in Sydney, Australia, (c) whenused in connection with any Canadian Revolving Loan, the term “Business Day”shall also exclude any day on which banks are not open for deposits in Toronto,Canada, (d) when used in connection with any German Revolving Loan, the term “BusinessDay” shall also exclude any day on which banks are not open for deposits inBerlin, Germany,

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and (e) when used in connection with any MexicanRevolving Loan, the term “Business Day” shall also exclude any day on whichbanks are not open for deposits in Mexico City, Mexico.

“Canadian Borrowing Base” means, at any time ofdetermination, an amount equal to the sum, without duplication of:

(a)           (i) 75% of each Canadian Loan Party’sEligible Real Estate valued at market value plus (ii) 85% of the NetOrderly Liquidation Value of each Canadian Loan Party’s Eligible Machinery andEquipment, minus

(b)           the Rent Reserve with respect to eachCanadian Loan Party, minus

(c)           the Priority Payables Reserve withrespect to each Canadian Loan Party, minus

(d)           the Secured Obligations Reserve withrespect to each Canadian Loan Party, minus

(e)           any Reserves with respect to each CanadianLoan Party.

The Canadian Borrowing Base at any time shall bedetermined by reference to the most recent Borrowing Base Certificate deliveredto the Administrative Agent pursuant to this Agreement.  Standards of eligibility and reserves andadvance rates of the Canadian Borrowing Base may be revised and adjusted fromtime to time solely at the commercially reasonable discretion of theAdministrative Agent, with any changes in such standards to be effectiveimmediately after delivery of notice thereof to the AdministrativeBorrower.  For purposes of calculatingthe Canadian Borrowing Base on any date, all amounts reflected or outstandingin Canadian Dollars shall be translated into dollars at the exchange rate in effecton such date, as determined in good faith by the Administrative Borrower.

“Canadian Confirmation Order” means an order ofthe Canadian Court, which shall, among other things, order and declare that theConfirmation Order and the Plan of Reorganization are recognized and shall beimplemented, binding and effective in Canada in accordance with their terms asif originally made in Canada.

“Canadian Court” means the Ontario SuperiorCourt of Justice (Commercial List).

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

“Canadian Lender” means each Lender or anyAffiliate of a Lender designated by such Lender to the Administrative Borroweras a “Canadian Lender”.  The CanadianLender on the Effective Date shall be Merrill Lynch Capital Canada Inc.

“Canadian Lending Office” means, as to anyCanadian Lender, the applicable branch, office or Affiliate of such CanadianLender designated by such Canadian Lender to make Canadian Revolving Loans tothe Canadian Subsidiary Borrower.

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“Canadian Loan Party” means the CanadianSubsidiary Borrower and any other Loan Party organized under the laws of Canadaor any province or territory thereof.

“Canadian Pension Plan” means any pensionbenefit plan within the meaning of the Pension Benefits Act (Ontario) inrespect of which any Loan Party makes or has made contributions in respect ofits employees.

“Canadian Revolving Exposure” means, withrespect to any Canadian Lender at any time, the sum of the outstandingprincipal amount of such Canadian Lender’s Canadian Revolving Loans.

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

“Canadian Security Agreement” means theCanadian Security Agreement, substantially in the form of Exhibit D-3,from the Canadian Subsidiary Borrower in favor of the Administrative Agent, andeach other security agreement or other instrument or document executed anddelivered by any Canadian Loan Party to secure any of the Obligations.

“Canadian Sublimit” means $10,000,000.

“Canadian Subsidiary Borrower” means PliantCorporation of Canada Ltd., a limited liability company organized under thelaws of Ontario.

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

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

“Cash Amount” has the meaning assigned to suchterm in Section 2.10(g).

“Cash Collection Period” means the periodcommencing on the first Business Day after the occurrence of a Cash CollectionTriggering Event and ending on the date the Commitments have expired orterminated and the principal of and interest on each Loan and all fees payablehereunder have been paid in full.

“Cash Collection Triggering Event” means that(a) the Facilities Availability Amount at any time is less than $15,000,000 or(b) an Event of Default has occurred and is continuing.

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

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

“Change in Control” means, at any time,(a) the failure by the Control Group to own, directly or indirectly,beneficially and of record, common stock of the Parent representing at least25% of the issued and outstanding common stock of the Parent; (b) theacquisition of ownership, directly or indirectly, beneficially or of record, byany Person or group (within the meaning of the Securities Exchange Act of 1934and the rules of the SEC thereunder as in effect on the Effective Date) otherthan the Control Group, of common stock of the Parent representing more than50% of the issued and outstanding common stock of the Parent; (c) theoccupation of a majority of the seats (other than vacant seats) on the board ofdirectors of the Parent by Persons who were neither (i) nominated bymembers of the Control Group or the board of directors of the Parent nor(ii) appointed by directors so nominated; provided, however,that a Change in Control shall not have occurred under this clause (c) as aresult of the occurrence of a vacancy on the board of directors of the Parentif, within 30 days after the occurrence of such vacancy, such vacancy is filledby a person who is nominated by members of the Control Group; (d) theacquisition of ownership, directly or indirectly, beneficially or of record, byany Person other than the Parent (or a Wholly Owned Subsidiary of the Parent)of any Equity Interests in any Borrower; or (e) the occurrence of a “Changeof Control” as defined under the Senior First Lien Note Documents, the SeniorSecond Lien Note Documents or the Senior Subordinated Note Documents or a “LiquidationEvent” as defined under the terms of any Preferred Stock.

“Change in Law” means (a) the adoption ofany law, rule or regulation after the Effective Date, (b) any change inany law, rule or regulation or in the interpreta­tion or application thereof byany Governmental Authority after the Effective Date or (c) compliance byany Lender (or, for purposes of Section 2.14(b), by any lendingoffice of such Lender or by such Lender’s holding company, if any) with anyrequest, guideline or directive (whether or not having the force of law) of anyGovernmental Authority made or issued after the Effective Date.

“Chapter 11 Case” and Chapter 11 Cases”means the Chapter 11 Case Nos. 06-10000 through 06-10010, jointly administeredunder Chapter 11 Case No. 06-10001, of the Filing Companies pursuant to thevoluntary petitions for reorganization under the Bankruptcy Code filed with theBankruptcy Court.

“Class”, when used in reference to any Loan orBorrowing, refers to whether such Loan, or the Loans comprising such Borrowing,are Australian Revolving Loans, Canadian Revolving Loans, German RevolvingLoans or Mexican Revolving Loans.  “Class”,when used in reference to any Lender, refers to whether such Lender has a Loanor Commitment with respect to a particular Class.

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

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“Collateral” means any and all “Collateral”, asdefined in any applicable Security Document, and any and all other property andinterests in property and proceeds thereof now owned or hereafter acquired byany Loan Party in or upon which a Lien is granted under any Security Document.

“Collateral Proceeds Account” means an accountmaintained by and in the name of the Administrative Agent, and designated bythe Administrative Agent as the “Collateral Proceeds Account” for purposes ofthis Agreement and the other Loan Documents.

“Commitment” means, with respect to eachLender, the commitment of such  Lender tomake Revolving Loans hereunder, expressed as an amount representing the maximumaggregate amount of such Lender’s Revolving Exposure hereunder, as suchcommitment may be (a) reduced from time to time pursuant to Section2.08 and (b) reduced or increased from time to time pursuant toassignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’sCommitment is set forth on Schedule 2.01(a), or in the Assignmentand Assumption pursuant to which such Lender shall have assumed its Commitment,as applicable.  The initial aggregateamount of the Lenders’ Commitments is $15,000,000.

“Compliance Certificate” means a certificate insubstantially the form of Exhibit H hereto.

“Confirmation Order” has the meaning assignedto such term in Section 4.01(b).

“Consolidated EBITDA” means, for any period,Consolidated Net Income for such period, plus, without duplication andto the extent deducted from revenues in determining Consolidated Net Income,the sum of (a) the aggregate amount of Consolidated Interest Expense forsuch period, (b) the aggregate amount of income tax expense for suchperiod, (c) all amounts attributable to depreciation, amortization andother non-cash charges or losses for such period (but excluding any such chargethat requires an accrual of, or a cash reserve for, anticipated cash chargesfor any future period); provided that any non-cash charges or lossesthat are added-back to Consolidated Net Income pursuant to this clause (c)shall be treated as cash charges or losses in any subsequent period duringwhich cash disbursements attributable thereto are made; (d) non-cashexpenses resulting from the grant of stock options or other equity-relatedincentives to any director, officer or employee of the Parent or any Subsidiarypursuant to a written plan or agreement, (e) all non-recurring transactionand financing expenses resulting from the Transactions, (f) all non-recurringtransaction and financing expenses incurred in the fiscal quarter endedDecember 31, 2005 resulting from modifications to the Existing SeniorSubordinated Note Indenture entered into in connection with the Pre-PetitionLoan Agreement, (g) all losses during such period resulting from the sale orother disposition of any asset of the Parent or any Subsidiary outside theordinary course of business, (h) any Excluded Charges during such periodand (i) all non-recurring restructuring charges in connection with the Chapter11 Cases specifically identified by the Administrative Borrower to theAdministrative Agent and incurred not later than October 31, 2006 and minus,without duplication and to the extent added to revenues in determiningConsolidated Net Income for such period, (a) all extraordinary gainsduring such period and (b) all gains during such period resulting from thesale or other disposition of any asset of the Parent or any Subsidiary outsidethe ordinary course of business, all as determined on a consolidated basis withrespect to the Parent and the Subsidiaries in

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accordance with GAAP. If the Parent or any Subsidiary has made any sale, transfer, lease orother disposition of assets outside of the ordinary course of businesspermitted by Section 6.06 during the relevant period fordetermining Consolidated EBITDA, Consolidated EBITDA for the relevant periodshall be calculated after giving pro forma effect thereto, as if such sale,transfer, lease or other disposition of assets (and any related incurrence,repayment or assumption of Indebtedness, with any new Indebtedness being deemedto be amortized over the relevant period in accordance with its terms, andassuming that any Loans borrowed in connection with such acquisition are repaidwith excess cash balances when available) had occurred on the first day of therelevant period for determining Consolidated EBITDA.

“Consolidated Interest Expense” means, for anyperiod, the interest expense, both expensed and capitalized (including theinterest component in respect of Capital Lease Obligations), accrued by theParent and the Subsidiaries during such period (net of payments made orreceived under interest rate protection agreements and net of interest income),determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, for anyperiod, net income or loss of the Parent and the Subsidiaries for such perioddetermined on a consolidated basis in accordance with GAAP; providedthat there shall be excluded (a) the income of any unconsolidatedSubsidiary and any Person in which any other Person (other than the Parent orany of the Subsidiaries or any director holding qualifying shares in compliancewith applicable law or any other third party holding a de minimus number ofshares in order to comply with other similar requirements) has an EquityInterest, except to the extent of the amount of dividends or otherdistributions actually paid by such Subsidiary or other Person during suchperiod to the Parent or any other Subsidiary that is not subject to therestrictions set forth in clause (a) or (b) hereof (provided thatthe Parent’s or any other Subsidiary’s equity in the net loss of any suchSubsidiary or Person for such period shall be included in determiningConsolidated Net Income), (b) the income (but not the loss) of anySubsidiary to the extent that such Subsidiary is contractually or legallyprohibited from paying dividends, except to the extent of the amount ofdividends or other distributions actually paid by such Subsidiary during suchperiod to the Parent or any other Subsidiary that is not subject to therestrictions set forth in clause (a) or (b) hereof, (c) the income(or loss) of any Person accrued prior to the date it becomes (or, for pro formapurposes, is deemed to have become) a Subsidiary or is merged into orconsolidated with the Parent or any of the Subsidiaries or the date that Person’sassets are acquired by the Parent or any of the Subsidiaries and (d) expensesand fees incurred by the Filing Companies and allowed by the Bankruptcy Courtin the Chapter 11 Cases.

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

“Control Agreement” means, with respect to anydeposit account, any securities account, commodity account, securitiesentitlement or commodity contract (each, as defined in the New York UniformCommercial Code), an agreement, in form and substance reasonably satisfactoryto the Administrative Agent, among the Administrative Agent, the financial institutionor other Person at which such account is maintained or with which suchentitlement or

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contract is carried and the Loan Party maintainingsuch account, effective to grant “control” (as defined under the applicableUniform Commercial Code) over such account to the Administrative Agent.

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

“Controlled Deposit Account” means each depositaccount (including all funds on deposit therein) that is (a) either (i) thesubject of an effective Control Agreement or (ii) otherwise subject to thecontrol of the Administrative Agent on terms satisfactory to the AdministrativeAgent in its sole discretion and (b) maintained by any Loan Party with afinancial institution reasonably satisfactory to the Administrative Agent.

“Controlled Securities Account” means eachsecurities account or commodity account (including all financial assets heldtherein and all certificates and instruments, if any, representing orevidencing such financial assets) that is (a) either (i) the subject of aneffective Control Agreement or (ii) otherwise subject to the control of theAdministrative Agent on terms satisfactory to the Administrative Agent in itssole discretion and (b) maintained by any Loan Party with a securitiesintermediary or commodity intermediary reasonably satisfactory to theAdministrative Agent.

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

“DIP Credit Agreement” means the SeniorSecured, Super Priority, Priming Debtor-in-Possession Credit Agreement, datedas of January 4, 2006, among Old Pliant, the Domestic Subsidiary Borrowersparty thereto, the Lenders party thereto, Morgan Stanley Senior Funding Inc.,as Syndication Agent, and General Electric Capital Corporation, asAdministrative Agent and Collateral Agent.

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

“Domestic Subsidiary” means any subsidiaryorganized under the laws of any State of the United States of America or theDistrict of Columbia or that is a subsidiary of an entity that is a “UnitedStates person” as defined in Section 7701(a)(30) of the U.S. Internal RevenueCode and is disregarded as an entity separate from its owner, or is otherwisefiscally transparent, for U.S. federal income tax purposes.

“Effective Date” means the date on which theconditions specified in Section 4.01 are satisfied (or waived inaccordance with Section 9.02).

“Eligible Machinery and Equipment” means, onany date, the amount of Equipment of each Loan Party, other than any Equipmentwhich is ineligible for inclusion in the calculation of the Borrowing Basepursuant to any of clauses (a) through (e) below or otherwise deemed, in thecommercially reasonable discretion of the Administrative Agent to be ineligiblefor inclusion in the calculation of the Borrowing Base.  Standards of eligibility may be fixed fromtime to time, in the commercially reasonable discretion of the AdministrativeAgent, with

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any changes in such standards to be effectiveimmediately after delivery of notice thereof to the AdministrativeBorrower.  Without limiting theAdministrative Agent’s commercially reasonable discretion provided herein, noEquipment shall be Eligible Machinery and Equipment if:

(a)           such Equipment is not subject to avalid and perfected first priority Lien (or equivalent under applicable law) infavor of the Administrative Agent, subject to no other Liens, other than Liensdescribed under clauses (a), (b) and (e) of the definition of “PermittedEncumbrances”;

(b)           such Equipment is not owned solely bya Loan Party or a Loan Party does not have sole and good, valid andunencumbered title thereto;

(c)           (i) with respect to Equipment of theAustralian Loan Parties, such Equipment is not located in Australia, (ii) withrespect to Equipment of the Canadian Loan Parties, such Equipment is notlocated in Canada, (iii) with respect to Equipment of the German Loan Parties,such Equipment is not located in Germany, or (iv) with respect to Equipment ofthe Mexican Loan Parties, such Equipment is not located in Mexico, unless inthe case of clauses (i) through (iv), the Administrative Agent is reasonablysatisfied that it has a legal, valid, perfected and enforceable securityinterest in such Equipment under the laws of the jurisdiction in which suchEquipment is located pursuant to the applicable Security Documents; or

(d)           such Equipment is not located at RealEstate (i) owned by a Loan Party, which Real Estate is subject to a firstpriority perfected Lien (or equivalent under applicable law) in favor of theAdministrative Agent or (ii) leased by a Loan Party where (x) the lessor hasdelivered to the Administrative Agent a Landlord Lien Waiver or Bailee Letter,as applicable or (y) a Rent Reserve has been taken with respect to suchEquipment; or

(e)           such Equipment was not included ineither the Pro Forma Opening Borrowing Base or the most recent appraisalconducted pursuant to Sections 5.09(b) or 5.19, which appraisalshall be based upon the Net Orderly Liquidation Value of such Equipment, shallbe in form and substance and from an independent third party appraiser, in eachcase reasonably satisfactory to the Administrative Agent.

“Eligible Real Estate” means, on any date, theamount of Real Estate of each Loan Party, other than any Real Estate which isineligible for inclusion in the calculation of the Borrowing Base pursuant toany of clauses (a) through (c) below or otherwise deemed, in the commerciallyreasonable discretion of the Administrative Agent to be ineligible forinclusion in the calculation of the Borrowing Base.  Standards of eligibility may be fixed fromtime to time in the commercially reasonable discretion of the AdministrativeAgent, with any changes in such standards to be effective immediately afterdelivery of notice thereof to the Administrative Borrower.  Without limiting the Administrative Agent’scommercially reasonable discretion provided herein, no Real Estate shall beEligible Real Estate if:

(a)           such Real Estate is not subject to avalid and perfected first priority Lien (or equivalent under applicable law) infavor of the Administrative Agent, subject to no

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other Liens, other thanLiens described under clauses (a), (b) and (e) of the definition of “PermittedEncumbrances”;

(b)           such Real Estate is not owned solelyby a Loan Party; or

(c)           such Real Estate was not included ineither the Pro Forma Opening Borrowing Base or the most recent appraisalconducted pursuant to Sections 5.09(b) or 5.19, which appraisalshall be based upon the market value of such Real Estate, shall be in form andsubstance and from an independent third party appraiser, in each casereasonably satisfactory to the Administrative Agent.

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

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

“Equipment” has the meaning assigned to suchterm in Article 9 of the New York Uniform Commercial Code and, in any event,including all of each Loan Party’s machinery and equipment, includingprocessing equipment, conveyors, machine tools, data processing and computerequipment, including embedded software and peripheral equipment and allengineering, processing and manufacturing equipment, office machinery,furniture, materials handling equipment, tools, attachments, accessories,automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motorvehicles, rolling stock and other equipment of every kind and nature, tradefixtures and fixtures not forming a part of real property, together with alladditions and accessions thereto, replacements therefor, all parts therefor,all substitutes for any of the foregoing, fuel therefor, and all manuals,drawings, instructions, warranties and rights with respect thereto, and all productsand proceeds thereof and condemnation awards and insurance proceeds withrespect thereto.

“Equity Interests” means shares of capitalstock, partnership interests, membership interests in a limited liabilitycompany, beneficial interests in a trust or other equity ownership interests ina Person, and any warrants, options or other rights entitling the holderthereof to purchase or acquire any such equity interest.

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

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

“ERISA Event” means (a) any “reportableevent”, as defined in Section 4043 of ERISA or the regulations issuedthereunder with respect to a Plan (other than an event for which the 30-daynotice period is waived); (b) the existence with respect to any Plan of an“accumulated funding deficiency” (as defined in Section 412 of the Code orSection 302 of ERISA), whether or not waived; (c) the filing pursuantto Section 412(d) of the Code or Section 303(d) of ERISA of anapplication for a waiver of the minimum funding standard with respect to anyPlan; (d) the incurrence by the Parent or any of its ERISA Affiliates ofany liability under Title IV of ERISA with respect to the termination ofany Plan; (e) the receipt by the Parent or any ERISA Affiliate from thePBGC or a plan administrator of any notice relating to an intention toterminate any Plan or Plans or to appoint a trustee to administer any Plan;(f) the incurrence by the Parent or any of its ERISA Affiliates of anyliability with respect to the withdrawal or partial withdrawal from any Plan orMultiemployer Plan; or (g) the receipt by the Parent or any ERISAAffiliate of any notice, or the receipt by any Multiemployer Plan from theParent or any ERISA Affiliate of any notice, concerning the imposition ofWithdrawal Liability or a determination that a Multiemployer Plan is, or isexpected to be, insolvent or in reorganization, within the meaning ofTitle IV of ERISA.

“Euro” means the single currency ofparticipating member States of the European Union.

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

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

“Excluded Charges” means non-recurring chargesincurred after the Effective Date in respect of restructurings, plant closings,headcount reductions or other similar actions, including severance charges inrespect of employee terminations; provided that the aggregate amount ofExcluded Charges shall not exceed (a) $45,000,000 during the term of thisAgreement and (b) $15,000,000 during any one fiscal year (or, in eachcase, such greater amount acceptable to the Administrative Agent in its solediscretion).

“Excluded Taxes” means, with respect to theAdministrative Agent, any Lender, or any other recipient of any payment to bemade by or on account of any obligation of any Borrower hereunder,(a) income or franchise taxes imposed on (or measured by) its net incomeby the United States of America, or by the jurisdiction under the laws ofwhich such recipient is organized or in which its principal office is located or,in the case of any Lender, in which its applicable lending office is located,(b) any branch profits taxes imposed by the United States of

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America or any similar tax imposed by any otherjurisdiction described in clause (a) above and (c) in the case of aForeign Lender with respect to any Borrower (other than an assignee pursuant toa request by the Administrative Borrower under Section 2.18(b)),any withholding tax (including, without limitation, taxes imposed under PartXIII of the Income Tax Act (Canada)) that is imposed on amounts payable by suchBorrower to such Foreign Lender that is attributable to such Foreign Lender’sfailure to comply with Section 2.16(e).

“Existing Letters ofCredit” means the letters of credit issued by LaSalle Business Credit, LLCand Wachovia Bank, National Association and outstanding as of the EffectiveDate, which are listed on Schedule 1.01(b).

“Existing Senior Subordinated Note Indenture”means collectively, (a) the indenture dated as of May 31, 2000, between OldPliant and The Bank of New York, as trustee, and (b) the indenture dated as ofApril 10, 2002, between Old Pliant and The Bank of New York, as trustee.

“Extraordinary Receipts” means any cashreceived by any Loan Party in excess of $500,000 in the aggregate not in theordinary course of business (and not consisting of proceeds from the issuanceof Stock, debt or disposition of Collateral), including, without limitation,(i) foreign, United States, state or local tax refunds paid  in connection with or as the result of anysettlement, audit, or amendment to any tax return, (ii) pension planreversions, (iii) judgments, proceeds of settlements or other consideration ofany kind in connection with any cause of action, and (iv) indemnity payments(but excluding therefrom working capital adjustments).

“Facilities Availability Amount” means, at anytime, an amount equal to (a) (i) the lesser of (A) the totalamount of the Working Capital Available Commitments at such time and(B) the Working Capital Borrowing Base in effect at such time minus(ii) the total Working Capital Revolving Exposure at such time plus(b) (i) the lesser of (A) the total amount of the Commitments at such time and(B) the Borrowing Base in effect at such time minus (ii) thetotal Revolving Exposure at such time.

“FCCR Period” means any period (a) beginning onthe first Business Day on which the Facilities Availability Amount is less than$20,000,000 for 5 consecutive days and (b) ending on the first Business Day onwhich the Facilities Availability Amount is greater than or equal to$20,000,000 for more than 15 consecutive days.

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

“Filing Companies” means Old Pliant, UniplastIndustries Co., Pliant Corporation International, Pliant Film Products ofMexico, Inc., Pliant Packaging of Canada, LLC, Pliant Solutions Corporation,Uniplast Holdings, Inc., Uniplast U.S., Inc., Pliant Investment, Inc., AlliantCompany LLC, Pliant Corporation of Canada Ltd. and Uniplast Industries Co.

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“Financial Officer” means the chief financialofficer, principal accounting officer, treasurer, assistant treasurer orcontroller of the Administrative Borrower or the Parent, as applicable.

“Fixed Charge Coverage Ratio” means, as of theend of any period of twelve consecutive fiscal months of the Parent, the ratioof (a) Consolidated EBITDA for such period to (b) the sum of(i) the aggregate amount of scheduled principal or similar payments madeduring such period in respect of Indebtedness of the Parent and theSubsidiaries (other than (A) payments made by the Parent or any Subsidiaryto the Parent or a Subsidiary, (B) payments made by the Parent or aSubsidiary in respect of loans under the Pre-Petition Loan Agreement and theDIP Credit Agreement and (C) payments made by the Parent or a Subsidiaryin respect of any of the Loans and the loans under the Working Capital CreditAgreement) plus (ii) Cash Interest Expense during such period plus(iii) cash dividends or other distributions paid by the Parent in respectof its Equity Interests during such period, plus (iv) the aggregateamount of Taxes paid in cash during such period, plus (v) CapitalExpenditures made during such period (excluding Capital Expenditures fundedwith the proceeds of a Reinvestment Event), all as determined on a consolidatedbasis with respect to the Parent and the Subsidiaries in accordance with GAAP.

“Foreign Fixed Asset Collateral” means allCollateral other than the Foreign Working Capital Collateral.

“Foreign Guarantee Agreement” means the ForeignGuarantee Agreement, substantially in the form of Exhibit B-2,among each Foreign Loan Party (other than the German Loan Parties) and theAdministrative Agent.

“Foreign Lender” means with respect to theCanadian Subsidiary Borrower, any Lender that is (i) not a resident of Canadafor the purposes of the Income Tax Act (Canada) or (ii) a bank that wouldreceive payment under the Loan Documents in respect of its Canadian bankingbusiness for the purposes of subsection 212(13.3) of the Income Tax Act(Canada).

“Foreign Loans Parties” means the AustralianLoan Parties, Canadian Loan Parties, German Loan Parties and Mexican LoanParties.

“Foreign Working Capital Collateral” means anyand all of the following assets and properties now owned or at any timehereafter acquired by any Loan Party that constitutes Collateral:  (i) all Accounts (as defined in the New YorkUniform Commercial Code); (ii) all Inventory (as defined in the New YorkUniform Commercial Code); (iii) all Payment Intangibles (as defined in the NewYork Uniform Commercial Code) (including corporate tax refunds and paymentsmade by distributors and wholesalers to whom loans have been made by any LoanParty), other than any Payment Intangibles that represent tax refunds inrespect of or otherwise relate to real property, Fixtures (as defined in theNew York Uniform Commercial Code), Equipment or Intellectual Property; (iv) allInvestment Property (as defined in the New York Uniform Commercial Code)(including capital stock of subsidiaries), marketable securities and otherFinancial Assets (as defined in the New York Uniform Commercial Code); (v) allindebtedness owed to any Loan Party that arises from cash advances made afterthe date hereof to enable the obligor or obligors thereon to acquire Inventory;(vi) all credit card proceeds of the

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Loan Parties, all collection accounts, DepositAccounts (as defined in the New York Uniform Commercial Code), commodityaccounts and securities accounts and any cash or other assets (includingInvestment Property, marketable securities and other Financial Assets) in anysuch accounts; (vii) all hedging, commodity or other derivative contracts (andany cash and other deposits securing the same); (viii) all permits and licensesrelated to any of the foregoing (excluding any permits or licenses related tothe ownership or operation of real property, Fixtures, Equipment orIntellectual Property); (ix) all books and records related to the foregoing;(x) to the extent evidencing, governing, securing or otherwise related to thepreceding clauses (i) through (ix), all (A) General Intangibles (as defined inthe New York Uniform Commercial Code), (B) Chattel Paper (as defined in the NewYork Uniform Commercial Code), (C) Instruments (as defined in the New York UniformCommercial Code) and (D) Documents (as defined in the New York UniformCommercial Code); and (xi) all products and Proceeds (as defined in the NewYork Uniform Commercial Code) of any and all of the foregoing in whatever formreceived, including proceeds of insurance policies related to Inventory of theLoan Parties and including proceeds of business interruption insurance to theextent related to the first 45 days of the covered period with respect to anybusiness interruption.

“Foreign Subsidiary” means any Subsidiary thatis not a Domestic Subsidiary.

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

“German Borrowing Base” means, at any time ofdetermination, an amount equal to the sum, without duplication of:

(a)           (i) 75% of each German Loan Party’sEligible Real Estate valued at market value plus (ii) 85% of the NetOrderly Liquidation Value of each German Loan Party’s Eligible Machinery andEquipment, minus

(b)           the Rent Reserve with respect to eachGerman Loan Party, minus

(c)           the Priority Payables Reserve withrespect to each German Loan Party, minus

(d)           the Secured Obligations Reserve withrespect to each German Loan Party, minus

(e)           any Reserves with respect to eachGerman Loan Party.

The German Borrowing Base at any time shall bedetermined by reference to the most recent Borrowing Base Certificate deliveredto the Administrative Agent pursuant to this Agreement.  Standards of eligibility and reserves andadvance rates of the German Borrowing Base may be revised and adjusted fromtime to time solely at the commercially reasonable discretion of theAdministrative Agent, with any changes in such standards to be effectiveimmediately after delivery of notice thereof to the Administrative Borrower.  For purposes of calculating the GermanBorrowing Base on any date, all amounts reflected or outstanding in Euros shallbe translated into dollars at the exchange rate in effect on such date, asdetermined in good faith by the Administrative Borrower.

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“German Collateral Proceeds Account” means anaccount maintained by and in the name of the Administrative Agent, anddesignated by the Administrative Agent as the “German Collateral ProceedsAccount” for purposes of this Agreement and the German Security Agreements.

“German Lender” means each Lender or anyAffiliate of a Lender designated by such Lender to the Administrative Borroweras a “German Lender”.  The German Lenderon the Effective Date shall be Merrill Lynch Capital Markets Bank Limited.

“German Loan Party” means the German SubsidiaryBorrower and any other Loan Party organized under the laws of Germany or anystate or province thereof.

“German Obligations” means (a) all principal ofand premium, if any, and interest (including interest accruing during thependency of any bankruptcy, insolvency, receivership or other similarproceeding, regardless of whether allowed or allowable in such proceeding) onthe German Revolving Loans when and as due, whether at maturity, byacceleration, upon one or more dates set for prepayment, or otherwise, (b) allother monetary obligations, including fees, costs, expenses and indemnities,whether primary, secondary, direct, contingent, fixed or otherwise (includingmonetary obligations incurred during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding), of each German Loan Party to theSecured Parties under this Agreement and the other Loan Documents, and (c) allcovenants, agreements, obligations and liabilities of each German Loan Partyunder or pursuant to this Agreement and the other Loan Documents.

“German Revolving Exposure” means, with respectto any German Lender at any time, the sum of the outstanding principal amountof such German Lender’s German Revolving Loans.

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

“German Security Agreements” mean the GermanGlobal Assignment Agreement, substantially in the form of Exhibit D-4,among the German Loan Parties and the Administrative Agent, and each othersecurity agreement or other instrument or document executed and delivered byany German Loan Party to secure any of the German Obligations.

“German Sublimit” means $10,000,000.

“German Subsidiary Borrower” means Pliant FilmProducts GmbH, a corporation organized under the laws of Germany.

“Governmental Authority” means the governmentof the United States of America, Australia, Canada, Germany or Mexico, anyother nation or any political subdivision thereof, whether state or local, andany agency, authority, instrumentality, regulatory body, court, central bank orother entity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of or pertaining to government.

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“Guarantee” of or by any Person (the “guarantor”)means any obligation, contingent or otherwise, of the guarantor guaranteeing orhaving the economic effect of guaranteeing any Indebtedness or other obligationof any other Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, and including any obligation of the guarantor, director indirect, (a) to purchase or pay (or advance or supply funds for thepurchase or payment of) such Indebtedness or other obligation or to purchase(or to advance or supply funds for the purchase of) any security for thepayment thereof, (b) to purchase or lease property, securities or servicesfor the purpose of assuring the owner of such Indebtedness or other obligationof the payment thereof, (c) to maintain working capital, equity capital orany other financial statement condition or liquidity of the primary obligor soas to enable the primary obligor to pay such Indebtedness or other obligationor (d) as an account party in respect of any letter of credit or letter ofguaranty issued to support such Indebtedness or obligation; providedthat the term “Guarantee” shall not include endorsements for collection ordeposit in the ordinary course of business.

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

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

“Indebtedness” of any Person means, withoutduplication, (a) all obligations of such Person for borrowed money,(b) all obligations of such Person evidenced by bonds, debentures, notesor similar instruments, (c) all obligations of such Person underconditional sale or other title retention agreements relating to propertyacquired by such Person, (d) all obligations of such Person in respect ofthe deferred purchase price of property or services (excluding accounts payableincurred in the ordinary course of business that are not overdue by more than90 days, unless the payment thereof is being contested in good faith) (itbeing understood that “deferred purchase price” in connection with any purchaseof property or assets shall include only that portion of the purchase pricethat shall be deferred beyond the date on which the purchase is actuallyconsummated), (e) all Indebtedness of others secured by (or for which theholder of such Indebtedness has an existing right, contingent or otherwise, tobe secured by) any Lien on property owned or acquired by such Person, whetheror not the Indebtedness secured thereby has been assumed, (f) allGuarantees by such Person of Indebtedness of others, (g) all Capital LeaseObligations of such Person, (h) all obligations, contingent or otherwise,of such Person as an account party in respect of letters of credit and lettersof guaranty, (i) all obligations, contingent or otherwise, of such Personin respect of bankers’ acceptances and (j) all obligations of such Person topurchase, redeem, retire, defease or otherwise acquire for value any EquityInterests of such Person, valued, in the case of redeemable preferred stock, atits involuntary liquidation preference plus accrued and unpaid dividends.  The Indebtedness of any Person shall includethe Indebtedness of any other entity (including any partnership in which suchPerson is a general partner) to the extent such Person is liable therefor as aresult of such Person’s ownership interest in or other relationship with suchentity, except to the extent the terms of such Indebtedness provide that suchPerson is not liable therefor. Notwithstanding the foregoing, “Indebtedness” shall not include(i) deferred taxes or

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(ii) unsecured indebtedness of the Parent or anySubsidiary to finance insurance premiums in a principal amount not in excess ofthe casualty and other insurance premiums to be paid by the Parent or anySubsidiary for a three-year period beginning on the date of any incurrence ofsuch indebtedness.

“Indemnified Taxes” means Taxes other thanExcluded Taxes.

“Initial Lender” means Merrill Lynch Bank USAand its Affiliates.

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

“Intellectual Property” means all intellectualand similar property of every kind and nature, including inventions, designs,patents, copyrights, licenses, trademarks, trade secrets, confidential orproprietary technical and business information, know-how, show-how or otherdata or information, software and databases and all embodiments or fixationsthereof and related documentation and registrations, and all additions,improvements and accessions to, and books and records describing or used in connectionwith, any of the foregoing.

“Intercreditor Agreement” means that certainAmended and Restated Intercreditor Agreement dated as of February 17, 2004among Old Pliant, the Pre-Petition Collateral Agent (as successor to DeutscheBank Trust Company Americas), the Senior First Lien Note Trustee and the SeniorSecond Lien Note Trustee (or any other trustee or agent to which Liens aregranted under the Senior First Lien Security Documents or the Senior SecondLien Security Documents).

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

“Interest Payment Date” means, withrespect to any ABR Loan or any Eurodollar Loan, the tenth Business Day of eachcalendar month.

“Interest Period” means, with respect to anyEurodollar Borrowing, the period commencing on the date of such Borrowing andending on the tenth Business Day of the first calendar month thereafter.  For purposes hereof, the date of a Borrowinginitially shall be the date on which such Borrowing is made and thereaftershall be the effective date of the most recent conversion or continuation ofsuch Borrowing.

“Landlord Lien Waiver” means a writtenagreement reasonably acceptable to the Administrative Agent, pursuant to whicha Person shall waive or subordinate its rights and claims as landlord in anyEquipment of the applicable Loan Party for unpaid rents, grant access to theAdministrative Agent for the repossession and sale of such Equipemnt, and makeother agreements relative thereto.

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

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

(a)           the rate of interest which isidentified and normally published by Bloomberg Professional Service Page BBAM 1as the offered rate for loans in dollars for a one month period under thecaption British Bankers Association LIBOR Rates as of 11:00 a.m. (London time),on the second full Business Day next preceding the first day of such InterestPeriod; dividedby

(b)           a number equal to 1.0 minusthe aggregate (but without duplication) of the rates (expressed as a decimalfraction) of reserve requirements in effect on the day that is 2 Business Daysprior to the beginning of such Interest Period (including basic, supplemental,marginal and emergency reserves under any regulations of the Federal ReserveBoard or other Governmental Authority having jurisdiction with respect thereto,as now and from time to time in effect) for Eurodollar funding (currentlyreferred to as “Eurocurrency Liabilities” in Regulation D of the FederalReserve Board) that are required to be maintained by a member bank of the FederalReserve System.

If such interest rates shall cease to be availablefrom Bloomberg Professional Service (or its successor satisfactory to theAdministrative Agent), the LIBO Rate shall be determined from such financialreporting service or other information as shall be mutually acceptable to theAdministrative Agent and the Administrative Borrower.

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

“Loan Documents” means this Agreement, theForeign Guarantee Agreement, the Security Documents and each other agreement ordocument executed by a Loan Party and delivered to the Administrative Agent orany Lender in connection with or pursuant to any of the foregoing.

“Loan Parties” means the Borrowers and each oftheir subsidiaries that executes and delivers a Loan Document.

“Loans” means the loans made by the Lenders tothe Borrowers pursuant to this Agreement.

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

“Material Adverse Effect” means a materialadverse effect on (a) the business, operations, properties, assets,performance or condition (financial or otherwise) or contingent or otherliabilities of the Parent and the Subsidiaries, taken as a whole, (b) theability of the Loan Parties to perform any material obligations under any LoanDocument or (c) the rights of or benefits available to the Lenders underany Loan Document.

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“Material Indebtedness” means Indebtedness(other than the Loans and loans and letters of credit under the Working CapitalCredit Agreement), or obligations in respect of one or more Swap Agreements, ofany one or more of the Parent and the Subsidiaries in an aggregate principal orsimilar amount exceeding $10,000,000. For purposes of determining Material Indebtedness, the “principal amount”of the obligations of the Parent or any Subsidiary in respect of any SwapAgreement at any time shall be the maximum aggregate amount (giving effect toany netting agreements) that the Parent or such Subsidiary would be required topay if such Swap Agreement were terminated at such time.

“Maturity Date” means the earliest of (a) July18, 2011, (b) the date of termination of the Lenders’ obligations to make Loansor permit existing Loans to remain outstanding pursuant to Article VII,(c) May 15, 2009, if the Senior First Lien Notes outstanding on the EffectiveDate are not refinanced in full prior to such date with the proceeds ofPermitted Refinancing Indebtedness, (d) August 1, 2009, if the Senior SecondLien Notes outstanding on the Effective Date are not refinanced in full priorto such date with the proceeds of Permitted Refinancing Indebtedness and (e)May 1, 2010, if the Senior Subordinated Notes outstanding on the Effective Dateare not refinanced in full prior to such date with the proceeds of PermittedRefinancing Indebtedness.

“Mexican Borrowing Base” means, at any time ofdetermination, an amount equal to the sum, without duplication of:

(a)           (i) 75% of each Mexican Loan Party’sEligible Real Estate valued at market value plus (ii) 85% of the NetOrderly Liquidation Value of each Mexican Loan Party’s Eligible Machinery andEquipment, minus

(b)           the Rent Reserve with respect to eachMexican Loan Party, minus

(c)           the Priority Payables Reserve withrespect to each Mexican Loan Party, minus

(d)           the Secured Obligations Reserve withrespect to each Mexican Loan Party, minus

(e)           any Reserves with respect to eachMexican Loan Party, including, without limitation, commencing 60 days after theEffective Date, Reserves with respect to any liens registered in favor ofBancomer (now known as BBVA Bancomer) on the Real Estate or Equipment of anyMexican Loan Party.

The Mexican Borrowing Base at any time shall bedetermined by reference to the most recent Borrowing Base Certificate deliveredto the Administrative Agent pursuant to this Agreement.  Standards of eligibility and reserves andadvance rates of the Mexican Borrowing Base may be revised and adjusted fromtime to time solely at the commercially reasonable discretion of theAdministrative Agent, with any changes in such standards to be effectiveimmediately after delivery of notice thereof to the AdministrativeBorrower.  For purposes of calculatingthe Mexican Borrowing Base on any date, all amounts reflected or outstanding inMexican Pesos shall be translated into dollars at the exchange rate in effecton such date, as determined in good faith by the Administrative Borrower.

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“Mexican Lender” means each Lender or anyAffiliate of a Lender designated by such Lender to the Administrative Borroweras a “Mexican Lender”.  The MexicanLender on the Effective Date shall be Merrill Lynch Mortgage Capital Inc.

“Mexican Loan Party” means the MexicanSubsidiary Borrower and any other Loan Party organized under the laws of Mexicoor any state or province thereof.

“Mexican Peso” or “P” refers to thelawful money of Mexico.

“Mexican Pledge Agreement” means the MexicanPledge Agreement, substantially in the form of Exhibit C-5,among the Mexican Loan Parties and the Administrative Agent.

“Mexican Revolving Exposure” means, withrespect to any Mexican Lender at any time, the sum of the outstanding principalamount of such Mexican Lender’s Mexican Revolving Loans.

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

“Mexican Security Agreement” means the MexicanSecurity Agreement, substantially in the form of Exhibit D-5,among the Mexican Loan Parties and the Administrative Agent, and each othersecurity agreement or other instrument or document executed and delivered byany Mexican Loan Party to secure any of the Obligations.

“Mexican Sublimit” means $10,000,000.

“Mexican Subsidiary Borrower” means AspenIndustrial, S.A. de C.V., a corporation organized under the laws of Mexico.

“Mexico” means the United Mexican States.

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

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

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

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

“Net Orderly Liquidation Value” means theorderly liquidation value on an as-is-where-is basis (net of costs and expensesincurred in connection with liquidation) of Equipment,

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as determined by reference to the Pro Forma OpeningBorrowing Base or the most recent appraisal of such Equipment received by theAdministrative Agent pursuant to Sections 5.09(b) or 5.19.

 “NetProceeds” means, with respect to any event (a) the cash proceedsreceived by the Parent and the Subsidiaries in respect of such event including(i) any cash received in respect of any non-cash proceeds (excludinginterest payments), but only as and when received, (ii) in the case of acasualty, insurance proceeds, and (iii) in the case of a condemnation orsimilar event, condemnation awards and similar payments, net of (b) thesum of (i) all reasonable fees and out-of-pocket expenses paid by theParent and the Subsidiaries to third parties (other than to the Parent or aSubsidiary) in connection with such event, (ii) in the case of a sale,transfer or other disposition of an asset (including pursuant to a sale andleaseback transaction or a casualty or other insured damage or condemnation orsimilar proceeding), the amount of all payments required to be made by theParent and the Subsidiaries as a result of such event to repay Indebtedness(other than Loans) secured by such asset or otherwise subject to mandatoryprepayment as a result of such event (including in order to obtain any consentrequired therefor) and (iii) the amount of all taxes paid (or reasonablyestimated to be payable) by the Parent and the Subsidiaries, and the amount ofany reserves established by the Parent and the Subsidiaries to fund contingentliabilities reasonably estimated to be payable, and that are directlyattributable to such event (as determined reasonably and in good faith by thechief financial officer of the Parent). In the case of Net Proceeds denominated in a currency other thandollars, the amount of such Net Proceeds shall be the dollar equivalent thereofbased upon the exchange rates prevailing at the time of the transaction givingrise to such Net Proceeds.

“New York Uniform Commercial Code” means theUniform Commercial Code as from time to time in effect in the State of NewYork.

“Non-Consenting Lender” has the meaningassigned to such term in Section 9.02(c).

“Obligations” means (a) all principal of andpremium, if any, and interest (including interest accruing during the pendencyof any bankruptcy, insolvency, receivership or other similar proceeding,regardless of whether allowed or allowable in such proceeding) on the RevolvingLoans when and as due, whether at maturity, by acceleration, upon one or moredates set for prepayment, or otherwise, (b) all other monetary obligations,including fees, costs, expenses and indemnities, whether primary, secondary,direct, contingent, fixed or otherwise (including monetary obligations incurredduring the pendency of any bankruptcy, insolvency, receivership or othersimilar proceeding, regardless of whether allowed or allowable in suchproceeding), of each Loan Party to the Secured Parties under this Agreement andthe other Loan Documents, and (c) all covenants, agreements, obligations andliabilities of each Loan Party under or pursuant to this Agreement and theother Loan Documents.

“Old Pliant” means Pliant Corporation, a Utahcorporation and the predecessor to the Parent.

“OriginalObligations” has the meaning assigned to such term in Section 9.15.

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

“Overall Commitments” shall have the meaningassigned to the term “Commitments” in the Working Capital Credit Agreement.

“Parallel Debt Security” has the meaningassigned to such term in Section 9.15.

“Parallel Obligations” has the meaning assignedto such term in Section 9.15.

“Parent” means Pliant Corporation, a Delawarecorporation.

“PBGC” means the Pension Benefit GuarantyCorporation referred to and defined in ERISA and any successor entityperforming similar functions.

“Perfection Certificate” means a certificatesubstantially in the form of Exhibit F, completed and supplemented with theschedules and attachments contemplated thereby, and duly executed by anexecutive officer of each Loan Party.

“Permitted Acquisition” means any acquisitionby the Parent or any of its Subsidiaries of all or substantially all of theassets or all of the Equity Interests of any Person or any operating divisionthereof (the “Target”), or the merger of any Target with or into theParent or any Subsidiary (and, in the case of a merger with any Borrower, withsuch Borrower being the surviving corporation), subject to the satisfaction ofeach of the following conditions:

(a)           the Administrative Agent shallreceive at least 10 days’ prior written notice of such proposed acquisition,which notice shall include, without limitation, a reasonably detaileddescription of such proposed acquisition;

(b)           such proposed acquisition shall onlyinvolve assets located in the United States and comprising a business, or thoseassets of a business, of the type engaged in by the Parent and its Subsidiariesas of the Effective Date;

(c)           such proposed acquisition shall beconsensual and shall have been approved by the Target’s board of directors;

(d)           no additional Indebtedness or otherliabilities shall be incurred, assumed or otherwise be reflected on aconsolidated balance sheet of the Parent and Target after giving effect to suchproposed acquisition, except (i) Loans made hereunder, (ii) ordinary course tradepayables and accrued expenses and (iii) Indebtedness of the Target permittedunder Section 6.01;

(e)           the sum of (i) all amounts payable inconnection with such proposed acquisition, (ii) all other PermittedAcquisitions consummated after the Effective Date (including in the case ofclauses (i) and (ii) all transaction costs and all Indebtedness and liabilitiesincurred or assumed in connection therewith or otherwise reflected in a

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consolidated balancesheet of the Parent and Target) and (iii) all Investments made pursuant toSection 6.05(j) shall not exceed $50,000,000 during the term of this Agreement;

(f)            at or prior to the closing of suchproposed acquisition, the Parent (or the Subsidiary making such proposedacquisition) and the Target shall have executed such documents and taken suchactions as may be required under Sections 5.12 and 5.13;

(g)           the Administrative Borrower shallhave delivered to the Administrative Agent, in form and substance reasonablysatisfactory to the Administrative Agent and no later than 10 days prior tosuch proposed acquisition, such other financial information, documentation orother information relating to such proposed acquisition as the AdministrativeAgent or any Lender shall reasonably request;

(h)           on or prior to the date of suchproposed acquisition, the Administrative Agent shall have received, in form andsubstance reasonably satisfactory to the Administrative Agent, copies of theacquisition agreement and any other documents reasonably requested by theAdministrative Agent; and

(i)            at the time of such proposedacquisition and after giving effect thereto, (A) no Default or Event of Defaultshall have occurred and be continuing and (B) the Fixed Charge Coverage Ratiofor the most recent 12-month period for which financial statements have beenprovided to the Administrative Agent, after giving pro forma effect to suchproposed acquisition, shall not be less than 1.10 to 1.00 and theAdministrative Agent shall have received reasonably detailed calculationssetting forth the Parent’s compliance with the foregoing.

“Permitted Encumbrances” means:

(a)           Liensimposed by law for Taxes that (i) are not yet due or (ii) are being contestedin compliance with Section 5.05;

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

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

(d)           depositsmade to secure the performance of bids, trade contracts, leases, statutoryobligations, surety and appeal bonds, performance bonds and other obligationsof a like nature, in each case in the ordinary course of business;

(e)           judgmentliens in respect of judgments that do not constitute an Event of Default underclause (k) of Article VII;

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

(g)           Liens(i) disclosed on title policies delivered to the Administrative Agent inrespect of any Mortgaged Property and (ii) easements, zoning restrictions,rights-of-way and similar restrictions and encumbrances (including minor titleand survey defects) on real property imposed by law or arising in the ordinarycourse of business that do not secure any Indebtedness and do not materiallydetract from the value of the affected property or interfere with the ordinaryconduct of business of the Parent or any Subsidiary;

(h)           Liensin respect of real property that become Mortgaged Property after the EffectiveDate pursuant to Section 5.13 to the extent such Lien is permittedby the applicable Mortgage and reasonably acceptable to the AdministrativeAgent; and

(i)            Canadianstatutory Liens for employee source deductions and vacation pay;

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

“Permitted Investments” means: (i) amarketable obligation, maturing within two years after issuance thereof, issuedor guaranteed by the United States of America or an instrumentality oragency thereof, (ii) a certificate of deposit or banker’s acceptance,maturing within one year after issuance thereof, issued by any Lender, or anational or state bank or trust company or a European, Canadian or Japanesebank in each case having capital, surplus and undivided profits of at least$100,000,000 and whose long-term unsecured debt has a rating of “A” or betterby S&P or A2 or better by Moody’s or the equivalent rating by any othernationally recognized rating agency (provided that the aggregate face amount ofall investments in certificates of deposit or banker’s acceptances issued bythe principal offices of or branches of such European or Japanese banks locatedoutside the United States shall not at any time exceed 33-1/3% ofall investments described in this definition), (iii) open marketcommercial paper, maturing within 270 days after issuance thereof, whichhas a rating of A1 or better by S&P or P1 or better by Moody’s, or theequivalent rating by any other nationally recognized rating agency,(iv) repurchase agreements and reverse repurchase agreements with a termnot in excess of one year with any financial institution that has been electeda primary government securities dealer by the Federal Reserve Board or whosesecurities are rated AA-or better by S&P or Aa3 or better by Moody’sor the equivalent rating by any other nationally recognized rating agencyrelating to marketable direct obligations issued or unconditionally guaranteedby the United States of America or any agency or instrumentality thereofand backed by the full faith and credit of the United States of America,(v) ”money market” preferred stock maturing within six months afterissuance thereof or municipal bonds issued by a corporation organized under thelaws of any state of the United States, which has a rating of “A” orbetter by S&P or Moody’s or the equivalent rating by any other nationallyrecognized rating agency, (vi) tax exempt floating rate option tenderbonds backed by letters of credit issued by a national or state bank whoselong-term unsecured debt has a rating of AA or better by S&P or Aa2 orbetter by Moody’s or the equivalent rating by any other nationally recognizedrating agency, (vii) ”money market” funds

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that invest in the investments specified inclauses (i) through (vi) above and (viii) demand deposit accountswith commercial banks.

“Permitted Redemption Indebtedness” means anyIndebtedness of the Parent issued to refinance, redeem, repurchase or otherwisereplace (collectively, “refinance”) all or any portion of any of theSeries AA Preferred Stock; provided that (a) the aggregate principalamount at maturity of such Permitted Redemption Indebtedness does not exceedthe aggregate liquidation preference of the Series AA Preferred Stock (plusaccrued and unpaid dividends) being refinanced, (b) such Permitted RedemptionIndebtedness has a rate of interest at a market rate determined at the time ofpricing, but in any event, at no time greater than the rate of interest of theSenior Subordinated Notes, (c) the stated maturity of such Permitted RedemptionIndebtedness is no earlier than 180 days after the Maturity Date, (d) suchPermitted Redemption Indebtedness does not require any scheduled amortization,principal or sinking fund payments earlier than 180 days after the MaturityDate, (e) such Permitted Redemption Indebtedness is unsecured and subordinatedin right of payment to the Obligations on terms no less favorable to theLenders than those contained in the Senior Subordinated Note Documents, (f)such Permitted Redemption Indebtedness does not have different obligors orguarantors than those with respect to the Senior Subordinated Notes, and(g) all other terms and conditions (including, as applicable, anyintercreditor provisions) of such Permitted Redemption Indebtedness are notless favorable to the Lenders or the Parent and its subsidiaries in anymaterial respect than those contained in the Senior Subordinated Notes.

“Permitted Refinancing Indebtedness” means anyIndebtedness of the Parent issued to refinance, redeem, repurchase or otherwisereplace (collectively, “refinance”) all or any portion of any of theSenior First Lien Notes, Senior Second Lien Notes or Senior Subordinated Notes(or previous refinancings, redemptions, repurchases or replacements thereofconstituting Permitted Refinancing Indebtedness); provided that (a) theaggregate principal amount at maturity of such Permitted RefinancingIndebtedness does not exceed the aggregate principal amount at maturity of theIndebtedness being refinanced (plus unpaid accrued interest and premiumthereon), (b) if the aggregate principal amount at maturity of the Indebtednessbeing refinanced exceeds the accreted value of such Indebtedness, the accretedvalue of such Permitted Refinancing Indebtedness does not exceed the accretedvalue of the Indebtedness being refinanced (plus unpaid accrued interest (notincluded in the accreted value) and premium thereon), (c) such PermittedRefinancing Indebtedness has a rate of interest at a market rate determined atthe time of pricing, but in any event, at no time greater than the rate ofinterest of any of the Indebtedness being refinanced, (d) the stated maturityof such Permitted Refinancing Indebtedness is no earlier than the later of (i)180 days after the Maturity Date and (ii) the date on which the Indebtednessbeing refinanced would otherwise come due in accordance with its terms,(e) such Permitted Refinancing Indebtedness does not require any scheduledamortization, principal or sinking fund payments earlier than the later of (i)180 days after the Maturity Date and (ii) the date on which the Indebtednessbeing refinanced would otherwise come due in accordance with its terms, (f)with respect to any refinancing of the Senior Subordinated Notes, suchPermitted Refinancing Indebtedness is unsecured and subordinated in right ofpayment to the Obligations on terms no less favorable to the Lenders than thosecontained in the Senior Subordinated Note Documents, (g) such PermittedRefinancing Indebtedness does not have different obligors or guarantors thanthose with respect to the Senior First Lien Notes, Senior Second Lien Notes orSenior Subordinated Notes, as applicable, being refinanced and (h) all

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other terms and conditions (including, as applicable, anycollateral and intercreditor provisions) of such Permitted RefinancingIndebtedness are not less favorable to the Lenders or the Parent and itssubsidiaries in any material respect than those contained in (i) except in thecase of Permitted Refinancing Indebtedness referred to in clause (ii) below,the Senior First Lien Notes, Senior Second Lien Notes or Senior SubordinatedNotes, as applicable, being refinanced, or (ii) if such Permitted RefinancingIndebtedness is refinancing any Senior First Lien Notes described in clause (b)of the definition thereof, the Senior First Lien Notes described in clause (a)of the definition thereof.

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

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

“Plan of Reorganization” means the Debtors’Fourth Amended Joint Plan of Reorganization dated June 19, 2006 filed by theFiling Companies with the Bankruptcy Court.

“Pledge Agreement” means the Mexican PledgeAgreement.

“Pounds” refers to the lawful money of theUnited Kingdom.

“Pre-Petition Collateral Agent” means the “CollateralAgent” under and as defined in the Pre-Petition Loan Agreement.

“Pre-Petition Loan Agreement” means the Amendedand Restated Credit Agreement, dated as of November 21, 2005, among the Parent,Uniplast Industries Co., and the Subsidiaries of Parent party thereto as borrowers,as Borrowers, the Lenders party thereto, Morgan Stanley Senior Funding, Inc.,as Domestic B Agent, and GE Capital, as Domestic A Agent, Administrative Agentand Collateral Agent.

“Preferred Stock” means the Series AA PreferredStock and the Series M Preferred Stock.

“Prepayment Fee” means a fee payable to theAdministrative Agent, for the benefit of the Lenders, in connection with thereduction in all or a portion of the Commitments or the termination of all or aportion of the Commitments in an amount equal to the amount of the Commitmentso reduced or terminated multipliedby 1.00%.

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

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“Priority Payables Reserve” means, with respectto any Person at any time, any amount payable by such Person that is secured bya Lien in favor of a Governmental Authority that ranks or is capable of rankingprior to or paripassu with the Liens created by the SecurityDocuments in respect of any Eligible Machinery and Equipment or Eligible RealEstate, including, if applicable, amounts owing for wages, vacation pay, severancepay, employee deductions (including with respect to any Australian Loan Partyany accrued annual leave, long service leave, sick leave, parental leave,rostered days off, annual leave loading and any payments in lieu of notice),sales tax, excise tax, Taxes payable pursuant to Part IX of the Excise TaxAct (Canada) (net of GST input credits), income tax, workers compensation,government royalties, pension fund obligations, overdue rents or Taxes, andother statutory or other claims.

“Process Agent” has the meaning assigned tosuch term in Section 9.09(d).

“Pro Forma Opening Borrowing Base” means theBorrowing Base, calculated as of June 30, 2006.

“Projections” has the meaning assigned to suchterm in Section 4.01(l).

“Qualified Preferred Stock” means, with respectto any Person, any preferred Equity Interest that by its terms (or by the termsof any security into which it is convertible or for which it is exchangeable orexercisable) or upon the happening of any event does not (a) (i) matureor becomes mandatorily redeemable pursuant to a sinking fund obligation orotherwise; (ii) become convertible or exchangeable at the option of theholder thereof for Indebtedness or preferred stock that is not QualifiedPreferred Stock; or (iii) become redeemable at the option of the holderthereof (other than as a result of a change of control event), in whole or inpart, in each case on or prior to the first anniversary of the Maturity Dateand (b) provide holders thereunder with rights upon the occurrence of a “changeof control” event or have other terms relating to “change of control” events.

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

“Recovery Event” means (a) any loss of ordamage to property of the Parent or any of its Subsidiaries that results in thereceipt by such Person of proceeds of insurance in excess of $500,000 in theaggregate or (b) any taking of property of the Parent or any of itsSubsidiaries that results in the receipt by such Person of a compensationpayment in respect thereof in excess of $500,000 in the aggregate.

“Register” has the meaning assigned to suchterm in Section 9.04.

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

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

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

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“Reinvestment Event” means any AssetDisposition or Recovery Event in respect of which the Administrative Borrowerhas delivered a Reinvestment Notice.

“Reinvestment Notice” means a written noticeexecuted by a Financial Officer stating that no Default or Event of Default hasoccurred and is continuing and that the Parent (directly or indirectly througha Subsidiary) intends and expects to use all or a specified portion of theproceeds of an Asset Disposition or Recovery Event to acquire assets useful inits business.

“Reinvestment Prepayment Amount” means, withrespect to any Reinvestment Event, the cash proceeds from such ReinvestmentEvent less any amount expended prior to the relevant Reinvestment Prepayment Dateto acquire assets useful in the Parent’s business.

“Reinvestment Prepayment Date” means, withrespect to any Reinvestment Event, the earliest of (a) the date occurring 180days after such Reinvestment Event, (b) the date on which the Parent shall havedetermined not to, or shall have otherwise ceased to, acquire assets useful inthe Parent’s business with all or any portion of the relevant proceeds from aReinvestment Event and (c) the date an Event of Default shall occur and becontinuing.

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

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

“Rent Reserve” means, with respect to anylocation that is not owned by a Loan Party where any Equipment (to the extentsubject to Liens arising by operation of law or otherwise to secure rent,warehousing fees or similar payment obligations payable by any Loan Party inrespect of such location) is located and with respect to which no Landlord LienWaiver or Bailee Letter, as applicable, is in effect, a reserve equal to threemonths’ rent, warehousing fees or similar payment obligations at such location;provided, however, that no Rent Reserve shall be establisheduntil 60 days after the Effective Date (or such later date acceptable to theAdministrative Agent in its sole discretion).

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

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

“Reserves” means any reserves against EligibleMachinery and Equipment or Eligible Real Estate of any Loan Party or theAvailability Amount that the Administrative Agent may, in its reasonable creditjudgment, establish from time to time, including, without limitation, reservesfor the cost of enforcing the rights of the Secured Parties under the SecurityDocuments.

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

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

“Revolving Credit Note” means a revolvingcredit note in substantially the form of Exhibit K hereto.

“Revolving Exposure” means, with respect to anyLender at any time, the sum of the Australian Revolving Exposure, CanadianRevolving Exposure, German Revolving Exposure and Mexican Revolving Exposure ofsuch Lender.

“Revolving Loan” means the Australian RevolvingLoans, Canadian Revolving Loans, German Revolving Loans and Mexican RevolvingLoans.

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

“SEC” means the Securities and ExchangeCommission.

“Secured Obligations Reserve” means, at anytime, any amount payable by a Loan Party that is secured by the Collateral andranks pari passu with or senior to the Obligations.

“Secured Parties” means (a) the Lenders, (b)the Administrative Agent, (c) the beneficiaries of each indemnificationobligation undertaken by any Loan Party under any Loan Document and (d) thepermitted successors and assigns of each of the foregoing.

“Security Agreements” means the AustralianSecurity Agreement, Canadian Security Agreement, German Security Agreement andMexican Security Agreement.

“Security Documents” means the SecurityAgreements, the Pledge Agreement, the Mortgages and each other securityagreement or other instrument or document executed and delivered by any LoanParty to secure any of the Obligations.

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

“Senior First Lien Note Indenture” means (a)the amended and restated indenture dated as of May 6, 2005, between the Parentand Wilmington Trust Company, as trustee, (b) the

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indenture dated as of February 17, 2004, between theParent and Wilmington Trust Company, as trustee, (c) the supplemental firstlien notes indenture, dated as of the Effective Date (the “SupplementalFirst Lien Notes Indenture”), between the Parent Borrower and WilmingtonTrust Company, as trustee, and (d) any other indenture or similar agreement orinstrument, in each case pursuant to which any Senior First Lien Notes areissued.

“Senior First Lien Notes” means (a) the$298,200,000 principal amount at maturity of 11-5/8% senior secured notes due2009 of the Parent outstanding on the Effective Date, (b) the $7,800,000principal amount at maturity of 11-1/8% senior secured discount notes due 2009of the Parent outstanding on the Effective Date and (c) any PermittedRefinancing Indebtedness in respect thereof.

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

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

“Senior Second Lien Note Documents” means theSenior Second Lien Notes, the Senior Second Lien Note Indenture, the SeniorSecond Lien Security Documents, the Intercreditor Agreement and all otherinstruments, agreements and documents evidencing, guaranteeing or otherwisegoverning the terms of the Senior Second Lien Notes.

“Senior Second Lien Note Indenture” means theindenture dated as of May 30, 2003, between the Parent and Wells Fargo Bank,N.A. (as successor to Wilmington Trust Company), as trustee, or any otherindenture or similar agreement or instrument, in each case pursuant to whichany Senior Second Lien Notes are issued.

“Senior Second Lien Notes” means the$250,000,000 aggregate principal amount of 11-1/8% senior secured notes due2009 of the Parent outstanding on the Effective Date and any PermittedRefinancing Indebtedness in respect thereof.

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

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

“Senior Subordinated Note Documents” means theSenior Subordinated Notes, the Senior Subordinated Note Indenture and all otherinstruments, agreements and documents evidencing, guaranteeing or otherwisegoverning the terms of the Senior Subordinated Notes.

“Senior Subordinated Note Indenture” meanscollectively, (a) the indenture dated as of July 18, 2006, between theParent and The Bank of New York Trust Company, N.A., as

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trustee, and (b) any other indenture or similar agreementor instrument, in each case pursuant to which any Senior Subordinated Notes areissued.

“Senior Subordinated Notes” means the$35,000,000 aggregate principal amount of 13% senior subordinated notes due2010 of the Parent outstanding on the Effective Date and any PermittedRefinancing Indebtedness in respect thereof.

“Series AA Preferred Stock” means the Series AAPreferred Stock of the Parent having the terms specified in the Parent’sAmended and Restated Certificate of Incorporation dated July 18, 2006, assuch terms may be amended or modified from time to time pursuant to Section6.12(a).

“Series M Preferred Stock” means the Series MPreferred Stock of the Parent having the terms specified in the Parent’sAmended and Restated Certificate of Incorporation dated July 18, 2006, assuch terms may be amended or modified from time to time pursuant to Section6.12(a).

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

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

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

“Subsidiary” means any direct or indirectsubsidiary of the Parent.

“Swap Agreement” means any agreement withrespect to any swap, spot, forward, future or derivative transaction or optionor similar agreement involving, or settled by reference to, one or more rates,currencies, commodities, equity or debt instruments or securities, or economic,financial or pricing indices or measures of economic, financial or pricing riskor value or any similar transaction or any combination of these transactions; providedthat no phantom

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stock or similar plan providing for payments only onaccount of services provided by current or former directors, officers,employees or consultants of the Parent or the Subsidiaries shall be a SwapAgreement.

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

“Transactions” means (a) the execution,delivery and performance by each Loan Party of the Loan Documents to which itis to be a party, the borrowing of Loans and the use of the proceeds thereof,(b) the execution, delivery and performance by each Working Capital Loan Partyof the Working Capital Loan Documents to which it is to be a party, theborrowing of loans thereunder, the use of the proceeds thereof and the issuanceof letters of credit thereunder, (c) the termination of the Pre-Petition LoanAgreement, and the payment in full of all loans, interest and other amountsaccrued or owing thereunder (other than in respect of the Existing Letters ofCredit, which will be fully cash collateralized or backstopped with letters ofcredit issued under the Working Capital Credit Agreement on or prior to theEffective Date), (d) the termination of the DIP Credit Agreement, and thepayment in full of all loans, interest and other amounts accrued or owingthereunder (other than in respect of the Existing Letters of Credit, which willbe fully cash collateralized or backstopped with letters of credit issued underthe Working Capital Credit Agreement on or prior to the Effective Date), and(e) the payment of the Transaction Costs.

“Transaction Costs” means the fees and expensesincurred by, or required to be reimbursed or paid by, the Parent and theSubsidiaries in connection with the Transactions.

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

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

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

“Withdrawal Liability” means liability of theParent or any ERISA Affiliate to a Multiemployer Plan as a result of a completeor partial withdrawal from such Multiemployer Plan, as such terms are definedin Part I of Subtitle E of Title IV of ERISA.

“Working Capital Available Commitments” shallhave the meaning assigned to the term “Available Commitments” in the WorkingCapital Credit Agreement.

“Working Capital Borrowing Base” shall have themeaning assigned to the term “Borrowing Base” in the Working Capital CreditAgreement.

“Working Capital Credit Agreement” means theWorking Capital Credit Agreement, dated as of the date hereof, among PliantCorporation, the Subsidiary Borrowers (as

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defined therein) party thereto, the lenders partythereto and Merrill Lynch Bank USA, as administrative agent thereunder.

“Working Capital Foreign Obligations” shallhave the meaning assigned to the terms “Foreign Obligations” in the WorkingCapital Credit Agreement.

“Working Capital Loan Documents” shall have themeaning assigned to the term “Loan Documents” in the Working Capital CreditAgreement.

“Working Capital Loan Party” shall have themeaning assigned to the term “Loan Party” in the Working Capital CreditAgreement.

“Working Capital Revolving Exposure” shall havethe meaning assigned to the term “Revolving Exposure” in the Working CapitalCredit Agreement.

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

SECTION 1.03.  Terms Generally.  The definitions of terms herein shall applyequally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronounshall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to havethe same meaning and effect as the word “shall”.  Unless the context requires otherwise(a) any definition of or reference to any agreement, instrument or otherdocument herein shall be construed as referring to such agreement, instrumentor other document as from time to time amended, supplemented or otherwisemodified (subject to any restrictions on such amendments, supplements ormodifications set forth herein), (b) any reference herein to any Personshall be construed to include such Person’s successors and assigns,(c) the words “herein”, “hereof” and “hereunder”, and words of similarimport, shall be construed to refer to this Agreement in its entirety and notto any particular provision hereof, (d) all references herein to Articles,Sections, Exhibits and Schedules shall be construed to refer to Articles andSections of, and Exhibits and Schedules to, this Agreement and (e) thewords “asset” and “property” shall be construed to have the same meaning andeffect and to refer to any and all tangible and intangible assets andproperties, including cash, securities, accounts and contract rights.

SECTION 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly providedherein, all terms of an accounting or financial nature shall be construed inaccordance with GAAP, as in effect from time to time; provided that, ifthe Administrative Borrower notifies the Administrative Agent that theAdministrative Borrower requests an amendment to any provision hereof toeliminate the effect of any change occurring after the date hereof in GAAP orin the application thereof on the operation of such provision (or if theAdministrative Agent notifies the Administrative Borrower that the RequiredLenders request an amendment to any

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provision hereof for such purpose), regardless ofwhether any such notice is given before or after such change in GAAP or in theapplication thereof, then such provision shall be interpreted on the basis ofGAAP as in effect and applied immediately before such change shall have becomeeffective until such notice shall have been withdrawn or such provision amendedin accordance herewith.

ARTICLE IITHE CREDITS

SECTION 2.01.  Commitments.  (a) [Intentionally Omitted].

(b)           Subject to the terms and conditionsset forth herein, each Australian Lender agrees to make loans in dollars to theAustralian Subsidiary Borrower from time to time during the AustralianAvailability Period in an aggregate principal amount that will not result in(i) such Lender’s Australian Revolving Exposure exceeding such Lender’sApplicable Percentage of the Australian Sublimit, (ii) the totalAustralian Revolving Exposure exceeding the lesser of (A) the AustralianSublimit and (B) the Australian Borrowing Base then in effect,(iii) the total Revolving Exposure exceeding the total amount of theCommitments at such time or (iv) the total Revolving Exposure plus the totalWorking Capital Revolving Exposure exceeding the total amount of the OverallCommitments at such time. Notwithstanding anything herein to the contrary, the obligations of eachAustralian Lender to make Australian Revolving Loans to the AustralianSubsidiary Borrower pursuant to this Agreement shall terminate if any Lender isunable to designate an Affiliate reasonably satisfactory to it as theAustralian Lender hereunder.

(c)           Subject to the terms and conditionsset forth herein, each Canadian Lender agrees to make loans in dollars to theCanadian Subsidiary Borrower from time to time during the RevolvingAvailability Period in an aggregate principal amount that will not result in(i) such Lender’s Canadian Revolving Exposure exceeding such Lender’sApplicable Percentage of the Canadian Sublimit, (ii) the total CanadianRevolving Exposure exceeding the lesser of (A) the Canadian Sublimit and(B) the Canadian Borrowing Base then in effect, (iii) the totalRevolving Exposure exceeding the total amount of the Commitments at such timeor (iv) the total Revolving Exposure plus the total Working Capital RevolvingExposure exceeding the total amount of the Overall Commitments at such time.

(d)           Subject to the terms and conditionsset forth herein, each German Lender agrees to make loans in dollars to theGerman Subsidiary Borrower from time to time during the Revolving AvailabilityPeriod in an aggregate principal amount that will not result in (i) such Lender’sGerman Revolving Exposure exceeding such Lender’s Applicable Percentage of theGerman Sublimit, (ii) the total German Revolving Exposure exceeding thelesser of (A) the German Sublimit and (B) the German Borrowing Basethen in effect, (iii) the total Revolving Exposure exceeding the totalamount of the Commitments at such time or (iv) the total Revolving Exposureplus the total Working Capital Revolving Exposure exceeding the total amount ofthe Overall Commitments at such time.

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(e)           Subject to the terms and conditionsset forth herein, each Mexican Lender agrees to make loans in dollars to theMexican Subsidiary Borrower from time to time during the Revolving AvailabilityPeriod in an aggregate principal amount that will not result in (i) such Lender’sMexican Revolving Exposure exceeding such Lender’s Applicable Percentage of theMexican Sublimit, (ii) the total Mexican Revolving Exposure exceeding thelesser of (A) the Mexican Sublimit and (B) the Mexican Borrowing Basethen in effect, (iii) the total Revolving Exposure exceeding the totalamount of the Commitments at such time or (iv) the total Revolving Exposureplus the total Working Capital Revolving Exposure exceeding the total amount ofthe Overall Commitments at such time.

(f)            Within the foregoing limits andsubject to the terms and conditions set forth herein, (i) the Borrowers (otherthan the Australian Subsidiary Borrower) may borrow, prepay and reborrowRevolving Loans (other than Australian Revolving Loans) during the RevolvingAvailability Period and (ii) the Australian Subsidiary Borrower may borrow,prepay and reborrow Australian Revolving Loans during the AustralianAvailability Period.

SECTION 2.02.  Loans and Borrowings.  (a) Each Australian Revolving Loan shall bemade as part of a Borrowing consisting of Australian Revolving Loans of thesame Type made by the Australian Lenders ratably in accordance with theirrespective Applicable Percentage.  EachCanadian Revolving Loan shall be made as part of a Borrowing consisting ofCanadian Revolving Loans of the same Type made by the Canadian Lenders ratablyin accordance with their respective Applicable Percentage.  Each German Revolving Loan shall be made aspart of a Borrowing consisting of German Revolving Loans of the same Type madeby the German Lenders ratably in accordance with their respective ApplicablePercentage.  Each Mexican Revolving Loanshall be made as part of a Borrowing consisting of Mexican Revolving Loans ofthe same Type made by the Mexican Lenders ratably in accordance with theirrespective Applicable Percentage.  Thefailure of any Lender to make any Loan required to be made by it shall notrelieve any other Lender of its obligations hereunder; provided that theCommitments of the Lenders are several and no Lender shall be responsible forany other Lender’s failure to make Loans as required.

(b)           Subject to Section 2.13,each Revolving Loan shall be comprised entirely of ABR Loans or EurodollarLoans as the applicable Borrower may request in accordance herewith.

(c)           At the commencement of each InterestPeriod for any Eurodollar Revolving Loan, such Borrowing shall be in anaggregate amount that is an integral multiple of $1,000,000 and not less than$5,000,000 (or, with respect to Australian Revolving Loans, $2,000,000).  At the time that each ABR Revolving Loan ismade, such Borrowing shall be in an aggregate amount that is an integralmultiple of $500,000 and not less than $1,000,000 (or, with respect toAustralian Revolving Loans, $2,000,000); provided that an ABR RevolvingLoan of any Class may be in an aggregate amount that is equal to the entireunused balance of the total amount of the Commitments of such Class.  Borrowings of more than one Type and Classmay be outstanding at the same time; provided that there shall not atany time be more than a total of eight Eurodollar Borrowings outstanding.

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

SECTION 2.03.  Requests for Borrowings.  To request a Revolving Loan, theAdministrative Borrower shall deliver a Borrowing Request to the AdministrativeAgent (on behalf of itself or another Borrower) (a) in the case of aEurodollar Borrowing, not later than 12:00 noon, New York City time,three Business Days before the date of the proposed Borrowing or (b) inthe case of an ABR Borrowing, not later than 4:00 p.m.,New York City time, one Business Day before the date of the proposedBorrowing.  Each such Borrowing Requestshall be irrevocable and shall be signed by the Administrative Borrower (onbehalf of itself or another Borrower). Each such Borrowing Request shall specify the following information incompliance with Section 2.02:

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

(ii)           whether the requested Borrowing is anAustralian Revolving Borrowing, Canadian Revolving Borrowing, German RevolvingBorrowing or Mexican Revolving Borrowing;

(iii)          the aggregate amount of suchBorrowing;

(iv)          the date of such Borrowing, whichshall be a Business Day; and

(v)           whether such Borrowing is to be anABR Borrowing or a Eurodollar Borrowing.

If no election as to the Type of Borrowing isspecified, then the requested Borrowing shall be an ABR Borrowing.  Promptly following receipt of a BorrowingRequest with respect to a Borrowing of any Class in accordance with thisSection, the Administrative Agent shall advise each Lender with respect to suchClass of the details thereof and of the amount of such Lender’s Loan to be madeas part of the requested Borrowing.  TheAustralian Subsidiary Borrower may not request more than two AustralianBorrowings and Australian Borrowings (as defined in the Working Capital CreditAgreement) in the aggregate per calendar month.

SECTION 2.04.  [Intentionally Omitted].

SECTION 2.05.  [Intentionally Omitted].

SECTION 2.06.  Funding of Borrowings.  (a) Each Lender shall make each Loan of anyClass to be made by it hereunder on the proposed date thereof by wire transferof immediately available funds by 12:00 noon, New York City time, tothe account of the Administrative Agent most recently designated by it for suchpurpose for such Class by notice to the Lenders.  The Administrative Agent will make such Loansavailable to the applicable Borrower by promptly transferring the amounts soreceived, in like funds, to the applicable Borrower Account.

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(b)           Unless the Administrative Agent shallhave received notice from a Lender prior to the proposed date of any Borrowingthat such Lender will not make available to the Administrative Agent suchLender’s share of such Borrowing, the Administrative Agent may, in its solediscretion, assume that such Lender has made such share available on such datein accordance with paragraph (a) of this Section and may, in reliance uponsuch assumption, make available to the applicable Borrower a correspondingamount.  In such event, if a Lender hasnot in fact made its share of the applicable Borrowing available to theAdministrative Agent, then the applicable Lender and the applicable Borrowerseverally agree to pay to the Administrative Agent forthwith on demand suchcorresponding amount with interest thereon, for each day from and including thedate such amount is made available to such Borrower to but excluding the dateof payment to the Administrative Agent, at (i) in the case of such Lender,the greater of the Federal Funds Effective Rate and a rate determined by theAdministrative Agent in accordance with banking industry rules on interbankcompensation or (ii) in the case of any Borrower, the interest rateapplicable to ABR Loans.  If such Lenderpays such amount to the Administrative Agent, then such amount shall constitutesuch Lender’s Loan included in such Borrowing.

SECTION 2.07.  Interest Elections.  (a) Each Revolving Borrowing initially shallbe of the Type specified in the applicable Borrowing Request.  Thereafter, the Administrative Borrower mayelect (on behalf of itself or another Borrower) to convert such Borrowing to adifferent Type or to continue such Borrowing, all as provided in this Section.  The Administrative Borrower (on behalf ofitself or another Borrower) may elect different options with respect todifferent portions of the affected Borrowing, in which case each such portionshall be allocated ratably among the Lenders holding the Loans comprising suchBorrowing, and the Loans comprising each such portion shall be considered aseparate Borrowing.

(b)           To make an election pursuant to thisSection, the Administrative Borrower shall notify the Administrative Agent ofsuch election in writing by the time that a Borrowing Request would be requiredunder Section 2.03 if the Administrative Borrower were requesting aRevolving Borrowing of the Class and Type resulting from such election to bemade on the effective date of such election. Each such Interest Election Request shall be irrevocable and shall be ina form approved by the Administrative Agent and signed by the AdministrativeBorrower.

(c)           Each Interest Election Request shallspecify the following information in compliance with Section 2.02:

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

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

(iii)          whether the resulting Borrowing is tobe an ABR Borrowing or a Eurodollar Borrowing.

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

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

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

(b)           The Administrative Borrower may atany time terminate, or from time to time reduce, the Commitments; providedthat (i) each reduction of the Commitments shall be in an amount that isan integral multiple of $1,000,000 and not less than $5,000,000 and(ii) the Administrative Borrower shall not terminate or reduce theCommitments if (A) the total Revolving Exposure would exceed the totalamount of the Commitments or (B) after giving pro forma effect to suchreduction, the Facilities Availability Amount would be less than $10,000,000.  In connection with such termination orreduction, the Borrowers shall pay the applicable Prepayment Fee; provided,however, that no Prepayment Fee shall be payable on the Commitments inthe event this Agreement is terminated in connection with a refinancing of theObligations in a transaction in which the Initial Lender provides for theBorrowers a credit facility in which the Initial Lender is the sole leadarranger and book manager and the sole administrative agent.

(c)           The Administrative Borrower shallnotify the Administrative Agent of any election to terminate or reduce theCommitments under paragraph (b) of this Section at least three BusinessDays prior to the effective date of such termination or reduction, specifyingsuch election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shalladvise the Lenders with respect to such Commitments of the contentsthereof.  Each notice delivered by theAdministrative Borrower pursuant to this Section shall be irrevocable; providedthat a notice of termination of the Commitments delivered by the AdministrativeBorrower under paragraph (b) of this Section may state that such notice isconditioned upon the effectiveness of other borrowings or the completion of thesale or issuance of stock of the Parent or the sale of assets of the Parent, inwhich case such notice may be revoked by the Administrative Borrower (by noticeto the Administrative Agent on or prior to the specified effective date) ifsuch condition is not satisfied.  Anytermination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall bemade ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.09.  Repayment of Loans; Evidence of Debt.  (a) The Australian Subsidiary Borrower herebyunconditionally promises to pay to the Administrative Agent for the

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account of each Australian Lender the then unpaidprincipal amount of each Australian Revolving Loan of such Australian Lender onthe Maturity Date.  The CanadianSubsidiary Borrower hereby unconditionally promises to pay to theAdministrative Agent for the account of each Canadian Lender the then unpaidprincipal amount of each Canadian Revolving Loan of such Canadian Lender madeto it on the Maturity Date.  The GermanSubsidiary Borrower hereby unconditionally promises to pay to theAdministrative Agent for the account of each German Lender the then unpaidprincipal amount of each German Revolving Loan of such German Lender on theMaturity Date.  The Mexican SubsidiaryBorrower hereby unconditionally promises to pay to the Administrative Agent forthe account of each Mexican Lender the then unpaid principal amount of eachMexican Revolving Loan of such Mexican Lender on the Maturity Date.

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

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

(d)           The entries made in the accountsmaintained pursuant to paragraph (b) or (c) of this Section shall beconclusive evidence (absent manifest error) of the existence and amounts of theobligations recorded therein; provided that the failure of any Lender orthe Administrative Agent to maintain such accounts or any error therein shallnot in any manner affect the obligation of any Borrower to repay the Loans inaccordance with the terms of this Agreement.

(e)           Any Lender may request that Loansmade by it be evidenced by a Revolving Credit Note.  In such event, the applicable Borrower shallprepare, execute and deliver to such Lender a Revolving Credit Note payable tothe order of such Lender (or, if requested by such Lender, to such Lender andits registered assigns).  Thereafter, theLoans evidenced by such Revolving Credit Note and interest thereon shall at alltimes (including after assignment pursuant to Section 9.04) berepresented by one or more Revolving Credit Notes in such form payable to theorder of the payee named therein (or, if such Revolving Credit Note is aregistered note, to such payee and its registered assigns).

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

(b)           (i)            [IntentionallyOmitted].

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(ii)           If at any time the total AustralianRevolving Exposure exceeds the lesser of (A) the Australian Sublimit atsuch time and (B) the Australian Borrowing Base then in effect, then inany such case the Australian Subsidiary Borrower shall immediately prepay theAustralian Revolving Loans, without demand or notice of any kind, to the extentnecessary to eliminate such excess.

(iii)          If at any time the total CanadianRevolving Exposure exceeds the lesser of (A) the Canadian Sublimit at suchtime and (B) the Canadian Borrowing Base then in effect, then in any suchcase the Canadian Subsidiary Borrower shall immediately prepay the CanadianRevolving Loans, without demand or notice of any kind, to the extent necessaryto eliminate such excess.

(iv)          If at any time the total GermanRevolving Exposure exceeds the lesser of (A) the German Sublimit at suchtime and (B) the German Borrowing Base then in effect, then in any suchcase the German Subsidiary Borrower shall immediately prepay the GermanRevolving Loans, without demand or notice of any kind, to the extent necessaryto eliminate such excess.

(v)           If at any time the total MexicanRevolving Exposure exceeds the lesser of (A) the Mexican Sublimit at suchtime and (B) the Mexican Borrowing Base then in effect, then in any suchcase the Mexican Subsidiary Borrower shall immediately prepay the MexicanRevolving Loans, without demand or notice of any kind, to the extent necessaryto eliminate such excess.

(vi)          If at any time the total RevolvingExposure exceeds the total amount of the Commitments at such time, then in anysuch case (A) the Australian Subsidiary Borrower shall immediately prepayAustralian Revolving Loans, (B) the Canadian Subsidiary Borrower shallimmediately prepay Canadian Revolving Loans, (C) the German Subsidiary Borrowershall immediately prepay German Revolving Loans, and (D) the Mexican SubsidiaryBorrower shall immediately prepay Mexican Revolving Loans, in each case,without demand or notice of any kind, to the extent necessary to eliminate suchexcess.

(c)           Subject to Section 2.17(b) and (c) ifan Event of Default shall have occurred and be continuing, during a CashCollection Period, the Administrative Agent may, and at the request of theRequired Lenders shall, (i) apply cash deposited in the Collateral ProceedsAccount on each Business Day to prepay the Revolving Loans, and (ii) apply cashdeposited in the German Collateral Proceeds Account on each Business Day toprepay German Revolving Loans; provided, however, that, in eachcase, proceeds of Foreign Working Capital Collateral shall be applied first, tothe payment of the Working Capital Foreign Obligations to the extent requiredby the Working Capital Credit Agreement and then, to the payment of theObligations.  To the extent the terms ofthis clause (c) do not require any payment to be allocated to any specificClass of Revolving Borrowings, the Administrative Agent will apply anyprepayment of Revolving Borrowings made pursuant to this clause (c) toeach Class of Revolving Borrowings on a pro rata basis, with each prepayment ofRevolving Borrowings within any Class applied to prepay ABR Borrowings beforeany other Borrowings, with any excess prepayment amount applied to prepayEurodollar Borrowings in order of expiration of their respective Interest

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Periods (and applied on a pro rata basis in respect ofEurodollar Borrowings with Interest Periods expiring on the same date).

(d)           (i)            Unlessa Reinvestment Notice shall be delivered in respect thereof, immediately uponreceipt by any Loan Party of cash proceeds of any Asset Disposition or RecoveryEvent, the Borrowers shall prepay the Loans in an amount equal to all suchproceeds, net of (A) commissions and other reasonable and customarytransaction costs, fees and expenses properly attributable to such transactionand payable by Borrowers in connection therewith (in each case, paid tonon-Affiliates), (B) transfer taxes, (C) amounts payable to holders of seniorLiens on such asset (to the extent such Liens constitute Permitted Encumbranceshereunder), if any, and (D) an appropriate reserve for income taxes inaccordance with GAAP in connection therewith; provided, however,that, proceeds of Foreign Working Capital Collateral shall be applied first, tothe payment of the Working Capital Foreign Obligations to the extent requiredby the Working Capital Credit Agreement and then, to the payment of theLoans.  On each Reinvestment PrepaymentDate, the Loans shall be prepaid by an amount equal to the ReinvestmentPrepayment Amount with respect to the relevant Reinvestment Event.  Any such prepayment pursuant to this clause(i) shall be applied in accordance with Section 2.17.

(ii)           If any Loan Party issues any EquityInterests or any debt securities (other than (A) in connection with the Plan ofReorganization, (B) Permitted Refinancing Indebtedness and Permitted RedemptionIndebtedness and (C) the Series M Preferred Stock to officers and employees ofthe Parent and the Subsidiaries), no later than the Business Day following thedate of receipt of proceeds thereof in excess of $500,000, all Borrowers (inthe case of an issuance by a Loan Party that is not a Borrower) or the issuingBorrower shall prepay first, the Revolving Loans (as defined in the WorkingCapital Credit Agreement) (and cash collateralize Letter of Credit Obligations(as defined in the Working Capital Credit Agreement)) to the extent required bythe Working Capital Credit Agreement and then, the Loans in an amount equal toall such proceeds, net of underwriting discounts and commissions and otherreasonable costs paid to non-Affiliates in connection therewith.  Any such prepayment shall be applied in accordancewith Section 2.17.

(iii)          If at any time any Loan Party receivesany Extraordinary Receipts, the Borrowers shall prepay first, the RevolvingLoans (as defined in the Working Capital Credit Agreement) to the extentrequired by the Working Capital Credit Agreement and then, the Loans in an amountequal to all such Extraordinary Receipts no later than the Business Dayfollowing the date of receipt thereof. Any such prepayment shall be applied in accordance with Section 2.17.

(e)           Prior to any optional or mandatoryprepayment of Borrowings hereunder (other than a mandatory prepayment madepursuant to clause (c) above), the Administrative Borrower shall, subject tothe requirements of clause (b) above, select the Borrowing or Borrowings to beprepaid and shall specify such selection in the notice of such prepaymentpursuant to paragraph (e) of this Section; provided that (i) theAdministrative Borrower may elect not to provide notice, or select theBorrowing or Borrowings to be prepaid, in connection with a mandatoryprepayment pursuant to clause (b) above and, in such an event, (A), suchprepayment shall be applied to outstanding Borrowings in such manner as theAdministrative

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Agent deems appropriate to comply with the terms ofclause (b) above and (B) to the extent that the terms of clause (b) above andsubclause (A) of this clause (i) do not require any prepayment to be allocatedto any specific Class of Revolving Borrowings, the Administrative Agent shallapply such prepayment to each Class of Revolving Borrowings on a pro ratabasis, and (ii) each prepayment of Revolving Borrowings within any Classshall be applied to prepay ABR Borrowings before any other Borrowings, with anyexcess prepayment amount applied to prepay Eurodollar Borrowings in order ofexpiration of their respective Interest Periods (and applied on a pro ratabasis in respect of Eurodollar Borrowings with Interest Periods expiring on thesame date).

(f)            The Administrative Borrower shallnotify the Administrative Agent in writing of any prepayment hereunder(i) in the case of prepayment of a Eurodollar Borrowing, not later than11:00 a.m., New York City time, three Business Days before the dateof prepayment, or (ii) in the case of prepayment of an ABR Borrowing, notlater than 11:00 a.m., New York City time, one Business Day beforethe date of prepayment.  Each such noticeshall be irrevocable and shall specify the prepayment date, the principalamount of each Borrowing or portion thereof to be prepaid and, in the case of amandatory prepayment, a reasonably detailed calculation of the amount of suchprepayment; provided that (A) no notice shall be required inrespect of any mandatory prepayment made pursuant to clause (c) above,(B) in the event the Administrative Borrower elects to provide notice of amandatory prepayment pursuant to clause (b) above to identify theBorrowings to be prepaid in connection therewith, such notice shall be given tothe Administrative Agent on the same day that the applicable prepayment isrequired to be made pursuant to such clause, it being understood that anyfailure or delay on the part of the Administrative Borrower in providing suchnotice to the Administrative Agent shall not affect the obligations of theAdministrative Borrower to make such prepayment, and (C) if a notice ofoptional prepayment is given in connection with a conditional notice oftermination of the Commitments as contemplated by Section 2.08,then such notice of prepayment may be revoked if such notice of termination isrevoked in accordance with Section 2.08.  Promptly following receipt of any suchnotice, the Administrative Agent shall advise the Lenders of the contentsthereof.  Each partial prepayment of anyBorrowing shall be in an amount such that the remaining amount of suchBorrowing not so prepaid would be permitted in the case of an advance of aBorrowing of the same Type as provided in Section 2.02, except asnecessary to apply fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing shall beapplied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accruedinterest to the extent required by Section 2.12.

(g)           If, at 3:00 p.m., New York City time,on any Business Day the amount, determined reasonably and in good faith by theAdministrative Borrower (the “Cash Amount”), equal to (i) the aggregateamount of “cash and cash equivalents” and “marketable securities” of the LoanParties, in each case that would be required to be reflected on a consolidatedbalance sheet of the Parent Borrower and the Subsidiaries prepared as of suchtime in accordance with GAAP (excluding any such “cash” that is “restricted”cash, including, without limitation, any such cash subject to the Lienspermitted by Section 6.03(j)), minus (ii) the aggregate amount of payments insuch cash and cash equivalents that will be made (and will reduce such cash andcash equivalents) on such Business Day is more than $11,000,000, then on suchBusiness Day (A) the Australian Subsidiary Borrower shall immediately prepayAustralian Revolving Loans, (B) the Canadian Subsidiary Borrower shallimmediately prepay Canadian Revolving Loans,

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(C) the German Subsidiary Borrower shall immediatelyprepay German Revolving Loans, and (D) the Mexican Subsidiary Borrower shallimmediately prepay Mexican Revolving Loans, in each case to the extentnecessary so that, after giving effect to such prepayment and the receipt bythe applicable Borrower of the proceeds of any Revolving Loans made or to bemade on such Business Day, the Cash Amount will not exceed $11,000,000.  For purposes of any calculation required bythis clause (g), Section 4.02(e) and Section 6.14, the amount of any cash andcash equivalents and marketable securities held by the Loan Parties at any timeand denominated in a currency other than dollars shall be deemed to be thedollar equivalent thereof determined in good faith by the AdministrativeBorrower based upon prevailing exchange rates at such time.

SECTION 2.11.  [Intentionally Omitted].

SECTION 2.12.  Interest.  (a) The Loans made by the Lenders comprisingeach ABR Borrowing shall bear interest at the Alternate Base Rate plusthe Applicable Rate.

(b)           The Loans made by the Lenderscomprising each Eurodollar Borrowing shall bear interest at the LIBO Rate forthe Interest Period in effect for such Borrowing plus the ApplicableRate.

(c)           [Intentionally Omitted].

(d)           Notwithstanding the foregoing, solong as any Event of Default has occurred and is continuing under Article VII(a), (b), (h) or (i), or so long as any other Event of Default has occurred andis continuing and at the election of the Administrative Agent (or upon thewritten request of the Required Lenders) confirmed by written notice to theAdministrative Borrower, the interest rates applicable to Loans and any fee orother amount payable by any Borrower hereunder shall bear interest, after aswell as before judgment, at a rate per annum equal to (i) in the case ofoverdue principal of any Loan, 2.50% plus the rate otherwise applicableto such Loan as provided in the preceding paragraphs of this Section or(ii) in the case of any other amount, 2.50% plus the rateapplicable to ABR Revolving Loans as provided in paragraph (a) of thisSection.

(e)           Accrued interest on each Loan shallbe payable in arrears on each Interest Payment Date for such Loan and upontermination of the Commitments; provided that (A) in the event ofany repayment or prepayment of any Loan (other than a prepayment of an ABRRevolving Loan (other than an Australian Revolving Loan) prior to the end ofthe Revolving Availability Period or an ABR Australian Revolving Loan prior tothe end of the Australian Availability Period), accrued interest on theprincipal amount repaid or prepaid shall be payable on the date of suchrepayment or prepayment and (B) in the event of any conversion of anyEurodollar Loan prior to the end of the current Interest Period therefor,accrued interest on such Loan shall be payable on the effective date of suchconversion.

(f)            All interest hereunder shall becomputed on the basis of a year of 360 days and shall be payable for the actualnumber of days elapsed (including the first day but excluding the lastday).  The applicable Alternate Base Rateor LIBO Rate shall be determined by the Administrative Agent, and suchdetermination shall be conclusive absent manifest error.  Solely for purposes of the Interest Act(Canada), (i) whenever interest is to be computed or expressed at

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any rate (the “Specified Rate”), the annualrate of interest to which each such Specified Rate is equal is such SpecifiedRate multipliedby a fraction, the numerator of which is theactual number of days in the relevant year and the denominator of which is 360;(ii) the principle of deemed reinvestment of interest shall not apply to anyinterest calculation hereunder; and (iii) the rates of interest stipulatedherein are intended to be nominal rates and not effective rates or yields.

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

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

(b)           the Administrative Agent is advisedby the Required Lenders or the Required Canadian Lenders that the LIBO Rate forsuch Interest Period will not adequately and fairly reflect the cost to suchLenders (or Lender) of making or maintaining their Loans (or its Loan) includedin such Borrowing for such Interest Period;

then the Administrative Agent shall give noticethereof to the Administrative Borrower and the Lenders or the Canadian Lenders,as applicable, by telephone or telecopy as promptly as practicable thereafterand, until the Administrative Agent notifies the Administrative Borrower andsuch Lenders that the circumstances giving rise to such notice no longer exist,(i) any Interest Election Request that requests the conversion of anyRevolving Borrowing or Canadian Revolving Borrowing, as applicable, to, orcontinuation of any such Borrowing as, a Eurodollar Borrowing shall beineffective and (ii) if any Borrowing Request with respect to anyRevolving Borrowing or Canadian Revolving Borrowing, as applicable, requests aEurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

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

(i)            impose, modify or deem applicableany reserve, special deposit or similar requirement against assets of, depositswith or for the account of, or credit extended by, any Lender (except any suchreserve requirement reflected in the LIBO Rate); or

(ii)           impose on any Lender or the Londoninterbank market any other condition affecting this Agreement or EurodollarLoans made by such Lender;

and the result of any of the foregoing shall be toincrease the cost to such Lender of making or maintaining any Eurodollar Loan(or of maintaining its obligation to make any such Loan) or to reduce theamount of any sum received or receivable by such Lender hereunder (whether ofprincipal, interest or otherwise), then the applicable Borrower(s) will pay tosuch Lender such additional amount or amounts as will compensate (on anafter-tax basis) such Lender for such additional costs incurred or reductionsuffered.

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(b)           If any Lender determines that anyChange in Law regarding capital requirements has or would have the effect ofreducing the rate of return on such Lender’s capital or on the capital of suchLender’s holding company, if any, as a consequence of this Agreement or theLoans made by such Lender to a level below that which such Lender or suchLender’s holding company could have achieved but for such Change in Law (takinginto consideration such Lender’s policies and the policies of such Lender’sholding company with respect to capital adequacy), then from time to time theapplicable Borrower(s) will pay to such Lender following receipt by theAdministrative Borrower of the certificate referred to in clause (c)below, such additional amount or amounts as will compensate such Lender or suchLender’s holding company for any such reduction suffered.

(c)           A certificate of a Lender settingforth the amount or amounts necessary to compensate such Lender or its holdingcompany, as the case may be, as specified in paragraph (a) or (b) of thisSection (and setting forth the underlying calculations) shall be delivered tothe Administrative Borrower and shall be conclusive absent manifest error.  The applicable Borrower(s) shall pay suchLender the amount shown as due on any such certificate within 10 daysafter receipt thereof.

(d)           Failure or delay on the part of anyLender to demand compensation pursuant to this Section shall not constitute awaiver of such Lender’s right to demand such compensation; provided thatthe Borrowers shall not be required to compensate a Lender pursuant to thisSection for any increased costs or reductions incurred more than 180 daysprior to the date that such Lender notifies the Administrative Borrower of theChange in Law giving rise to such increased costs or reductions and of suchLender’s intention to claim compensation therefor; providedfurtherthat, if the Change in Law giving rise to such increased costs or reductions isretroactive, then the 180-day period referred to above shall be extendedto include the period of retroactive effect thereof.

SECTION 2.15.  Break Funding Payments.  In the event of (a) the payment of anyprincipal of any Eurodollar Loan other than on the last day of an InterestPeriod applicable thereto (including as a result of an Event of Default),(b) the conversion of any Eurodollar Loan other than on the last day ofthe Interest Period applicable thereto, (c) the failure to borrow,convert, continue or prepay any Eurodollar Loan on the date specified in anynotice delivered pursuant hereto (regardless of whether such notice may berevoked under Section 2.10(f) and is revoked in accordancetherewith), or (d) the assignment of any Eurodollar Loan other than on thelast day of the Interest Period applicable thereto as a result of a request bythe Administrative Borrower pursuant to Section 2.18, then, in anysuch event, the applicable Borrower(s) shall compensate each Lender for theloss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss,cost or expense to any Lender shall be deemed to include an amount reasonablydetermined by such Lender to be the excess, if any, of (i) the amount ofinterest that would have accrued on the principal amount of such Loan had suchevent not occurred, at the LIBO Rate that would have been applicable to suchLoan, for the period from the date of such event to the last day of the thencurrent Interest Period therefor (or, in the case of a failure to borrow,convert or continue, for the period that would have been the Interest Periodfor such Loan), over (ii) the amount of interest that would accrue on suchprincipal amount for such period at the interest rate that such Lender wouldbid were it to bid, at the commencement of such period, for dollar deposits ofa comparable amount and period from other banks in the

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eurodollar market. A certificate of any Lender setting forth any amount or amounts thatsuch Lender is entitled to receive pursuant to this Section (and setting forththe underlying calculations) shall be delivered to the Administrative Borrowerand shall be conclusive absent manifest error. The applicable Borrower(s) shall pay such Lender the amount shown as dueon any such certificate within 10 days after receipt thereof.

SECTION 2.16.  Taxes. (a) Any and all payments by or on account of any obligation of theBorrowers hereunder or under any other Loan Document shall be made free andclear of and without deduction or withholding for any Indemnified Taxes orOther Taxes; provided that if any Borrower shall be required to deductor withhold any Indemnified Taxes or Other Taxes from such payments, then(i) the sum payable shall be increased as necessary so that after makingall required deductions or withholdings (including deductions or withholdingsapplicable to additional sums payable under this Section) the AdministrativeAgent or Lender (as the case may be) receives an amount equal to the sum itwould have received had no such deductions or withholdings been made,(ii) such Borrower shall make such deductions or withholdings and(iii) such Borrower shall pay the full amount deducted or withheld to therelevant Governmental Authority in accordance with applicable law.

(b)           In addition, the Borrowers shall payany Other Taxes to the relevant Governmental Authority in accordance withapplicable law.

(c)           The Borrowers shall indemnify theAdministrative Agent and each Lender, within 10 days after written demandtherefor, for the full amount of any Indemnified Taxes or Other Taxes paid bythe Administrative Agent or such Lender, as the case may be, on or with respectto any payment by or on account of any obligation of the Borrowers hereunder orunder any other Loan Document (including Indemnified Taxes or Other Taxesimposed or asserted on or attributable to amounts payable under this Section)and any penalties, interest and reasonable expenses arising therefrom or withrespect thereto, whether or not such Indemnified Taxes or Other Taxes werecorrectly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of suchpayment or liability (and setting forth the underlying calculations) deliveredto the Administrative Borrower by a Lender or by the Administrative Agent onits own behalf or on behalf of a Lender, shall be conclusive absent manifesterror.

(d)           As soon as practicable after anypayment of Indemnified Taxes or Other Taxes by a Borrower to a GovernmentalAuthority, such Borrower shall deliver to the Administrative Agent the originalor a certified copy of a receipt issued by such Governmental Authorityevidencing such payment, a copy of the return reporting such payment or otherevidence of such payment reasonably satisfactory to the Administrative Agent.

(e)           Any Foreign Lender that is entitledto an exemption from or reduction of withholding Tax under the laws of thejurisdiction in which a Borrower is located, or any treaty to which suchjurisdiction is a party, with respect to payments under this Agreement made bysuch Borrower, shall deliver to the Administrative Borrower (with a copy to theAdministrative Agent), at the time or times prescribed by applicable law, suchproperly completed and executed documentation prescribed by applicable law orreasonably requested by the Administrative Borrower as will permit such paymentsto be made without withholding or at a reduced rate.

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Notwithstanding any other provision of this Section 2.16,no such Foreign Lender shall be required to deliver any form pursuant to this Section 2.16(e)that such Foreign Lender is not legally able to deliver or that, in thereasonable judgment of such Foreign Lender could be disadvantageous to suchForeign Lender.

(f)            If the Administrative Agent or aLender (or transferee) determines, in its reasonable discretion, that it hasreceived a refund of any Taxes or Other Taxes as to which it has beenindemnified by a Borrower or with respect to which a Borrower has paidadditional amounts pursuant to this Section 2.16, it shall pay oversuch refund to such Borrower (but only to the extent of indemnity paymentsmade, or additional amounts paid, by such Borrower under this Section 2.16with respect to the Taxes or Other Taxes giving rise to such refund), net ofall out-of-pocket expenses of the Administrative Agent or such Lender (ortransferee) and without interest (other than any interest paid by the relevantGovernmental Authority with respect to such refund); provided, however,that the Borrowers, upon the request of the Administrative Agent or such Lender(or transferee), agree to repay the amount paid over to such Borrower (plus anypenalties, interest or other charges imposed by the relevant GovernmentalAuthority), to the Administrative Agent or such Lender (or transferee) in theevent the Administrative Agent or such Lender (or transferee) is required torepay such refund to such Governmental Authority.  Nothing contained in this Section 2.16(f)shall require the Administrative Agent or any Lender to make available its Taxreturns (or any other information relating to its Taxes which it deemsconfidential) to any Borrower or any other Person.

SECTION 2.17.  Payments Generally; Pro Rata Treatment;Sharing of Setoffs.  (a) EachBorrower shall make each payment required to be made by it hereunder or underany other Loan Document (whether of principal, interest or fees, or of amountspayable under Section 2.14, 2.15 or 2.16, orotherwise) prior to 2:00 p.m., New York City time, on the date whendue, by wire transfer in immediately available funds, without setoff orcounterclaim.  Any amounts received aftersuch time on any date may, in the discretion of the Administrative Agent, bedeemed to have been received on the next succeeding Business Day for purposesof calculating interest thereon.  Allsuch payments shall be made to the Administrative Agent at its offices at 800Scudders Mill Road, Plainsboro, NJ 08536, except (i) payments by the CanadianSubsidiary Borrower shall be made directly to each Canadian Lender at itsCanadian Lending Office, (ii) payments pursuant to Sections 2.14, 2.15,2.16 and 10.03 shall be made directly to the Persons entitledthereto and (iii) payments pursuant to other Loan Documents shall be made tothe Persons specified therein.  TheAdministrative Agent shall distribute any such payments received by it for theaccount of any other Person to the appropriate recipient promptly followingreceipt thereof.  If any payment underany Loan Document shall be due on a day that is not a Business Day, the datefor payment shall be extended to the next succeeding Business Day, and, in thecase of any payment accruing interest, interest thereon shall be payable forthe period of such extension.  Allpayments under each Loan Document shall be made in dollars.

(b)           Any proceeds of Collateral of theLoan Parties (other than the German Loan Parties) received by theAdministrative Agent (i) not constituting either (A) a specific payment ofprincipal, interest, fees or other sum payable under the Loan Documents (whichshall be applied as specified therein), or (B) a mandatory prepayment pursuantto Section 2.10(b) or (c) (which shall be applied in accordancewith Section 2.10) or (ii) after an Event of Default has

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occurred and is continuing and the AdministrativeAgent so elects or the Required Lenders so direct, such funds shall be appliedratably as follows:

first,to pay any fees, indemnities, or expense reimbursements including amounts thendue to the Administrative Agent from the Borrowers;

second,to pay any fees or expense reimbursements then due to the Lenders from theBorrowers;

third,to pay interest on the Revolving Loans;

fourth,to pay the principal of the Revolving Loans;

fifth,to the payment of any other Obligation due to the Administrative Agent or anyLender by the Borrowers; and

sixth,if all of the Obligations (other than contingent obligations for which no claimhas been made) have been indefeasibly paid and performed in full and theCommitments have been terminated, to the Loan Parties;

provided, however, thatproceeds of Foreign Working Capital Collateral shall be applied first, to thepayment of the Working Capital Foreign Obligations to the extent required bythe Working Capital Credit Agreement and then, to the payment of theObligations.

To the extent that the terms of this clause (b) do notrequire any payment to be allocated to any specific Class of RevolvingBorrowings, the Administrative Agent shall apply such prepayment to each Classof Revolving Borrowings on a pro rata basis. The Administrative Agent and the Lenders shall have the continuing andexclusive right to apply and reverse and reapply any and all such proceeds andpayments to any portion of the Obligations in accordance with the paymentpriorities established hereby.

(c)           Any proceeds of Collateral of theGerman Loan Parties received by the Administrative Agent (i) not constitutingeither (A) a specific payment of principal, interest, fees or other sum payableunder the Loan Documents (which shall be applied as specified therein), or (B)a mandatory prepayment pursuant to Section 2.10(b) or (c) (whichshall be applied in accordance with Section 2.10) or (ii) after anEvent of Default has occurred and is continuing and the Administrative Agent soelects or the Required Lenders so direct, such funds shall be applied ratablyas follows:

first,to pay any fees, indemnities, or expense reimbursements including amounts thendue to the Administrative Agent from the German Subsidiary Borrower;

second,to pay any fees or expense reimbursements then due to the Lenders from theGerman Subsidiary Borrower;

third,to pay interest on the German Revolving Loans;

fourth,to pay the principal of the German Revolving Loans;

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fifth,to the payment of any other German Obligation due to the Administrative Agentor any Lender by the German Subsidiary Borrower; and

sixth,if all of the German Obligations (other than contingent obligations for whichno claim has been made) have been indefeasibly paid and performed in full andthe Commitments have been terminated, to the Loan Parties;

provided, however, thatproceeds of Foreign Working Capital Collateral shall be applied first, to thepayment of the Working Capital Foreign Obligations to the extent required bythe Working Capital Credit Agreement and then, to the payment of the GermanObligations.

To the extent that the terms of this clause (c) do not require anypayment to be allocated to any specific Class of Borrowings, the AdministrativeAgent shall apply such prepayment to each Class of Borrowings on a pro ratabasis.  The Administrative Agent and theLenders shall have the continuing and exclusive right to apply and reverse andreapply any and all such proceeds and payments to any portion of the GermanObligations in accordance with the payment priorities established hereby.

(d)           At the election of the AdministrativeAgent, all payments of principal, interest, fees, premiums, reimbursableexpenses (including, without limitation, all reimbursement for fees andexpenses pursuant to Section 9.03), and other sums payable under theLoan Documents, may be paid from the proceeds of Borrowings made hereunderwhether made following a request by the Administrative Borrower pursuant to Section2.03 or a deemed request as provided in this Section or may be deductedfrom any deposit account of the Borrowers maintained with the AdministrativeAgent.  The Borrowers hereby irrevocablyauthorize (i) the Administrative Agent to make a Borrowing for the purpose ofpaying each payment of principal, interest and fees as it becomes due hereunderor any other amount due under the Loan Documents and agrees that all such amountscharged shall constitute Loans and that all such Borrowings shall be deemed tohave been requested pursuant to Section 2.03 and (ii) the AdministrativeAgent to charge any deposit account of the Borrowers maintained with theAdministrative Agent for each payment of principal, interest and fees as itbecomes due hereunder or any other amount due under the Loan Documents.  If at any time insufficient funds arereceived by and available to the Administrative Agent to pay fully all amountsof principal, interest and fees then due hereunder, such funds shall be applied(i) first, towards payment of interest and fees then due hereunder,ratably among the parties entitled thereto in accordance with the amounts ofinterest and fees then due to such parties, and (ii) second,towards payment of principal then due hereunder, ratably among the partiesentitled thereto in accordance with the amounts of principal then due to suchparties.

(e)           If any Lender shall, by exercisingany right of set-off or counterclaim or otherwise, obtain payment in respect ofany principal of or interest on any of its Revolving Loans resulting in suchLender receiving payment of a greater proportion of the aggregate amount of itsRevolving Loans and accrued interest thereon than the proportion received byany other Lender, then the Lender receiving such greater proportion shallpurchase (for cash at face value) participations in the Revolving Loans ofother Lenders to the extent necessary so that the benefit of all such paymentsshall be shared by the Lenders ratably in accordance with the aggregate amountof principal of and accrued interest on their respective Revolving Loans; providedthat

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(i) if any such participations are purchased andall or any portion of the payment giving rise thereto is recovered, suchparticipations shall be rescinded and the purchase price restored to the extentof such recovery, without interest, and (ii) the provisions of thisparagraph shall not be construed to apply to any payment made by any Borrowerpursuant to and in accordance with the express terms of this Agreement or anypayment obtained by a Lender as consideration for the assignment of or sale ofa participation in any of its Revolving Loans to any assignee or participant,other than to a Borrower or any Subsidiary or Affiliate thereof (as to whichthe provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it mayeffectively do so under applicable law, that any Lender acquiring aparticipation pursuant to the foregoing arrangements may exercise against anyBorrower rights of setoff and counterclaim with respect to such participationas fully as if such Lender were a direct creditor of such Borrower in theamount of such participation.

(f)            Unless the Administrative Agentshall have received notice from the Administrative Borrower prior to the dateon which any payment is due to the Administrative Agent for the account of theLenders hereunder that the applicable Borrower will not make such payment, theAdministrative Agent may assume, in its sole discretion, that such Borrower hasmade such payment on such date in accordance herewith and may, in reliance uponsuch assumption, distribute to the Lenders the amount due.  In such event, if no Borrower has in factmade such payment, then each of the Lenders severally agrees to repay to theAdministrative Agent forthwith on demand the amount so distributed to suchLender with interest thereon, for each day from and including the date suchamount is distributed to it to but excluding the date of payment to theAdministrative Agent, at the greater of the Federal Funds Effective Rate and arate determined by the Administrative Agent in accordance with banking industryrules on interbank compensation.

(g)           If any Lender shall fail to make anypayment required to be made by it pursuant to Section 2.06(b), 2.17(f)or 10.03(c), then the Administrative Agent may, in its discretion(notwithstanding any contrary provision hereof), apply any amounts thereafterreceived by the Administrative Agent for the account of such Lender to satisfysuch Lender’s obligations under such Sections until all such unsatisfiedobligations are fully paid.

SECTION 2.18.  MitigationObligations.  (a) If any Lenderrequests compensation under Section 2.14, or if any Borrower isrequired to pay any additional amount to any Lender or any GovernmentalAuthority for the account of any Lender pursuant to Section 2.16,then, upon the Administrative Borrower’s written request, such Lender shall usecommercially reasonable efforts to designate a different lending office forfunding or booking its Loans hereunder or to assign its rights and obligationshereunder to another of its offices, branches or affiliates (providedthat, if such compensation or additional amounts relate to a particular Classof Loans, such designation or assignment may relate only to such Class ofLoans), if, in the reasonable judgment of such Lender, such designation orassignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14or 2.16, as the case may be, in the future and (ii) would notsubject such Lender to any unreimbursed cost or expense and would not otherwisebe disadvantageous to such Lender.  EachBorrower hereby agrees to pay all reasonable costs and expenses incurred by anyLender in connection with any such designation or assignment.

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(b)           If any Lender (other than the InitialLender) requests compensation under Section 2.14, or if anyBorrower is required to pay any additional amount to any Lender (other than theInitial Lender) or any Governmental Authority for the account of such Lenderpursuant to Section 2.16, or if any Lender (other than the InitialLender) defaults in its obligation to fund Loans hereunder, then theAdministrative Borrower may, at its sole expense and effort, upon notice tosuch Lender and the Administrative Agent, require such Lender to assign anddelegate, without recourse (in accordance with and subject to the restrictionscontained in Section 9.04), all its interests, rights andobligations under this Agreement to an assignee that shall assume suchobligations (which assignee may be another Lender, if a Lender accepts suchassignment); provided that (i) the Administrative Borrower shallhave received the prior written consent of the Administrative Agent, whichconsent shall not unreasonably be withheld, (ii) such Lender shall havereceived payment of an amount equal to the outstanding principal of its Loans,accrued interest thereon, accrued fees and all other amounts payable to ithereunder, from the assignee (to the extent of such outstanding principal andaccrued interest and fees) or the Borrowers (in the case of all other amounts),(iii) in the case of any such assignment resulting from a claim forcompensation under Section 2.14 or payments required to be madepursuant to Section 2.16, such assignment will result in areduction in such compensation or payments and (iv) with respect tocompensation or additional amounts (but not defaults) in respect of aparticular Class of Loans, such assignment may be limited to such Class ofLoans.  A Lender shall not be required tomake any such assignment and delegation if, prior thereto, as a result of awaiver by such Lender or otherwise, the circumstances entitling theAdministrative Borrower to require such assignment and delegation cease to apply.

SECTION 2.19.  [Intentionally Omitted].

SECTION 2.20.  The Administrative Borrower.  Each Borrower hereby appoints the CanadianSubsidiary Borrower as the Administrative Borrower hereunder (in such capacity,the “Administrative Borrower”), and the Administrative Borrower shallact under this Agreement as the agent, attorney-in-fact and legalrepresentative of each Borrower for all purposes, including requesting Loansand receiving account statements and other notices and communications to theBorrowers (or any of them) from the Administrative Agent or any Lender.  The Administrative Agent and the Lenders mayrely, and shall be fully protected in relying, on any Borrowing Request,disbursement instruction, report, information or any notice or communicationmade or given by the Administrative Borrower, whether in its own name, asBorrowers’ agent, or on behalf of the Borrowers, and neither the AdministrativeAgent nor any Lender shall have any obligation to make any inquiry or requestany confirmation from or on behalf of any other Borrower as to the bindingeffect on it of any such notice or request.

ARTICLE IIIREPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants to theAdministrative Agent and the Lenders that:

SECTION 3.01.  Organization; Powers.  Each of the Parent and the Subsidiaries isduly organized, validly existing and, where applicable, in good standing underthe laws of the

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jurisdiction of its organization, has all requisitepower and authority to carry on its business as now conducted and, except wherethe failure to do so, individually or in the aggregate, could not reasonably beexpected to result in a Material Adverse Effect, is qualified to do businessin, and is in good standing in, every jurisdiction where such qualification isrequired.

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

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do not require anyconsent or approval of, registration or filing with, or any other action by, anyGovernmental Authority or any other Person, except such as have been obtainedor made and are in full force and effect and except filings necessary toperfect Liens created under the Loan Documents, (b) will not violate anyapplicable law or regulation or the charter, by-laws or otherorganizational documents of the Parent or any of the Subsidiaries or any orderof any Governmental Authority, except, with respect to any violation ofapplicable law or regulation, to the extent any such violation would not,individually or in the aggregate, be reasonably likely to have a MaterialAdverse Effect, (c) will not violate or result in a default under anymaterial indenture, agreement or other instrument binding upon the Parent orany of the Subsidiaries or its assets, or give rise to a right thereunder torequire any payment to be made by the Parent or any of the Subsidiaries, and(d) will not result in the creation or imposition of any Lien on any assetof the Parent or any of the Subsidiaries, except Liens created under the LoanDocuments and the Working Capital Loan Documents.

SECTION 3.04.  Financial Condition; No Material AdverseChange.  (a) The Parent hasheretofore furnished to the Lenders (i) its consolidated balance sheet andstatements of income, stockholders’ equity and cash flows (A) as of and for thefiscal year ended December 31, 2005, reported on by Ernst & YoungLLP, independent public accountants and (B) as of and for the fiscalquarter ended March 31, 2006, certified by its chief financial officer and (ii)its consolidated balance sheet and statements of income and stockholders’equity as of and for the fiscal month ended May 31, 2006, certified by itschief financial officer.  Such financialstatements present fairly, in all material respects, the financial position andresults of operations and cash flows of the Parent and its consolidatedSubsidiaries, as of such dates and for such periods in accordance with GAAP andin the case of clauses (i)(B) and (ii) above, subject to normal year-end audit adjustmentsand the absence of footnotes.

(b)           The Parent has heretofore madeavailable to the Lenders its pro forma consolidated balance sheet as of March31, 2006, prepared giving effect to the Transactions as if the Transactions hadoccurred on such date.  Such pro formaconsolidated balance sheet (i) has been prepared in good faith based onthe same assumptions used to prepare the applicable pro

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forma financial statements, which were simultaneouslymade available to the Lenders (which assumptions are believed by the Parent tobe reasonable), (ii) is based on the best information available to theParent after due inquiry, (iii) accurately reflects all materialadjustments necessary to give effect to the Transactions and (iv) presentsfairly, in all material respects, the pro forma financial position of theParent and its consolidated Subsidiaries as of March 31, 2006, as if theTransactions had occurred on such date.

(c)           Except as disclosed in the financialstatements referred to above or the notes thereto, after giving effect to theTransactions, none of the Parent or any of the Subsidiaries has, as of theEffective Date, any material contingent liabilities, unusual long-termcommitments or unrealized losses.

(d)           Since December 31, 2005, there hasbeen no material adverse change in the business, operations, properties,assets, performance, condition (financial or otherwise) or contingent or otherliabilities of the Parent and the Subsidiaries, taken as a whole, other thanthe commencement of the Chapter 11 Cases.

SECTION 3.05.  Properties.  (a) Each of the Parent and the Subsidiarieshas good title to, or valid leasehold interests in, all its real and personalproperty material to its business (including its Mortgaged Properties), exceptfor minor defects in title that do not interfere with its ability to conductits business as currently conducted or to utilize such properties for theirintended purposes and other Permitted Encumbrances.

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

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

(d)           As of the Effective Date, neither theParent nor any of the Subsidiaries has received notice of, or has knowledge of,any pending or contemplated condemnation proceeding affecting any MortgagedProperty or any sale or disposition thereof in lieu of condemnation.  Neither any Mortgaged Property nor anyinterest therein is subject to any right of first refusal, option or othercontractual right to purchase such Mortgaged Property or interest therein heldby any Person, other than any Loan Party.

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

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(b)           Except with respect to any mattersthat, individually or in the aggregate, would not be reasonably likely toresult in a Material Adverse Effect, neither the Parent nor any of theSubsidiaries (i) has failed to comply with any Environmental Law or toobtain, maintain or comply with any permit, license or other approval requiredunder any Environmental Law, (ii) has become subject to any EnvironmentalLiability, (iii) has received notice of any claim with respect to anyEnvironmental Liability or (iv) knows of any basis for any EnvironmentalLiability.

SECTION 3.07.  Compliance with Laws and Agreements.  Each of the Parent and the Subsidiaries is incompliance with all laws, regulations and orders of any Governmental Authorityapplicable to it or its property and all indentures, agreements and otherinstruments binding upon it or its property, except where the failure to do so,individually or in the aggregate, could not reasonably be expected to result ina Material Adverse Effect.  No Defaulthas occurred and is continuing.

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

SECTION 3.09.  Taxes. Each of the Parent and the Subsidiaries has timely filed or caused to befiled all Tax returns and reports required to have been filed and has paid orcaused to be paid all Taxes required to have been paid by it, except(a) Taxes that are being contested in good faith by appropriateproceedings and for which the Parent or such Subsidiary, as applicable, has setaside on its books adequate reserves to the extent required by GAAP or(b) to the extent that the failure to do so could not reasonably beexpected to result in a Material Adverse Effect.  There is no proposed tax assessment againstany Loan Party that would, if made, have a Material Adverse Effect.  No Loan Party or their subsidiaries is partyto any tax sharing agreement with any other Person pursuant to which it isliable for any Taxes of any Person that could be reasonably expected to have aMaterial Adverse Effect.

SECTION 3.10.  ERISA. No ERISA Event has occurred or is reasonably expected to occur that,when taken together with all other such ERISA Events for which liability isreasonably expected to occur, could reasonably be expected to result in aMaterial Adverse Effect.  The presentvalue of all accumulated benefit obligations under each Plan individually(based on the assumptions used for purposes of Statement of FinancialAccounting Standards No. 87) did not, as of the date of the most recentaudited financial statements reflecting such amounts, exceed by more than$30,000,000 the fair market value of the assets of such Plan individually, andthe present value of all accumulated benefit obligations of all underfundedPlans (based on the assumptions used for purposes of Statement of FinancialAccounting Standards No. 87) did not, as of the date of the most recentaudited financial statements reflecting such amounts, exceed by more than$30,000,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.11.  Disclosure.  The Parent has disclosed to the Lenders allagreements, instruments and corporate or other restrictions to which the Parentor any of the Subsidiaries is subject, and all other matters known to any ofthem, that, individually or in the aggregate, could reasonably be expected toresult in a Material Adverse Effect.  Thereports,

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financial statements, certificates and other writteninformation furnished by or on behalf of any Loan Party to the AdministrativeAgent, the Arranger or any Lender in connection with the negotiation of thisAgreement or any other Loan Document or delivered hereunder or thereunder (asmodified or supplemented by other information so furnished), when made ordelivered, did not contain any material misstatement of fact or omit to stateany material fact necessary to make the statements therein, in the light of thecircumstances under which they were made, not misleading; provided that,with respect to projected financial information, the Parent represents onlythat such information was prepared in good faith based upon assumptionsbelieved to be reasonable at the time.

SECTION 3.12.  Subsidiaries; Loan Party Information.  (a) Schedule 3.12(a) sets forththe name of, the jurisdiction of organization of, and the direct or indirectownership interest of the Parent in, each Subsidiary of the Parent, in eachcase as of the Effective Date.

(b)           Schedule 3.12(b) sets forth asof the Effective Date the name, address of principal place of business and thefederal tax identification number (if any) of each Loan Party.

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

SECTION 3.14.  Labor Matters.  As of the Effective Date, there are nostrikes, lockouts or slowdowns against the Parent or any Subsidiary pending or,to the knowledge of the Parent, threatened that could reasonably be expected toresult in a Material Adverse Effect.  Allmaterial payments due from the Parent or any Subsidiary, or for which any claimmay be made against the Parent or any Subsidiary, on account of wages andemployee health and welfare insurance and other benefits, have been paid oraccrued as a liability on the books of the Parent or such Subsidiary.  The consummation of the Transactions will notgive rise to any right of termination or right of renegotiation on the part ofany union under any collective bargaining agreement to which the Parent or anySubsidiary is bound.

SECTION 3.15.  Solvency.  Immediately after the consummation of theTransactions to occur on the Effective Date and immediately following themaking of each Loan (if any) on the Effective Date or such other date as Loansrequested hereunder are made, and after giving effect to the application of theproceeds of such Loans, (a) the fair value of the assets of the LoanParties taken as a whole, at a fair valuation, will exceed their debts andliabilities, subordinated, contingent or otherwise; (b) the present fairsaleable value of the property of the Loan Parties taken as a whole will begreater than the amount that will be required to pay the probable liability oftheir debts and other liabilities, subordinated, contingent or otherwise, assuch debts and other liabilities become absolute and matured; (c) the LoanParties taken as a whole will be able to pay their debts and liabilities,subordinated, contingent or otherwise, as such debts and liabilities becomeabsolute and matured; (d) the Loan Parties taken as a whole will not haveunreasonably small capital with which to conduct the business in which they areengaged as such business is now conducted and is proposed to be conductedfollowing the Effective Date; and (e) the Loan Parties taken as a whole willnot be deemed insolvent or

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bankrupt under any applicable bankruptcy or insolvencylegislation under the laws of Australia, Canada, Germany or Mexico.

SECTION 3.16.  Security Documents.  (a) The Pledge Agreement is effective tocreate in favor of the Administrative Agent, for the ratable benefit of theSecured Parties, a legal, valid and enforceable security interest in theCollateral described therein (and the proceeds thereof) and, when suchCollateral is delivered to the Administrative Agent and any other requirementsset forth therein are completed, the Administrative Agent shall have a fullyperfected second-priority Lien on, and security interest in, all right, titleand interest of the Loan Parties in such Collateral and the proceeds thereof assecurity for the Obligations, as applicable, in each case prior and superior inright to any other Person, other than with respect to Liens securing theWorking Capital Foreign Obligations.

(b)           The Security Agreements areeffective  (with respect to theAustralian Security Agreement, on and after the Australian Effective Date) tocreate in favor of the Administrative Agent, for the ratable benefit of theSecured Parties, a legal, valid and enforceable security interest in theCollateral described therein (and the proceeds thereof) and, when financingstatements, and/or other filings, notices and registrations, in the case ofCollateral under the Security Documents in appropriate form are filed, given orobtained with, to or from the appropriate offices in each relevant jurisdiction(including those specified on Schedule 6 to the Perfection Certificate),the Administrative Agent shall have a fully perfected Lien on, and securityinterest in, all right, title and interest of the Loan Parties in suchCollateral and, subject to Section 9-315 of the New YorkUniform Commercial Code and the legislation in other jurisdictions, theproceeds thereof, as security for the Obligations, in each case prior andsuperior in right to any other Person, other than with respect to Liensexpressly permitted by Section 6.03.

(c)           [Intentionally Omitted].

(d)           The Mortgages are effective tocreate, subject to the exceptions listed in each title insurance policycovering such Mortgage, in favor of the Administrative Agent, for the ratablebenefit of the Secured Parties, a legal, valid and enforceable Lien on all ofthe Loan Parties’ right, title and interest in and to the Mortgaged Propertiesthereunder and the proceeds thereof, and when the Mortgages are filed in theoffices specified on Schedule 3.16(d), the Administrative Agentshall have a fully perfected Lien on, and security interest in, all right,title and interest of the Loan Parties in such Mortgaged Properties and, to theextent applicable, subject to Section 9-315 of the New YorkUniform Commercial Code (and the equivalent legislation in otherjurisdictions), the proceeds thereof, in each case prior and superior in rightto any other Person, other than with respect to the rights of Persons pursuantto Liens expressly permitted by Section 6.03.

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

(b)           No part of the proceeds of any Loanwill be used, whether directly or indirectly, and whether immediately,incidentally or ultimately, (i) to purchase or carry Margin

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Stock or any security convertible into or exchangeablefor Margin Stock, or extend credit to others for the purpose of purchasing orcarrying Margin Stock or any security convertible into or exchangeable forMargin Stock, or to refund Indebtedness originally incurred for such purpose,or (ii) for any purpose that entails a violation of the provisions of theRegulations of the Board, including Regulation U or Regulation X.

SECTION 3.18.  Senior Secured Obligations.  All the Obligations of the Loan Partiesconstitute “Senior Indebtedness” and “Designated Senior Indebtedness” under andas defined in the Senior Subordinated Note Indenture.

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

SECTION 3.20.  Permanent Establishment in Canada.  Neither the Parent nor Pliant SolutionsCorporation (a) maintains any location in Canada, (b) has any incomeattributable to a permanent establishment in Canada or (c) is required to payany income taxes in Canada.

SECTION 3.21. CanadianPension Plans.   The Canadian PensionPlans are duly registered under the Income Tax Act (Canada) and any otherapplicable laws which require registration, have been administered inaccordance with the Income Tax Act (Canada) and such other applicable laws andno event has occurred which could reasonably be expected to cause the loss ofsuch registered status, except to the extent that any failure to do so couldnot reasonably be expected to have a Material Adverse Effect.  All material obligations of each of the LoanParties (including fiduciary, funding, investment and administrationobligations) required to be performed in connection with the Canadian PensionPlans and the funding agreements therefor have been performed on a timelybasis, except to the extent that any failure to do so could not reasonably beexpected to have a Material Adverse Effect. There are no outstanding disputes concerning the assets of the CanadianPension Plans.  No promises of benefitimprovements under the Canadian Pension Plans have been made except where suchimprovement could not reasonably be expected to have a Material AdverseEffect.  All contributions or premiumsrequired to be made or paid by each of the Loan Parties to the Canadian PensionPlans have been made on a timely basis in accordance with the terms of suchplans and all applicable laws.  Therehave been no improper withdrawals or applications of the assets of the CanadianPension Plans.  Each of the CanadianPension Plans is fully funded on a solvency basis and going concern basis(using actuarial methods and assumptions which are consistent with thevaluations last filed with the applicable Governmental Authorities and whichare consistent with GAAP).   No CanadianPension Plan or fund maintained by or on behalf of any Loan Party for thebenefit of any officer, director or employee of such Loan Party is a so-calleddefined benefit plan.  For any CanadianPension Plan or fund, and for any other employee benefit plan, which is adefined contribution plan requiring any Loan Party to contribute thereto, or todeduct from payments to any individual and pay such deductions into or to thecredit of such Canadian Pension Plan or fund, all required employercontributions have been properly withheld by such Loan Party and fully paidinto the funding arrangements for the applicable Pension Plan or fund.  Any assessments owed to the

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Pension Benefits Guarantee Fund established under thePension Benefits Act (Ontario), or other assessments or payments required undersimilar legislation in any other jurisdiction, have been paid when due.

ARTICLE IVCONDITIONS

SECTION 4.01.  Effective Date.  The obligations of the Lenders to make Loanshereunder shall not become effective until the date on which each of thefollowing conditions is satisfied (or waived in accordance with Section 9.02):

(a)           The Administrative Agent (or itscounsel) shall have received from the Borrowers and each Lender, a counterpartof this Agreement signed on behalf of such party.

(b)           (i) The Bankruptcy Court shall haveentered an order (the “Confirmation Order”), in form and substancereasonably satisfactory to the Administrative Agent, confirming the Plan ofReorganization and approving and authorizing the transactions contemplatedthereby; (ii) the Plan of Reorganization shall not have been modified, altered,amended or otherwise changed or supplemented without the prior written consentof the Administrative Agent; (iii) all material conditions precedent to theeffectiveness of the Plan of Reorganization shall have been satisfied (orwaived with the prior written consent of the Administrative Agent) and theEffective Date (as defined in the Plan of Reorganization) shall have occurred(other than the extension of credit under this Agreement); (iv) unlessotherwise agreed by the Administrative Agent, ten days shall have passed sincethe entry of the Confirmation Order and the Confirmation Order shall not besubject to any stay; (v) the Administrative Agent shall be reasonably satisfiedthat, except as otherwise consented to by it, the Bankruptcy Court’s retentionof jurisdiction under the Confirmation Order will not govern the enforcement ofthe Loan Documents; (vi) the transactions set forth in the Plan ofReorganization shall have been consummated in accordance with all applicableRequirements of Law and otherwise to the reasonable satisfaction of theAdministrative Agent; and (vii) the Administrative Agent shall have received acopy of the Confirmation Order, certified by a Financial Officer of the Parentas complete and correct.

(c)           (i) The Canadian Court shall haveissued and entered the Canadian Confirmation Order, in form and substancereasonably satisfactory to the Administrative Agent made on notice (the lengthof which is reasonably satisfactory to the Administrative Agent) to the servicelist and such other parties as the Administrative Agent may designate, actingreasonably; (ii) the Canadian Confirmation Order shall be in full force andeffect and not be subject to any stay; and (iii) the Administrative Agent shallhave received a copy of the Canadian Confirmation Order, certified by aFinancial Officer of the Parent as complete and correct.

(d)           The Administrative Agent shall havereceived a certificate of the Secretary of each Loan Party certifying (i) thenames and true signatures of each officer of such

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Loan Party that has beenauthorized to execute and deliver any Loan Document or other document requiredhereunder to be executed and delivered by or on behalf of such Loan Party, (ii)a copy of the certificate of incorporation (or equivalent organizationaldocument) of such Loan Party, certified as of a recent date by the Secretary ofState of the state of organization of such Loan Party (other than the MexicanLoan Parties), together with certificates of such official attesting to thegood standing of such Loan Party, (iii) the by-laws (or equivalentorganizational document) of such Loan Party as in effect on the date of suchcertification, and (iv) the resolutions of such Loan Party’s Board of Directors(or equivalent governing body) approving and authorizing the execution,delivery and performance of the Loan Documents to which it is a party, all inform and substance reasonably satisfactory to the Administrative Agent and itscounsel.

(e)           The Administrative Agent shall havereceived a certificate, dated the Effective Date and signed by the President, aVice President or a Financial Officer of the Administrative Borrower, (i)confirming compliance with the conditions set forth in paragraphs (a) and(b) of Section 4.02, (ii) certifying that the conditions set forth inparagraphs (b) (other than clauses (v) and (vii) thereof), (c) (other thanclause (iii) thereof) and (q) of this Section 4.01 have been satisfied and(iii) certifying that the liens registered in favor of Bancomer (now known asBBVA Bancomer) against any Mexican Loan Party do not secure any Indebtedness orother obligation of such Mexican Loan Party.

(f)            The Administrative Agent shall havereceived all fees and other amounts due and payable on or prior to theEffective Date, including, to the extent invoiced, reimbursement or payment ofall reasonable out-of-pocket expenses required to be reimbursed or paid by anyLoan Party hereunder or under any other Loan Document.

(g)           The Administrative Agent shall havereceived counterparts of the Pledge Agreement signed on behalf of each LoanParty party thereto.

(h)           The Administrative Agent shall havereceived counterparts of each Security Agreement (other than the AustralianSecurity Agreement) signed on behalf of each Loan Party party thereto, togetherwith the following:

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

(ii)           a completed Perfection Certificatedated the Effective Date and signed by an executive officer of each Loan Party,together with all attachments contemplated thereby, including the results of asearch of the Uniform Commercial Code filings or other filings, notices orregistrations made with respect to the Loan Parties in the jurisdictionscontemplated by the Perfection Certificate and copies of the financingstatements (or similar documents) disclosed by such search and evidencereasonably

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satisfactory to theAdministrative Agent that the Liens indicated by such financing statements (orsimilar documents) are permitted by Section 6.03 or have beenreleased;

(iii)          counterparts of a Mortgage withrespect to each Mortgaged Property signed on behalf of the record owner of suchMortgaged Property;

(iv)          [intentionally omitted];

(v)           policy or policies of title insuranceissued by a nationally recognized title insurance company, insuring the Lien ofeach such Mortgage as a valid first Lien on the Mortgaged Property describedtherein, free of any other Liens except as permitted by Section 6.03, in formand substance reasonably acceptable to the Administrative Agent, together withsuch endorsements, coinsurance and reinsurance as the Administrative Agent mayreasonably request;

(vi)          copies of all existing surveys andsuch other information and documents with respect to the Mortgaged Propertiesas shall be necessary for the aforesaid title insurance policies to be issuedwithout a survey exception; and

(vii)         such other customary documentation withrespect to the Mortgaged Properties as the Administrative Agent may reasonablyrequire.

(i)            The Administrative Agent shall havereceived counterparts of the Foreign Guarantee Agreement signed on behalf ofeach Loan Party party thereto.

(j)            The Administrative Agent shall havereceived a favorable written opinion (addressed to the Administrative Agent andthe Lenders and dated the Effective Date) of each of (i) Sidley AustinLLP, counsel for the Borrowers and the other Loan Parties, (ii) GeneralCounsel of the Borrowers and the other Loan Parties, (iii) Ontario counselfor the Canadian Loan Parties acceptable to the Administrative Agent, (iv)German counsel for the German Loan Parties acceptable to the AdministrativeAgent and (v) Mexican counsel for the Mexican Loan Parties acceptable to theAdministrative Agent and, in the case of each such opinion required by thisparagraph, covering such other matters relating to the Loan Parties, the LoanDocuments or the Transactions as the Administrative Agent shall reasonablyrequest and otherwise in form and substance reasonably satisfactory to theAdministrative Agent.  Each Borrowerhereby requests such counsel to deliver such opinions.

(k)           The Lenders shall have received thefinancial statements described in Section 3.04, which financial statementsshall not be materially inconsistent with the financial statements or forecastspreviously provided to the Lenders.

(l)            The Lenders shall have receivedprojections of the Parent and the Subsidiaries through the fiscal year endingDecember 31, 2009, presented on a monthly basis through December 31, 2006and on an annual basis thereafter (the “Projections”), which Projectionsshall not be materially inconsistent with the projections previously providedto the Administrative Agent and the Arranger.

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(m)          The Administrative Agent shall havereceived evidence reasonably satisfactory to it that the insurance required by Section 5.07is in effect, together with insurance certificates naming the AdministrativeAgent as additional insured and/or loss payee to the extent required by Section5.07.

(n)           [Intentionally Omitted].

(o)           Each of the Pre-Petition LoanAgreement and the DIP Credit Agreement shall have been terminated, and allloans, interest and other amounts accrued or owing thereunder shall have beenpaid in full (other than the Existing Letters of Credit, which shall have beenfully cash collateralized or backstopped with letters of credit issued underthe Working Capital Credit Agreement on or prior to the Effective Date) and allLiens granted in respect thereof shall have been released and the terms andconditions of any such release shall be reasonably satisfactory to theAdministrative Agent.  The AdministrativeAgent shall have received payoff letters in form and substance reasonablysatisfactory to the Administrative Agent from General Electric CapitalCorporation with respect to the Pre-Petition Loan Agreement and the DIP CreditAgreement.

(p)           The Working Capital Credit Agreementshall have been duly and properly authorized, executed and delivered by therespective parties thereto on terms and conditions reasonably satisfactory tothe Administrative Agent, consummated pursuant to the terms thereof and shallbe in full force and effect as of the Effective Date.

(q)           After giving effect to theTransactions, the Parent and the Subsidiaries shall not have any outstandingIndebtedness or preferred stock other than (i) Indebtedness incurred underthe Loan Documents and the Working Capital Loan Documents, (ii) the SeniorFirst Lien Notes, (iii) the Senior Second Lien Notes, (iv) the SeniorSubordinated Notes, (v) the Preferred Stock, and (vi) theIndebtedness permitted pursuant to Section 6.01(ii).

(r)            The Administrative Agent shall havereceived all documentation and other information requested by it to satisfy therequirements of bank regulatory authorities under applicable “know yourcustomer” and anti-money laundering rules and regulations, including the USAPatriot Act.

(s)           The Administrative Agent shall havereceived a completed Borrowing Base Certificate that sets forth the Pro FormaOpening Borrowing Base.

(t)            The Administrative Agent shall havereceived Control Agreements with respect to each of the accounts set forth on Schedule5.17 to the extent required by Section 5.17.

(u)           The Administrative Agent shall havereceived a certificate, dated the Effective Date and signed by the President ofthe Administrative Borrower, to the effect that immediately after theconsummation of the Transactions to occur on the Effective Date and immediatelyfollowing the making of each Loan on the Effective Date and after giving effectto the application of the proceeds of such Loans, (i) the fair value ofthe assets of the Loan Parties taken as a whole, at a fair valuation, willexceed their debts and

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liabilities,subordinated, contingent or otherwise; (ii) the present fair saleablevalue of the property of the Loan Parties taken as a whole will be greater thanthe amount that will be required to pay the probable liability of their debtsand other liabilities, subordinated, contingent or otherwise, as such debts andother liabilities become absolute and matured; (iii) the Loan Partiestaken as a whole will be able to pay their debts and liabilities, subordinated,contingent or otherwise, as such debts and liabilities become absolute andmatured; (iv) the Loan Parties taken as a whole will not have unreasonablysmall capital with which to conduct the business in which they are engaged assuch business is now conducted and is proposed to be conducted following theEffective Date; and (v) the Loan Parties taken as a whole will not be deemedinsolvent or bankrupt under any applicable bankruptcy or insolvency legislationunder the laws of Australia, Canada, Germany or Mexico.

(v)           The Administrative Agent shall havereceived evidence reasonably satisfactory to it of the merger of Old Pliantwith and into the Parent, with the Parent as the surviving corporation.

(w)          The Administrative Agent shall havereceived a Compliance Certificate signed by a Financial Officer and the chieflegal officer of the Administrative Borrower, dated the Effective Date(delivered, and containing a statement that it was delivered, in good faithafter reasonable investigation) to the effect that the Loans (if any) made onthe Effective Date do not violate the provisions of the Senior First Lien NoteIndenture, the Senior Second Lien Note Indenture and the Senior SubordinatedNote Indenture (including a reasonably detailed summary as to the calculationsnecessary to determine the absence of any such violation).

(x)            The Administrative Agent shall havereceived evidence reasonably satisfactory to it that the Process Agent requiredby Section 9.09(d) shall have been duly appointed by the Borrowers.

(y)           The Administrative Agent shall havereceived such other documents as the Administrative Agent, any Lender or theirrespective counsel may have reasonably requested.

The Administrative Agent shall notify theAdministrative Borrower and the Lenders of the Effective Date, and such noticeshall be conclusive and binding.

SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loanon the occasion of any Borrowing is subject to the satisfaction of thefollowing conditions:

(a)           The representations and warranties ofeach Loan Party set forth in the Loan Documents qualified as to materialityshall be true and correct and those not so qualified shall be true and correctin all material respects on and as of the date of such Borrowing, except to theextent such representations and warranties expressly relate to an earlier datein which case such representations and warranties shall be true and correct asof such earlier date.

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(b)           At the time of and immediately aftergiving effect to such Borrowing, no Default shall have occurred and becontinuing.

(c)           At the time of, and after givingeffect to, such Borrowing, (i) the total Australian Revolving Exposureshall not exceed the lesser of (A) the Australian Sublimit and(B) the Australian Borrowing Base then in effect, (ii) the totalCanadian Revolving Exposure shall not exceed the lesser of (A) theCanadian Sublimit and (B) the Canadian Borrowing Base then in effect,(iii) the total German Revolving Exposure shall not exceed the lesser of(A) the German Sublimit and (B) the German Borrowing Base then ineffect, (iv) the total Mexican Revolving Exposure shall not exceed thelesser of (A) the Mexican Sublimit and (B) the Mexican Borrowing Basethen in effect, (v) the total Revolving Exposure shall not exceed the totalamount of the Commitments then in effect and (vi) the total Revolving Exposureplus the total Working Capital Revolving Exposure shall not exceed the totalamount of the Overall Commitments then in effect.

(d)           If at the time of, and after givingeffect to, such Borrowing, the total Revolving Exposure and Working CapitalRevolving Exposure exceeds 85% of the maximum amount of Indebtedness permittedto be incurred under this Agreement and the Working Capital Credit Agreementpursuant to the Senior First Lien Indenture, the Senior Second Lien NoteIndenture and the Senior Subordinated Note Indenture, the Administrative Agentshall have received a Compliance Certificate signed by a Financial Officer andthe chief legal officer of the Administrative Borrower, dated the date of suchBorrowing (delivered, and containing a statement that it was delivered, in goodfaith after reasonable investigation) to the effect that such Borrowing doesnot violate the provisions of the Senior First Lien Note Indenture, the SeniorSecond Lien Note Indenture and the Senior Subordinated Note Indenture(including a reasonably detailed summary as to the calculations necessary todetermine the absence of any such violation).

(e)           At the time of the Borrowing Requestwith respect to such Borrowing, the amount that the Administrative Borrowerreasonably and in good faith estimates will be the Cash Amount at3:00 p.m., New York City time, on the requested date of suchBorrowing (after giving effect to such Borrowing) shall not exceed $11,000,000,and such Borrowing Request shall contain a statement to that effect and thatthe Administrative Borrower reasonably and in good faith expects to be incompliance with Section 6.14 as of the date of such Borrowing.

(f)            The making of such Loan does notviolate any applicable law or regulation and is not enjoined, temporarily,preliminarily or permanently.

The making of any Loan on the occasion of eachBorrowing shall be deemed to constitute a representation and warranty by eachBorrower on the date thereof as to the matters specified in this Section.

SECTION 4.03.  Australian Effective Date.  The obligations of the Australian Lenders tomake Australian Revolving Loans hereunder shall not become effective until thedate on which each of the following conditions is satisfied:

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(a)           [Intentionally Omitted.]

(b)           The Administrative Agent shall havereceived a counterpart of the Australian Security Agreement signed on behalf ofthe Australian Subsidiary Borrower, together with all documents andinstruments, including Uniform Commercial Code (or equivalent) financingstatements, required by the Australian Security Agreement or by law orreasonably requested by the Administrative Agent to be filed, registered orrecorded to create or perfect the Liens intended to be created under theAustralian Security Agreement, in proper form for filing, registration or recordation.

(c)           The Administrative Agent shall havereceived a favorable written opinion (addressed to the Administrative Agent andthe Lenders and dated the Australian Effective Date) of Australian counsel forthe Australian Loan Parties acceptable to the Administrative Agent, coveringsuch other matters relating to the Australian Loan Parties, the Loan Documentsor the Transactions as the Administrative Agent shall reasonably request andotherwise in form and substance reasonably satisfactory to the AdministrativeAgent.  The Australian SubsidiaryBorrower hereby requests such counsel to deliver such opinions.

(d)           The Administrative Agent shall havereceived a certificate of the Secretary of the Australian Subsidiary Borrowercertifying (i) the names and true signatures of each officer of the AustralianSubsidiary Borrower that has been authorized to execute and deliver any LoanDocument or other document required hereunder to be executed and delivered byor on behalf of the Australian Subsidiary Borrower, (ii) that there have beenno changes to the certificate of incorporation (or equivalent organizationaldocument) of the Australian Subsidiary Borrower from the certificate ofincorporation (or equivalent organizational document) delivered to theAdministrative Agent on the Effective Date, and attaching a good standingcertificate of the Australian Subsidiary Borrower dated as of a recent datefrom its jurisdiction of organization, (iii) that there have been no changes tothe by-laws (or equivalent organizational document) of the AustralianSubsidiary Borrower from the by-laws (or equivalent organizational document)delivered to the Administrative Agent on the Effective Date, and (iv) theresolutions of the Australian Subsidiary Borrower’s Board of Directors (or equivalentgoverning body) approving and authorizing the execution, delivery andperformance of the Loan Documents to which it is a party, all in form andsubstance reasonably satisfactory to the Administrative Agent and its counsel.

(e)           The Administrative Agent shall havereceived a certificate, dated the Australian Effective Date and signed by thePresident, a Vice President or a Financial Officer of the AdministrativeBorrower, confirming compliance with the conditions set forth inparagraphs (a) and (b) of Section 4.02.

(f)            The Administrative Agent shall havereceived a completed Borrowing Base Certificate, dated the Australian EffectiveDate, that sets forth the Australian Borrowing Base.

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(g)           The Administrative Agent shall havereceived such other documents as the Administrative Agent, any AustralianLender or their respective counsel may have reasonably requested.

ARTICLE VAFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminatedand the principal of and interest on each Loan and all fees and otherObligations payable hereunder shall have been paid in full, each Borrowercovenants and agrees with the Administrative Agent and the Lenders that:

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

(a)           within 90 days after the end ofeach fiscal year of the Parent, its audited consolidated balance sheet andrelated statements of operations, stockholders’ equity and cash flows as of theend of and for such year, setting forth in each case in comparative form thefigures for the previous fiscal year, all reported on by Ernst & YoungLLP or other independent public accountants of recognized national standing(without a “going concern” or like qualification or exception and without anyqualification or exception as to the scope of such audit) to the effect thatsuch consolidated financial statements present fairly in all material respectsthe financial condition and results of operations of the Parent and itsconsolidated Subsidiaries on a consolidated basis in accordance with GAAPconsistently applied;

(b)           within 45 days after the end ofeach of the first three fiscal quarters of each fiscal year of the Parent, itsconsolidated and consolidating balance sheet and related statements ofoperations, stockholders’ equity and cash flows as of the end of and for suchfiscal quarter and the then elapsed portion of the fiscal year, setting forthin each case in comparative form the figures for the corresponding period orperiods of (or, in the case of the balance sheet, as of the end of) theprevious fiscal year, all certified by one of the Parent’s Financial Officersas presenting fairly in all material respects the financial condition and resultsof operations of the Parent and its consolidated Subsidiaries on a consolidatedand consolidating basis in accordance with GAAP consistently applied, subjectto normal year-end audit adjustments and the absence of footnotes;

(c)           within 30 days after the end ofeach fiscal month of each fiscal year (other than the final fiscal month ofeach fiscal quarter) of the Parent, its consolidated and consolidating balancesheet and related statements of operations as of the end of and for such fiscalmonth and the then elapsed portion of the fiscal year, setting forth in eachcase in comparative form the figures for the corresponding period or periods of(or, in the case of the balance sheet, as of the end of) (i) the previousfiscal year and (ii) the Projections or the most recent forecasts delivered tothe Administrative Agent pursuant to Section 5.01(i) below, all certified byone of the Parent’s Financial Officers as presenting fairly in all materialrespects the financial condition and results of operations of the Parent andits

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consolidated Subsidiarieson a consolidated and consolidating basis in accordance with GAAP consistentlyapplied, subject to normal year-end audit adjustments and the absence offootnotes;

(d)           concurrently with any delivery offinancial statements under clause (a), (b) or (c) above, a certificate ofa Financial Officer of the Administrative Borrower (i) certifying as towhether a Default has occurred and, if a Default has occurred, specifying thedetails thereof and any action taken or proposed to be taken with respectthereto, (ii) during any FCCR Period, setting forth reasonably detailedcalculations of the Fixed Charge Coverage Ratio as of the last day of the lastfiscal period covered by such financial statements and (iii) stating whetherany change in GAAP or in the application thereof has occurred since the date ofthe Parent’s audited financial statements referred to in Section 3.04and, if any such change has occurred, specifying the effect of such change onthe financial statements accompanying such certificate;

(e)           concurrently with any delivery offinancial statements under clause (a) or (b) above, a ComplianceCertificate signed by a Financial Officer and the chief legal officer of theAdministrative Borrower (delivered, and containing a statement that it wasdelivered, in good faith after reasonable investigation) to the effect that thethen outstanding Revolving Exposure and Working Capital Revolving Exposure donot violate the provisions of the Senior First Lien Note Indenture, the SeniorSecond Lien Note Indenture and the Senior Subordinated Note Indenture(including a reasonably detailed summary as to the calculations necessary todetermine the absence of any such violation);

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

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

(h)           within two Business Days of anyrequest therefor, such other information concerning the amount, composition andmanner of computation of the Borrowing Base as the Administrative Agent mayreasonably request (in such detail as may reasonably be requested by theAdministrative Agent);

(i)            not later than 30 days following thecommencement of each fiscal year, (i) the annual business plan of the Parentand its Subsidiaries for such fiscal year approved

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by the Board of Directorsof the Parent, and (ii) forecasts prepared by management of the Parent for such fiscal year and each ofthe succeeding fiscal years through the fiscal year in which the Maturity Dateis scheduled to occur (including a projected consolidated balance sheet andrelated statements of projected operations and cash flow as of the end of andfor each such fiscal year), presented on a monthly basis for such fiscal yearand on an annual basis thereafter, and, promptly when available, any significantrevisions of such business plan and forecasts;

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

(k)           promptly following any requesttherefor, such other information regarding the operations, business affairs andfinancial condition of the Parent or any Subsidiary, or compliance with theterms of any Loan Document, as the Administrative Agent, the AdministrativeAgent or any Lender may reasonably request;

(l)            [Intentionally Omitted];

(m)          [Intentionally Omitted]; and

(n)           promptly after the AdministrativeBorrower obtains knowledge thereof, notice of the occurrence of any FCCR Periodor Cash Collection Triggering Event.

SECTION 5.02.  Notices of Material Events.  The Administrative Borrower will furnish tothe Administrative Agent and each Lender prompt written notice of thefollowing:

(a)           the occurrence of any Default;

(b)           the filing or commencement of anyaction, suit or proceeding by or before any arbitrator or GovernmentalAuthority against or, to the knowledge of an executive officer or a FinancialOfficer of the Administrative Borrower, affecting the Parent or any Affiliatethereof that would reasonably be expected to result in a Material AdverseEffect;

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

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

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

Each notice delivered under this Section shall beaccompanied by a statement of a Financial Officer or other executive officer ofthe Administrative Borrower setting forth the details of the

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event or development requiring such notice and anyaction taken or proposed to be taken with respect thereto.

SECTION 5.03.  Information Regarding Collateral.  (a) The Administrative Borrower will furnishto the Administrative Agent 10 day’s prior written notice of any change(i) in any Loan Party’s corporate name or in any trade name used toidentify it in the conduct of its business or in the ownership of itsproperties, (ii) in the location of any Loan Party’s chief executiveoffice, its principal place of business, any office in which it maintains booksor records relating to Collateral owned by it or any office or facility atwhich Collateral owned by it having an aggregate fair value in excess of$250,000 with respect to Foreign Fixed Asset Collateral and $1,000,000 withrespect to Foreign Working Capital Collateral is located (including theestablishment of any such new office or facility), (iii) in any Loan Party’sidentity or corporate structure, (iv) in any Loan Party’s Federal TaxpayerIdentification Number or other organizational identification number (or, withrespect to each Foreign Subsidiary, any comparable identification numbers issuedby any Governmental Authority) or (v) in any Loan Party’s jurisdiction ofincorporation or organization.  TheAdministrative Borrower agrees not to effect or permit any change referred toin the preceding sentence unless all filings have been made under the UniformCommercial Code or the applicable legislation of other jurisdictions orotherwise that are required in order for the Administrative Agent to continueat all times following such change to have a valid, legal and perfectedsecurity interest in all the Collateral.

(b)           At the time of delivery of the annualfinancial statements with respect to the preceding fiscal year pursuant toclause (a) of Section 5.01, the Administrative Borrower shalldeliver to the Administrative Agent a certificate of a Financial Officer andthe chief legal officer of the Administrative Borrower, (i) setting forththe information required pursuant to Section 2 of the PerfectionCertificate or confirming that there has been no change in such informationsince the date of the Perfection Certificate delivered on the Effective Date orthe date of the most recent certificate delivered pursuant to this Section and(ii) certifying that all Uniform Commercial Code financing statements(including fixture filings, as applicable) or other appropriate filings,recordings or registrations, including all refilings, rerecordings andreregistrations, containing a description of the Collateral have been filed ofrecord in each governmental, municipal or other appropriate office in each jurisdictionidentified pursuant to clause (i) above to the extent necessary to protectand perfect the security interests under the Security Agreements for a periodof not less than 18 months after the date of such certificate (except asnoted therein with respect to any continuation statements to be filed withinsuch period).

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

SECTION 5.05.  Payment of Obligations; Compliance withLeases.  (a) Each Borrower will, andwill cause each of the Parent and the Subsidiaries to, pay (i) all Taxesand

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other charges of any Governmental Authority imposed onit or any of its properties or assets or in respect of any of its franchises,business, income or property before any penalty or interest accrues thereon and(ii) all claims (including claims for labor, services, materials andsupplies) for sums that have become due and payable and that by law have or maybecome a Lien (other than a Lien permitted under Section 6.03) uponany of the property or assets of the Parent or any of the Subsidiaries, priorto the time when any penalty or fine shall be incurred with respect thereto,except with respect to subsections (i) and (ii) of this Section 5.05 where(A) the validity or amount thereof is being contested in good faith byappropriate procedures or proceedings, (B) the Parent or such Subsidiaryhas set aside on its books adequate reserves with respect thereto in accordancewith GAAP, (C) such contest effectively suspends collection of thecontested obligation and the enforcement of any Lien securing such obligationand (D) the failure to make payment pending such contest would notreasonably be expected to result in a Material Adverse Effect.

(b)           Each Borrower will, and will causeeach of the Parent and the Subsidiaries to, comply with all material terms ofeach lease under which the Parent or any Subsidiary leases any property, aslessee, and at which Equipment that has an aggregate fair value in excess of$250,000 and is included in the calculation of the Borrowing Base is located.

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

SECTION 5.07.  Insurance.  Each Borrower will, and will cause each ofthe Parent and the Subsidiaries to, maintain insurance with respect to itsmaterial properties and business against loss or damage of the kindscustomarily insured against by Persons engaged in the same or similar business,of such types and in such amounts as are customarily carried under similarcircumstances by such other Persons. Such insurance shall be maintained with financially sound and reputableinsurers, except that a portion of such insurance program (not to exceed thatwhich is customary in the case of companies engaged in the same or similarbusiness or having similar properties similarly situated) may be effectedthrough self-insurance, provided adequate reserves therefor, in accordance withGAAP, are maintained.  All insurancepolicies or certificates (or certified copies thereof) with respect to suchinsurance (A) shall be endorsed to the Administrative Agent’s reasonablesatisfaction for the benefit of the Lenders (including by naming theAdministrative Agent as loss payee or additional insured, as appropriate); and(B) shall state that such insurance policy shall not be canceled without30 days’ prior written notice thereof (or, in connection with anycancellation resulting from the non-payment of premiums, 10 days’ priorwritten notice thereof).  TheAdministrative Borrower shall promptly notify the Administrative Agent of anymaterial change or revision, or notice of expiration or non-renewal, withrespect to any such insurance policy. The Administrative Borrower shall furnish to the Administrative Agent,on the Effective Date and on the date of delivery of each annual financialstatement, full information as to the insurance carried.  At any time that insurance at levelsdescribed in Schedule 5.07 is not being maintained by or on behalfof the Parent or any of the Subsidiaries, the Administrative Borrower willnotify the Administrative Agent in writing within two Business Days thereofand, if thereafter notified by the Administrative Agent or the Required Lendersto do so, the Administrative Borrower or any such

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Subsidiary, as the case may be, shall obtain insuranceat such levels at least equal to those set forth on Schedule 5.07; providedthat such insurance can be obtained at commercially reasonable rates.

SECTION 5.08.  Casualty and Condemnation.  The Administrative Borrower will furnish tothe Administrative Agent and the Lenders prompt written notice of any casualtyor other insured damage to any portion of any Collateral or the commencement ofany action or proceeding for the taking of any Collateral or any part thereofor interest therein under power of eminent domain or by condemnation or similarproceeding, where the reduction in the fair market value of the Collateral soaffected in connection with any such casualty event or condemnation is at least$2,500,000.

SECTION 5.09.  Books and Records; Inspection and AuditRights.  (a) Each Borrower will, andwill cause each of the Parent and the Subsidiaries to, keep proper books ofrecord and account in which full, true and correct entries are made in allmaterial respects of all dealings and transactions in relation to its businessand activities.  Each Borrower will, andwill cause each of its subsidiaries to, permit any representatives designatedby the Administrative Agent or any Lender, upon reasonable prior notice, tovisit and inspect its properties, to examine and make extracts from its booksand records, and to discuss its affairs, finances and condition with itsofficers and independent accountants (and the Borrowers shall be provided theopportunity to participate in any such discussions with such independentaccountants), all at such reasonable times and as often as reasonablyrequested.  The Borrowers shall pay thereasonable fees and expenses of any representatives retained by theAdministrative Agent to conduct any such inspection; provided, howeverthat so long as no Event of Default shall have occurred and be continuing, theBorrowers shall only be required to pay for one such inspection per fiscal yearof the Parent.

(b)           Each Borrower will, and will causeeach of the other Loan Parties to, upon reasonable prior notice, permit anyrepresentatives designated by the Administrative Agent (including anyconsultants, accountants, lawyers and appraisers retained by the AdministrativeAgent) to conduct evaluations and appraisals of the Administrative Borrower’scomputation of the Borrowing Base and the assets included in the BorrowingBase, all at such reasonable times and as often as reasonably requested.  The Borrowers shall pay the reasonable feesand expenses of any representatives retained by the Administrative Agent toconduct any such evaluation or appraisal; provided, however thatso long as no Event of Default shall have occurred and be continuing, theBorrowers shall only be required to pay for one such evaluation or appraisalpursuant to this clause (b) per calendar year for each category of Collateralincluded in each Borrowing Base.  TheBorrowers also agree to modify or adjust the computation of the Borrowing Base(which may include maintaining additional reserves or modifying the eligibilitycriteria for the components of the Borrowing Base) to the extent required bythe Administrative Agent or the Required Lenders as a result of any suchevaluation or appraisal or otherwise.

(c)           In the event that historicalaccounting practices, systems or reserves relating to the components of theBorrowing Base are modified in a manner that is adverse to the Lenders in anymaterial respect, the Borrowers will agree to maintain such additional reserves(for purposes of computing the Borrowing Base) in respect of the components ofthe Borrowing Base and make such other adjustments to its parameters forincluding the components of the

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Borrowing Base as the Administrative Agent or theRequired Lenders in their commercially reasonable discretion shall requirebased upon such modifications.

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

SECTION 5.11.  Use of Proceeds.  (a) [Intentionally Omitted].

(b)           The proceeds of the Revolving Loanswill be used solely (i) to refinance the Pre-Petition Loan Agreement and theDIP Credit Agreement, (ii) to pay Transaction Costs and (iii) for ordinaryworking capital and general corporate purposes of the applicable Borrower andits Subsidiaries, including, without limitation, the payment of amounts payablepursuant to the Plan of Reorganization on the Effective Date.

(c)           No part of the proceeds of any Loanwill be used, whether directly or indirectly, and whether immediately,incidentally or ultimately, (i) to purchase or carry Margin Stock or anysecurity convertible into or exchangeable for Margin Stock, or extend credit toothers for the purpose of purchasing or carrying Margin Stock or any securityconvertible into or exchangeable for Margin Stock, or to refund Indebtednessoriginally incurred for such purpose, or (ii) for any purpose that entailsa violation of any of the Regulations of the Board, including Regulation Uand Regulation X.

(d)           [Intentionally Omitted].

SECTION 5.12.  Additional Subsidiaries.  If any additional subsidiary is formed oracquired by a Loan Party after the Effective Date, the Administrative Borrowerwill notify the Administrative Agent and the Lenders thereof and (i) theAdministrative Borrower will cause such subsidiary to become a party to theapplicable Security Documents in the manner provided therein and such othermortgages and security, pledge, guarantee and subordination agreements asreasonably requested by the Administrative Agent to guarantee and secure theObligations, in each case within three Business Days after such subsidiary isformed or acquired and promptly take such actions to create and perfect Lienson such subsidiary’s assets to secure the Obligations as the AdministrativeAgent or the Required Lenders shall reasonably request and (ii) if anyEquity Interests or Indebtedness of such subsidiary are owned by or on behalfof any Loan Party, the Administrative Borrower will cause certificates andpromissory notes evidencing such Equity Interests and Indebtedness to be pledgedto secure the Obligations within three Business Days after such Subsidiary isformed or acquired.

SECTION 5.13.  Further Assurances.  (a) Each Borrower will, and will cause eachother Loan Party to, execute any and all further documents, financing statements,agreements and instruments, and take all such further actions (including thefiling and recording of financing statements, fixture filings, mortgages, deedsof trust and other documents), that may be required under any applicable law,or which the Administrative Agent or the Required Lenders may reasonablyrequest, to effectuate the transactions contemplated by the Loan

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Documents or to grant, preserve, protect or perfectthe Liens created or intended to be created by the Security Documents or thevalidity or priority of any such Lien, all at the expense of the LoanParties.  Each Borrower also agrees toprovide to the Administrative Agent, from time to time upon request, evidencereasonably satisfactory to the Administrative Agent as to the perfection andpriority of the Liens created or intended to be created by the SecurityDocuments.

(b)           If any material assets (including anyreal property or improvements thereto or any interest therein) are acquired bythe Borrowers or any other Loan Party after the Effective Date (other thanassets constituting Collateral that become subject to the Lien of theappropriate Security Agreements upon acquisition thereof), the AdministrativeBorrower will notify the Administrative Agent and the Lenders thereof, and, ifrequested by the Administrative Agent or the Required Lenders, the Borrowerswill cause such assets to be subjected to a Lien securing the Obligations andwill take, and cause the other Loan Parties to take, such actions as shall benecessary or reasonably requested by the Administrative Agent to grant andperfect such Liens, including actions described in paragraph (a) of thisSection, all at the expense of the Loan Parties; provided that thefollowing property shall not be covered by this Section 5.13(b):  (i) owned real estate or leaseholdinterests with an aggregate fair market value of less than $5,000,000,(ii) any other items of tangible personal property with, in each case, afair market value of less than $500,000 and (iii) items explicitlyexcluded by exceptions in any Security Agreement, Pledge Agreement or otherSecurity Document.

SECTION 5.14.  Supplemental Disclosure.  From time to time as may be reasonablyrequested by the Administrative Agent (which request will not be made morefrequently than once each year absent the occurrence and continuance of anEvent of Default) or at the Loan Parties’ election, the Administrative Borrowershall supplement each Schedule, or any representation herein or in any otherLoan Document, with respect to any matter hereafter arising that, if existingor occurring at the date of this Agreement, would have been required to be setforth or described in such Schedule or as an exception to such representationor that is necessary to correct any information in such Schedule orrepresentation which has been rendered inaccurate thereby (and, in the case ofany supplements to any Schedule, such Schedule shall be appropriately marked toshow the changes made therein); provided that (a) no such supplement toany such Schedule or representation shall amend, supplement or otherwise modifyany Schedule or representation, or be or be deemed a waiver of any Default orEvent of Default resulting from the matters disclosed therein, except asconsented to by the Administrative Agent and the Required Lenders in writing,and (b) no supplement shall be required or permitted as to representations andwarranties that relate solely to the Closing Date.

SECTION 5.15.  Intellectual Property.  Each Borrower will, and will cause each ofthe Parent and the Subsidiaries to, conduct its business and affairs withoutinfringement of or interference with any Intellectual Property of any otherPerson in any material respect and shall comply in all material respects withthe terms of its Intellectual Property licenses.

SECTION 5.16.  Landlord Lien Waivers, MortgageeAgreements and Bailee Letters.  Asreasonably requested by the Administrative Agent, each Borrower will, and willcause each of the other Loan Parties to, use commercially reasonable efforts toobtain a Landlord Lien Waiver, mortgagee agreement or Bailee Letter, asapplicable, from the lessor of each leased property, mortgagee of ownedproperty or bailee with respect to any warehouse, processor or

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converter facility or other location where ForeignFixed Asset Collateral having an aggregate fair value in excess of $250,000 isstored or located or Foreign Working Capital Collateral having an aggregatefair value in excess of $1,000,000 is stored or located, which agreement orletter shall contain a waiver or subordination of all Liens or claims that thelandlord, mortgagee or bailee may assert against the Foreign Fixed AssetCollateral or Foreign Working Capital Collateral at that location, and shallotherwise be reasonably satisfactory in form and substance to theAdministrative Agent.  Each Loan Partyshall timely and fully pay and perform its obligations under all leases andother agreements with respect to each leased location or public warehouse whereany Collateral is or may be located.

SECTION 5.17. DepositoryBanks. (a) Each Borrower will, and will cause each of the other LoanParties to, maintain a bank reasonably acceptable to the Administrative Agentas its principal depository bank, including for the maintenance of operating,administrative, cash management, collection activity, and other depositaccounts for the conduct of its business. Schedule 5.17 sets forth as of the Effective Date all deposit accounts,securities accounts and commodities accounts of each Borrower and the otherLoan Parties.

(b)           Each Borrower shall, and shall causeeach other Loan Party to, (i) deposit all of its cash in deposit accounts thatare Controlled Deposit Accounts, (ii) not establish or maintain any securitiesaccount or commodity account that is not a Controlled Securities Account and(iii) not establish or maintain any deposit account that is not a ControlledDeposit Account; provided, however, that the Loan Parties maymaintain (A) payroll, withholding tax and other fiduciary or zero balanceaccounts and (B) prior to September 30, 2006, cash in deposit accounts withBank of Montreal in an aggregate amount not to exceed $1,000,000 at any time; provided,further, that the Borrowers shall cause all balances in the accountsreferred to in clause (B) above to be transferred into a Controlled DepositAccount on a weekly basis.

(c)           Each Borrower shall, and shall causeeach other Loan Party to, notify and direct each Account debtor and every otherPerson obligated to make payments with respect to any Accounts, Inventory orother Collateral to make all such payments directly to a Controlled DepositAccount.  Each Borrower shall, and shallcause each other Loan Party to, use all reasonable efforts to cause eachAccount debtor and every other Person identified in the preceding sentence tomake all payments with respect to any Accounts, Inventory or other Collateraldirectly to a Controlled Deposit Account. In the event that a Loan Party directly receives any cash or otherfunds, notwithstanding the arrangements for payment directly into theControlled Deposit Accounts, such remittances shall be held for the benefit ofthe Administrative Agent and the Secured Parties and shall be segregated fromother funds of such Loan Party, and each Borrower shall, or shall cause eachother Loan Party to, cause such remittances and payments to be deposited into aControlled Deposit Account as soon as practicable after such Loan Party’sreceipt thereof.  Without the priorwritten consent of the Administrative Agent, no Loan Party shall, under anycircumstances whatsoever, change the general instructions given to Accountdebtors and other Persons obligated to make payments with respect to anyAccounts, Inventory or other Collateral regarding the deposit of payments withrespect thereto in a Controlled Deposit Account.

(d)           Each Borrower shall, and shall causeeach other Loan Party to, use all reasonable efforts to prevent (i) any fundsthat are proceeds of Foreign Fixed Asset Collateral

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from being deposited or otherwise commingled with proceedsof Foreign Working Capital Collateral and (ii) any funds that are proceeds ofCollateral from being deposited or otherwise commingled with proceeds of assetsthat do not constitute Collateral.

(e)           During a Cash Collection Period, theAdministrative Agent may, and at the request of the Required Lenders shall,transfer any funds held in a Controlled Deposit Account or ControlledSecurities Account on each Business Day to a Collateral Proceeds Account orGerman Collateral Proceeds Account, as applicable.  With respect to any Controlled DepositAccount or Controlled Securities Account that is not the subject of a ControlAgreement, during a Cash Collection Period, at the request of theAdministrative Agent, each Borrower shall, and shall cause each Loan Party to,transfer any funds held in such Controlled Deposit Account or ControlledSecurities Account on each Business Day to a Collateral Proceeds Account or German Collateral Proceeds Account, asapplicable.  The Administrative Agentshall not have any responsibility for, or bear any risk of loss of, anyinvestment or income of any funds in any Collateral Proceeds Account or GermanCollateral Proceeds Account.  From timeto time after funds are deposited in any Collateral Proceeds Account or GermanCollateral Proceeds Account, the Administrative Agent may apply funds then heldin such Collateral Proceeds Account or German Collateral Proceeds Account tothe payment of Obligations in accordance with Section 2.10(c).  No Loan Party and no Person claiming on behalfof or through any Loan Party shall have any right to demand payment of anyfunds held in any Collateral Proceeds Account or German Collateral ProceedsAccount at any time prior to the termination of all Commitments and the paymentin full of all Obligations.

SECTION 5.18.  ERISA. Each Borrower will, and will cause each of the Parent and theSubsidiaries to, establish, maintain and operate all Plans to comply in allmaterial respects with the provisions of ERISA, the Code, and all other applicablelaws, and the regulations and interpretations thereunder other than to theextent that the Loan Parties are in good faith contesting by appropriateproceedings the validity or implication of any such provision, law, rule,regulation or interpretation.

SECTION 5.19.  Post-Closing Conditions.  Each Borrower will, and will cause each ofthe Parent and the Subsidiaries to, deliver each of the documents, instrumentsand agreements, and take each of the actions, set forth on Schedule 5.19 withinthe time periods set forth on such Schedule.

SECTION 5.20.  Canadian Pension Plans.  No Loan Party will (a) terminate any CanadianPension Plan in a manner, or take any other action with respect to any CanadianPension Plan, which could reasonably be expected to result in any materialliability of a Loan Party, (b) fail to make full payment when due of allamounts which, under the provisions of any Canadian Pension Plan, agreementrelating thereto or applicable law, such Loan Party is required to pay ascontributions thereto, except where the failure to make such payments could notreasonably be expected to have a Material Adverse Effect, (c) permit to existany accumulated funding deficiency, whether or not waived, with respect to anyCanadian Pension Plan in an amount which could reasonably be expected to causea Material Adverse Effect, (d) contribute to or assume an obligation tocontribute to any “multi-employer pension plan” as such term is defined in thePension Benefits Act (Ontario), (e) acquire an interest in any Person if suchPerson sponsors, maintains or contributes to, or at any time in the six-yearperiod preceding such

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acquisition has sponsored, maintained, or contributedto any “multi-employer pension plan” as such term is defined in the PensionBenefits Act (Ontario), or (f) permit the actuarial present value of thebenefit liabilities (computed on an accumulated benefit obligation basis inaccordance with GAAP) under all Canadian Pension Plans in the aggregate toexceed the current value of the assets of all Canadian Pension Plans in theaggregate that are allocable to such benefit liabilities, in each case only tothe extent such liabilities and assets relate to benefits to be paid toemployees of the Loan Parties, by an amount that could reasonably be expected tocause a Material Adverse Effect.

ARTICLE VINEGATIVE COVENANTS

Until the Commitments have expired or terminated andthe principal of and interest on each Loan and all fees and other Obligationspayable hereunder have been paid in full, each Borrower covenants and agreeswith the Administrative Agent and the Lenders that:

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

(i)            Indebtedness created under the LoanDocuments and the Working Capital Loan Documents;

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

(iii)          Indebtedness of the Parent to anySubsidiary and of any Subsidiary to the Parent or any other Subsidiary; provided,that (A) any such loans and advances made by a Loan Party shall be evidenced bya promissory note pledged to secure the Obligations and (B) the aggregateprincipal amount of loans and advances made by any German Loan Party to anyother Loan Party shall not exceed the amount of free reserves of such GermanLoan Party;

(iv)          Guarantees by the Parent of Indebtednessof any Subsidiary and by any Subsidiary of Indebtedness of the Parent or anyother Subsidiary; provided that (A)  any Guarantee of the SeniorSubordinated Notes by a Subsidiary shall be subordinated on the same terms asthe Senior Subordinated Notes and (B) any Guarantee of the Senior SubordinatedNotes, the Senior First Lien Notes or the Senior Second Lien Notes shall begiven only by a Domestic Subsidiary that is a Working Capital Loan Party andUniplast Industries Co.;

(v)           Indebtedness of the Parent or anySubsidiary incurred to finance the acquisition, construction or improvement ofany fixed or capital assets, including Capital Lease Obligations and anyIndebtedness assumed in connection with the acquisition of any such assets orsecured by a Lien on any such assets prior to the acquisition thereof,including Capital Lease Obligations incurred pursuant to transactions permittedby Section 6.07, and extensions, renewals and replacements of anysuch

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Indebtedness that do notincrease the outstanding principal amount thereof; provided that(A) such Indebtedness is incurred prior to or within 20 days aftersuch acquisition or the completion of such construction or improvement and(B) the aggregate principal amount of Indebtedness permitted by this clause (v)shall not exceed $25,000,000 at any time outstanding;

(vi)          the Senior First Lien Notes in anaggregate principal amount at maturity not exceeding $306,000,000 plusthe amount of additional Permitted Refinancing Indebtedness in respect thereofincurred in respect of unpaid accrued interest (not included in the accretedvalue) and premium thereon;

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

(viii)        the Senior Second Lien Notes in anaggregate principal amount not exceeding $250,000,000 plus the amount ofadditional Permitted Refinancing Indebtedness in respect thereof incurred inrespect of unpaid accrued interest and premium thereon;

(ix)           the Senior Subordinated Notes in anaggregate principal amount not exceeding $35,000,000 plus the amount ofadditional Permitted Refinancing Indebtedness in respect thereof incurred inrespect of unpaid accrued interest and premium thereon;

(x)            any Permitted RedemptionIndebtedness in respect of the Series AA Preferred Stock;

(xi)           the Existing Letters of Credit;

(xii)          Indebtedness in respect of any lettersof credit entered into in the ordinary course of business in an aggregate faceamount not to exceed $5,000,000; and

(xiii)         unsecured Indebtedness of the Parent inan aggregate principal amount not exceeding $10,000,000 pursuant to anoverdraft line of credit in form and substance reasonably satisfactory to theAdministrative Agent; provided, however, that to the extent alegal opinion is delivered by counsel to the Parent in connection with suchoverdraft line of credit, the Administrative Agent shall receive concurrentlytherewith a reliance letter in favor of the Administrative Agent and theLenders.

SECTION 6.02.  Certain Equity Securities.  The Borrowers will not, nor will it permitthe Parent or any Subsidiary to, issue any preferred stock (other than (a)Qualified Preferred Stock of the Parent and (b) the Preferred Stock issuedpursuant to the Plan of Reorganization) or be or become liable in respect ofany obligation (contingent or otherwise) to purchase, redeem, retire, acquireor make any other payment in respect of any Equity Interests of the Parent orany Subsidiary.

SECTION 6.03.  Liens. The Borrowers will not, and will not permit the Parent or any Subsidiaryto, create, incur, assume or permit to exist any Lien on any property or assetnow

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owned or hereafter acquired by it, or assign or sellany income or revenues (including accounts receivable) or rights in respect ofany thereof, except:

(a)           Liens created under the LoanDocuments and the Working Capital Loan Documents;

(b)           Permitted Encumbrances;

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

(d)           any Lien existing on any property orasset prior to the acquisition thereof by the Parent or any Subsidiary orexisting on any property or asset of any Person that becomes a Subsidiary afterthe Effective Date prior to the time such Person becomes a Subsidiary; providedthat (i) such Lien is not created in contemplation of or in connectionwith such acquisition or such Person becoming a Subsidiary, as the case may be,(ii) such Lien shall not apply to any other property or assets of theParent or any Subsidiary and (iii) such Lien shall secure only thoseobligations that it secures on the date of such acquisition or the date suchPerson becomes a Subsidiary, as the case may be and extensions, renewals andreplacements thereof that do not increase the outstanding principal amountthereof;

(e)           Liens on fixed or capital assetsacquired, constructed or improved by the Parent or any Subsidiary; providedthat (i) such Liens secure Indebtedness permitted by clause (v) of Section 6.01,(ii) such Liens and the Indebtedness secured thereby are incurred prior toor within 120 days after such acquisition or the completion of suchconstruction or improvement, (iii) the Indebtedness secured thereby doesnot exceed 100% of the cost of acquiring, constructing or improving such fixedor capital assets and (iv) such security interests shall not apply to anyother property or assets of the Parent or any Subsidiary other than propertydirectly related to such fixed or capital assets and of a type customarilycovered by such Liens, except that such security interests may not apply to anyaccounts receivable or inventory;

(f)            leases and subleases of realproperty and tangible personal property and licenses and sublicenses ofintellectual property rights, in each case granted in the ordinary course ofbusiness and not interfering individually or in the aggregate (with all suchlicenses and subleases being taken as a whole) in any material respect with theconduct of the business of the Parent and the Subsidiaries;

(g)           Liens granted under the Senior FirstLien Security Documents or the Senior Second Lien Security Documents; providedthat (i) such Liens secure only obligations under the Senior First LienNote Documents and the Senior Second Lien Note Documents, respectively, exceptthat such obligations shall not include obligations under

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any Indebtedness (orobligations under any Swap Agreements) except to the extent incurred pursuantto Section 6.01(viii), with respect to the Senior Second Lien Notes, orSection 6.01(vi), with respect to the Senior First Lien Notes, and(ii)  such Liens do not apply to any asset that is subject to a Liengranted under a Security Document to secure the Obligations;

(h)           Liens on cash deposited with theissuing bank for any Existing Letter of Credit to cash collateralize suchExisting Letter of Credit (including with respect to interest, fees andexpenses associated therewith); provided that (i) the amount ofsuch cash subject to such Lien at any time shall not exceed 105% of the faceamount of such Existing Letter of Credit and (ii) upon the termination orexpiration of such Existing Letter of Credit, to the extent there has been nodrawing under such Existing Letter of Credit that has not been reimbursed atsuch time, an amount of cash equal to 105% of the face amount of such ExistingLetter of Credit (less any amounts retained to pay interest, fees and expensesassociated therewith) shall be promptly released from such Lien; provided,further, that such Existing Letters of Credit have not been backstoppedwith letters of credit issued under the Working Capital Credit Agreement;

(i)            Liens on cash deposited with theissuing bank for any letter of credit permitted by clause (xii) of Section 6.01to cash collateralize such letter of credit (including with respect tointerest, fees and expenses associated therewith); provided that(i) the amount of such cash subject to such Lien at any time shall notexceed 105% of the face amount of such letter of credit and (ii) upon thetermination or expiration of such letter of credit, to the extent there hasbeen no drawing under such letter of credit that has not been reimbursed atsuch time, an amount of cash equal to 105% of the face amount of such letter ofcredit (less any amounts retained to pay interest, fees and expenses associatedtherewith) shall be promptly released from such Lien;

(j)            Liens on cash deposited in trust forthe benefit of the employees of the Australian Loan Parties; providedthat the amount of such cash subject to such Lien at any time shall not exceedthe lesser of (i) 25% of the outstanding principal amount the AustralianRevolving Loans under this Agreement and the Australian Revolving Loans underand as defined in the Working Capital Credit Agreement, the proceeds of whichhave been distributed by the Australian Subsidiary Borrower to the Parent andits Subsidiaries, and (ii) $1,750,000; and

(k)           Liens on cash deposited with NationalAustralia Bank to cash collateralize obligations of the Australian Loan Partiesto National Australia Bank with respect to a landlord guarantee and payrollfacilities; provided that the amount of such cash subject to such Lienat any time shall not exceed $210,000.

SECTION 6.04.  Fundamental Changes.  (a) The Borrowers will not and will notpermit the Parent or any Subsidiary to, merge into or consolidate with anyother Person, or permit any other Person to merge into or consolidate with it,or liquidate or dissolve, except that, if at the time thereof and immediatelyafter giving effect thereto no Default shall have occurred and be continuing(i) any Subsidiary may merge into the Parent; provided that if anySubsidiary that is party to such transaction is (A) a Loan Party, the survivingentity must be a Loan Party, or

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(B) a Borrower, the surviving entity must be aBorrower, (ii) any Subsidiary may merge into any Subsidiary that is a LoanParty; provided that if any Subsidiary that is party to such transactionis (A) a Loan Party, the surviving entity must be a Loan Party, or(B) a Borrower, the surviving entity must be a Borrower, (iii) anySubsidiary that is not a Loan Party may merge into any Subsidiary that is not aLoan Party; provided that any such merger involving a Person that is nota Wholly Owned Subsidiary immediately prior to such merger shall not bepermitted unless also permitted by Section 6.05, and (iv)  anySubsidiary (other than any Borrower) may liquidate or dissolve if the Parentdetermines in good faith that such liquidation or dissolution is in the bestinterests of the Parent and is not materially disadvantageous to the Lenders.

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

SECTION 6.05.  Investments, Loans, Advances, Guaranteesand Acquisitions.  The Borrowers willnot, and will not permit the Parent or any of the Subsidiaries to, purchase,hold or acquire (including pursuant to any merger with any Person that was nota Wholly Owned Subsidiary prior to such merger) any Equity Interests, evidencesof indebtedness or other securities (including any option, warrant or otherright to acquire any of the forgoing) of, make or permit to exist any loans oradvances to, Guarantee any obligations of, or make or permit to exist anyinvestment or other interest in, any other Person, or purchase or otherwiseacquire (in one transaction or a series of transactions) any assets of anyother Person constituting a business unit, except:

(a)           Permitted Investments;

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

(c)           investments by the Parent and theSubsidiaries in the Equity Interests of their respective subsidiaries (that areSubsidiaries prior to such Investment);

(d)           loans or advances made by the Parentto any Subsidiary and made by any Subsidiary to the Parent or any otherSubsidiary; provided that (i) any such loans and advances made by a LoanParty shall be evidenced by a promissory note pledged to secure the Obligationsand (ii) the aggregate principal amount of loans and advances made by anyGerman Loan Party to any other Loan Party shall not exceed the amount of freereserves of such German Loan Party;

(e)           Guarantees by the Parent of Indebtednessand other obligations of any Subsidiary and Guarantees by any Subsidiary ofIndebtedness or other obligations of the Parent or any other Subsidiary; providedthat (i) no Subsidiary shall Guarantee the Senior First Lien Notes, SeniorSecond Lien Notes or Senior Subordinated Notes unless (A) such Subsidiaryalso has Guaranteed the Domestic Obligations (as defined in the Working CapitalCredit Agreement), and (B) with respect to any Guarantee of the Senior

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Subordinated Notes, suchGuarantee is subordinated to such Guarantee of the Domestic Obligations (asdefined in the Working Capital Credit Agreement) on terms no less favorable tothe Lenders than the subordination provisions of the Senior Subordinated Notesand (ii) any such Guarantee constituting Indebtedness is permitted by Section 6.01;

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

(g)           payroll, travel and similar advancesto cover matters that are expected at the time of such advances ultimately tobe treated as expenses for accounting purposes and that are made in theordinary course of business;

(h)           investments of any Person existing atthe time such Person becomes a Subsidiary or at the time such Person merges orconsolidates with the Parent or any of the Subsidiaries, in either case incompliance with the terms of this Agreement; provided that suchinvestments were not made by such Person in connection with, or in anticipationor contemplation of, such Person becoming a Subsidiary or such merger orconsolidation;

(i)            Swap Agreements entered into incompliance with Section 6.08;

(j)            other loans, advances andinvestments; provided that the amount of any such loan, advance orinvestment made pursuant to this clause (j) together with all amounts payablein connection with Permitted Acquisitions pursuant to Section 6.05(l)shall not exceed $50,000,000 in the aggregate during the term of this Agreement;

(k)           notes or other evidences ofIndebtedness acquired as consideration in connection with a sale, transfer,lease or other disposition of any asset by the Parent or any of theSubsidiaries; and

(l)            Permitted Acquisitions.

SECTION 6.06.  Asset Sales.  The Borrowers will not, and will not permitthe Parent or any of the Subsidiaries to, sell, transfer, lease or otherwisedispose of any asset, including any Equity Interest owned by it (other than anysuch sale, transfer, lease or other disposition resulting from any casualty orcondemnation of any assets of the Parent or any of the Subsidiaries), nor willthe Borrowers permit the Parent or any of the Subsidiaries to issue anyadditional Equity Interest in such Subsidiary, except:

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

(b)           sales, transfers, issuances anddispositions to the Parent or a Subsidiary; provided that any suchsales, transfers or dispositions involving a Subsidiary that is not a LoanParty shall be made in compliance with Section 6.10;

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

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

(e)           sales of investments referred to inclauses (b), (f), (j) and (k) of Section 6.05;

(f)            sales, transfers and dispositions ofassets (other than Equity Interests of a Subsidiary) that are not permitted byany other clause of this Section; provided that the aggregate fairmarket value of all assets sold, transferred or otherwise disposed of inreliance upon this clause (f) shall not exceed (i) $10,000,000 in theaggregate in any fiscal year of the Parent or (ii) $50,000,000 in the aggregateduring the term of this Agreement;

(g)           transfers and dispositionsconstituting investments permitted under Section 6.05; and

(h)           sales, transfers and dispositions ofthe assets set forth in Schedule 6.06; provided that theAdministrative Borrower provides the Administrative Agent with written noticeof any such sale, transfer or disposition not less than five Business Daysprior to the consummation thereof;

provided that all sales, transfers,leases and other dispositions permitted hereby shall be made for an amount notless than fair value (as determined in good faith by the Board of Directors ofthe Parent), or, in the case of clause (d) above, for an amount, if less,equal to the aggregate cost expended for the property that is the subject ofsuch sale-leaseback (except that those permitted by clause (a) above shallbe made on terms that are customary in the ordinary course) and forconsideration in cash.  For purposes ofthis Section 6.06, the following shall be deemed to be cash:securities received by the Parent or any Subsidiary from the transferee thatare immediately convertible into cash without breach of their terms or theagreement pursuant to which they were purchased and that are promptly convertedby the Parent or such Subsidiary into cash.

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

SECTION 6.08.  SwapAgreements.  The Borrowers will not,and will not permit the Parent or any of the Subsidiaries to, enter into anySwap Agreement, except (a) Swap Agreements entered into to hedge ormitigate risks to which the Parent or any Subsidiary has actual exposure (otherthan those in respect of Equity Interests of the Parent or any of theSubsidiaries) and (b) Swap Agreements entered into in order to effectivelycap, collar or exchange interest rates (from fixed to floating rates, from onefloating rate to another floating rate, to a fixed rate or otherwise) withrespect to any interest-bearing liability or investment of the Parent or anySubsidiary.

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SECTION 6.09.  Restricted Payments; Certain Payments ofIndebtedness.  (a) The Borrowers willnot, and will not permit the Parent or any Subsidiary to, declare or make, oragree to pay or make, directly or indirectly, any Restricted Payment, or incurany obligation (contingent or otherwise) to do so, except (i) Wholly OwnedSubsidiaries may declare and pay dividends with respect to their EquityInterests and Subsidiaries that are not Wholly Owned Subsidiaries may declareand pay dividends ratably with respect to their Equity Interests, (ii) theParent may, subject to Section 6.02, make dividends with respect toits Equity Interests consisting solely of additional Equity Interests permittedhereunder, (iii) the Parent may purchase the Parent’s Equity Interests frompresent or former officers or employees of the Parent or any Subsidiary uponthe death, disability or termination of employment of such officer or employeein an aggregate amount for all payments under this clause (iii) not to exceed$1,000,000 per fiscal year of the Parent; provided, that any such amountnot so expended in the fiscal year for which it is permitted may be carriedover for expenditure in succeeding fiscal years, (iv) the Parent may make apayment in connection with the settlement of the claims of Richard P. Durhamand Durham Capital, L.L.C. in connection with the alleged “put” rights of suchparties with respect to certain capital stock and warrants issued by Old Pliantin an aggregate amount not to exceed the lesser of (A) the actual amount ofsuch settlement and (B) $12,000,000 and (v) the Parent may redeem the Series AAPreferred Stock with proceeds of Permitted Redemption Indebtedness; providedthat in each case, no Default has occurred and is continuing or would resulttherefrom.

(b)           The Borrowers will not, and will notpermit the Parent or any Subsidiary to, make or agree to pay or make, directlyor indirectly, any payment or other distribution (whether in cash, securitiesor other property) of or in respect of principal of or interest on any SeniorFirst Lien Note, Senior Second Lien Note or Senior Subordinated Note, or anypayment or other distribution (whether in cash, securities or other property),including any sinking fund or similar deposit, on account of the purchase, redemption,retirement, acquisition, cancellation or termination of any Senior First LienNote, Senior Second Lien Note or Senior Subordinated Note, except(i) payment of regularly scheduled interest payments as and when due inrespect of the Senior First Lien Notes; provided that, (A) the Parentshall not be permitted to make cash interest payments in respect of the SeniorFirst Lien Notes referred to in clause (a) of the definition thereof or theinterest payable pursuant to the Supplemental First Lien Notes Indenture and(B) on and prior to June 15, 2007, the Parent shall not be permitted tomake cash interest payments in respect of the Senior First Lien Notes referredto in clause (b) of the definition thereof, (ii) payment of regularlyscheduled interest payments as and when due in respect of the Senior SecondLien Notes and (iii) payment of regularly scheduled interest payments as andwhen due in respect of the Senior Subordinated Notes; provided, however,that on and prior to July 15, 2007, the Parent shall not be permitted to makecash interest payments in respect of the Senior Subordinated Notes.

SECTION 6.10.  Transactions with Affiliates.  The Borrowers will not, and will not permitthe Parent or any Subsidiary to, sell, lease or otherwise transfer any propertyor assets to, or purchase, lease or otherwise acquire any property or assetsfrom, or otherwise engage in any other transactions with, any of its Affiliates(including any Subsidiary), except (a) transactions in the ordinary courseof business that are at prices and on terms and conditions not less favorableto the Parent or such Subsidiary than could be obtained on an arm’s-lengthbasis from unrelated third parties (as determined in good faith by members ofthe board of

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directors of the Parent having a majority of thevoting power held by all disinterested members of the board of directors of theParent), (b) transactions between or among the Parent and the Subsidiariesand not involving any other Affiliate (except to the extent the involvementwith the other Affiliate otherwise complies with this Section 6.10),(c) any Restricted Payment permitted by Section 6.09, and (d)transactions expressly contemplated by Schedule 6.10.

SECTION 6.11.  Restrictive Agreements.  The Borrowers will not and will not permitthe Parent or any Subsidiary to, directly or indirectly, enter into, incur orpermit to exist any agreement or other arrangement that prohibits, restricts orimposes any condition upon (a) the ability of the Parent or any Subsidiaryto create, incur or permit to exist any Lien upon any of its property or assetsor (b) the ability of any Subsidiary to pay dividends or otherdistributions with respect to any of its Equity Interests (it being understoodthat the priority of any preferred stock in receiving dividends or liquidatingdistributions prior to dividends or liquidating distributions being paid oncommon stock shall not be deemed a restriction on the ability to makedistributions on capital stock) or to make or repay loans or advances to the Parentor any other Subsidiary (it being understood that the subordination of loans oradvances made to the Parent or any Subsidiary to other Indebtedness incurred bythe Parent or such Subsidiary shall not be deemed a restriction on the abilityto make loans or advances) or to Guarantee Indebtedness of the Parent or anyother Subsidiary; provided that (i) the foregoing shall not applyto restrictions and conditions imposed by law or by any Loan Document or anyWorking Capital Loan Document, (ii) the foregoing shall not apply torestrictions and conditions existing on the Effective Date identified on Schedule 6.11,(iii) the foregoing shall not apply to any restriction or condition withrespect to a Subsidiary pursuant to an agreement relating to any Equity Interestsor Indebtedness of such Subsidiary, in each case incurred by such Subsidiaryprior to the date on which such Subsidiary was acquired by the Parent (otherthan Equity Interests or Indebtedness incurred as consideration in, incontemplation of, or to provide all or any portion of the funds or creditsupport utilized to consummate the transaction or series of relatedtransactions pursuant to which such Subsidiary became a Subsidiary or wasotherwise acquired by the Parent) and outstanding on such date; (iv) theforegoing shall not apply to any restriction or condition pursuant to anagreement refinancing an agreement referred to in clause (i), (ii) or(iii) or this clause (iv) or contained in any amendment to an agreementreferred to in clause (i), (ii) or (iii) or this clause (iv); provided,however, that the conditions and restrictions contained in any suchrefinancing agreement or amendment are no more restrictive, taken as a whole,than the encumbrances and restrictions contained in the applicable predecessoragreement; (v) the foregoing shall not apply to customary restrictions andconditions contained in agreements relating to the sale of a Subsidiary orassets pending such sale; provided such restrictions and conditionsapply only to the Subsidiary or assets that are to be sold and such sale ispermitted hereunder, (vi) clause (a) of the foregoing shall not applyto restrictions or conditions imposed by any agreement relating to securedIndebtedness or other secured obligations permitted by this Agreement if suchrestrictions or conditions apply only to the property or assets securing suchIndebtedness or other obligations, (vii) clause (a) of the foregoingshall not apply to customary provisions in contracts restricting the assignmentthereof, or the subletting, assignment or transfer of any property or assetthat is subject to a lease, license or similar contract; (viii)  theforegoing shall not apply to net worth provisions in lease and other agreementsentered into by the Parent or any Subsidiary in the ordinary course ofbusiness; and (ix) the foregoing shall not apply to restrictions imposedby the Senior First Lien Note Documents, the Senior Second Lien Note Documentsand the Senior Subordinated Note Documents.

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SECTION 6.12.  Amendment of Material Documents.  The Borrowers will not, and will not permitthe Parent or any Subsidiary to, amend, modify or waive any of its rights under(a) its certificate of incorporation, by-laws or otherorganizational documents, including the terms related to the Preferred Stock(other than amendments and modifications that are not adverse to the interestsof the Lenders and do not impair the exercise of remedies under any SecurityDocument) or (b) the Senior First Lien Note Documents, the Senior SecondLien Note Documents or the Senior Subordinated Note Documents (other thanamendments to the Senior First Lien Security Documents or the Senior SecondLien Security Documents permitted by the Intercreditor Agreement and otheramendments and modifications that are not adverse to the interests of theLenders and do not impair the exercise of remedies under any SecurityDocument).

SECTION 6.13.  Designated Senior Debt.  The Borrowers shall not permit Parent todesignate any Indebtedness (other than indebtedness under the Loan Documentsand the Working Capital Loan Documents, indebtedness in respect of the SeniorFirst Lien Notes incurred in compliance with Section 6.01(vi) and indebtednessin respect of the Senior Second Lien Notes incurred in compliance with Section6.01(viii)) as “Designated Senior Debt” for purposes of and as defined in theSenior Subordinated Note Documents.

SECTION 6.14.  Cash Held by Loan Parties.  The Borrowers will not permit at any time onany day (a) the aggregate amount of “cash and cash equivalents” and “marketablesecurities” of the Loan Parties, in each case that would be required to bereflected on a consolidated balance sheet of the Parent Borrower and theSubsidiaries prepared as of such time in accordance with GAAP (excluding anysuch “cash” that is “restricted” cash, including, without limitation, any suchcash subject to the Liens permitted by Section 6.03(j)), minus (b) theaggregate amount of payments in such cash and cash equivalents that theBorrowers reasonably and in good faith determine will be made by the LoanParties (and will reduce such cash and cash equivalents) within the next 30days to exceed $15,000,000.

SECTION 6.15.  ERISA. The Borrowers will not, and will not permit the Parent or any Subsidiaryto, cause or permit any ERISA Affiliate to, cause or permit to occur (i) anevent that could result in the imposition of a Lien under Section 412 of theCode or Section 302 or 4068 of ERISA or (ii) an ERISA Event to the extent suchERISA Event would reasonably be expected to result in taxes, penalties andother liabilities in an aggregate amount in excess of $250,000 in theaggregate.

SECTION 6.16.  Cancellation of Indebtedness.  The Borrowers will not, and will not permitthe Parent or any Subsidiary to, cancel any claim or debt owing to it, except(a) for reasonable consideration negotiated on an arm’s length basis and in theordinary course of its business consistent with past practices and (b) pursuantto the Plan of Reorganization.

SECTION 6.17.  Change in Fiscal Year; Accounting Policies.  The Borrowers will not, and will not permitthe Parent or any Subsidiary to, change its fiscal year from a year endingDecember 31 unless required by law, in which case such Loan Party will give theAdministrative Agent at least thirty (30) days prior written noticethereof.  Subject to Section 1.04,the Borrowers will not, and will not permit the Parent or any Subsidiary to,change

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its accounting policies from those used to prepare thefinancial statements delivered pursuant to Section 4.01(i) without theprior written consent of the Administrative Agent.

SECTION 6.18.  Financial Covenants.

(a)           The Borrowers shall cause the Parentto have at the end of each fiscal month ending immediately prior to or duringany FCCR Period, a Fixed Charge Coverage Ratio for the 12-month period thenended of not less than the amount set forth below:

| Fiscal Month Ending           | ** ** | **Minimum Fixed Charge Coverage Ratio** |
|-------------------------------|------------|-----------------------------------------|
|                          |       |                                    |
| On or prior to  July 18, 2007 |       | 1.00 to 1.00                            |
|                          |       |                                    |
| Each fiscal  month thereafter |       | 1.10 to 1.00                            |

 

(b)           The Borrowers shall not permit theFacilities Availability Amount to be less than $10,000,000 at any time.

SECTION 6.19. [IntentionallyOmitted].

SECTION 6.20.  [Intentionally Omitted].

ARTICLE VII

EVENTS OF DEFAULT

If any one or more of the following events (“Eventsof Default”) shall occur:

(a)           any Borrower shall fail to pay anyprincipal of any Loan when and as the same shall become due and payable,whether at the due date thereof or at a date fixed for prepayment thereof orotherwise;

(b)           any Borrower shall fail to(i) pay any interest on any Loan or any fee or any other amount (otherthan an amount referred to in clause (a) of this Article) payable underthis Agreement or any other Loan Document, when and as the same shall becomedue and payable, or (ii) fail to deliver any Borrowing Base Certificaterequired to be delivered pursuant to the terms of this Agreement, and, in thecase of clause (ii), such failure shall continue unremedied for a period ofthree Business Days;

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

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(d)           any Borrower shall fail to observe orperform any covenant, condition or agreement contained in Section 5.02,5.04 (with respect to the existence of such Borrower), 5.11, 5.17or 5.19 or in Article VI;

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

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

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

(h)           an involuntary proceeding shall becommenced or an involuntary petition shall be filed seeking (i) liquidation,reorganization or other relief in respect of any Borrower, the Parent or anySubsidiary or its debts, or of a substantial part of its assets, under anyFederal, state or foreign bankruptcy, insolvency, receivership or similar lawnow or hereafter in effect or (ii) the appointment of a receiver, interim receiver,administrator, trustee, custodian, sequestrator, conservator or similarofficial for any Borrower, the Parent or any Subsidiary or for a substantialpart of its assets, and, in any such case, such proceeding or petition shallcontinue undismissed for 30 days or an order or decree approving or orderingany of the foregoing shall be entered;

(i)            any Borrower, the Parent or anySubsidiary shall (i) voluntarily commence any proceeding or file any petitionseeking liquidation, reorganization or other relief under any Federal, state orforeign bankruptcy, insolvency, receivership or similar law now or hereafter ineffect, (ii) consent to the institution of, or fail to contest in a timely andappropriate manner, any proceeding or petition described in clause (h) of thisArticle, (iii) apply for or consent to the appointment of a receiver, interimreceiver, trustee, custodian, sequestrator, conservator or similar official forany Borrower, the Parent or any Subsidiary or for a substantial part of itsassets, (iv) file an answer admitting the material allegations of a petitionfiled against it in any proceeding described in clause (h) of this Article, (v)make a general assignment for the benefit of creditors or (vi) take any actionfor the purpose of effecting any of the foregoing;

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(j)            any Borrower, the Parent or anySubsidiary shall admit in writing its inability or fail generally to pay itsdebts as they become due;

(k)           one or more judgments for the paymentof money in an aggregate amount in excess of $5,000,000 (net of amounts coveredby insurance as to which the insurer has not denied liability) shall berendered against any Borrower, the Parent, any Subsidiary or any combinationthereof and the same shall remain undischarged for a period of 30 consecutivedays during which execution shall not be effectively stayed, or any actionshall be legally taken by a judgment creditor to attach or levy upon any assetsof any Borrower, the Parent or any Subsidiary to enforce any such judgment;

(l)            an ERISA Event shall have occurredthat, in the reasonable opinion of the Required Lenders, when taken togetherwith all other ERISA Events that have occurred, could reasonably be expected toresult in liability of the Parent and the Subsidiaries in an aggregate amountexceeding (i) $7,000,000 in any year or (ii) $15,000,000 during theterm of this Agreement;

(m)          (i) any Loan Document shall for anyreason be asserted by any Borrower, the Parent or any of the Subsidiaries notto be a legal, valid and binding obligation of any party thereto, (ii) any Lienpurported to be created under any Security Document shall cease to be, or shallbe asserted by any Borrower, the Parent or any of the Subsidiaries not to be, avalid and perfected Lien on any Collateral, with the priority required by theLoan Documents, except (A) as a result of the sale or other disposition of theapplicable Collateral in a transaction permitted under the Loan Documents, (B)as a result of (1) the Administrative Agent’s failure to take any actionreasonably requested by the Administrative Borrower in order to maintain avalid and perfected Lien on any Collateral or (2) any action taken by theAdministrative Agent to release any Lien on any Collateral or (C) Liens onCollateral with a fair market value not exceeding $500,000 in the aggregate,(iii) the Guarantees pursuant to the Foreign Guarantee Agreement by the LoanParties of any of the Obligations shall cease to be in full force and effect(other than in accordance with the terms thereof), or shall be asserted by anyBorrower, the Parent or any of the Subsidiaries not to be in effect or not tobe legal, valid and binding obligations or (iv) the Obligations of any Borroweror the Guarantees thereof by the Loan Parties pursuant to the SecurityDocuments, shall cease to constitute “Senior Indebtedness” under thesubordination provisions of the Senior Subordinated Note Documents, or suchsubordination provisions shall be invalidated or otherwise cease, or shall beasserted by Parent or any of the Subsidiaries to be invalid or to cease, to belegal, valid and binding obligations of the parties thereto;

(n)           a Change in Control shall occur;

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

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(p)           an Event of Default under and asdefined in the Working Capital Credit Agreement shall occur;

then, and in every such event (other than an eventwith respect to any Borrower described in clause (h) or (i) of thisArticle), and at any time thereafter during the continuance of such event, theAdministrative Agent may, and at the request of the Required Lenders shall, bynotice to the Administrative Borrower, take either or both of the followingactions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shallterminate immediately, and (ii) declare the Loans then outstanding to bedue and payable in whole (or in part, in which case any principal not sodeclared to be due and payable (the “remaining Loans”) may thereafter bedeclared to be due and payable), and thereupon the principal of the Loans sodeclared to be due and payable, together with accrued interest thereon and allfees and other obligations (other than any remaining Loans) of each Borroweraccrued hereunder, shall become due and payable immediately, withoutpresentment, demand, protest or other notice of any kind, all of which arehereby waived by each Borrower; and in case of any event with respect to anyBorrower described in clause (h) or (i) of this Article, the Commitmentsshall automatically terminate and the principal of the Loans then outstanding, togetherwith accrued interest thereon and all fees and other obligations of eachBorrower accrued hereunder, shall automatically become due and payable, withoutpresentment, demand, protest or other notice of any kind, all of which arehereby waived by each Borrower.  Inaddition to the remedies set forth above, in every such event, theAdministrative Agent may exercise any remedies under the other Loan Documentsor at law or equity.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01. Authorization,Action, Etc.  Each of the Lendershereby irrevocably appoints the Administrative Agent as its agent andauthorizes the Administrative Agent to take such actions on its behalf and toexercise such powers as are delegated to the Administrative Agent by the termsof the Loan Documents, together with such actions and powers as are reasonablyincidental thereto.

The bank serving as the Administrative Agent hereundershall have the same rights and powers in its capacity as a Lender as any otherLender and may exercise the same as though it were not the AdministrativeAgent, and such bank and its Affiliates may accept deposits from, lend money toand generally engage in any kind of business with the Parent or any Subsidiaryor other Affiliate thereof as if it were not the Administrative Agenthereunder.

The Administrative Agent shall not have any duties orobligations except those expressly set forth in the Loan Documents.  Without limiting the generality of theforegoing, (a) the Administrative Agent shall not be subject to anyfiduciary or other implied duties, regardless of whether a Default has occurredand is continuing, (b) the Administrative Agent shall not have any duty totake any discretionary action or exercise any discretionary powers, exceptdiscretionary rights and powers expressly contemplated by the Loan Documentsthat the Administrative Agent is required to exercise in writing by theRequired Lenders (or such other number or percentage of the Lenders as shall benecessary under the circumstances as provided

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in Section 9.02), and (c) except asexpressly set forth in the Loan Documents, the Administrative Agent shall nothave any duty to disclose, and shall not be liable for the failure to disclose,any information relating to any Borrower, the Parent or any of the Subsidiariesthat is communicated to or obtained by the bank serving as Administrative Agentor any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or nottaken by it with the consent or at the request of the Required Lenders (or suchother number or percentage of the Lenders as shall be necessary under thecircumstances as provided in Section 9.02) or in the absence of its owngross negligence or willful misconduct. The Administrative Agent shall not be deemed to have knowledge of anyDefault unless and until written notice thereof is given to the AdministrativeAgent by the Administrative Borrower or a Lender, and the Administrative Agentshall not be responsible for or have any duty to ascertain or inquire into(i) any statement, warranty or representation made in or in connectionwith any Loan Document, (ii) the contents of any certificate, report orother document delivered thereunder or in connection therewith, (iii) theperformance or observance of any of the covenants, agreements or other terms orconditions set forth in any Loan Document, (iv) the validity,enforceability, effectiveness or genuineness of any Loan Document or any otheragreement, instrument or document, or (v) the satisfaction of anycondition set forth in Article IV or elsewhere in any LoanDocument, other than to confirm receipt of items expressly required to bedelivered to the Administrative Agent.

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

The Administrative Agent may perform any and all itsduties and exercise its rights and powers by or through any one or moresub-agents appointed by the Administrative Agent.  The Administrative Agent and any suchsub-agent may perform any and all its duties and exercise its rights and powersthrough their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply toany such sub-agent and to the Related Parties of the Administrative Agent andany such sub-agent, and shall apply to their respective activities inconnection with the syndication of the credit facilities provided for herein aswell as activities as Administrative Agent.

The Administrative Agent may resign at any time bynotifying the Lenders and the Administrative Borrower.  Upon any such resignation, the RequiredLenders shall have the right, with the consent of the Administrative Borrower(such consent not to be unreasonably withheld and which shall not be requiredduring the continuance of an Event of Default), to appoint a successor.  If no successor shall have been so appointedby the Required Lenders and shall have accepted such appointment within30 days after the retiring Administrative Agent gives notice of itsresignation, then the retiring Administrative Agent may, on behalf of theLenders, appoint a successor Administrative Agent selected from among theLenders or that shall be a bank with an office in New York, New York, or anAffiliate of any such bank.  Upon the

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acceptance of its appointment as Administrative Agenthereunder by a successor, such successor shall succeed to and become vestedwith all the rights, powers, privileges and duties of the retiringAdministrative Agent, and the retiring Administrative Agent shall be dischargedfrom its duties and obligations hereunder. The fees payable by the Borrowers to a successor Administrative Agentshall be the same as those payable to its predecessor unless otherwise agreedbetween the Borrowers and such successor. After the Administrative Agent’s resignation hereunder, the provisionsof this Article and Section 9.03 shall continue in effect for thebenefit of such retiring Administrative Agent, its sub-agents and theirrespective Related Parties in respect of any actions taken or omitted to betaken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independentlyand without reliance upon the Administrative Agent or any other Lender andbased on such documents and information as it has deemed appropriate, made itsown credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,independently and without reliance upon the Administrative Agent or any otherLender and based on such documents and information as it shall from time totime deem appropriate, continue to make its own decisions in taking or nottaking action under or based upon this Agreement, any other Loan Document orrelated agreement or any document furnished hereunder or thereunder.

Notwithstanding any other provision contained herein,the Arranger shall not, in its capacity as such, have any responsibilitiesunder this Agreement or the other Loan Documents.

SECTION 8.02.  Declaration of Trust (Treuhand) andAppointment as Administrator.  TheAdministrative Agent shall: (a) hold any Lien or security interest which isgoverned by German law and is assigned (Sicherungseigentum/Sicherungsabtretung)or otherwise transferred to it under a non-accessory security right (nichtakzessorische Sicherheit) pursuant to any of the German Security Agreements orotherwise for the purpose of securing any of the Obligations secured thereunderas trustee (Treuhänder) for the benefit of the Secured Parties; (b) hold anyabstract acknowledgement of indebtedness (abstraktes Schuldanerkenntnis) whichis governed by German law and under which certain Loan Parties haveacknowledged to owe to the Administrative Agent certain Obligations as trustee(Treuhänder) for the benefit of the Secured Parties; and (c) administer anyLien or security interest (if any) which is pledged (Verpfändung) or otherwisetransferred under an accessory security right (akzessorische Sicherheit) to itand/or the Secured Parties pursuant to any of the German Security Agreements orotherwise for the purpose of securing any of the Obligations secured thereunderand each Secured Party authorizes the Administrative Agent to accept as itsrepresentative (Stellvertreter) any pledge or other creation of any otheraccessory right made to such Secured Party, and shall act in relation to theLien and security interests in accordance with the terms and subject to theconditions of this Agreement and the other Loan Documents.  Each Secured Party hereby ratifies andapproves all acts done by the Administrative Agent on such Secured Party’sbehalf.

It is hereby agreed that, in relation to anyjurisdiction the courts of which would not recognize or give effect to thetrust (Treuhand) expressed to be created by this Section 8.02, therelationship of the Secured Party to the Administrative Agent in relation toany Lien or security interest governed by German law shall be construed as oneof principal and agent but, to

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the extent permissible under the laws of suchjurisdiction, all the other provisions of this Section 8.02 shall havefull force and effect between the parties hereto.

Each Secured Party (with the exception of theAdministrative Agent) hereby releases the Administrative Agent acting on itsbehalf pursuant to the terms of this Agreement or any other Loan Document fromthe restrictions of Section 181 of the German Civil Code (BürgerlichesGesetzbuch) (restriction of self-dealing).

SECTION 8.03.  Quebec Security.  For greater certainty, and without limitingthe powers of the Administrative Agent, or any other Person acting as an agentor mandatory for the Administrative Agent hereunder or under any of the otherLoan Documents, each Loan Party hereby acknowledges that, for purposes ofholding any security granted by any Loan Party on property pursuant to the lawsof the Province of Quebec to secure obligations of such Loan Party under anybond, the Administrative Agent shall be the holder of an irrevocable power ofattorney (fondé de pouvoir) (within the meaning of the Civil Code of Québec)for all present and future Lenders and in particular for all present and futureholders of any such bond.  Each Lenderhereby irrevocably constitutes, to the extent necessary, the AdministrativeAgent as the holder of an irrevocable power of attorney (fondé de pouvoir)(within the meaning of Article 2692 of the Civil Code of Québec) in order tohold security granted by any Loan Party in the Province of Quebec to secure theobligations of such Loan Party under any bond. Each assignee of a Lender shall be deemed to have confirmed and ratifiedthe constitution of the Administrative Agent as the holders of such irrevocablepower of attorney (fondé de pouvoir) by execution of an Assignment andAssumption.  Notwithstanding theprovisions of section 32 of An Act respecting the special powers of legalpersons (Québec), the Administrative Agent may acquire and be the holder of anybond.  The Borrowers hereby acknowledgethat such bond constitutes a title of indebtedness, as such term is used inArticle 2692 of the Civil Code of Québec.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01.  Notices.  (a) Except in the case of notices and othercommunications expressly permitted to be given by telephone, all notices andother communications provided for herein shall be in writing and shall bedelivered by hand or overnight courier service, mailed by certified orregistered mail or sent by telecopy, as follows:

(i)            if to any Borrower, to theAdministrative Borrower at 1475 Woodfield Road, Suite 700, Schaumberg, Illinois60173, Attention: Chief Financial Officer (Telecopy No. (847) 969-3338),with a copy to Sidley Austin LLP, One South Dearborn Street, Chicago, Illinois60603, Attention: Michael L. Gold (Telecopy No. (312) 853-7036);

(ii)           if to the Administrative Agent, toMerrill Lynch Bank USA, 4 World Financial Center, Floor 10, New York, New York10080, Attention: Ryan D. Bell (Telecopy No. (212) 449-6673), with a copy fornotices related to borrowings and payments to Merrill Lynch Bank USA, 800Scudders Mill Road, Plainsboro, New Jersey 08536, Attention: Joseph Sandford(Telecopy No. (609) 282-3809), and with further

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copies (other than fornotices related to borrowings and payments) to Merrill Lynch Bank USA, 4 WorldFinancial Center, Floor 10, New York, New York 10080, Attention: Paul Tufaro(Telecopy No.(212) 738-1070), and Weil, Gotshal & Manges LLP, 767 FifthAvenue, New York, New York 10153, Attention: Douglas R. Urquhart (Telecopy No.(212) 310-8007);

(iii)          [Intentionally Omitted]; and

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

(b)           Notices and other communications tothe Lenders hereunder may be delivered or furnished by electroniccommunications pursuant to procedures approved by the Administrative Agent; providedthat the foregoing shall not apply to notices pursuant to Article IIunless otherwise agreed by the Administrative Agent and the applicableLender.  The Administrative Agent or theAdministrative Borrower may, in its discretion, agree to accept notices andother communications to it hereunder by electronic communications pursuant toprocedures approved by it; provided that approval of such procedures maybe limited to particular notices or communications.

(c)           Any party hereto may change itsaddress or telecopy number for notices and other communications hereunder bynotice to the other parties hereto.  Allnotices and other communications given to any party hereto in accordance withthe provisions of this Agreement shall be deemed to have been given on the dateof receipt.

SECTION 9.02.  Waivers; Amendments.  (a) No failure or delay by the AdministrativeAgent or any Lender in exercising any right or power hereunder or under anyother Loan Document shall operate as a waiver thereof, nor shall any single orpartial exercise of any such right or power, or any abandonment ordiscontinuance of steps to enforce such a right or power, preclude any other orfurther exercise thereof or the exercise of any other right or power.  The rights and remedies of the AdministrativeAgent and the Lenders hereunder and under the other Loan Documents are cumulativeand are not exclusive of any rights or remedies that they would otherwisehave.  No waiver of any provision of anyLoan Document or consent to any departure by any Loan Party therefrom shall inany event be effective unless the same shall be permitted by paragraph (b)of this Section, and then such waiver or consent shall be effective only in thespecific instance and for the purpose for which given.  Without limiting the generality of theforegoing, the making of a Loan shall not be construed as a waiver of anyDefault, regardless of whether the Administrative Agent or any Lender may havehad notice or knowledge of such Default at the time.

(b)           Neither this Agreement nor any otherLoan Document nor any provision hereof or thereof may be waived, amended ormodified except, in the case of this Agreement, pursuant to an agreement oragreements in writing entered into by the Borrowers and the Required Lendersor, in the case of any other Loan Document, pursuant to an agreement oragreements in writing entered into by the Administrative Agent and the LoanParty or Loan Parties that are parties thereto, in each case with the consentof the Required Lenders; provided that no such agreement shall have theeffect of:

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(i)            increasing the Commitment of anyLender without the consent of each Lender;

(ii)           reducing the principal amount of anyLoan or reducing the rate of interest thereon, or reducing any fees payablehereunder, without the written consent of each Lender affected thereby and theAdministrative Agent;

(iii)          postponing the maturity of any Loan,or any scheduled date of payment of the principal amount of any Loan, or anydate for the payment of any interest thereon, or any fees payable hereunder, orreducing the amount of, waiving or excusing any such payment, or postponing thescheduled date of expiration of any Commitment, without the written consent ofeach Lender affected thereby and the Administrative Agent;

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

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

(vi)          releasing any Loan Party from itsGuarantee under the Foreign Guarantee Agreement (except with respect to thedissolution, consolidation or merger of such Loan Party in accordance with theterms of Section 6.04 or as expressly provided in the Foreign GuaranteeAgreement), or limiting its liability in respect of such Guarantee, without thewritten consent of each Lender; provided, however, that if theRequired Lenders have approved the sale of the Equity Interests of such LoanParty, the consent of the Required Lenders (and not each Lender) shall berequired for such release;

(vii)         releasing all or substantially all theCollateral from the Liens of the Security Documents (except as expresslyprovided therein), without the written consent of each Lender;

(viii)        changing any provision of any LoanDocument to permit the Parent or any of the Subsidiaries to enter into anyaccounts receivable or inventory securitization transaction or other similarfinancing arrangement, including any sale of, or any grant of a securityinterest in, accounts receivable or inventory in connection with any assetsecuritization or other similar financing arrangement, without the writtenconsent of Lenders having Commitments representing in the aggregate more than66-2/3% of the total amount of theCommitments at such time;

(ix)           changing any provision of any LoanDocument in a manner that by its terms adversely affects the rights in respectof payments due to Lenders holding Loans of any Class differently than thoseholding Loans of any other Class without the written

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consent of Lendersholding a majority in interest of the outstanding Loans and unused Commitmentsof each affected Class; or

(x)            increasing the Australian Sublimit,Canadian Sublimit, German Sublimit or Mexican Sublimit, without the writtenconsent of each Australian Lender, Canadian Lender, German Lender or MexicanLender, as applicable, and the Administrative Agent; and

providedfurther that no suchagreement shall amend, modify or otherwise affect the rights or duties of theAdministrative Agent without the prior written consent of the AdministrativeAgent.

(c)           If, in connection with any proposedamendment, waiver or consent  requiringthe consent of “each Lender” or “each Lender affected thereby,” the consent ofthe Required Lenders is obtained, but the consent of other necessary Lenders isnot obtained (any such Lender whose consent is necessary but not obtained beingreferred to herein as a “Non-Consenting Lender”), then so long as theAdministrative Agent is not a Non-Consenting Lender, the Administrative Agentmay elect to replace a Non-Consenting Lender as a Lender party to thisAgreement, provided that, concurrently with such replacement, (i) another bankor other entity which is reasonably satisfactory to the Administrative Borrowerand the Administrative Agent shall agree, as of such date, to purchase for cashthe Loans and other Obligations due to the Non-Consenting Lender pursuant to anAssignment and Assumption and to become a Lender for all purposes under thisAgreement and to assume all obligations of the Non-Consenting Lender to beterminated as of such date and to comply with the requirements of clause (b) ofSection 9.04, and (ii) the Borrowers shall pay to such Non-ConsentingLender in same day funds on the day of such replacement (1) all interest, feesand other amounts then accrued but unpaid to such Non-Consenting Lenderby the Borrowers hereunder to and including the date of termination, includingwithout limitation payments due to such Non-Consenting Lender under Sections2.14 and 2.16, and (2) an amount, if any, equal to the payment whichwould have been due to such Lender on the day of such replacement under Section2.15 had the Loans of such Non-Consenting Lender been prepaid on such daterather than sold to the replacement Lender.

SECTION 9.03.  Expenses; Indemnity; Damage Waiver; Jointand Several Obligations.  (a) TheBorrowers jointly and severally shall pay (i) all reasonable out-of-pocketexpenses incurred by the Administrative Agent, the Arranger and theirrespective Affiliates, including the reasonable fees, charges and disbursementsof outside counsel for the Administrative Agent and the Arranger, in connectionwith the preparation and administration of the Loan Documents or anyamendments, modifications or waivers of the provisions thereof (whether or notthe transactions contemplated hereby or thereby shall be consummated) and(ii) all reasonable out-of-pocket expenses incurred by the AdministrativeAgent, the Arranger or any Lender, including the reasonable fees, charges anddisbursements of any outside counsel for the Administrative Agent, the Arrangeror any Lender, in connection with the enforcement or protection of its rightsin connection with the Loan Documents, including its rights under this Section,or in connection with the Loans made hereunder, including all such reasonableout-of-pocket expenses incurred during any workout, restructuring ornegotiations in respect of such Loans.

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(b)           The Borrowers jointly and severallyshall indemnify the Administrative Agent, the Arranger and each Lender, andeach Related Party of any of the foregoing Persons (each such Person beingcalled an “Indemnitee”) against, and hold each Indemnitee harmless from,any and all losses, claims, damages, liabilities and related expenses,including the fees, charges and disbursements of any counsel for anyIndemnitee, incurred by or asserted against any Indemnitee arising out of, inconnection with, or as a result of (i) the execution or delivery of anyLoan Document or any other agreement or instrument contemplated hereby, theperformance by the parties to the Loan Documents of their respectiveobligations thereunder or the consummation of the Transactions or any othertransactions contemplated hereby, (ii) any Loan or the use of the proceedstherefrom, (iii) any actual or alleged presence or Release of HazardousMaterials on or from any Mortgaged Property or any other property currently orformerly owned or operated by the Parent or any of the Subsidiaries, or anyEnvironmental Liability related in any way to the Parent or any of theSubsidiaries, or (iv) any actual or prospective claim, litigation,investigation or proceeding relating to any of the foregoing, whether based oncontract, tort or any other theory and regardless of whether any Indemnitee isa party thereto; provided that such indemnity shall not, as to anyIndemnitee, be available to the extent that such losses, claims, damages,liabilities or related expenses are determined by a court of competentjurisdiction by final and nonappealable judgment to have resulted from thegross negligence or willful misconduct of such Indemnitee or any Affiliate ofsuch Indemnitee (or of any officer, director, employee, advisor or agent ofsuch Indemnitee or any such Indemnitee’s Affiliates) or to the extent suchdamages constitute special, indirect or consequential damages (as opposed todirect or actual damages).

(c)           To the extent that the Borrowers failto pay any amount required to be paid by it to the Administrative Agent or theArranger under paragraph (a) or (b) of this Section, each Lender severallyagrees to pay to the Administrative Agent or the Arranger, as the case may be,such Lender’s pro rata share (determined as of the time that the applicableunreimbursed expense or indemnity payment is sought) of such unpaid amount; providedthat the unreimbursed expense or indemnified loss, claim, damage, liability orrelated expense, as the case may be, was incurred by or asserted against theAdministrative Agent in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determinedbased upon its share of the sum of the total Revolving Exposure and unusedCommitments at the time.

(d)           To the extent permitted by applicablelaw, the Borrowers shall not assert, and each of them hereby waives, any claimagainst any Indemnitee, on any theory of liability, for special, indirect,consequential or punitive damages (as opposed to direct or actual damages) arisingout of, in connection with, or as a result of, this Agreement or any agreementor instrument contemplated hereby, the Transactions, any Loan or the use of theproceeds thereof.

(e)           All amounts due under this Sectionshall be payable promptly after written demand therefor.  Notwithstanding anything herein to thecontrary, the maximum liability of the German Subsidiary Borrower with respectto the expense reimbursement and indemnification obligations under this Section9.03 shall not exceed the amount of free reserves of the German SubsidiaryBorrower.

SECTION 9.04.  Successors and Assigns.  (a) The provisions of this Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors

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and assigns permitted hereby, except that (i) noBorrower may assign or otherwise transfer any of its rights or obligationshereunder without the prior written consent of each Lender (and any attemptedassignment or transfer by any Borrower without such consent shall be null andvoid) and (ii) no Lender may assign or otherwise transfer its rights orobligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed orimplied, shall be construed to confer upon any Person (other than the partieshereto, their respective successors and assigns permitted hereby, Participants(to the extent provided in paragraph (c) of this Section) and, to the extentexpressly contemplated hereby, the Related Parties of each of theAdministrative Agent, the Arranger and the Lenders) any legal or equitableright, remedy or claim under or by reason of this Agreement.

(b)           (i)            Subject to the conditions set forth inparagraph (b)(ii) below, any Lender may assign to one or more assigneesall or a portion of its rights and obligations under this Agreement (includingall or a portion of its Commitment and the Loans at the time owing to it) withthe prior written consent (such consent not to be unreasonably withheld ordelayed) of:

(A)          the Administrative Borrower; providedthat no consent of the Administrative Borrower shall be required (1) for anassignment to a Lender, an Affiliate of a Lender or an Approved Fund or (2) ifan Event of Default has occurred and is continuing; and

(B)           the Administrative Agent.

(ii)           Assignments shall be subject to thefollowing additional conditions:

(A)          except in the case of an assignment toa Lender, an Affiliate of a Lender or an Approved Fund or an assignment of theentire remaining amount of the assigning Lender’s Commitment or Loans of anyClass, the amount of the Commitment or Loans of the assigning Lender subject toeach such assignment (determined as of the date the Assignment and Assumptionwith respect to such assignment is delivered to the Administrative Agent) shallnot be less than $1,000,000 unless each of the Administrative Borrower and theAdministrative Agent otherwise consents;

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

(C)           the parties to each such assignmentrelating to the assignment shall execute and deliver to the AdministrativeAgent an Assignment and Assumption, together with a processing and recordationfee of $3,500; and

(D)          the assignee, if it shall not be aLender, shall deliver to the Administrative Agent an AdministrativeQuestionnaire and all applicable tax documentation.

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(iii)          Subject to acceptance and recordingthereof pursuant to paragraph (b)(iv) of this Section, from and after theeffective date specified in each Assignment and Assumption the assignee thereundershall be a party hereto and, to the extent of the interest assigned by suchAssignment and Assumption, have the rights and obligations of a Lender underthis Agreement, and the assigning Lender thereunder shall, to the extent of theinterest assigned by such Assignment and Assumption, be released from itsobligations under this Agreement (and, in the case of an Assignment andAssumption covering all of the assigning Lender’s rights and obligations underthis Agreement, such Lender shall cease to be a party hereto but shall continueto be entitled to the benefits of Sections 2.14, 2.15, 2.16and 10.03).  Any assignment ortransfer by a Lender of rights or obligations under this Agreement that doesnot comply with this Section 9.04 shall be treated for purposes of thisAgreement as a sale by such Lender of a participation in such rights andobligations in accordance with paragraph (c) of this Section.

(iv)          The Administrative Agent, acting forthis purpose as an agent of the Borrowers, shall maintain at one of its officesa copy of each Assignment and Assumption delivered to it and a register for therecordation of the names and addresses of the Lenders, and the Commitment of,and principal amount of the Loans owing to, each Lender pursuant to the terms hereoffrom time to time (the “Register”). The entries in the Register shall be conclusive, and the AdministrativeBorrower, each other Borrower, the Administrative Agent and the Lenders maytreat each Person whose name is recorded in the Register pursuant to the termshereof as a Lender hereunder for all purposes of this Agreement,notwithstanding notice to the contrary. The Register shall be available for inspection by the AdministrativeBorrower and any Lender, at any reasonable time and from time to time uponreasonable prior notice.  Each Lenderselling a participation to a Participant shall, as a non-fiduciary agent of theBorrowers, keep a register (substantially similar in form to the Register) ofeach such Participant, specifying such Participant’s entitlement to payments ofprincipal and interest with respect to such Participation.  The entries in such register shall beconclusive, and each Lender shall treat each Person whose name is recorded insuch Lender’s register as the Participant, notwithstanding any notice to thecontrary.

(v)           Upon its receipt of a duly completedAssignment and Assumption and all applicable tax documentation executed by anassigning Lender and an assignee, the assignee’s completed AdministrativeQuestionnaire (unless the assignee shall already be a Lender hereunder), theprocessing and recordation fee referred to in this Section and any writtenconsent to such assignment required by this Section, the Administrative Agentshall accept such Assignment and Assumption and record the informationcontained therein in the Register.  Noassignment shall be effective for purposes of this Agreement unless it has beenrecorded in the Register as provided in this paragraph.

(c)           (i)            AnyLender may, without the consent of any Borrower or the Administrative Agent,sell participations to one or more banks or other entities (a “Participant”)in all or a portion of such Lender’s rights and obligations under thisAgreement (including all or a portion of its Commitment and the Loans owing toit); provided that (A) such Lender’s obligations under thisAgreement shall remain unchanged, (B) such Lender shall remain solely

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responsible to the other parties hereto for theperformance of such obligations and (C) each Borrower, the AdministrativeAgent and the other Lenders shall continue to deal solely and directly withsuch Lender in connection with such Lender’s rights and obligations under thisAgreement.  Any agreement or instrumentpursuant to which a Lender sells such a participation shall provide that suchLender shall retain the sole right to enforce the Loan Documents and to approveany amendment, modification or waiver of any provision of the Loan Documents; providedthat such agreement or instrument may provide that such Lender will not,without the consent of the Participant, agree to any amendment, modification orwaiver described in clauses (ii), (iii) or (vii) of the first proviso to Section9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrowers agreethat each Participant shall be entitled to the benefits of Sections 2.14,2.15 and 2.16 to the same extent as if it were a Lender and hadacquired its interest by assignment pursuant to paragraph (b) of thisSection; provided such Participant agrees to be subject to Section 2.18(a)as though it were a Lender.  To theextent permitted by law, each Participant also shall be entitled to thebenefits of Section 9.08 as though it were a Lender; providedsuch Participant agrees to be subject to Section 2.17(f) as thoughit were a Lender.

(ii)           A Participant shall be entitled toreceive greater payment under Section 2.14 or 2.16 than theapplicable Lender would have been entitled to receive with respect to theparticipation sold to such Participant; provided, however, thatif (A) the aggregate amount of participations sold by the Initial Lender underthis Agreement and the Working Capital Credit Agreement exceeds $50,000,000(the “Participation Amount”) or (B) the aggregate payments to aParticipant under Section 2.14 or 2.16 of this Agreement andSection 2.14 or 2.16 of the Working Capital Credit Agreementin excess of the payments the applicable Lender would have been entitled toreceive with respect to the participation sold to such Participant is greaterthan $500,000 per year (the “Additional Payment Amount”), a Participantwith respect to any amount in excess of the Participation Amount or any paymentin excess of the Additional Payment Amount shall not be entitled to receivegreater payment under Section 2.14 or 2.16 than the InitialLender would have been entitled to receive with respect to the participationsold to such Participant unless the Administrative Borrower consents to suchparticipation in excess of the Participation Amount or payment in excess of theAdditional Payment Amount (which consent shall not be unreasonablywithheld).  A Participant that would be aForeign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16unless such Participant agrees, for the benefit of the Borrowers, to complywith Section 2.16(e) as though it were a Lender.

(d)           Any Lender may at any time pledge orassign a security interest in all or any portion of its rights under thisAgreement to secure obligations of such Lender, including any pledge orassignment to secure obligations to a Federal Reserve Bank, and this Sectionshall not apply to any such pledge or assignment of a security interest; providedthat no such pledge or assignment of a security interest shall release a Lenderfrom any of its obligations hereunder or substitute any such pledgee orassignee for such Lender as a party hereto.

(e)           Notwithstanding anything to thecontrary contained herein, any Lender (a “Granting Lender”) may grant toa special purpose funding vehicle (an “SPC”), identified as such inwriting from time to time by the Granting Lender to the Administrative Agentand the

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Administrative Borrower, the option to provide to theBorrowers all or any part of any Loan that such Granting Lender would otherwisebe obligated to make to the Borrowers pursuant to this Agreement; provided,however, that (i) nothing herein shall constitute a commitment by anySPC to make any Loan and (ii) if an SPC elects not to exercise such option orotherwise fails to provide all or any part of such Loan, the Granting Lendershall be obligated to make such Loan pursuant to the terms hereof.  The making of a Loan by an SPC hereundershall utilize the applicable Commitment of the Granting Lender to the same extent,and as if, such Loan were made by such Granting Lender.  Each party hereto hereby agrees that no SPCshall be liable for any indemnity or similar payment obligation under thisAgreement (all liability for which shall remain with the Granting Lender).  In furtherance of the foregoing, each partyhereto hereby agrees (which agreement shall survive the termination of thisAgreement) that, prior to the date that is one year and one day after thepayment in full of all outstanding commercial paper or other seniorindebtedness of any SPC, it will not institute against, or join any otherperson in instituting against, such SPC any bankruptcy, reorganization,arrangement, insolvency or liquidation proceedings under the laws of the UnitedStates or any State thereof, or the laws of Canada or any province or territorythereof.  In addition, notwithstandinganything to the contrary contained in this Section 9.04, any SPC may (i)with notice to, but without the prior written consent of, the AdministrativeBorrower and the Administrative Agent and without paying any processing feetherefor, assign all or a portion of its interests in any Loans to the GrantingLender or to any financial institutions (consented to by the AdministrativeBorrower and the Administrative Agent) providing liquidity and/or creditsupport to or for the account of such SPC to support the funding or maintenanceof Loans and (ii) disclose on a confidential basis any non-public informationrelating to its Loans to any rating agency, commercial paper dealer or providerof any surety, guarantee or credit or liquidity enhancement to such SPC.

SECTION 9.05.  Survival.  All covenants, agreements, representationsand warranties made by the Loan Parties in the Loan Documents and in thecertificates or other instruments delivered in connection with or pursuant tothis Agreement or any other Loan Document shall be considered to have beenrelied upon by the other parties hereto and shall survive the execution anddelivery of the Loan Documents and the making of any Loans, regardless of anyinvestigation made by any such other party or on its behalf and notwithstandingthat the Administrative Agent or any Lender may have had notice or knowledge ofany Default or incorrect representation or warranty at the time any credit isextended hereunder, and shall continue in full force and effect as long as theprincipal of or any accrued interest on any Loan or any fee or any other amountpayable under this Agreement is outstanding and so long as the Commitments havenot expired or terminated.  Theprovisions of Sections 2.14, 2.15, 2.16, 10.03and 10.13 and Article VIII shall survive and remain in fullforce and effect regardless of the consummation of the transactionscontemplated hereby, the repayment of the Loans, the expiration or terminationof the Commitments or the termination of this Agreement or any provisionhereof.

SECTION 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be executed incounterparts (and by different parties hereto on different counterparts), eachof which shall constitute an original, but all of which when taken togethershall constitute a single contract.  ThisAgreement, the other Loan Document and any separate letter agreements withrespect to fees payable to the Administrative Agent or the Arranger constitute theentire contract among the parties relating to the subject matter hereof andsupersede any and all previous

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agreements and understandings, oral or written,relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shallbecome effective when it shall have been executed by the Administrative Agentand when the Administrative Agent shall have received counterparts hereof that,when taken together, bear the signatures of each of the other parties hereto,and thereafter shall be binding upon and inure to the benefit of the partieshereto and their respective successors and assigns.  Delivery of an executed counterpart of asignature page of this Agreement by telecopy or other electronic transmissionshall be effective as delivery of a manually executed counterpart of thisAgreement.

SECTION 9.07.  Severability.  Any provision of this Agreement held to beinvalid, illegal or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such invalidity, illegality orunenforceability without affecting the validity, legality and enforceability ofthe remaining provisions hereof; and the invalidity of a particular provisionin a particular jurisdiction shall not invalidate such provision in any otherjurisdiction.

SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurredand be continuing, each Lender and each of its Affiliates is hereby authorizedat any time and from time to time, to the fullest extent permitted by law, toset off and apply any and all deposits (general or special, time or demand,provisional or final) at any time held and other obligations at any time owingby such Lender or Affiliate to or for the credit or the account of any Borroweragainst any of and all the obligations of the Borrowers now or hereafterexisting under this Agreement or any other Loan Document held by such Lender,irrespective of whether or not such Lender shall have made any demand underthis Agreement and although such obligations may be unmatured.  The rights of each Lender under this Sectionare in addition to other rights and remedies (including other rights of setoff)that such Lender may have.

SECTION 9.09.  Governing Law; Jurisdiction; Consent toService of Process.  (a) ThisAgreement shall be construed in accordance with and governed by the law of theState of New York.

(b)           Each of the Borrowers herebyirrevocably and unconditionally submits, for itself and its property, to thenonexclusive jurisdiction of the Supreme Court of the State of New Yorksitting in New York County and of the United States District Court of theSouthern District of New York, and any appellate court from any thereof, in anyaction or proceeding arising out of or relating to any Loan Document, or forrecognition or enforcement of any judgment, and each of parties hereto herebyirrevocably and unconditionally agrees that all claims in respect of any suchaction or proceeding may be heard and determined in such New York State or, tothe extent permitted by law, in such Federal court.  Each of the parties hereto agrees that afinal judgment in any such action or proceeding shall be conclusive and may beenforced in other jurisdictions by suit on the judgment or in any other mannerprovided by law.  Nothing in this Agreementor any other Loan Document shall affect any right that the Administrative Agentor any Lender may otherwise have to bring any action or proceeding relating tothis Agreement or any other Loan Document against any Borrower or itsproperties in the courts of any jurisdiction.

(c)           Each of the Borrowers herebyirrevocably and unconditionally waives, to the fullest extent it may legallyand effectively do so, any objection that it may now or hereafter

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have to the laying of venue of any suit, action or proceedingarising out of or relating to this Agreement or any other Loan Document in anycourt referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocablywaives, to the fullest extent permitted by law, the defense of an inconvenientforum to the maintenance of such action or proceeding in any such court.

(d)           Each of the Borrowers herebyirrevocably designates, appoints and empowers CT Corporation System, 111 EighthAvenue, New York, NY 10011 (telephone: (212) 894-8800) (the “Process Agent”),in the case of any suit, action or proceeding brought in the United States ofAmerica as its designee, appointee and agent to receive, accept and acknowledgefor and on its behalf, and in respect of its property, service of any and all legalprocess, summons, notices and documents that may be served in any action orproceeding arising out of or in connection with this Agreement or any LoanDocument.  Such service may be made bymailing (by registered or certified mail, postage prepaid) or delivering a copyof such process to such Borrower in care of the Process Agent at the ProcessAgent’s above address, and each Borrower hereby irrevocably authorizes anddirects the Process Agent to accept such service on its behalf.  As an alternative method of service, each ofthe Borrowers irrevocably consents to service of process in the manner providedfor notices in Section 9.01. Nothing in this Agreement or any other Loan Document will affect theright of any party to this Agreement to serve process in any other mannerpermitted by law.  Each of the Borrowersagrees that a final judgment in any such action or proceeding shall beconclusive and may be enforced in other jurisdictions by suit on the judgmentor in any other manner provided by law.

SECTION 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THEFULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BYJURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATINGTO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATEDHEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLYOR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEKTO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHERPARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11.  Headings.  Article and Section headings and the Table ofContents used herein are for convenience of reference only, are not part ofthis Agreement and shall not affect the construction of, or be taken intoconsideration in interpreting, this Agreement.

SECTION 9.12.  Confidentiality.  Each of the Administrative Agent and theLenders agrees to maintain the confidentiality of the Information (as definedbelow), except that Information may be disclosed (a) to its and its Affiliates’investment advisors, directors, officers, employees and agents, includingaccountants, legal counsel and other advisors (the “Representatives”)and any direct or indirect contractual counterparty in swap agreements enteredinto in connection with a Lender’s outstanding Loans from time to time or tosuch

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contractual counterparty’s professional advisor (itbeing understood that the Persons to whom such disclosure is made will beinformed of the confidential nature of such Information and instructed to keepsuch Information confidential and, in the case of any such contractualcounterparty or its professional advisor, such persons shall agree in writingto be bound by the provisions of this Section 9.12), (b) to theextent requested or demanded by any Governmental Authority or anyself-regulatory organization (including the National Association of InsuranceCommissioners or other similar organization), (c) to the extent requiredby applicable laws or regulations or by any subpoena, order or similar legalprocess; provided that, to the extent reasonably practicable and notprohibited by applicable laws or regulations or by any judicial oradministrative order, such Person will provide the Administrative Borrower withprior notice of such disclosure, (d) any nationally recognized ratingagency that requires access to information about a Lender’s investmentportfolio in connection with ratings issued with respect to such Lender,(e) to any other party to this Agreement, (f) in connection with theexercise of any remedies hereunder or any suit, action or proceeding relatingto this Agreement or any other Loan Document or the enforcement of rightshereunder or thereunder, (g) subject to an agreement containing provisionssubstantially the same as those of this Section, to (i) any assignee of orParticipant in, or any prospective assignee of or Participant in, any of itsrights or obligations under this Agreement, or (ii) any actual orprospective counterparty (or its advisors) to any swap or derivative transactionrelating to any Borrower and its obligations, (h) with the consent of theAdministrative Borrower or (i) to the extent such Information(i) becomes publicly available other than as a result of a breach of thisSection or (ii) becomes available to the Administrative Agent or anyLender on a nonconfidential basis from a source other than any Borrower, theParent, any Subsidiary or any of their Representatives that is not known tosuch Person to be subject to any obligation of confidentiality to any Borrower,the Parent or any Subsidiary.  For thepurposes of this Section, “Information” means all information receivedfrom any Borrower, the Parent, any Subsidiary or any of their Representativesrelating to any Borrower, the Parent, the Subsidiaries or their businesses,other than any such information that is available to the Administrative Agentor any Lender on a nonconfidential basis prior to disclosure by the Parent orany Subsidiary.  Any Person required tomaintain the confidentiality of Information as provided in this Section shallbe considered to have complied with its obligation to do so if such Person hasexercised the same degree of care to maintain the confidentiality of suchInformation as such Person would accord to its own confidential information.

SECTION 9.13.  Conversion of Currencies.  (a) If, for the purpose of obtaining judgmentin any court, it is necessary to convert a sum owing hereunder in one currencyinto another currency, each party hereto agrees, to the fullest extent that itmay effectively do so, that the rate of exchange used shall be that at which inaccordance with normal banking procedures in the relevant jurisdiction thefirst currency could be purchased with such other currency on the Business Dayimmediately preceding the day on which final judgment is given.

(b)           The obligations of the Borrowers inrespect of any sum due to any party hereto or any holder of the obligationsowing hereunder (the “Applicable Creditor”) shall, notwithstanding anyjudgment in a currency (the “Judgment Currency”) other than the currencyin which such sum is stated to be due hereunder (the “Agreement Currency”),be discharged only to the extent that, on the Business Day following receipt bythe Applicable Creditor of any sum adjudged to be so due in the JudgmentCurrency, the Applicable Creditor may in accordance

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with normal banking procedures in the relevantjurisdiction purchase the Agreement Currency with the Judgment Currency; if theamount of the Agreement Currency so purchased is less than the sum originallydue to the Applicable Creditor in the Agreement Currency, each of the Borrowersagrees, as a separate obligation and notwithstanding any such judgment, toindemnify the Applicable Creditor against such loss.  The obligations of the Borrowers contained inthis Section 9.13 shall survive the termination of this Agreement andthe payment of all other amounts owing hereunder.

SECTION 9.14.  Interest Rate Limitation.  Notwithstanding anything herein to thecontrary, if at any time the interest rate applicable to any Loan, togetherwith all fees, charges and other amounts that are treated as interest on suchLoan under applicable law (collectively the “Charges”), shall exceed themaximum lawful rate (the “Maximum Rate”) that may be contracted for, charged,taken, received or reserved by the Lender holding such Loan in accordance withapplicable law, the rate of interest payable in respect of such Loan hereunder,together with all Charges payable in respect thereof, shall be limited to theMaximum Rate and, to the extent lawful, the interest and Charges that wouldhave been payable in respect of such Loan but were not payable as a result ofthe operation of this Section shall be cumulated and the interest and Chargespayable to such Lender in respect of other Loans or periods shall be increased(but not above the Maximum Rate therefor) until such cumulated amount, togetherwith interest thereon at the Federal Funds Effective Rate to the date ofrepayment, shall have been received by such Lender.

SECTION 9.15. ParallelObligations.  For the purposes oftaking and ensuring the continuing validity of security (the “Parallel DebtSecurity”) under the Security Documents subject to the laws of (or to theextent affecting assets situated in) Germany and such other jurisdictions asthe Administrative Agent and the Administrative Borrower (each actingreasonably) agree, notwithstanding any contrary provision in any Loan Document:

(a)           Abstract Acknowledgement ofIndebtedness.

(i)            Each Borrower undertakes (such undertakings,the “Parallel Obligations”) to pay to the Administrative Agent amountsequal to all present and future amounts (the “Original Obligations”)owing by it to a Secured Party under any Loan Document;

(ii)           the Administrative Agent shall haveits own independent right to demand payment of the Parallel Obligations;

(iii)          the Parallel Obligations shall notlimit or affect the existence of the Original Obligations for which the SecuredParties shall have an independent right to demand payment;

(iv)          notwithstanding paragraphs (ii) and(iii), payment by a Borrower of its Parallel Obligations shall to the sameextent decrease and be a good discharge of the corresponding OriginalObligations owing to the relevant Secured Parties and payment by a Borrower of itsOriginal Obligations to the relevant Secured Parties shall to

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the same extent decreaseand be a good discharge of the Parallel Obligations owing by it to theAdministrative Agent;

(v)           the Parallel Obligations are owed tothe Administrative Agent in its own name and the Parallel Debt Security shallsecure the Parallel Obligations so owing;

(vi)          without limiting or affecting theAdministrative Agent’s right to protect, preserve or enforce its rights underany Security Agreement, the Administrative Agent undertakes to each SecuredParty not to exercise its rights in respect of the Parallel Obligations withoutthe consent of the relevant Secured Party; and

(vii)         the Administrative Agent undertakes todistribute to the Secured Parties an amount equal to any amounts collected orreceived by the Administrative Agent which it has applied in reduction of theParallel Obligations in accordance with the terms of this Agreement as if theterms of this Agreement as if the Original Obligations had not been discharged.

(b)           Joint and Several Creditor.

(i)            Each Borrower and each of theSecured Parties (other than the Administrative Agent) agrees that theAdministrative Agent shall be the joint creditor (together with the relevantSecured Parties) of each and every obligation of any Borrower towards each ofthe Secured Parties (other than the Administrative Agent) under the LoanDocuments. Accordingly the Administrative Agent will have its own independentright to demand performance by the relevant Borrower of those obligations.However, any discharge of any such obligation to either the AdministrativeAgent or a Secured Party (other than the Administrative Agent) shall, to thatextent, discharge the corresponding obligation owing to the other; and

(ii)           without limiting or affecting theAdministrative Agent’s rights against any Borrower (whether under this Section9.15 or under any other provision of the Loan Documents), theAdministrative Agent agrees with each other Secured Party (on a several anddivided basis) that, subject as set out in the next sentence, it will notexercise its rights as a joint creditor with a Secured Party (other than theAdministrative Agent) except with the consent of the relevant Secured Party.However, for the avoidance of doubt, nothing in the previous sentence shall inany way limit the Administrative Agent’s right to act in the protection orpreservation of rights under, or to enforce any Security Agreement ascontemplated by, this Agreement and/or the relevant Security Agreement (or todo any act reasonably incidental to any of the foregoing).

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IN WITNESS WHEREOF, the parties hereto have causedthis Agreement to be duly executed by their respective authorized officers asof the day and year first above written.
|   | PLIANT CORPORATION PTY LTD.        |
|--------|------------------------------------|
|   |                               |   |
|   |                               |   |
|   | By:                                |   |   |
|   |                               | Name: |
|   |                               | Title |
|   |                               |   |
|   | PLIANT CORPORATION OF CANADA

LTD. |
|   |                               |   |
|   |                               |   |
|   | By:                                |   |   |
|   |                               | Name: |
|   |                               | Title |
|   |                               |   |
|   | PLIANT FILM PRODUCTS GMBH          |
|   |                               |   |
|   |                               |   |
|   | By:                                |   |   |
|   |                               | Name: |
|   |                               | Title |
|   |                               |   |
|   | ASPEN INDUSTRIAL, S.A. DE C.V.     |
|   |                               |   |
|   |                               |   |
|   | By:                                |   |   |
|   |                               | Name: |
|   |                               | Title |

 
| ACKNOWLEDGED AND AGREED      |
|------------------------------|
| with respect to Article III: |
|                         |
| PLIANT CORPORATION           |
|                         |
|                         |
| By:                          |   |   |
| Name:                        |
| Title                        |

 

 

[SIGNATURE PAGE TO FIXEDASSET CREDIT AGREEMENT]

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|        | MERRILL LYNCH BANK USA, as  Administrative Agent and Lender             |
|--------|-------------------------------------------------------------------------|
|   |                                                                    |   |
|   |                                                                    |   |
|   | By:                                                                     |   |   |
|   |                                                                    | Name: |
|   |                                                                    | Title: |
|   |                                                                    |   |
|   | MERRILL LYNCH INTERNATIONAL  (AUSTRALIA) LIMITED, as Australian  Lender |
|   |                                                                    |   |
|   |                                                                    |   |
|   | By:                                                                     |   |   |
|   |                                                                    | Name: |
|   |                                                                    | Title: |
|   |                                                                    |   |
|   | MERRILL LYNCH CAPITAL CANADA  INC., as Canadian Lender                  |
|   |                                                                    |
|   |                                                                    |
|   | By:                                                                     |   |   |
|   |                                                                    | Name: |
|   |                                                                    | Title: |
|   |                                                                    |   |
|   |                                                                    | MERRILL LYNCH CAPITAL MARKETS  BANK LIMITED, as German Lender |
|   |                                                                    |   |
|   |                                                                    |   |
|   | By:                                                                     |   |   |
|   |                                                                    | Name: |
|   |                                                                    | Title: |
|   |                                                                    |   |
|   |                                                                    | MERRILL LYNCH MORTGAGE  CAPITAL INC., as Mexican Lender |
|   |                                                                    |   |
|   |                                                                    |   |
|   | By:                                                                     |   |   |
|   |                                                                    | Name: |
|   |                                                                    | Title: |

 

 

[SIGNATURE PAGE TO FIXEDASSET CREDIT AGREEMENT]

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