**Exhibit 10.1**

WORKING CAPITAL CREDITAGREEMENT

dated as of

July 18, 2006

among

PLIANT CORPORATION,as Parent Borrower,

The Subsidiary BorrowersParty Hereto,

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                     | 47       |
| Section 1.03. | Terms Generally                                             | 47       |
| Section 1.04. | Accounting Terms; GAAP                                      | 48       |
| ARTICLE II    | The Credits                                                 | 48       |
| Section 2.01. | Commitments                                                 | 48       |
| Section 2.02. | Loans and Borrowings                                        | 50       |
| Section 2.03. | Requests for Borrowings                                     | 50       |
| Section 2.04. | Swingline Loans                                             | 51       |
| Section 2.05. | Letters of Credit                                           | 52       |
| Section 2.06. | Funding of Borrowings                                       | 57       |
| Section 2.07. | Interest Elections                                          | 57       |
| Section 2.08. | Termination and  Reduction of Commitments                   | 58       |
| Section 2.09. | Repayment of Loans;  Evidence of Debt                       | 59       |
| Section 2.10. | Prepayment of Loans                                         | 60       |
| Section 2.11. | Fees                                                        | 64       |
| Section 2.12. | Interest                                                    | 65       |
| Section 2.13. | Alternate Rate of  Interest                                 | 66       |
| Section 2.14. | Increased Costs                                             | 66       |
| Section 2.15. | Break Funding Payments                                      | 67       |
| Section 2.16. | Taxes                                                       | 68       |
| Section 2.17. | Payments Generally; Pro  Rata Treatment; Sharing of Setoffs | 69       |
| Section 2.18. | Mitigation Obligations                                      | 74       |
| Section 2.19. | Protective Advances                                         | 75       |
| ARTICLE III   | Representations and  Warranties                             | 75       |
| Section 3.01. | Organization; Powers                                        | 75       |
| Section 3.02. | Authorization;  Enforceability                              | 76       |
| Section 3.03. | Governmental Approvals;  No Conflicts                       | 76       |
| Section 3.04. | Financial Condition; No  Material Adverse Change            | 76       |
|               |                                                             |          |  |  |

 

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|               | ** **                                      | **Page** |
|---------------|-------------------------------------------------|----------|
|          |                                            |     |
| Section 3.05. | Properties                                      | 77       |
| Section 3.06. | Litigation and  Environmental Matters           | 77       |
| Section 3.07. | Compliance with Laws  and Agreements            | 78       |
| Section 3.08. | Investment Company  Status                      | 78       |
| Section 3.09. | Taxes                                           | 78       |
| Section 3.10. | ERISA                                           | 78       |
| Section 3.11. | Disclosure                                      | 78       |
| Section 3.12. | Subsidiaries; Loan  Party Information           | 79       |
| Section 3.13. | Insurance                                       | 79       |
| Section 3.14. | Labor Matters                                   | 79       |
| Section 3.15. | Solvency                                        | 79       |
| Section 3.16. | Security Documents                              | 80       |
| Section 3.17. | Federal Reserve  Regulations                    | 81       |
| Section 3.18. | Senior Secured  Obligations                     | 81       |
| Section 3.19. | Related Names                                   | 81       |
| Section 3.20. | Permanent Establishment  in Canada              | 81       |
| Section 3.21. | Canadian Pension Plans                          | 82       |
| ARTICLE IV    | Conditions                                      | 75       |
| Section 4.01. | Effective Date                                  | 82       |
| Section 4.02. | Each Credit Event                               | 88       |
| Section 4.03. | Australian Effective  Date                      | 89       |
| ARTICLE V     | Affirmative Covenants                           | 90       |
| Section 5.01. | Financial Statements  and Other Information     | 90       |
| Section 5.02. | Notices of Material  Events                     | 93       |
| Section 5.03. | Information Regarding  Collateral               | 94       |
| Section 5.04. | Existence; Conduct of  Business                 | 94       |
| Section 5.05. | Payment of Obligations;  Compliance with Leases | 95       |
| Section 5.06. | Maintenance of  Properties                      | 95       |
| Section 5.07. | Insurance                                       | 95       |
|               |                                                 |          |  |  |

 

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|               | ** **                                                      | **Page** |
|---------------|-----------------------------------------------------------------|----------|
|          |                                                            |     |
| Section 5.08. | Casualty and Condemnation                                       | 96       |
| Section 5.09. | Books and Records;  Inspection and Audit Rights                 | 96       |
| Section 5.10. | Compliance with Laws                                            | 97       |
| Section 5.11. | Use of Proceeds and  Letters of Credit                          | 97       |
| Section 5.12. | Additional Subsidiaries                                         | 97       |
| Section 5.13. | Further Assurances                                              | 98       |
| Section 5.14. | Supplemental Disclosure                                         | 99       |
| Section 5.15. | Intellectual Property                                           | 99       |
| Section 5.16. | Landlord Lien Waivers,  Mortgagee Agreements and Bailee Letters | 99       |
| Section 5.17. | Depository Banks                                                | 99       |
| Section 5.18. | ERISA                                                           | 101      |
| Section 5.19. | Post-Closing Conditions                                         | 101      |
| Section 5.20. | Canadian Pension Plans                                          | 101      |
| ARTICLE VI    | Negative Covenants                                              | 102      |
| Section 6.01. | Indebtedness                                                    | 102      |
| Section 6.02. | Certain Equity  Securities                                      | 103      |
| Section 6.03. | Liens                                                           | 103      |
| Section 6.04. | Fundamental Changes                                             | 105      |
| Section 6.05. | Investments, Loans,  Advances, Guarantees and Acquisitions      | 106      |
| Section 6.06. | Asset Sales                                                     | 107      |
| Section 6.07. | Sale and Lease-Back  Transactions                               | 109      |
| Section 6.08. | Swap Agreements                                                 | 109      |
| Section 6.09. | Restricted Payments;  Certain Payments of Indebtedness          | 109      |
| Section 6.10. | Transactions with  Affiliates                                   | 110      |
| Section 6.11. | Restrictive Agreements                                          | 110      |
| Section 6.12. | Amendment of Material  Documents                                | 111      |
| Section 6.13. | Designated Senior Debt                                          | 111      |
| Section 6.14. | Cash Held by Foreign  Loan Parties                              | 112      |
|               |                                                                 |          |  |  |

 

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|               | ** **                                                         | **Page** |
|---------------|--------------------------------------------------------------------|----------|
|          |                                                               |     |
| Section 6.15. | ERISA                                                              | 112      |
| Section 6.16. | Cancellation of  Indebtedness                                      | 112      |
| Section 6.17. | Change in Fiscal Year;  Accounting Policies                        | 112      |
| Section 6.18. | Financial Covenants                                                | 112      |
| Section 6.19. | [Intentionally Omitted]                                            | 112      |
| Section 6.20. | Pliant Investment, Inc.  and Alliant Company LLC                   | 113      |
| ARTICLE VII   | Events of Default                                                  | 113      |
| ARTICLE VIII  | The Administrative  Agent                                          | 116      |
| Section 8.01. | Authorization, Action,  Etc                                        | 116      |
| Section 8.02. | Declaration of Trust  (Treuhand) and Appointment as Administrator  | 118      |
| Section 8.03. | Quebec Security                                                    | 118      |
| ARTICLE IX    | Miscellaneous                                                      | 119      |
| Section 9.01. | Notices                                                            | 119      |
| Section 9.02. | Waivers; Amendments                                                | 120      |
| Section 9.03. | Expenses; Indemnity;  Damage Waiver; Joint and Several Obligations | 122      |
| Section 9.04. | Successors and Assigns                                             | 124      |
| Section 9.05. | Survival                                                           | 127      |
| Section 9.06. | Counterparts;  Integration; Effectiveness                          | 128      |
| Section 9.07. | Severability                                                       | 128      |
| Section 9.08. | Right of Setoff                                                    | 128      |
| Section 9.09. | Governing Law;  Jurisdiction; Consent to Service of Process        | 128      |
| Section 9.10. | WAIVER OF JURY TRIAL                                               | 129      |
| Section 9.11. | Headings                                                           | 130      |
| Section 9.12. | Confidentiality                                                    | 130      |
| Section 9.13. | Conversion of  Currencies                                          | 130      |
| Section 9.14. | Interest Rate  Limitation                                          | 131      |
| Section 9.15. | Parallel Obligations                                               | 131      |
|               |                                                                    |          |  |  |

 

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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      |   | Form of Domestic Guarantee Agreement                         |
| Exhibit B-2      |   | Form of Foreign Guarantee Agreement                          |
| Exhibit C-1      |   | Form of Domestic Pledge Agreement                            |
| Exhibit C-2      |   | [Intentionally Omitted]                                      |
| Exhibit C-3a     |   | Form of Canadian Pledge Agreement (Pliant  Corporation)      |
| Exhibit C-3b     |   | Form of Canadian Pledge Agreement (Uniplast  Holdings, Inc.) |
| Exhibit C-4      |   | Form of German Pledge Agreement                              |
| Exhibit C-5      |   | Form of Mexican Pledge Agreement                             |
| Exhibit D-1      |   | Form of Domestic Security Agreement                          |
| Exhibit D-2      |   | [Intentionally Omitted]                                      |
| Exhibit D-3a     |   | Form of Canadian Security Agreement (Domestic)               |
| Exhibit D-3b     |   | Form of Canadian Security Agreement (Canadian)               |
| 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                                    |

 

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| Exhibit H |   | Form of Compliance Certificate   |
|-----------|--------|----------------------------------|
| Exhibit I |   | Form of Letter of Credit Request |
| Exhibit J |   | Form of Swingline Loan Request   |
| Exhibit K |   | Form of Revolving Credit Note    |

 

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WORKING CAPITAL CREDIT AGREEMENT, dated as of July 18,2006 (this “Agreement”), among PLIANT CORPORATION, a Delawarecorporation (the “Parent Borrower”), the Subsidiary Borrowers partyhereto, the Lenders party hereto and MERRILL LYNCH BANK USA, as AdministrativeAgent (in such capacity, the “Administrative Agent”).

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.

“Account” shall have the meaning assigned tosuch term in the New York Uniform Commercial Code and shall also include anyright to payment for goods sold or leased, or for services rendered, whether ornot earned by performance.

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

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

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

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

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“Adjusted Eligible Work in Process” means, onany date, the amount of Eligible Work in Process on such date, minus theInventory Reserves with respect to such Eligible Work in Process on such date.

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

“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, a rateper annum equal to the greater of (a) the Prime Rate in effect on such dayand (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 Rate or the Federal Funds Effective Rateshall be effective from and including the effective date of such change in thePrime Rate or the Federal Funds Effective Rate, respectively.

“Applicable Percentage” means, (a) with respectto any Domestic Lender, the percentage of the total amount of the Commitmentsrepresented by such Domestic Lender’s Commitment, (b) with respect to anyAustralian Lender, the percentage of the total amount of the AustralianRevolving Exposure represented by such Australian Lender’s Australian RevolvingExposure, (c) with respect to any Canadian Lender, the percentage of the totalamount of the Canadian Revolving Exposure represented by such Canadian Lender’sCanadian Revolving Exposure, (d) 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 (e) 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:

(a)           withrespect to any ABR Loan or Eurodollar Loan (other than any German RevolvingLoan), the applicable rate per annum set forth below under the caption “ABRSpread” or “Eurodollar Spread”, as the case may be, based upon the AverageRevolving Exposure for such day (calculated as of the end of such day):

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| **Average Revolving Exposure**                            | ** ** | **ABR Spread** | ** ** | **Eurodollar Spread** | ** ** |
|-----------------------------------------------------------|------------|----------------|------------|-----------------------|------------|
| Category 1  Greater than 75% of Available Credit          |       | 2.00           | %          | 3.00                  | %          |
| Category 2  Less 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 (other than any German Revolving Loans) fromand including the first day following such date of determination.  Notwithstanding the foregoing, the ApplicableRate with respect to any ABR Loan or Eurodollar Loan (other than any GermanRevolving Loan) will be determined by reference to Category 1 (i) at anytime that an Event of Default has occurred and is continuing or (ii) ifthe Parent Borrower fails to deliver any Borrowing Base Certificate required tobe delivered by it pursuant to Section 5.01(f), during the period from theexpiration of the time for delivery thereof until the Parent Borrower deliverssuch Borrowing Base Certificate.

(b)           withrespect to any German Revolving Loan, (i) 5.00% per annum in the case of ABRLoans and (ii) 6.00% per annum in the case of Eurodollar Loans.

“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, (b)an Affiliate of a Lender or (c) an entity or an Affiliate of an entity thatadministers, 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 Borrower or any of its Subsidiaries inexcess 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:

3

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(a)           (i) 95% of each Australian Loan Party’sAdjusted Eligible Accounts Receivable, plus (ii) 85% of eachAustralian Loan Party’s Adjusted Eligible Finished Goods, plus(iii) 55% of each Australian Loan Party’s Adjusted Eligible Work inProcess, plus (iv) 55% of each Australian Loan Party’s Adjusted EligibleRaw Materials, 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 Parent Borrower.  For purposes of calculating the AustralianBorrowing Base on any date, all amounts reflected or outstanding in AustralianDollars shall be translated into dollars at the exchange rate in effect on suchdate, as determined in good faith by the Parent Borrower.

“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.

 “AustralianLender” means each Domestic Lender or any Affiliate of a Domestic Lenderdesignated by such Domestic Lender to the Parent Borrower as an “AustralianLender”.  The Australian Lender on theEffective 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 Pledge Agreement” means anAustralian Pledge Agreement, in form and substance reasonably satisfactory tothe Parent Borrower and the Administrative Agent, among the Parent Borrower,the Australian Subsidiary Borrower and the Administrative Agent, pursuant towhich the Parent Borrower will pledge 65% of the outstanding Equity Interestsof the Australian Subsidiary Borrower in favor of the Administrative Agent, forthe ratable benefit of the Secured Parties, as security for the Obligations.

“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.

4

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“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 Parent 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 Working CapitalCollateral in favor of Merrill Lynch Bank USA, for the ratable benefit of theForeign Secured Parties, as security for the Foreign Obligations, and eachother security agreement or other instrument or document executed and deliveredby any Australian Loan Party to secure any of the Foreign Obligations.

“Australian Sublimit” means $5,000,000.

“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 Commitments” means, at any time, (a)the total amount of the Commitments at such time minus (b) the aggregateFixed Asset Revolving Exposure at such time.

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

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

“Bailee Letter” means a written agreementreasonably acceptable to the Administrative Agent, pursuant to which a baileeof Inventory of any Loan Party agrees to hold such Inventory for the benefit ofthe Administrative Agent, to waive or subordinate its rights and claims asbailee in such Inventory, including warehouseman’s liens, processor’s liens,rights of levy and distraint for rent, grant access to the Administrative Agentfor the repossession and sale of such Inventory, and make other agreementsrelative 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.

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“Banking Services” means overdrafts and relatedliabilities owed to any of the Lenders (or any Affiliates thereof) arising fromtreasury, depositary and cash management services or in connection with anyautomated clearinghouse transfers of funds.

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

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

“Borrower” means the Parent Borrower or anySubsidiary Borrower.

“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 Parent Borrower to the Administrative Agent.

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

“Borrowing Base” means, at any time ofdetermination, an amount equal to the sum, without duplication of the DomesticBorrowing Base, the Australian Borrowing Base, the Canadian Borrowing Base, theGerman Borrowing Base and the Mexican Borrowing Base.

“Borrowing Base Certificate” means acertificate substantially in the form of Exhibit E (with suchchanges therein as may be required by the Administrative Agent, to reflect thecomponents of, and reserves against, the Borrowing Base as provided forhereunder from time to time), executed and certified as accurate and completeby a Financial Officer of the Parent Borrower, which certificate shall includeappropriate exhibits, 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, and (e) when used in connection with any Mexican RevolvingLoan, the term “Business Day” shall also exclude any day on which banks are notopen for deposits in Mexico City, Mexico.

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“Canadian Borrowing Base” means, with respectto each Canadian Subsidiary Borrower, at any time of determination, an amountequal to the sum, without duplication of:

(a)           (i) 95% of such Canadian SubsidiaryBorrower’s Adjusted Eligible Accounts Receivable, plus (ii) 85% of suchCanadian Subsidiary Borrower’s Adjusted Eligible Finished Goods, plus(iii)  55% of such Canadian Subsidiary Borrower’s Adjusted Eligible Workin Process, plus (iv) 55% of such Canadian Subsidiary Borrower’sAdjusted Eligible Raw Materials, minus

(b)           the Rent Reserve with respect to suchCanadian Subsidiary Borrower, minus

(c)           the Priority Payables Reserve withrespect to such Canadian Subsidiary Borrower, minus

(d)           the Secured Obligations Reserve withrespect to such Canadian Subsidiary Borrower, minus

(e)           any Reserves with respect to suchCanadian Subsidiary Borrower.

Each 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 each 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 effective immediatelyafter delivery of notice thereof to the Parent Borrower.  For purposes of calculating each CanadianBorrowing Base on any date, all amounts reflected or outstanding in CanadianDollars shall be translated into dollars at the exchange rate in effect on suchdate, as determined in good faith by the Parent 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 Domestic Lender orany Affiliate of a Domestic Lender designated by such Domestic Lender to theParent Borrower as a “Canadian Lender”. The Canadian Lender on the Effective Date shall be Merrill Lynch CapitalCanada 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 Borrowers.

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“Canadian Loan Party” means the CanadianSubsidiary Borrowers and any other Loan Party organized under the laws ofCanada or 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 Pledge Agreement” means the CanadianPledge Agreements, substantially in the form of Exhibit C-3aand Exhibit C-3b, among the Administrative Agent and each ofthe Parent Borrower and Uniplast Holdings, Inc.

“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 Agreements, substantially in the form of Exhibit D-3aand Exhibit D-3b, among, respectively, the AdministrativeAgent and the Parent Borrower, Pliant Packaging and Uniplast Canada, and theAdministrative Agent and Pliant Corporation of Canada Ltd., and each othersecurity agreement or other instrument or document executed and delivered byany Canadian Loan Party (other than Uniplast Canada) to secure any of theForeign Obligations or by Uniplast Canada to secure any of the DomesticObligations.

“Canadian Sublimit” means $40,000,000.

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

 “CapitalExpenditures” means, for any period, without duplication, (a) theadditions to property, plant and equipment and other capital expenditures ofthe Parent Borrower and the Subsidiaries that are (or would be) set forth in aconsolidated statement of cash flows of the Parent Borrower and theSubsidiaries for such period prepared in accordance with GAAP and (b) CapitalLease Obligations incurred by the Parent Borrower and the Subsidiaries duringsuch 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 thereofdetermined in accordance with GAAP.

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

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“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 and all Letters of Credit have expired orterminated and all LC Disbursements shall have been reimbursed.

“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.

“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.

“Cash Management Arrangement” means anyarrangement pursuant to which any financial institution provides any Loan Partywith treasury, depositary or cash management services or automatedclearinghouse transfers of funds.

“CERCLA” means the Comprehensive EnvironmentalResponse, Compensation, and Liability Act, 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 Borrower representing atleast 25% of the issued and outstanding common stock of the Parent Borrower;(b)  the acquisition of ownership, directly or indirectly, beneficially orof record, by any Person or group (within the meaning of the SecuritiesExchange Act of 1934 and the rules of the SEC thereunder as in effect on theEffective Date) other than the Control Group, of common stock of the ParentBorrower representing more than 50% of the issued and outstanding common stockof the Parent Borrower; (c) the occupation of a majority of the seats(other than vacant seats) on the board of directors of the Parent Borrower byPersons who were neither (i) nominated by members of the Control Group orthe board of directors of the Parent Borrower nor (ii) appointed bydirectors so nominated; provided, however, that a Change inControl shall not have occurred under this clause (c) as a result of theoccurrence of a vacancy on the board of directors of the Parent Borrower if,within 30 days after the occurrence of such vacancy, such vacancy is filled bya 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 Borrower (or a Wholly Owned Subsidiary of theParent Borrower that is a Loan Party) of any Equity Interests in any SubsidiaryBorrower; or (e) the occurrence of a “Change of Control” as defined underthe Senior First Lien Note Documents, the Senior Second Lien Note Documents orthe Senior Subordinated Note Documents or a “Liquidation Event” as definedunder 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 the Issuing Bank (or, for purposes of Section 2.14(b),by any lending office of such Lender or by such Lender’s or the Issuing Bank’sholding company, if any) with any

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request, guideline or directive (whether or not havingthe force of law) of any Governmental Authority made or issued after theEffective 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 Domestic Revolving Loans, Australian Revolving Loans, Canadian RevolvingLoans, German Revolving Loans, Mexican Revolving Loans, Swingline Loans orProtective Advances.  “Class”,when used in reference to any Lender, refers to whether such Lender has a Loanor Commitment with respect to a particular Class.

“Class of Eligible Inventory” means each ofEligible Finished Goods, Eligible Raw Materials and Eligible Work in Process.

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

“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.

“Commitment” means, with respect to eachDomestic Lender, the commitment of such Domestic Lender to make DomesticRevolving Loans and to acquire participations in Letters of Credit andSwingline Loans hereunder, expressed as an amount representing the maximumaggregate amount of such Domestic Lender’s Domestic Revolving Exposurehereunder, as such commitment may be (a) reduced from time to timepursuant to Section 2.08 and (b) reduced or increased from time totime pursuant to assignments by or to such Domestic Lender pursuant to Section9.04, together with the commitment of such Lender to acquire participationsin Protective Advances hereunder.  Theinitial amount of each Domestic Lender’s Commitment is set forth on Schedule 2.01(a),or in the Assignment and Assumption pursuant to which such Domestic Lendershall have assumed its Commitment, as applicable.  The initial aggregate amount of the DomesticLenders’ Commitments is $200,000,000.

“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

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to Consolidated Net Income pursuant to thisclause (c) shall be treated as cash charges or losses in any subsequentperiod during which cash disbursements attributable thereto are made;(d) non-cash expenses resulting from the grant of stock options or otherequity-related incentives to any director, officer or employee of the ParentBorrower or any Subsidiary pursuant to a written plan or agreement,(e) all non-recurring transaction and financing expenses resulting fromthe Transactions, (f) all non-recurring transaction and financing expensesincurred in the fiscal quarter ended December 31, 2005 resulting frommodifications to the Existing Senior Subordinated Note Indenture entered intoin connection with the Pre-Petition Loan Agreement, (g) all losses during suchperiod resulting from the sale or other disposition of any asset of the ParentBorrower or any Subsidiary outside the ordinary course of business,(h) any Excluded Charges during such period and (i) all non-recurringrestructuring charges in connection with the Chapter 11 Cases specificallyidentified by the Parent Borrower to the Administrative Agent and incurred notlater than October 31, 2006 and minus, without duplication and to theextent added to revenues in determining Consolidated Net Income for suchperiod, (a) all extraordinary gains during such period and (b) allgains during such period resulting from the sale or other disposition of anyasset of the Parent Borrower or any Subsidiary outside the ordinary course ofbusiness, all as determined on a consolidated basis with respect to the ParentBorrower and the Subsidiaries in accordance with GAAP.  If the Parent Borrower or any Subsidiary hasmade any sale, transfer, lease or other disposition of assets outside of theordinary course of business permitted by Section 6.06 during therelevant period for determining Consolidated EBITDA, Consolidated EBITDA forthe relevant period shall be calculated after giving pro forma effect thereto,as if such sale, transfer, lease or other disposition of assets (and anyrelated incurrence, repayment or assumption of Indebtedness, with any newIndebtedness being deemed to be amortized over the relevant period inaccordance with its terms, and assuming that any Loans borrowed in connection withsuch acquisition are repaid with excess cash balances when available) hadoccurred on the first day of the relevant period for determining ConsolidatedEBITDA.

“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 Borrower and the Subsidiaries during such period (net of payments madeor received under interest rate protection agreements and net of interestincome), determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Income” means, for anyperiod, net income or loss of the Parent Borrower and the Subsidiaries for suchperiod determined 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 ParentBorrower or any of the Subsidiaries or any director holding qualifying sharesin compliance with applicable law or any other third party holding a de minimusnumber of shares in order to comply with other similar requirements) has anEquity Interest, except to the extent of the amount of dividends or otherdistributions actually paid by such Subsidiary or other Person during suchperiod to the Parent Borrower or any other Subsidiary that is not subject tothe restrictions set forth in clause (a) or (b) hereof (providedthat the Parent Borrower’s or any other Subsidiary’s equity in the net loss ofany such Subsidiary 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

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dividends, except to the extent of the amount ofdividends or other distributions actually paid by such Subsidiary during suchperiod to the Parent Borrower or any other Subsidiary that is not subject tothe restrictions 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 Borrower or any of the Subsidiaries or the datethat Person’s assets are acquired by the Parent Borrower or any of theSubsidiaries and (d) expenses and fees incurred by the Filing Companies andallowed by the Bankruptcy Court in 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 financialinstitution or other Person at which such account is maintained or with whichsuch entitlement or contract is carried and the Loan Party maintaining suchaccount, effective to grant “control” (as defined under the applicable UniformCommercial 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.

“Credit Exposure” means, as to any Lender atany time, the sum of (a) such Lender’s Revolving Exposure at such time, plus(b) an amount equal to its Applicable Percentage, if any, of the aggregateprincipal amount of Protective Advances outstanding at such time.

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“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.

“Dilution Factors” means, without duplication,with respect to any period, the aggregate amount of all deductions, creditmemos, returns, adjustments, allowances, bad debt write-offs and other non-cashcredits that are recorded to reduce accounts receivable of the Loan Parties ina manner consistent with current and historical accounting practices of theLoan Parties.

“Dilution Ratio” means, at any date,(a) the amount (expressed as a percentage) equal to (i) the aggregateamount of the applicable Dilution Factors for the 12 most recently endedfiscal months of the Parent Borrower dividedby (ii) totalgross sales of the Loan Parties for the 12 most recently ended fiscalmonths of the Parent Borrower, minus (b) 5%; provided thatthe Dilution Ratio shall not be less than zero.

“Dilution Reserve” means, at any date, theDilution Ratio on such date multipliedby the amount of EligibleAccounts Receivable on such date.

“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 Borrowers” means the Parent Borrowerand the Domestic Subsidiary Borrowers.

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

(a)           (i) 95% of each Domestic Loan Party’sAdjusted Eligible Accounts Receivable, plus (ii) 85% of each DomesticLoan Party’s Adjusted Eligible Finished Goods, plus (iii) 55% ofeach Domestic Loan Party’s Adjusted Eligible Work in Process, plus (iv)55% of each Domestic Loan Party’s Adjusted Eligible Raw Materials, minus

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

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

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

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

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The Domestic 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 Domestic 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 Parent Borrower.

“Domestic Collateral Proceeds Account” means anaccount maintained by and in the name of the Administrative Agent, anddesignated by the Administrative Agent as the “Domestic Collateral ProceedsAccount” for purposes of this Agreement and the other Loan Documents.

 “DomesticGuarantee Agreement” means the Domestic Guarantee Agreement, substantiallyin the form of Exhibit B-1, among each Domestic Loan Party,Uniplast Canada and the Administrative Agent.

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

“Domestic Loan Party” means the ParentBorrower, the Domestic Subsidiary Borrowers and any other Loan Party organizedunder the laws of any state of the United States of America or the District ofColumbia.

“Domestic Obligations” means (a) all principalof and 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 Domestic Revolving Loans, Swingline Loans and Protective Advances when andas due, whether at maturity, by acceleration, upon one or more dates set forprepayment, or otherwise, (b) all principal of and premium, if any, andinterest (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Canadian Revolving Loans madeto Uniplast Canada when and as due, whether at maturity, by acceleration, uponone or more dates set for prepayment, or otherwise, (c) each payment requiredto be made by the Borrowers under this Agreement in respect of any Letter ofCredit, when and as due, including payments in respect of reimbursement ofdisbursements, interest thereon and obligations to provide cash collateral, (d)all other monetary obligations, including fees, costs, expenses andindemnities, whether primary, secondary, direct, contingent, fixed or otherwise(including monetary obligations incurred during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding), of each Domestic Loan Party andUniplast Canada to the Domestic Secured Parties under this Agreement and theother Loan Documents, (e) all covenants, agreements, obligations andliabilities of each Domestic Loan Party and Uniplast Canada under or pursuantto this Agreement and the other Loan Documents, (f) all Swap Obligations and(g) the due and punctual payment and performance of all Banking ServicesObligations.

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“Domestic Pledge Agreement” means the DomesticPledge Agreement, substantially in the form of Exhibit C-1,among each Domestic Loan Party, Uniplast Canada and the Administrative Agent.

“Domestic Revolving Exposure” means, withrespect to any Domestic Lender at any time, the sum of the outstandingprincipal amount of such Domestic Lender’s Domestic Revolving Loans and its LCExposure and Swingline Exposure at such time.

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

“Domestic Secured Parties” means (a) theDomestic Lenders and the Canadian Lenders, (b) the Administrative Agent, (c)the Issuing Banks, (d) each counterparty to a Swap Agreement with a Loan Partythe obligations under which constitute Domestic Obligations, (e) thebeneficiaries of each indemnification obligation undertaken by any DomesticLoan Party or Uniplast Canada under any Loan Document, (f) each lender inrespect of overdrafts and related liabilities owed to any of the Lenders (orany Affiliates thereof) and arising from treasury, depositary and cashmanagement services or in connection with any automated clearinghouse transfersof funds and (g) the permitted successors and assigns of each of the foregoing.

“Domestic Security Agreement” means theDomestic Security Agreement, substantially in the form of Exhibit D-1,among each Domestic Loan Party, Uniplast Canada and the Administrative Agent.

“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.

“Domestic Subsidiary Borrowers” means UniplastHoldings, Inc., a Delaware corporation, and Uniplast U.S., Inc., a Delawarecorporation.

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

“Eligible Accounts Receivable” means, at anytime of determination, the aggregate of the amounts (determined as provided inthe second succeeding sentence) for each Account of the Loan Parties that satisfiesthe following criteria at the time of creation and continues to meet the sameat such time of determination:  suchAccount (i) has been invoiced to, and represents the bona fide amounts dueto any Loan Party  from, the purchaser ofgoods or services, in each case originated in the ordinary course of businessof such Loan Party, and (ii) is not ineligible for inclusion in thecalculation of the Borrowing Base pursuant to any of clauses (a) through(v) below or otherwise deemed, in the commercially reasonable discretion of theAdministrative Agent to be ineligible for inclusion in the calculation of theBorrowing Base.  Without limiting theforegoing, to qualify as Eligible Accounts Receivable, an Account shallindicate no Person other than a Loan Party as payee or remittance party.  The amount to be so included in EligibleAccounts Receivable at any time with respect to Accounts shall be the face

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amount of Accounts, reduced by, without duplicationand to the extent not reflected in such face amount, (i) the amount of allaccrued and actual discounts, claims, credits or credits pending, debit memos,promotional program allowances, price adjustments, finance charges or otherallowances (including any amount that the applicable Loan Party may be obligatedto rebate to a customer pursuant to the terms of any agreement or understanding(written or oral)), (ii) the aggregate amount of all limits and deductionsprovided for in this definition and elsewhere in this Agreement, (iii) theaggregate amount of all cash received in respect of such Account but not yetapplied by the applicable Loan Party to reduce the amount of such Account and(iv) with respect to an Account of the Canadian Loan Parties, the amountof all goods and services taxes, harmonized taxes and sales taxes payable inrespect of such Account.  Standards ofeligibility may be fixed from time to time in the commercially reasonablediscretion of the Administrative Agent, with any changes in such standards tobe effective immediately after delivery of notice thereof to the ParentBorrower.  Unless otherwise approved fromtime to time in writing by the Administrative Agent, no Account shall be anEligible Account Receivable if:

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

(b)           such Account(i) is unpaid more than 90 days from the original date of invoice or60 days from the original due date or (ii) has been written off thebooks of the applicable Loan Party or has been otherwise designated on suchbooks as uncollectible; or

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

(d)           the Account Debtorwith respect to such Account is insolvent or the subject of any bankruptcy caseor insolvency proceeding of any kind, unless (i) the sale to such AccountDebtor in respect of such Account is made following the commencement of theapplicable bankruptcy case or insolvency proceeding, (ii) the AdministrativeAgent determines in its commercially reasonable discretion that such AccountDebtor has sufficient liquidity to make payment with respect to such Account,(iii) such Account has administrative claim priority (or equivalent underapplicable law) in the bankruptcy case or insolvency proceeding of such AccountDebtor and (iv) such Account may be paid currently by such Account Debtor underapplicable law; or

(e)           (i) with respect toan Account of the Domestic Loan Parties, such Account is not payable in dollars or Canadian Dollars or theapplicable Account Debtor is either not organized under the laws of the UnitedStates of America or any State thereof or the District of Columbia or islocated or has its principal place of business or substantially all its assetsoutside the United States, (ii) with respect to an Account of the AustralianLoan Parties, such Account is not payable in Australian Dollars or New ZealandDollars or the applicable Account Debtor is either not organized under the lawsof Australia or any province or territory thereof or is located or has itsprincipal place of business or substantially all its assets outside Australia,(iii) with respect to an Account of the Canadian Loan Parties, such Account isnot payable in Canadian Dollars or dollars or the applicable Account Debtor iseither not organized under the laws of Canada or any

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province thereofor is located or has its principal place of business or substantially all itsassets outside Canada, (iv) with respect to an Account of the German LoanParties, such Account is not payable in Euros or Pounds or the applicableAccount Debtor is either not organized under the laws of Germany or anyprovince thereof or is located or has its principal place of business orsubstantially all its assets outside Germany, or (v) with respect to an Accountof the Mexican Loan Parties, such Account is not payable in Mexican Pesos,dollars or Canadian Dollars or the applicable Account Debtor is either notorganized under the laws of Mexico or any province thereof or is located or hasits principal place of business or substantially all its assets outside Mexico,unless in the case of clauses (i) through (v), the Administrative Agent isreasonably satisfied that it has a legal, valid, perfected and enforceablesecurity interest in such Account under the laws of the jurisdiction in whichthe applicable Account Debtor is located pursuant to the applicable SecurityDocuments; or

(f)            the applicableAccount Debtor is the government of the United States of America, Mexico orCanada (or any state, municipality, province or territory thereof) or anydepartment, agency or instrumentality thereof, unless the relevant Loan Partyduly assigns its rights to payment of such Account to, or for the benefit of,the Administrative Agent pursuant to the Assignment of Claims Act of 1940, asamended, or the Financial Administration Act (Canada) (or such otherlegislation as may govern the assignment of government debt in such province orterritory), as amended, or the Ley de Adquisiciones, Arrendamientos y Serviciosdel Sector Publico, as amended, as applicable, which assignment and relateddocuments and filings shall be in form and substance reasonably satisfactory tothe Administrative Agent; or

(g)           such Account issubject to any adverse security deposit, progress payment, retainage or othersimilar advance made by or for the benefit of the applicable Account Debtor, ineach case to the extent thereof; or

(h)           such Account is notsubject to a valid and perfected first-priority Lien (or equivalent underapplicable law) in favor of the Administrative Agent, subject to no otherLiens, other than Liens described under clauses (a) and (e) of thedefinition of “Permitted Encumbrances”; or

(i)            (A) suchAccount was invoiced (1) in advance of goods or services provided or(2) twice or more or (B) income associated with such Account has notbeen earned; or

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

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

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

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

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

(o)           the applicableAccount Debtor (i) is a creditor of any Loan Party, (ii) has, or hasasserted, a right of set-off against any Loan Party (unless such Account Debtorhas entered into a written agreement reasonably acceptable to theAdministrative Agent to waive such set-off rights) or (iii) has disputedits liability (whether by chargeback or otherwise) or made any asserted orunasserted claim with respect to such Account or any other Account of any LoanParty that has not been resolved, in each case, without duplication, to theextent of (A) the amount owed by such Loan Party to such Account Debtor,(B) the amount of such actual or asserted right of set-off or (C) theamount of such dispute or claim, as the case may be; or

(p)           such Account doesnot comply in all material respects with the requirements of all applicablelaws and regulations, whether Federal, state, provincial, local or foreign,including the Federal Consumer Credit Protection Act, the Federal Truth inLending Act and Regulation Z of the Board; or

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

(r)            such Account is forgoods that have been sold under a purchase order or pursuant to the terms of acontract or other agreement or understanding (written or oral) that indicatesthat any Person other than the applicable Loan Party has or has had or haspurported to have or have had an ownership interest in such goods; or

(s)           such Account is anextended terms account that is due and payable more than 90 days from theoriginal date of invoice; or

(t)            such Account iscreated on cash in advance terms; or

(u)           such Accountconsists of bonus volume rebate accruals or sales allowance accruals, but onlyto the extent of such accruals; or

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(v)           such Accountconstitutes manual billings or re-bills, other than manual billings from scrapsales.

Notwithstanding the forgoing, (i) all Accounts of anysingle Account Debtor and its Affiliates that, in the aggregate, exceed(A) 25% in respect of an Account Debtor whose securities are ratedInvestment Grade or (B) 15% in respect of all other Account Debtors, ineither case of the total amount of all Accounts of the Loan Parties at any timeof determination, shall be deemed not to be Eligible Accounts Receivable to theextent of such excess and (ii) all Accounts that constitute bill and storagereceivables and otherwise qualify as Eligible Accounts Receivable shall beincluded in each applicable Borrowing Base at an advance rate equal to 85%.

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

“Eligible Inventory” means, at any time ofdetermination, without duplication, the Inventory Value of the Inventory of theLoan Parties at such time that is not ineligible for inclusion in thecalculation of the Borrowing Base pursuant to any of clauses (a) through(n) below or otherwise deemed, in the commercially reasonable discretion of theAdministrative Agent, to be ineligible for inclusion in the calculation of theBorrowing Base.  Without limiting theforegoing, to qualify as “Eligible Inventory”, no Person other than a LoanParty shall have any direct or indirect ownership, interest or title to suchInventory and no Person other than a Loan Party shall be indicated on anypurchase order or invoice with respect to such Inventory as having orpurporting to have an interest therein. Standards of eligibility may be fixed from time to time in thecommercially reasonable discretion of the Administrative Agent, with anychanges in such standards to be effective immediately after delivery of noticethereof to the Parent Borrower.  Unlessotherwise approved from time to time in writing by the Administrative Agent, noInventory shall be deemed Eligible Inventory if:

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

(b)           (i) with respect to Inventory of theDomestic Loan Parties, such Inventory is not located in the United States, (ii)with respect to Inventory of the Australian Loan Parties, such Inventory is notlocated in Australia, (iii) with respect to Inventory of the Canadian LoanParties, such Inventory is not located in Canada, (iv) with respect toInventory of the German Loan Parties, such Inventory is not located in Germany,or (v) with respect to Inventory of the Mexican Loan Parties, such Inventory isnot located in Mexico, unless in the case of clauses (i) through (v), theAdministrative Agent is reasonably satisfied that it has a legal, valid,perfected and enforceable security interest in such Inventory under the laws ofthe jurisdiction in which such Inventory is located pursuant to the applicableSecurity Documents; or

(c)           such Inventory isnot either (i) located in a third party warehouse or in another locationnot owned by a Loan Party and either (A) covered by a Landlord Lien Waiveror Bailee Letter, as applicable, in each case in form and substance acceptableto

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the AdministrativeAgent, or (B) a Rent Reserve has been taken with respect to such Inventoryor (ii) located on property owned by a Loan Party; or

(d)           such Inventoryconstitutes goods returned or rejected due to quality issues by a customer ofthe applicable Loan Party, or constitutes goods in transit to third parties; or

(e)           such Inventoryconstitutes operating supplies, packaging or shipping materials, cartons,repair parts, labels or miscellaneous spare parts or other such materials notconsidered for sale in the ordinary course of business; or

(f)            such Inventory isnot subject to a valid and perfected first-priority Lien (or equivalent underapplicable law) in favor of the Administrative Agent, subject to no otherLiens, other than Liens described under clauses (a), (b) and (e) of thedefinition of “Permitted Encumbrances”; or

(g)           such Inventory isconsigned or at a customer location but still accounted for in the perpetualinventory balance of the applicable Loan Party; or

(h)           such Inventory isbeing processed offsite at a third party location or outside processor, or isin transit to or from the such third party location or outside processor, or islocated at a closed facility; or

(i)            such Inventory isseconds or thirds or stale or is scrap, obsolete or slow moving orunmerchantable or is identified as overstock or excess by the applicable LoanParty; or

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

(k)           such Inventory is adiscontinued product or component thereof; or

(l)            any portion of theInventory Value of such Inventory is attributable to intercompany profitbetween any Loan Party and any of its Affiliates; or

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

(n)           such Inventory isnot in good condition, does not meet all material standards imposed by anyGovernmental Authority having regulatory authority over it, is repair orreplacement parts for machinery and equipment, is rejected, defective orundergoing quality review.

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

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“Eligible Work in Process” means, on any date,the amount of Eligible Inventory that (a) is defined as Work in Process by eachLoan Party on such date as shown on its perpetual inventory records inaccordance with its current and historical accounting practices and (b)constitutes either plain film waiting to be converted or printed film on rollstock.

“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 Borrower or any Subsidiarydirectly or indirectly resulting from or based upon (a) violation of anyEnvironmental Law, (b) the generation, use, handling, transportation,storage, treatment or disposal of any Hazardous Materials, (c) exposure toany Hazardous Materials, (d) the release or threatened release of anyHazardous Materials into the environment or (e) any contract, agreement orother consensual arrangement pursuant to which liability is assumed or imposedwith respect to any of the foregoing.

“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.

“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 Borrower, istreated as a single employer under Section 414(b) or (c) of the Code or,solely for purposes of Section 302 of ERISA and Section 412 of theCode, is treated 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 Borrower or any of its ERISAAffiliates of any liability under Title IV of ERISA with respect to thetermination of any Plan; (e) the receipt by the Parent Borrower or anyERISA Affiliate from the PBGC or a plan administrator of any notice relating toan intention to terminate any Plan or Plans or to appoint a trustee toadminister any Plan; (f) the incurrence by the Parent Borrower or any ofits ERISA Affiliates of any liability

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with respect to the withdrawal or partial withdrawalfrom any Plan or Multiemployer Plan; or (g) the receipt by the ParentBorrower or any ERISA Affiliate of any notice, or the receipt by anyMultiemployer Plan from the Parent Borrower or any ERISA Affiliate of anynotice, concerning the imposition of Withdrawal Liability or a determinationthat a Multiemployer Plan is, or is expected to be, insolvent or inreorganization, within the meaning of Title 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, the Issuing Bank or any other recipient ofany payment to be made by or on account of any obligation of any Borrowerhereunder, (a) income or franchise taxes imposed on (or measured by) itsnet income by the United States of America, or by the jurisdiction underthe laws of which such recipient is organized or in which its principal officeis located or, in the case of any Lender, in which its applicable lendingoffice is located, (b) any branch profits taxes imposed by theUnited States of America or any similar tax imposed by any other jurisdictiondescribed in clause (a) above, (c) in the case of a Foreign Lenderwith respect to any Borrower (other than an assignee pursuant to a request bythe Parent Borrower under Section 2.18(b)), any withholding tax(including, without limitation, taxes imposed under Part XIII of the Income TaxAct (Canada)) that is imposed on amounts payable by such Borrower to suchForeign Lender that is attributable to such Foreign Lender’s failure to complywith Section 2.16(e) and (d) in the case of a Foreign Lender withrespect to any Domestic Borrower (other than an assignee pursuant to a requestby Parent Borrower under Section 2.18(b)), any U.S. withholding tax thatis imposed on amounts payable to such Foreign Lender at the time such ForeignLender becomes a party hereto (or designates a new lending office) (or becomesa Participant hereunder), except to the extent that such Foreign Lender (or itsassignor, if any) was entitled, at the time of designation of a new lendingoffice (or assignment), to receive additional amounts from the applicableBorrower with respect to such tax pursuant to Section 2.16(a).

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

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“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 or any of their respective subsidiaries in excess of$500,000 in the aggregate not in the ordinary course of business (and notconsisting of proceeds from the issuance of Stock, debt or disposition ofCollateral), including, without limitation, (i) foreign, United States, stateor local tax refunds paid  in connectionwith or as the result of any settlement, audit, or amendment to any tax return,(ii) pension plan reversions, (iii) judgments, proceeds of settlements or otherconsideration of any 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 Available Commitments at such time and (B) the BorrowingBase in effect at such time minus (ii) the total Revolving Exposureat such time plus (b) (i) the lesser of (A) the total amount of theFixed Asset Commitments at such time and (B) the Fixed Asset BorrowingBase in effect at such time minus (ii) the total Fixed AssetRevolving 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).

“Fee Letter” means that certain Fee Letterdated May 18, 2006 between Old Pliant and the Administrative Agent.

“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.

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

“Finished Goods” means completed goods thatrequire no additional processing or manufacturing to be sold to customers(other than customers that are Affiliates of any Loan Party) by a Loan Party inthe ordinary course of business.

“First Priority Assets” means (a) at all timesprior to the 2004 Notes First Lien Transition Date (as defined in theIntercreditor Agreement), the assets referred to in clauses (a)(i)

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through (xi) of the definition of the term “SeniorLender First Lien Collateral” in the Intercreditor Agreement, and (b) at alltimes on and after the 2004 Notes First Lien Termination Date, any and allassets.

“First Priority Collateral” shall have themeaning assigned to the term “Senior Lender First Lien Collateral” in theIntercreditor Agreement.

“Fixed Asset Borrowing Base” shall have themeaning assigned to the term “Borrowing Base” in the Fixed Asset CreditAgreement.

“Fixed Asset Commitments” shall have themeaning assigned to the term “Commitments” in the Fixed Asset Credit Agreement.

“Fixed Asset Credit Agreement” means the FixedAsset Credit Agreement, dated as of the date hereof, among Pliant CorporationPty Ltd., Pliant Corporation of Canada Ltd., Pliant Film Products GmbH andASPEN Industrial, S.A. de C.V., as borrowers, the lenders party thereto andMerrill Lynch Bank USA, as administrative agent thereunder.

“Fixed Asset Loan Documents” shall have themeaning assigned to the term “Loan Documents” in the Fixed Asset CreditAgreement.

“Fixed Asset Loan Party” shall have the meaningassigned to the term “Loan Party” in the Fixed Asset Credit Agreement.

“Fixed Asset Obligations” shall have themeaning assigned to the term “Obligations” in the Fixed Asset Credit Agreement.

“Fixed Asset Revolving Exposure” shall have themeaning assigned to the term “Revolving Exposure” in the Fixed Asset CreditAgreement.

“Fixed Charge Coverage Ratio” means, as of theend of any period of twelve consecutive fiscal months of the Parent Borrower,the ratio of (a) Consolidated EBITDA for such period to (b) the sumof (i) the aggregate amount of scheduled principal or similar paymentsmade during such period in respect of Indebtedness of the Parent Borrower andthe Subsidiaries (other than (A) payments made by the Parent Borrower orany Subsidiary to the Parent Borrower or a Subsidiary, (B) payments madeby the Parent Borrower or a Subsidiary in respect of loans under thePre-Petition Loan Agreement and the DIP Credit Agreement and (C) paymentsmade by the Parent Borrower or a Subsidiary in respect of any of the Loans andthe loans under the Fixed Asset Credit Agreement) plus (ii) CashInterest Expense during such period plus (iii) cash dividends orother distributions paid by the Parent Borrower in respect of its EquityInterests during such period, plus (iv) the aggregate amount ofTaxes 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 Borrower and the Subsidiaries in accordancewith GAAP.

“Foreign Collateral Proceeds Account” means anaccount maintained by and in the name of the Administrative Agent, anddesignated by the Administrative Agent as the

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“Foreign Collateral Proceeds Account” for purposes ofthis Agreement and the other Loan Documents.

“Foreign Fixed Asset Collateral” means allCollateral of the Foreign Loan Parties (other than Uniplast Canada), other thanthe 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 Uniplast Canada and the German LoanParties) and the Administrative Agent.

“Foreign Lender” means (a) with respect to theDomestic Borrowers, any Lender that is organized under the laws of ajurisdiction other than the United States of America, any State thereof or theDistrict of Columbia and (b) with respect to the Canadian Subsidiary Borrowers,any Lender that is (i) not a resident of Canada for the purposes of the IncomeTax Act (Canada) or (ii) a bank that would receive payment under the LoanDocuments in respect of its Canadian banking business for the purposes ofsubsection 212(13.3) of the Income Tax Act (Canada).

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

“Foreign Obligations” means (a) all principalof and 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 Foreign Revolving Loans (other than the Canadian Revolving Loans made toUniplast Canada) when and as due, whether at maturity, by acceleration, uponone or more dates set for prepayment, or otherwise, (b) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of each Foreign Loan Party (other than UniplastCanada) to the Foreign Secured Parties under this Agreement and the other LoanDocuments, and (c) all covenants, agreements, obligations and liabilities ofeach Foreign Loan Party (other than Uniplast Canada) under or pursuant to thisAgreement and the other Loan Documents.

“Foreign Revolving Exposure” means, withrespect to any Lender at any time, the sum of the Australian RevolvingExposure, Canadian Revolving Exposure, German Revolving Exposure and MexicanRevolving Exposure of such Lender.

“Foreign Revolving Loans” means the AustralianRevolving Loans, Canadian Revolving Loans, German Revolving Loans and MexicanRevolving Loans.

“ForeignSecured Parties” means (a) the Australian Lenders, (b) the CanadianLenders, (c) the German Lenders, (d) the Mexican Lenders, (e) theAdministrative Agent, (f) the beneficiaries of each indemnification obligationundertaken by any Foreign Loan Party under any Loan Document and (g) thepermitted successors and assigns of each of the foregoing.

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“Foreign Security Documents” means theAustralian Security Agreement, Canadian Security Agreement, German SecurityAgreement, Mexican Pledge Agreement, Mexican Security Agreement, and each othersecurity agreement or other instrument or document executed and delivered byany Foreign Loan Party to secure any of the Foreign Obligations.

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

“Foreign Subsidiary Borrowers” means theAustralian Subsidiary Borrower, Canadian Subsidiary Borrowers, GermanSubsidiary Borrower and Mexican Subsidiary Borrower.

“Foreign Working Capital Collateral” means anyand all of the following assets and properties now owned or at any timehereafter acquired by any Foreign Loan Party (other than Uniplast Canada) thatconstitutes Collateral:  (i) allAccounts; (ii) all Inventory; (iii) all Payment Intangibles (as defined in theNew York 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 Foreign Loan Party (other than Uniplast Canada) thatarises from cash advances made after the date hereof to enable the obligor orobligors thereon to acquire Inventory; (vi) all credit card proceeds of theForeign Loan Parties (other than Uniplast Canada), all collection accounts,Deposit Accounts (as defined in the New York Uniform Commercial Code),commodity accounts and securities accounts and any cash or other assets(including Investment Property, marketable securities and other FinancialAssets) in any such accounts; (vii) all hedging, commodity or other derivativecontracts (and any cash and other deposits securing the same); (viii) allpermits and licenses related to any of the foregoing (excluding any permits orlicenses related to the ownership or operation of real property, Fixtures,Equipment or Intellectual Property); (ix) all books and records related to theforegoing; (x) to the extent evidencing, governing, securing or otherwiserelated to the preceding clauses (i) through (ix), all (A) General Intangibles(as defined in the New York Uniform Commercial Code), (B) Chattel Paper (asdefined in the New York Uniform Commercial Code), (C) Instruments (as definedin the New York Uniform Commercial Code) and (D) Documents (as defined in theNew York Uniform Commercial Code); and (xi) all products and Proceeds (asdefined in the New York Uniform Commercial Code) of any and all of theforegoing in whatever form received, including proceeds of insurance policiesrelated to Inventory of the Foreign Loan Parties (other than Uniplast Canada)and including proceeds of business interruption insurance to the extent relatedto the first 45 days of the covered period with respect to any businessinterruption.

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

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

(a)           (i) 95% of each German Loan Party’sAdjusted Eligible Accounts Receivable, plus (ii) 85% of each German LoanParty’s Adjusted Eligible Finished Goods, plus (iii) 55% of each GermanLoan Party’s Adjusted Eligible Work in Process, plus (iv) 55% of eachGerman Loan Party’s Adjusted Eligible Raw Materials, 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 Parent 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 Parent Borrower.

“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, the German Security Agreements and theGerman Pledge Agreement.

 “GermanLender” means each Domestic Lender or any Affiliate of a Domestic Lenderdesignated by such Domestic Lender to the Parent Borrower as a “German Lender”.  The German Lender on the Effective Date shallbe 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

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in such proceeding), of each German Loan Party to theForeign Secured Parties under this Agreement and the other Loan Documents, and(c) all covenants, agreements, obligations and liabilities of each German LoanParty under or pursuant to this Agreement and the other Loan Documents.

 “GermanPledge Agreement” means the German Pledge Agreement, substantially in theform of Exhibit C-4, among the Parent Borrower, the GermanLoan Parties and the Administrative Agent.

 “GermanRevolving Exposure” means, with respect to any German Lender at any time,the sum of the outstanding principal amount of such German Lender’s GermanRevolving 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 $15,000,000.

“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.

“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.

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“Guarantee Agreements” means the DomesticGuarantee Agreement and the Foreign Guarantee Agreement.

“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 (ii) unsecured indebtedness of the ParentBorrower or any Subsidiary to finance insurance premiums in a principal amountnot in excess of the casualty and other insurance premiums to be paid by theParent Borrower or any Subsidiary for a three-year period beginning on the dateof any incurrence of such 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.

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“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 (including any Swingline Loan) or any Eurodollar Loan,the tenth Business Day of each calendar 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.

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

“Inventory Reserves” means reserves againstInventory equal to the sum of the following (with each reserve determined atthe commercially reasonable discretion of the Administrative Agent):

(a)           a reserve for shrink that arises fromdiscrepancies between the perpetual accounting system of the applicable LoanParty and physical counts of the Inventory pertaining to inventory quantitieson hand;

(b)           a reserve for royalties;

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

(d)           to the extent not included in thecalculation of Inventory Value, a revaluation reserve whereby capitalizedfavorable variances shall be deducted from Eligible Inventory and unfavorablevariances shall not be added to Eligible Inventory;

(e)           a lower of the cost or market reservefor any differences between the applicable Loan Party’s actual cost to produceversus its selling price to third parties determined on a product line basis;

(f)            a reserve for prepaid freight;

(g)           a reserve for vendor rebates;

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(h)           with respect to the German LoanParties, a reserve for any amounts payable by such German Loan Party tosuppliers for such Inventory; and

(i)            any other reserve as deemedappropriate from time to time.

“Inventory Value” means, with respect to anyInventory of any Loan Party at any time of determination, the lesser of (a) thecost of such Inventory as shown on the perpetual inventory records of each LoanParty stated on a basis consistent with its current and historical accountingpractices, in dollars, determined on a first-in, first-out basis, less anymarkup on such Inventory from an Affiliate and (b) the market value of suchInventory.

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

“Issuing Bank” means Merrill Lynch Bank USA, inits capacity as the issuer of Letters of Credit hereunder, and its successorsin such capacity as provided in Section 2.05(i) and such otherfinancial institutions as may become Issuing Banks as provided in Section 2.05(i).  The Issuing Bank may, in its discretion,arrange for one or more Letters of Credit to be issued by Affiliates of theIssuing Bank, in which case the term “Issuing Bank” shall include any suchAffiliate with respect to Letters of Credit issued by such Affiliate.  In the event that there is more than one IssuingBank at any time, references herein and in the other Loan Documents to theIssuing Bank shall be deemed to refer to the Issuing Bank in respect of theapplicable Letter of Credit or to all Issuing Banks, as the context requires.

“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 anyInventory of the applicable Loan Party for unpaid rents, grant access to theAdministrative Agent for the repossession and sale of such Inventory, and makeother agreements relative thereto.

“LC Availability Period” means the period fromand including the Effective Date to but excluding the earlier of (a) thedate that is 30 days prior to the Maturity Date and (b) the date oftermination of the Commitments.

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

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

“Lenders” means the Domestic Lenders, theAustralian Lenders, the Canadian Lenders, the German Lenders and the MexicanLenders.

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

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“Letter of Credit Request” means a request bythe Parent Borrower for a Letter of Credit in substantially the form of ExhibitI hereto.

“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 theFederal Reserve 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 Parent Borrower.

“Lien” means, with respect to any asset,(a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,charge or security interest in, on or of such asset, (b) the interest of 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, the FeeLetter, the Guarantee Agreements, the Security Documents, the IntercreditorAgreement, all Swap Agreements between any Loan Party and any counterparty thatwas a Lender (or an Affiliate thereof) at the time it entered into such SwapAgreement, all agreements or other documents executed by any Loan Party inrespect of Banking Services and each other agreement or document executed by aLoan Party and delivered to the Administrative Agent or any Lender inconnection with or pursuant to any of the foregoing.

“Loan Parties” means the Parent Borrower, theSubsidiary Borrowers, and each of the other Subsidiaries that executes anddelivers a Loan Document.

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

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

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

“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 Borrower and the Subsidiaries, taken as a whole,(b) the ability of the Loan Parties to perform any material obligationsunder any Loan Document or (c) the rights of or benefits available to theLenders under any Loan Document.

“Material Indebtedness” means Indebtedness(other than the Loans, Letters of Credit and loans under the Fixed Asset CreditAgreement), or obligations in respect of one or more Swap Agreements, of anyone or more of the Parent Borrower and the Subsidiaries in an aggregateprincipal or similar amount exceeding $10,000,000.  For purposes of determining MaterialIndebtedness, the “principal amount” of the obligations of the Parent Borroweror any Subsidiary in respect of any Swap Agreement at any time shall be themaximum aggregate amount (giving effect to any netting agreements) that theParent Borrower or such Subsidiary would be required to pay if such SwapAgreement 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 Loansand to incur LC Exposure or permit existing Loans to remain outstandingpursuant to Article VII, (c) May 15, 2009, if the Senior First Lien Notesoutstanding on the Effective Date are not refinanced in full prior to such datewith the proceeds of Permitted Refinancing Indebtedness, (d) August 1, 2009, ifthe Senior Second Lien Notes outstanding on the Effective Date are notrefinanced in full prior to such date with the proceeds of PermittedRefinancing Indebtedness and (e) May 1, 2010, if the Senior Subordinated Notesoutstanding on the Effective Date are not refinanced in full prior to such datewith the proceeds of Permitted Refinancing Indebtedness.

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

(a)           (i) 95% of each Mexican Loan Party’sAdjusted Eligible Accounts Receivable, plus (ii) 85% of eachMexican Loan Party’s Adjusted Eligible Finished Goods, plus (iii) 55% ofeach Mexican Loan Party’s Adjusted Eligible Work in Process, plus (iv)55% of each Mexican Loan Party’s Adjusted Eligible Raw Materials, 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 Accounts or Inventory of anyMexican Loan Party.

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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 Parent Borrower.  For purposes of calculating the MexicanBorrowing Base on any date, all amounts reflected or outstanding in MexicanPesos shall be translated into dollars at the exchange rate in effect on suchdate, as determined in good faith by the Parent Borrower.

“Mexican Lender” means each Domestic Lender orany Affiliate of a Domestic Lender designated by such Domestic Lender to theParent Borrower as a “Mexican Lender”. The Mexican Lender on the Effective Date shall be Merrill Lynch MortgageCapital 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 Parent Borrower, Pliant Corporation International, the Mexican LoanParties and the Administrative Agent.

 “MexicanRevolving Exposure” means, with respect to any Mexican Lender at any time,the sum of the outstanding principal amount of such Mexican Lender’s MexicanRevolving 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 Foreign Obligations.

“Mexican Sublimit” means $15,000,000.

“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 tosecure the Obligations.

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“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 Proceeds” means, with respect to any event(a) the cash proceeds received by the Parent Borrower and the Subsidiariesin respect of such event including (i) any cash received in respect of anynon-cash proceeds (excluding interest payments), but only as and when received,(ii) in the case of a casualty, insurance proceeds, and (iii) in thecase of a condemnation or similar event, condemnation awards and similarpayments, net of (b) the sum of (i) all reasonable fees andout-of-pocket expenses paid by the Parent Borrower and the Subsidiaries tothird parties (other than to the Parent Borrower or a Subsidiary) in connectionwith such event, (ii) in the case of a sale, transfer or other dispositionof an asset (including pursuant to a sale and leaseback transaction or acasualty or other insured damage or condemnation or similar proceeding), theamount of all payments required to be made by the Parent Borrower and theSubsidiaries as a result of such event to repay Indebtedness (other than Loans)secured by such asset or otherwise subject to mandatory prepayment as a resultof such event (including in order to obtain any consent required therefor) and (iii) theamount of all taxes paid (or reasonably estimated to be payable) by the ParentBorrower and the Subsidiaries, and the amount of any reserves established bythe Parent Borrower and the Subsidiaries to fund contingent liabilitiesreasonably estimated to be payable, and that are directly attributable to suchevent (as determined reasonably and in good faith by the chief financialofficer of the Parent Borrower).  In thecase of Net Proceeds denominated in a currency other than dollars, the amountof such Net Proceeds shall be the dollar equivalent thereof based upon theexchange rates prevailing at the time of the transaction giving rise to suchNet Proceeds.

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

“New Zealand Dollar” refers to the lawful moneyof New Zealand.

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

“Obligations” means the Domestic Obligationsand the Foreign Obligations.

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

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

“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.

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“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 Borrower” has the meaning specified inthe preamble.

“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 Borrower or any of its Subsidiaries of all or substantially allof the assets or all of the Equity Interests of any Person or any operatingdivision thereof (the “Target”), or the merger of any Target with orinto the Parent Borrower or any Subsidiary (and, in the case of a merger withany Borrower, with such Borrower being the surviving corporation), subject tothe satisfaction of each 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 Borrower and itsSubsidiaries as 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 Borrower and Target after giving effectto such proposed acquisition, except (i) Loans made hereunder, (ii) ordinarycourse trade payables and accrued expenses and (iii) Indebtedness of the Targetpermitted under 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 aconsolidated balance sheet of the Parent Borrower and Target) and (iii) allInvestments made pursuant to Section 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 Borrower (or the Subsidiary making suchproposed acquisition) and the Target shall have executed such documents andtaken such actions as may be required under Sections 5.12  and 5.13;

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(g)           the Parent Borrower shall havedelivered 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 Borrower’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;

(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

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property or interferewith the ordinary conduct of business of the Parent Borrower 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 agency relatingto marketable direct obligations issued or unconditionally guaranteed by theUnited States of America or any agency or instrumentality thereof andbacked 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 nationally recognizedrating agency, (vi) tax exempt floating rate option tender bonds backed byletters of credit issued by a national or state bank whose long-term unsecureddebt has a rating of AA or better by S&P or Aa2 or better by Moody’s or theequivalent rating by any other nationally recognized rating agency, (vii) ”moneymarket” funds that invest in the investments specified in clauses (i)through (vi) above and (viii) demand deposit accounts with commercialbanks.

“Permitted Redemption Indebtedness” means anyIndebtedness of the Parent Borrower issued to refinance, redeem, repurchase orotherwise replace (collectively, “refinance”) all or any portion of anyof the Series AA Preferred Stock; provided that (a) the aggregateprincipal amount at maturity of such Permitted Redemption Indebtedness does notexceed the aggregate liquidation preference of the Series AA Preferred Stock(plus accrued and unpaid

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dividends) being refinanced, (b) such PermittedRedemption 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 the Senior Subordinated Notes, (c) the stated maturity of suchPermitted Redemption Indebtedness is no earlier than 180 days after theMaturity Date, (d) such Permitted Redemption Indebtedness does not requireany scheduled amortization, principal or sinking fund payments earlier than 180days after the Maturity Date, (e) such Permitted Redemption Indebtedness isunsecured and subordinated in right of payment to the Obligations on terms noless favorable to the Lenders than those contained in the Senior SubordinatedNote Documents, (f) such Permitted Redemption Indebtedness does not havedifferent obligors or guarantors than those with respect to the SeniorSubordinated Notes, and (g) all other terms and conditions (including, asapplicable, any intercreditor provisions) of such Permitted RedemptionIndebtedness are not less favorable to the Lenders or the Parent Borrower andits subsidiaries in any material respect than those contained in the SeniorSubordinated Notes.

 “PermittedRefinancing Indebtedness” means any Indebtedness of the Parent Borrowerissued to refinance, redeem, repurchase or otherwise replace (collectively, “refinance”)all or any portion of any of the Senior First Lien Notes, Senior Second LienNotes or Senior Subordinated Notes (or previous refinancings, redemptions,repurchases or replacements thereof constituting Permitted RefinancingIndebtedness); provided that (a) the aggregate principal amount atmaturity of such Permitted Refinancing Indebtedness does not exceed theaggregate principal amount at maturity of the Indebtedness being refinanced(plus unpaid accrued interest and premium thereon), (b) if the aggregateprincipal amount at maturity of the Indebtedness being refinanced exceeds theaccreted value of such Indebtedness, the accreted value of such PermittedRefinancing Indebtedness does not exceed the accreted value of the Indebtednessbeing refinanced (plus unpaid accrued interest (not included in the accretedvalue) and premium thereon), (c) such Permitted Refinancing Indebtedness has arate of interest at a market rate determined at the time of pricing, but in anyevent, at no time greater than the rate of interest of any of the Indebtednessbeing refinanced, (d) the stated maturity of such Permitted RefinancingIndebtedness is no earlier than the later of (i) 180 days after the MaturityDate and (ii) the date on which the Indebtedness being refinanced wouldotherwise come due in accordance with its terms, (e) such PermittedRefinancing Indebtedness does not require any scheduled amortization, principalor sinking fund payments earlier than the later of (i) 180 days after theMaturity Date and (ii) the date on which the Indebtedness being refinancedwould otherwise come due in accordance with its terms, (f) with respect to anyrefinancing of the Senior Subordinated Notes, such Permitted RefinancingIndebtedness is unsecured and subordinated in right of payment to theObligations on terms no less favorable to the Lenders than those contained inthe Senior Subordinated Note Documents, (g) such Permitted RefinancingIndebtedness does not have different obligors or guarantors than those withrespect to the Senior First Lien Notes, Senior Second Lien Notes or SeniorSubordinated Notes, as applicable, being refinanced and (h) all otherterms and conditions (including, as applicable, any collateral andintercreditor provisions) of such Permitted Refinancing Indebtedness are notless favorable to the Lenders or the Parent Borrower and its subsidiaries inany material respect than those contained in (i) except in the case ofPermitted Refinancing Indebtedness referred to in clause (ii) below, the SeniorFirst Lien Notes, Senior Second Lien Notes or Senior Subordinated Notes, asapplicable, 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.

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“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 (otherthan a Multiemployer Plan) subject to the provisions of Title IV of ERISA,Section 412 of the Code or Section 302 of ERISA, and in respect ofwhich the Parent Borrower 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 Agreements” means the Domestic PledgeAgreement, Australian Pledge Agreement, Canadian Pledge Agreement, GermanPledge Agreement and Mexican Pledge Agreement.

“Pliant Packaging” means Pliant Packaging ofCanada, LLC, a Utah limited liability company.

“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 ParentBorrower, Uniplast Industries Co., and the Subsidiaries of Parent Borrowerparty thereto as borrowers, as Borrowers, the Lenders party thereto, MorganStanley Senior Funding, Inc., as Domestic B Agent, and GE Capital, as DomesticA Agent, Administrative Agent and 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.

“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 Security

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Documents in respect of any Eligible AccountsReceivable or Eligible Inventory, including, if applicable, amounts owing forwages, vacation pay, severance pay, employee deductions (including with respectto any Australian Loan Party any accrued annual leave, long service leave, sickleave, parental leave, rostered days off, annual leave loading and any paymentsin lieu of notice), sales tax, excise tax, Taxes payable pursuant toPart IX of the Excise Tax Act (Canada) (net of GST input credits), incometax, workers compensation, government royalties, pension fund obligations,overdue rents or Taxes, and other statutory or other claims.

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

“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).

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

“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) mature or becomes mandatorily redeemable pursuant to a sinkingfund obligation or otherwise; (ii) become convertible or exchangeable atthe option of the holder thereof for Indebtedness or preferred stock that isnot Qualified Preferred Stock; or (iii) become redeemable at the option ofthe holder thereof (other than as a result of a change of control event), inwhole or in part, in each case on or prior to the first anniversary of theMaturity Date and (b) provide holders thereunder with rights upon theoccurrence of a “change of control” event or have other terms relating to “changeof control” events.

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

“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 Borrower or any of its Subsidiaries thatresults in the receipt by such Person of proceeds of insurance in excess of$500,000 in the aggregate or (b) any taking of property of the Parent Borroweror any of its Subsidiaries that results in the receipt by such Person of acompensation payment 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 and interpretationsthereunder or thereof.

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

“Reinvestment Event” means any AssetDisposition or Recovery Event in respect of which the Parent Borrower hasdelivered 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 Borrower (directly or indirectlythrough a Subsidiary) intends and expects to use all or a specified portion ofthe proceeds of an Asset Disposition or Recovery Event to acquire assets usefulin its 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 PrepaymentDate to acquire assets useful in the Parent Borrower’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 Borrowershall have determined not to, or shall have otherwise ceased to, acquire assetsuseful in the Parent Borrower’s business with all or any portion of therelevant proceeds from a Reinvestment Event and (c) the date an Event ofDefault shall occur and be continuing.

“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 Inventory (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 Credit Exposure and unused Commitments representing more than 50% of thesum of the total Credit Exposure and unused Commitments at such time.

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“Reserves” means any reserves against EligibleAccounts Receivable, Eligible Finished Goods, Eligible Raw Materials orEligible Work in Progress of any Loan Party or the Availability Amount that theAdministrative Agent may, in its reasonable credit judgment, establish fromtime to time, including, without limitation, reserves for the cost of enforcingthe rights of the Secured Parties under the Security Documents.

“Restricted Payment” means any dividend orother distribution (whether in cash, securities or other property) with respectto any Equity Interests in the Parent Borrower or any Subsidiary, or anypayment (whether in cash, securities or other property), including any sinkingfund or similar deposit, on account of the purchase, redemption, retirement,acquisition, cancellation or termination of any such Equity Interests in theParent Borrower or any Subsidiary or any option, warrant or other right toacquire any such Equity Interests in the Parent Borrower 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 Domestic Revolving Exposure and ForeignRevolving Exposure of such Lender.

“Revolving Loan” means a Domestic RevolvingLoan or any Foreign Revolving Loan.

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

“SEC” means the Securities and ExchangeCommission.

“Second Priority Collateral” shall have themeaning assigned to the term “2004 Notes First Lien Collateral” in theIntercreditor Agreement.

“Secured Obligations Reserve” means, at anytime, the sum of (a) the Mark-to-Market Value of the Swap Obligations ofthe Loan Parties at such time, (b) if, at such time, any Cash ManagementArrangement is in effect that could give rise to Banking Services Obligations,the actual amount of Banking Services Obligations at such time and (c) anyamount payable by a Loan Party that is secured by the First Priority Collateraland ranks pari passu with or senior to the Obligations.

“Secured Parties” means the Domestic SecuredParties and the Foreign Secured Parties.

“Security Agreements” means the DomesticSecurity Agreement, Australian Security Agreement, Canadian Security Agreement,German Security Agreement and Mexican Security Agreement.

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“Security Documents” means the SecurityAgreements, the Pledge Agreements, 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 ParentBorrower and Wilmington Trust Company, as trustee, (b) the indenture dated asof February 17, 2004, between the Parent Borrower and Wilmington Trust Company,as trustee, (c) the supplemental first lien notes indenture, dated as of theEffective Date (the “Supplemental First Lien Notes Indenture”), betweenthe Parent Borrower and Wilmington Trust Company, as trustee, and (d) any otherindenture or similar agreement or instrument, in each case pursuant to whichany Senior First Lien Notes are issued.

“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 Borrower outstanding on the Effective Date, (b) the$7,800,000 principal amount at maturity of 11-1/8% senior secured discountnotes due 2009 of the Parent Borrower outstanding on the Effective Date and (c)any Permitted Refinancing 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 Borrower and Wells FargoBank, 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 Borrower 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.

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“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 the ParentBorrower and The Bank of New York Trust Company, N.A., as trustee, and (b) anyother indenture or similar agreement or instrument, in each case pursuant towhich any Senior Subordinated Notes are issued.

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

“Series AA Preferred Stock” means the Series AAPreferred Stock of the Parent Borrower having the terms specified in the ParentBorrower’s Amended and Restated Certificate of Incorporation dated July 18,2006, as such 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 Borrower having the terms specified in the ParentBorrower’s Amended and Restated Certificate of Incorporation dated July 18,2006, as such 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

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entity of which securities or other ownershipinterests representing more than 50% of the equity or more than 50% of the ordinaryvoting power or, in the case of a partnership, more than 50% of the generalpartnership interests are, as of such date, owned, controlled or held.

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

“Subsidiary Borrower” means each of theAustralian Subsidiary Borrower, the Canadian Subsidiary Borrowers, the DomesticSubsidiary Borrowers, the German Subsidiary Borrower and the Mexican SubsidiaryBorrower.

“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 stock or similar plan providing for payments only on account ofservices provided by current or former directors, officers, employees orconsultants of the Parent Borrower or the Subsidiaries shall be a SwapAgreement.

“Swap Obligations” of each Loan Party means allobligations, monetary or otherwise, under each Swap Agreement that (i) iseffective on the Effective Date with a counterparty that is a Lender (or anAffiliate of a Lender) as of the Effective Date or (ii) is entered into afterthe Effective Date with any counterparty that is a Lender (or an Affiliatethereof) at the time such Swap Agreement is entered into.

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

“Swingline Lender” means Merrill Lynch BankUSA, in its capacity as lender of Swingline Loans hereunder.

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

“Swingline Loan Request” means a request by theParent Borrower for a Swingline Loan in substantially the form of Exhibit Jhereto.

“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, the use of the proceeds thereof andthe issuance of Letters of Credit hereunder, (b) the execution, delivery andperformance by each Fixed Asset Loan Party of the Fixed Asset Loan Documents towhich it is to be a party, the borrowing of loans thereunder and the use of theproceeds thereof, (c) the termination of the Pre-Petition Loan Agreement, andthe payment 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 under

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this Agreement on or prior to the Effective Date), (d)the termination of the DIP Credit Agreement, and the payment in full of allloans, interest and other amounts accrued or owing thereunder (other than inrespect of the Existing Letters of Credit, which will be fully cashcollateralized or backstopped with Letters of Credit issued under thisAgreement on or prior to the Effective Date), and (e) the payment of theTransaction Costs.

“Transaction Costs” means the fees and expensesincurred by, or required to be reimbursed or paid by, the Parent Borrower andthe Subsidiaries 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.

“Uniplast Canada” means Uniplast IndustriesCo., an unlimited liability company organized under the laws of Nova Scotia.

“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 Borrower.

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

“Work in Process” means items that requireadditional processing or manufacturing to be sold to customers (other thancustomers that are Affiliates of any Loan Party) by a Loan Party in theordinary course of its business, other than Raw Materials.

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 or

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modifications set forth herein), (b) anyreference herein to any Person shall be construed to include such Person’ssuccessors and assigns, (c) the words “herein”, “hereof” and “hereunder”,and words of similar import, shall be construed to refer to this Agreement inits entirety and not to any particular provision hereof, (d) allreferences herein to Articles, Sections, Exhibits and Schedules shall beconstrued to refer to Articles and Sections of, and Exhibits and Schedules to,this Agreement and (e) the words “asset” and “property” shall be construedto have the same meaning and effect and to refer to any and all tangible andintangible assets and properties, including cash, securities, accounts andcontract 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 Parent Borrower notifies the Administrative Agent that the Parent Borrowerrequests an amendment to any provision hereof to eliminate the effect of anychange occurring after the date hereof in GAAP or in the application thereof onthe operation of such provision (or if the Administrative Agent notifies theParent Borrower that the Required Lenders request an amendment to any provisionhereof for such purpose), regardless of whether any such notice is given beforeor after such change in GAAP or in the application thereof, then such provisionshall be interpreted on the basis of GAAP as in effect and applied immediatelybefore such change shall have become effective until such notice shall havebeen withdrawn or such provision amended in accordance herewith.

ARTICLE IITHE CREDITS

SECTION 2.01.  Commitments.  (a) Subject to the terms and conditions set forth herein, each DomesticLender agrees to make loans in dollars to the Parent Borrower and the DomesticSubsidiary Borrowers from time to time during the Revolving Availability Periodin an aggregate principal amount that will not result in (i) such Lender’sDomestic Revolving Exposure exceeding such Lender’s Commitment (after givingeffect to the application of any proceeds being applied contemporaneously withthe advance of such Domestic Revolving Loans), (ii) the total DomesticRevolving Exposure exceeding the lesser of (A) the total amount of theAvailable Commitments at such time and (B) the Domestic Borrowing Basethen in effect, (iii) the total Revolving Exposure exceeding the totalamount of the Available Commitments at such time or (iv) the total RevolvingExposure plus the total Fixed Asset Revolving Exposure exceeding the totalamount of the Commitments at such time, subject to the Administrative Agent’sauthority, in its sole discretion, to make Protective Advances pursuant to theterms of Section 2.19.

(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 Australian AvailabilityPeriod in an aggregate principal amount that will not result in (i) such Lender’sAustralian Revolving Exposure exceeding such Lender’s Applicable Percentage ofthe Australian Sublimit, (ii) the total Australian Revolving Exposureexceeding the lesser of (A) the Australian Sublimit and (B) theAustralian Borrowing Base then in effect, (iii) the total RevolvingExposure exceeding the total amount of the Available Commitments at such timeor (iv) the total Revolving Exposure plus the total Fixed Asset RevolvingExposure

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exceeding the total amount of the Commitments at suchtime, subject to the Administrative Agent’s authority, in its sole discretion,to make Protective Advances pursuant to the terms of Section 2.19.  Notwithstanding anything herein to thecontrary, the obligations of each Australian Lender to make AustralianRevolving Loans to the Australian Subsidiary Borrower pursuant to thisAgreement shall terminate if any Domestic Lender is unable to designate anAffiliate reasonably satisfactory to it as the Australian Lender hereunder.

(c)           Subject to the terms and conditionsset forth herein, each Canadian Lender agrees to make loans in dollars to theCanadian Subsidiary Borrowers 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 Canadian Sublimit, (iii) the CanadianRevolving Exposure with respect to each Canadian Subsidiary Borrower exceedingsuch Canadian Subsidiary Borrower’s Canadian Borrowing Base then in effect,(iv) the total Revolving Exposure exceeding the total amount of theAvailable Commitments at such time or (v) the total Revolving Exposure plus thetotal Fixed Asset Revolving Exposure exceeding the total amount of theCommitments at such time, subject to the Administrative Agent’s authority, inits sole discretion, to make Protective Advances pursuant to the terms of Section2.19.

(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 Available Commitments at such time or (iv) the total RevolvingExposure plus the total Fixed Asset Revolving Exposure exceeding the totalamount of the Commitments at such time, subject to the Administrative Agent’sauthority, in its sole discretion, to make Protective Advances pursuant to theterms of Section 2.19.

(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 Available Commitments at such time or (iv) the total RevolvingExposure plus the total Fixed Asset Revolving Exposure exceeding the totalamount of the Commitments at such time, subject to the Administrative Agent’sauthority, in its sole discretion, to make Protective Advances pursuant to theterms of Section 2.19.

(f)            Withinthe foregoing limits and subject to the terms and conditions set forth herein,(i) the Borrowers (other than the Australian Subsidiary Borrower) may borrow,prepay and reborrow Revolving Loans (other than Australian Revolving Loans)during the Revolving Availability Period and (ii) the Australian SubsidiaryBorrower may borrow, prepay and reborrow Australian Revolving Loans during theAustralian Availability Period.

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SECTION 2.02.  Loans and Borrowings.  (a) Each Domestic Revolving Loan (other thana Swingline Loan) shall be made as part of a Borrowing consisting of DomesticRevolving Loans of the same Type made by the Domestic Lenders ratably inaccordance with their respective Commitments. Each Australian Revolving Loan shall be made as part of a Borrowingconsisting of Australian Revolving Loans of the same Type made by theAustralian Lenders ratably in accordance with their respective ApplicablePercentage.  Each Canadian Revolving Loanshall be made as part of a Borrowing consisting of Canadian Revolving Loans ofthe same Type made by the Canadian Lenders ratably in accordance with theirrespective Applicable Percentage.  EachGerman Revolving Loan shall be made as part of a Borrowing consisting of GermanRevolving Loans of the same Type made by the German Lenders ratably inaccordance with their respective Applicable Percentage.  Each Mexican Revolving Loan shall be made aspart of a Borrowing consisting of Mexican Revolving Loans of the same Type madeby the Mexican Lenders ratably in accordance with their respective ApplicablePercentage.  The failure of any Lender tomake any Loan required to be made by it shall not relieve any other Lender ofits obligations hereunder; provided that the Commitments of the Lendersare several and no Lender shall be responsible for any other Lender’s failureto make Loans as required.  AnyProtective Advance and any Swingline Loan shall be made in accordance with theprocedures set forth in Sections 2.19 and 2.04.

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

(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.  At the time that each ABRRevolving Loan is made, such Borrowing shall be in an aggregate amount that isan integral multiple of $500,000 and not less than $1,000,000; providedthat an ABR Revolving Loan of any Class may be in an aggregate amount that isequal to the entire unused balance of the total amount of the Commitments ofsuch Class or that is equal to the amount required to finance the reimbursementof an LC Disbursement as contemplated by Section 2.05(e).  Each Swingline Loan shall be in an amountthat is an integral multiple of $100,000 and not less than $500,000.  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.

(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, the ParentBorrower shall deliver a Borrowing Request to the Administrative Agent (onbehalf of itself or another Borrower) (a) in the case of a EurodollarBorrowing, not later than 12:00 noon, New York City time, threeBusiness Days before the date of the proposed Borrowing or (b) in the caseof an ABR Borrowing, not later than 4:00 p.m., New York Citytime, one Business Day before the date of the proposed Borrowing; providedthat any such notice of an ABR Revolving Loan to finance the reimbursement ofan LC Disbursement as contemplated by Section 2.05(e) may be givennot later than 10:00 a.m., New York City time, on the date of theproposed

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Borrowing.  Eachsuch Borrowing Request shall be irrevocable and shall be signed by the ParentBorrower (on behalf of itself or another Borrower).  Each such Borrowing Request shall specify thefollowing information in compliance with Section 2.02:

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

(ii)           whether the requested Borrowing is aDomestic Revolving Borrowing, Australian Revolving Borrowing, CanadianRevolving Borrowing, German Revolving Borrowing 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 Fixed Asset CreditAgreement) in the aggregate per calendar month.

SECTION 2.04.  Swingline Loans.  (a) Subject to the terms and conditions setforth herein, the Swingline Lender agrees to make loans (“Swingline Loans”)to the Parent Borrower from time to time during the Revolving AvailabilityPeriod, in an aggregate principal amount at any time outstanding that will notresult in (i) the aggregate principal amount of outstanding SwinglineLoans exceeding $10,000,000, (ii) the total Domestic Revolving Exposureexceeding the lesser of (A) the total amount of the Available Commitments and(B) the Domestic Borrowing Base then in effect, (iii) the total RevolvingExposure exceeding the total amount of the Available Commitments then in effectand (iv) the total Revolving Exposure plus the total Fixed Asset RevolvingExposure exceeding the total amount of the Commitments then in effect; providedthat the Swingline Lender shall not be required to make a Swingline Loan torefinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions setforth herein, the Parent Borrower may borrow, prepay and reborrow SwinglineLoans.

(b)           To request a Swingline Loan, theParent Borrower shall deliver a Swingline Loan Request to the AdministrativeAgent, not later than 3:00 p.m., New York City time, on the day of aproposed Swingline Loan.  Each suchSwingline Loan Request shall be irrevocable and shall specify the requesteddate (which shall be a Business Day) and the amount of the requested SwinglineLoan.  The Administrative Agent willpromptly advise the Swingline Lender of any such notice received from theParent Borrower.  The Swingline Lendershall make each Swingline Loan available to the Parent Borrower by wire transferto the account specified

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by the Parent Borrower in the request for suchSwingline Loan (or, in the case of a Swingline Loan made to finance thereimbursement of an LC Disbursement as provided in Section 2.05(e),by remittance to the Issuing Bank) by 2:00 p.m., New York City time,on the requested date of such Swingline Loan.

(c)           The Swingline Lender may by writtennotice given to the Administrative Agent not later than 10:00 a.m.,New York City time, on any Business Day require the Domestic Lenders toacquire participations on such Business Day in all or a portion of theSwingline Loans outstanding.  Such noticeshall specify the aggregate amount of Swingline Loans in which Domestic Lenderswill participate.  Promptly upon receiptof such notice, the Administrative Agent will give notice thereof to eachDomestic Lender, specifying in such notice such Domestic Lender’s ApplicablePercentage of such Swingline Loan or Loans. Each Domestic Lender hereby absolutely and unconditionally agrees, uponreceipt of notice as provided above, to pay to the Administrative Agent, forthe account of the Swingline Lender, such Domestic Lender’s ApplicablePercentage of such Swingline Loan or Loans. Each Domestic Lender acknowledges and agrees that its obligation toacquire participations in Swingline Loans pursuant to this paragraph isabsolute and unconditional and shall not be affected by any circumstancewhatsoever, including the occurrence and continuance of a Default or reductionor termination of the Commitments, and that each such payment shall be made withoutany offset, abatement, withholding or reduction whatsoever.  Each Domestic Lender shall comply with itsobligation under this paragraph by making a wire transfer to the AdministrativeAgent for the benefit of the Swingline Lender of immediately available funds,in the same manner as provided in Section 2.06 with respect toDomestic Revolving Loans made by such Domestic Lender (and Section 2.06shall apply, mutatismutandis, to the payment obligations of theDomestic Lenders), and the Administrative Agent shall promptly pay to theSwingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify theParent Borrower of any participations in any Swingline Loan acquired pursuant tothis paragraph, and thereafter payments in respect of such Swingline Loan shallbe made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lenderfrom the Parent Borrower (or other party on behalf of the Parent Borrower) inrespect of a Swingline Loan after receipt by the Swingline Lender of theproceeds of a sale of participations therein shall be promptly remitted to theAdministrative Agent; any such amounts received by the Administrative Agentshall be promptly remitted by the Administrative Agent to the Domestic Lendersthat shall have made their payments pursuant to this paragraph and to theSwingline Lender, as their interests may appear.  The purchase of participations in a SwinglineLoan pursuant to this paragraph shall not relieve the Parent Borrower of anydefault in the payment thereof.

SECTION 2.05.  Letters of Credit.  (a) General.  Subject to the terms and conditions set forthherein, the Issuing Bank agrees to issue at the request of the Parent Borrowerone or more Letters of Credit from time to time on any Business Day during theLC Availability Period.  The ParentBorrower may request the issuance of Letters of Credit for its own account orthe account of any other Domestic Loan Party (provided that the ParentBorrower shall be a co-applicant with respect to each Letter of Credit issuedfor the account of or in favor of such other Loan Party, and the issuance ofany such Letter of Credit shall constitute a Guarantee by the Parent Borrowerof Indebtedness of such Loan Party pursuant to Section 6.05(e)), ina form reasonably acceptable to the Administrative Agent and the Issuing Bank,at any time and from time to time during the LC Availability Period.  All Letters of Credit shall be denominated in

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dollars.  In theevent of any inconsistency between the terms and conditions of this Agreementand the terms and conditions of any form of letter of credit application orother agreement submitted by the Parent Borrower to, or entered into by theParent Borrower with, the Issuing Bank relating to any Letter of Credit, theterms and conditions of this Agreement shall control.

(b)           Notice of Issuance, Amendment,Renewal, Extension; Certain Conditions. To request the issuance of a Letter of Credit (or the amendment, renewalor extension of an outstanding Letter of Credit), the Parent Borrower shallhand deliver or telecopy (or transmit by electronic communication, ifarrangements for doing so have been approved by the Issuing Bank) to theIssuing Bank and the Administrative Agent (reasonably in advance of therequested date of issuance, amendment, renewal or extension) a Letter of CreditRequest requesting the issuance of a Letter of Credit, or identifying theLetter of Credit to be amended, renewed or extended, and specifying the date ofissuance, amendment, renewal or extension (which shall be a Business Day), thedate on which such Letter of Credit is to expire (which shall comply withparagraph (c) of this Section), the amount of such Letter of Credit, thename and address of the beneficiary thereof and such other information as shallbe necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the ParentBorrower also shall submit a letter of credit application on the Issuing Bank’sstandard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,renewed or extended only if (and upon issuance, amendment, renewal or extensionof each Letter of Credit the Parent Borrower shall be deemed to represent and warrantthat), after giving effect to such issuance, amendment, renewal or extension(i) the LC Exposure shall not exceed $20,000,000, (ii) the total DomesticRevolving Exposure shall not exceed the lesser of (A) the total amount of theAvailable Commitments and (B) the Domestic Borrowing Base then in effect,(iii) the total Revolving Exposure shall not exceed the total amount ofthe Available Commitments then in effect and (iv) the total Revolving Exposureplus the total Fixed Asset Revolving Exposure shall not exceed the total amountof the Commitments then in effect.

(c)           Expiration Date.  Each Letter of Credit shall expire at orprior to the close of business on the earlier of (i) the date one yearafter the date of the issuance of such Letter of Credit (or, in the case of anyrenewal or extension thereof, one year after such renewal or extension) and(ii) the date that is 30 days prior to the Maturity Date.

(d)           Participations.  By the issuance of a Letter of Credit (or anamendment to a Letter of Credit increasing the amount thereof) and without anyfurther action on the part of the Issuing Bank or the Lenders, the Issuing Bankhereby grants to each Domestic Lender, and each Domestic Lender hereby acquiresfrom the Issuing Bank, a participation in such Letter of Credit equal to suchDomestic Lender’s Applicable Percentage of the aggregate amount available to bedrawn under such Letter of Credit.  Inconsideration and in furtherance of the foregoing, each Domestic Lender herebyabsolutely and unconditionally agrees to pay to the Administrative Agent, forthe account of the Issuing Bank, such Domestic Lender’s Applicable Percentageof each LC Disbursement made by the Issuing Bank and not reimbursed by theParent Borrower on the date due as provided in paragraph (e) of thisSection, or of any reimbursement payment required to be refunded to the ParentBorrower for any reason.  Each DomesticLender acknowledges and agrees that its obligation to acquire participations pursuantto this paragraph in respect of Letters of Credit is absolute and unconditionaland shall not be affected by any circumstance whatsoever, including anyamendment, renewal or extension of any Letter of

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Credit or the occurrence and continuance of a Defaultor reduction or termination of the Commitments, and that each such paymentshall be made without any offset, abatement, withholding or reductionwhatsoever.

(e)           Reimbursement.  If the Issuing Bank shall make anyLC Disbursement in respect of a Letter of Credit, the Parent Borrowershall reimburse such LC Disbursement by paying to the Administrative Agentan amount equal to such LC Disbursement not later than 12:00 noon,New York City time, on the date that such LC Disbursement is made, ifthe Parent Borrower shall have received notice of such LC Disbursementprior to 10:00 a.m., New York City time, on such date, or, if suchnotice has not been received by the Parent Borrower prior to such time on suchdate, then not later than 12:00 noon, New York City time, on (i) theBusiness Day that the Parent Borrower receives such notice, if such notice isreceived prior to 10:00 a.m., New York City time, on the day ofreceipt, or (ii) the Business Day immediately following the day that theParent Borrower receives such notice, if such notice is not received prior tosuch time on the day of receipt; provided that, if the Parent Borrowerdoes not otherwise elect by notice to the Administrative Agent to make suchpayment, the Parent Borrower shall be deemed to have requested in accordancewith Section 2.03 (but without regard to the minimum borrowingamounts specified in Section 2.02) that such LC Disbursementbe financed with an ABR Domestic Revolving Loan in an amount equal to suchLC Disbursement, the Administrative Agent shall notify the DomesticLenders thereof, the Domestic Lenders shall (subject to the conditions toborrowing herein) advance their respective ABR Domestic Revolving Loans (whichshall be applied to reimburse such LC Disbursement) and, to the extentsuch ABR Domestic Revolving Loans are so advanced and applied, the ParentBorrower’s obligation to make such payment shall be deemed discharged as of thedate due and replaced by the resulting ABR Domestic Revolving Loans.  If and to the extent that the Parent Borrower’sobligation to make such payment is not fully discharged and replaced by ABRDomestic Revolving Loans as aforesaid (whether as a result of the failure tosatisfy any condition to borrowing or otherwise) and if the Parent Borrowerotherwise fails to make such payment when due, the Administrative Agent shallnotify each Domestic Lender of the applicable LC Disbursement, the paymentthen due from the Parent Borrower in respect thereof and such Domestic Lender’sApplicable Percentage thereof.  Promptlyfollowing receipt of such notice, each Domestic Lender shall pay to theAdministrative Agent its Applicable Percentage of the payment then due from theParent Borrower, in the same manner as provided in Section 2.06with respect to Domestic Revolving Loans made by such Domestic Lender (and Section 2.06shall apply, mutatismutandis, to the payment obligations of theDomestic Lenders), and the Administrative Agent shall promptly pay to theIssuing Bank the amounts so received by it from the Domestic Lenders.  Promptly following receipt by theAdministrative Agent of any payment from the Parent Borrower pursuant to thisparagraph, the Administrative Agent shall distribute such payment to theIssuing Bank or, to the extent that Domestic Lenders have made paymentspursuant to this paragraph to reimburse the Issuing Bank, then to such DomesticLenders and the Issuing Bank as their interests may appear.  Any payment made by a Domestic Lenderpursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement(other than the funding of ABR Domestic Revolving Loans as contemplated above)shall not constitute a Loan and shall not relieve the Parent Borrower of itsobligation to reimburse such LC Disbursement.

(f)            Obligations Absolute.  The Parent Borrower’s obligation to reimburseLC Disbursements as provided in paragraph (e) of this Section shallbe absolute, unconditional

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and irrevocable, and shall be performed strictly inaccordance with the terms of this Agreement under any and all circumstanceswhatsoever and irrespective of (i) any lack of validity or enforceabilityof any Letter of Credit or this Agreement, or any term or provision therein,(ii) any draft or other document presented under a Letter of Creditproving to be forged, fraudulent or invalid in any respect or any statement thereinbeing untrue or inaccurate in any respect, (iii) payment by the IssuingBank under a Letter of Credit against presentation of a draft or other documentthat does not comply with the terms of such Letter of Credit or (iv) anyother event or circumstance whatsoever, whether or not similar to any of theforegoing, that might, but for the provisions of this Section, constitute alegal or equitable discharge of, or provide a right of setoff against, theParent Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, norany of their Related Parties, shall have any liability or responsibility byreason of or in connection with the issuance or transfer of any Letter ofCredit or any payment or failure to make any payment thereunder (irrespectiveof any of the circumstances referred to in the preceding sentence), or anyerror, omission, interruption, loss or delay in transmission or delivery of anydraft, notice or other communication under or relating to any Letter of Credit(including any document required to make a drawing thereunder), any error ininterpretation of technical terms or any consequence arising from causes beyondthe control of the Issuing Bank; provided that nothing in this Section 2.05shall be construed to excuse the Issuing Bank from liability to the ParentBorrower to the extent of any direct damages (as opposed to consequentialdamages, claims in respect of which are hereby waived by the Parent Borrower tothe extent permitted by applicable law) suffered by the Parent Borrower thatare caused by the Issuing Bank’s failure to exercise care when determiningwhether drafts and other documents presented under a Letter of Credit complywith the terms thereof.  The partieshereto expressly agree that, in the absence of gross negligence or willfulmisconduct on the part of the Issuing Bank, the Issuing Bank shall be deemed tohave exercised care in each such determination. In furtherance of the foregoing and without limiting the generalitythereof, the parties agree that, with respect to documents presented thatappear on their face to be in substantial compliance with the terms of a Letterof Credit, the Issuing Bank may, in its sole discretion, either accept and makepayment upon such documents without responsibility for further investigation,regardless of any notice or information to the contrary, or refuse to acceptand make payment upon such documents if such documents are not in strictcompliance with the terms of such Letter of Credit.

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

(h)           Interim Interest.  If the Issuing Bank shall make anyLC Disbursement, then, unless the Parent Borrower shall reimburse suchLC Disbursement in full on the date such LC Disbursement is made, theunpaid amount thereof shall bear interest, for each day from and including thedate such LC Disbursement is made to but excluding the date that theParent Borrower reimburses such LC Disbursement, at the rate per annumthen applicable to ABR

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Domestic Revolving Loans; provided that, if theParent Borrower fails to reimburse such LC Disbursement when due pursuantto paragraph (e) of this Section, then Section 2.12(d) shallapply.  Interest accrued pursuant to thisparagraph shall be for the account of the Issuing Bank, except that interestaccrued on and after the date of payment by any Domestic Lender pursuant toparagraph (e) of this Section to reimburse the Issuing Bank shall be forthe account of such Lender to the extent of such payment.

(i)            Replacement of the Issuing Bank;Additional Issuing Banks.  TheIssuing Bank may be replaced at any time by written agreement among the ParentBorrower, the Administrative Agent, the replaced Issuing Bank and the successorIssuing Bank.  The Administrative Agentshall notify the Domestic Lenders of any such replacement of the Issuing Bankor any such additional Issuing Bank.  Atthe time any such replacement shall become effective, the Parent Borrower shallpay all unpaid fees accrued for the account of the replaced Issuing Bankpursuant to Section 2.11(b). From and after the effective date of any such replacement or addition,as applicable, (i) the successor or additional Issuing Bank shall have allthe rights and obligations of the Issuing Bank under this Agreement withrespect to Letters of Credit to be issued thereafter and (ii) referencesherein to the term “Issuing Bank” shall be deemed to refer to such successor orsuch addition or to any previous Issuing Bank, or to such successor or suchaddition and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bankhereunder, the replaced Issuing Bank shall remain a party hereto and shallcontinue to have all the rights and obligations of an Issuing Bank under thisAgreement with respect to Letters of Credit issued by it prior to suchreplacement, but shall not be required to issue additional Letters ofCredit.  If at any time there is morethan one Issuing Bank hereunder, the Parent Borrower may, in its discretion,select which Issuing Bank is to issue any particular Letter of Credit.

(j)            Cash Collateralization.  If any Event of Default shall occur and becontinuing, on the Business Day that the Parent Borrower receives notice fromthe Administrative Agent or the Required Lenders (or, if the maturity of theLoans has been accelerated, Domestic Lenders with LC Exposure representinggreater than 50% of the total LC Exposure) demanding the deposit of cashcollateral pursuant to this paragraph, the Parent Borrower shall deposit in anaccount with the Administrative Agent, in the name of the Administrative Agentand for the benefit of the Domestic Lenders, an amount in cash equal to 105% ofthe LC Exposure as of such date plus any accrued and unpaid interestthereon; provided that the obligation to deposit such cash collateralshall become effective immediately, and such deposit shall become immediatelydue and payable, without demand or other notice of any kind, upon the occurrenceof any Event of Default with respect to the Parent Borrower described in clause(h) or (i) of Article VII.  The ParentBorrower also shall deposit cash collateral pursuant to this paragraph as andto the extent required by Section 2.10(b), and any such cashcollateral so deposited and held by the Administrative Agent hereunder shallconstitute part of the Borrowing Base for purposes of determining compliancewith Section 2.10(b).  Eachsuch deposit shall be held by the Administrative Agent as collateral for thepayment and performance of the obligations of the Parent Borrower under thisAgreement.  The Administrative Agentshall have exclusive dominion and control, including the exclusive right ofwithdrawal, over such account.  Otherthan any interest earned on the investment of such deposits, which investmentsshall be made at the option and sole discretion of the Administrative Agent andat the Parent Borrower’s risk and expense, such deposits shall not bearinterest.  Interest or profits, if any,on such

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investments shall accumulate in such account.  Moneys in such account shall be applied bythe Administrative Agent to reimburse the Issuing Bank forLC Disbursements for which it has not been reimbursed and, to the extentnot so applied, shall be held for the satisfaction of the reimbursementobligations of the Parent Borrower for the LC Exposure at such time or, ifthe maturity of the Loans has been accelerated (but subject to the consent ofDomestic Lenders with LC Exposure representing greater than 50% of thetotal LC Exposure), be applied to satisfy other obligations of the ParentBorrower under this Agreement.  If theParent Borrower is required to provide an amount of cash collateral hereunderas a result of the occurrence of an Event of Default, such amount (to theextent not applied as aforesaid) shall be returned to the Parent Borrowerwithin three Business Days after all Events of Default have been cured orwaived.  If the Parent Borrower isrequired to provide an amount of cash collateral hereunder pursuant to Section 2.10(b),such amount (to the extent not applied as aforesaid) shall be returned to theParent Borrower as and to the extent that, after giving effect to such return,the Parent Borrower would remain in compliance with Section 2.10(b)and no Default shall have occurred and be continuing.

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; provided that SwinglineLoans shall be made as provided in Section 2.04.  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; providedthat ABR Domestic Revolving Loans made to finance the reimbursement of (i) anLC Disbursement as provided in Section 2.05(e) shall beremitted by the Administrative Agent to the Issuing Bank and (ii) a ProtectiveAdvance shall be made by the Administrative Agent.

(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 has notin 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 Parent Borrower may elect (onbehalf of itself or another Borrower) to convert such Borrowing to a differentType or to continue such Borrowing, all as provided in this Section.  The Parent Borrower (on behalf

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of itself or another Borrower) may elect differentoptions with respect to different portions of the affected Borrowing, in whichcase each such portion shall be allocated ratably among the Lenders holding theLoans comprising such Borrowing, and the Loans comprising each such portionshall be considered a separate Borrowing. This Section shall not apply to Swingline Loans or Protective Advances,which may not be converted or continued.

(b)           To make an election pursuant to thisSection, the Parent Borrower shall notify the Administrative Agent of suchelection in writing by the time that a Borrowing Request would be requiredunder Section 2.03 if the Parent 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 Parent Borrower.

(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 to bean ABR Borrowing or a Eurodollar Borrowing.

(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 Parent Borrower fails todeliver 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 theParent Borrower, then, so long as an Event of Default is continuing (i) nooutstanding Borrowing may be converted to or continued as a EurodollarBorrowing and (ii) unless repaid, each Eurodollar Borrowing shall beconverted to an ABR Borrowing at the end of the Interest Period applicablethereto.

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

(b)           The Parent Borrower may at any timeterminate, or from time to time reduce, the Commitments; provided that(i) each reduction of the Commitments shall be in an amount that is anintegral multiple of $1,000,000 and not less than $5,000,000 and (ii) theParent

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Borrower shall not terminate or reduce the Commitmentsif (A) the total Revolving Exposure would exceed the total amount of theAvailable Commitments or (B) after giving pro forma effect to suchreduction, the Facilities Availability Amount would be less than$10,000,000.  In connection with suchtermination or reduction, the Borrowers shall pay the applicable PrepaymentFee; provided, however, that no Prepayment Fee shall be payableon the Commitments in the event this Agreement is terminated in connection witha refinancing of the Obligations in a transaction in which the Initial Lenderprovides for the Borrowers a credit facility in which the Initial Lender is thesole lead arranger and book manager and the sole administrative agent.

(c)           The Parent Borrower shall notify theAdministrative Agent of any election to terminate or reduce the Commitmentsunder paragraph (b) of this Section at least three Business Days prior tothe effective date of such termination or reduction, specifying such electionand the effective date thereof.  Promptlyfollowing receipt of any notice, the Administrative Agent shall advise theLenders with respect to such Commitments of the contents thereof.  Each notice delivered by the Parent Borrowerpursuant to this Section shall be irrevocable; provided that a notice oftermination of the Commitments delivered by the Parent Borrower underparagraph (b) of this Section may state that such notice is conditionedupon the effectiveness of other borrowings or the completion of the sale orissuance of stock of the Parent Borrower or the sale of assets of the ParentBorrower, in which case such notice may be revoked by the Parent Borrower (bynotice to the Administrative Agent on or prior to the specified effective date)if such 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 Parent Borrower herebyunconditionally promises to pay (i) to the Administrative Agent for theaccount of each Domestic Lender the then unpaid principal amount of eachDomestic Revolving Loan of such Domestic Lender made to it on the MaturityDate, (ii) to the Administrative Agent the then unpaid amount of each ProtectiveAdvance on the earlier of the Maturity Date and demand by the AdministrativeAgent and (iii) to the Swingline Lender the then unpaid principal amountof each Swingline Loan on the Maturity Date. Each Domestic Subsidiary Borrower hereby unconditionally promises topay to the Administrative Agent for the account of each Domestic Lenderthe then unpaid principal amount of each Domestic Revolving Loan of suchDomestic Lender made to it on the Maturity Date.  The Australian Subsidiary Borrower herebyunconditionally promises to pay to the Administrative Agent for the account ofeach Australian Lender the then unpaid principal amount of each AustralianRevolving Loan of such Australian Lender on the Maturity Date.  Each Canadian Subsidiary Borrower herebyunconditionally promises to pay to the Administrative Agent for the account ofeach Canadian Lender the then unpaid principal amount of each CanadianRevolving Loan of such Canadian Lender made to it on the Maturity Date.  The German Subsidiary Borrower herebyunconditionally promises to pay to the Administrative Agent for the account ofeach German Lender the then unpaid principal amount of each German RevolvingLoan of such German Lender on the Maturity Date.  The Mexican Subsidiary Borrower hereby unconditionallypromises to pay to the Administrative Agent for the account of each MexicanLender the then unpaid principal amount of each Mexican Revolving Loan of suchMexican Lender on the Maturity Date.

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(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 paidto such 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 accounts maintainedpursuant to paragraph (b) or (c) of this Section shall be conclusiveevidence (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)            Ifat any time the total Domestic Revolving Exposure exceeds the lesser of(A) the total amount of the Available Commitments at such time and(B) the Domestic Borrowing Base then in effect, then in any such case theDomestic Borrowers shall immediately prepay first, Protective Advances, second,Swingline Loans and third, Domestic Revolving Loans, without demand ornotice of any kind, to the extent necessary to eliminate such excess.  If any such excess remains after all DomesticRevolving Loans, Protective Advances and Swingline Loans are prepaid, theParent Borrower shall deposit cash collateral pursuant to Section 2.05(j)in an amount equal to such remaining excess.

(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.

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(iii)          If at any time (A) the total CanadianRevolving Exposure exceeds the Canadian Sublimit at such time or (B) theCanadian Revolving Exposure with respect to any Canadian Subsidiary Borrowerexceeds such Canadian Subsidiary Borrower’s Canadian Borrowing Base then ineffect, then in any such case the Canadian Subsidiary Borrowers shallimmediately prepay their respective Canadian Revolving Loans, without demand ornotice of any kind, to the extent necessary to 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 Available Commitments at such time,then in any such case (A) the Domestic Borrowers shall immediately prepay first,Protective Advances, second, Swingline Loans and third, DomesticRevolving Loans, (B) the Australian Subsidiary Borrower shall immediatelyprepay Australian Revolving Loans, (C) the Canadian Subsidiary Borrowers shallimmediately prepay Canadian Revolving Loans, (D) the German Subsidiary Borrowershall immediately prepay German Revolving Loans, and (E) 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.  If any such excess remains afterall Revolving Loans, Protective Advances and Swingline Loans are prepaid, theParent Borrower shall deposit cash collateral pursuant to Section 2.05(j)in an amount equal to such remaining excess.

(c)           Subject to Section 2.17(b), (c) and(d) if an 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 Domestic CollateralProceeds Account on each Business Day to prepay, first, ProtectiveAdvances, second, Swingline Loans and third, Domestic RevolvingLoans, (ii) apply cash deposited in the Foreign Collateral Proceeds Account oneach Business Day to prepay Foreign Revolving Loans and (iii) apply cashdeposited in the German Collateral Proceeds Account on each Business Day toprepay German Revolving Loans; provided, however, that, in thecase of clauses (ii) and (iii), proceeds of Foreign Fixed Asset Collateralshall be applied first, to the payment of the Fixed Asset Obligations to theextent required by the Fixed Asset Credit Agreement and then, to the payment ofthe Foreign Revolving Loans and German Revolving Loans, respectively.  To the extent the terms of this clause (c) donot require any payment to be allocated to any specific Class of RevolvingBorrowings, the Administrative Agent will apply any prepayment of RevolvingBorrowings made pursuant to this clause (c) to each Class of RevolvingBorrowings on a pro rata basis, with each prepayment of Revolving Borrowingswithin any Class applied to prepay ABR

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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).

(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 Fixed Asset Collateral shall be applied first, to thepayment of the Fixed Asset Obligations to the extent required by the FixedAsset Credit Agreement and then, to the payment of the Loans.  On each Reinvestment Prepayment Date, theLoans shall be prepaid by an amount equal to the Reinvestment Prepayment Amountwith 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 Borrower and the Subsidiaries), no later than the Business Dayfollowing the date of receipt of proceeds thereof in excess of $500,000, allBorrowers (in the case of an issuance by a Loan Party that is not a Borrower)or the issuing Borrower shall prepay the Loans (and cash collateralize Letterof Credit Obligations) in an amount equal to all such proceeds, net ofunderwriting discounts and commissions and other reasonable costs paid tonon-Affiliates in connection therewith. Any such prepayment shall be applied in accordance with Section 2.17.

(iii)          If at any time any Loan Party or anyof their respective subsidiaries receives any Extraordinary Receipts, theBorrowers shall prepay the Loans in an amount equal to all such ExtraordinaryReceipts no later than the Business Day following the date of receiptthereof.  Any such prepayment shall beapplied in accordance with Section 2.17.

(e)           Prior to any optional or mandatory prepaymentof Borrowings hereunder (other than a mandatory prepayment made pursuant toclause (c) above), the Parent Borrower shall, subject to the requirements ofclause (b) above, select the Borrowing or Borrowings to be prepaid and shallspecify such selection in the notice of such prepayment pursuant to paragraph(e) of this Section; provided that (i) the Parent Borrower may elect notto provide notice, or select the Borrowing or Borrowings to be prepaid, inconnection with a mandatory prepayment pursuant to clause (b) above and, insuch an event, (A), such prepayment shall be applied to outstanding Borrowingsin such manner as the Administrative Agent deems appropriate to comply with theterms of clause (b) above and (B) to the extent that the terms of clause (b)above

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and subclause (A) of this clause (i) do not requireany prepayment to be allocated to any specific Class of Revolving Borrowings,the Administrative Agent shall apply such prepayment to each Class of RevolvingBorrowings on a pro rata basis, and (ii) each prepayment of RevolvingBorrowings within any Class shall be applied to prepay ABR Borrowings beforeany other Borrowings, with any excess prepayment amount applied to prepayEurodollar Borrowings in order of expiration of their respective InterestPeriods (and applied on a pro rata basis in respect of Eurodollar Borrowingswith Interest Periods expiring on the same date).

(f)            The Parent Borrower shall notify theAdministrative Agent (and, in the case of prepayment of a Swingline Loan, theSwingline Lender) in writing of any prepayment hereunder (i) in the caseof prepayment of a Eurodollar Borrowing, not later than 11:00 a.m.,New York City time, three Business Days before the date of prepayment,(ii) in the case of prepayment of an ABR Borrowing, not later than11:00 a.m., New York City time, one Business Day before the date ofprepayment or (iii) in the case of prepayment of a Swingline Loan, notlater than 12:00 noon, New York City time, on the date of prepayment.  Each such notice shall be irrevocable andshall specify the prepayment date, the principal amount of each Borrowing orportion thereof to be prepaid and, in the case of a mandatory prepayment, areasonably detailed calculation of the amount of such prepayment; providedthat (A) no notice shall be required in respect of any mandatoryprepayment made pursuant to clause (c) above, (B) in the event theParent Borrower elects to provide notice of a mandatory prepayment pursuant toclause (b) above to identify the Borrowings to be prepaid in connectiontherewith, such notice shall be given to the Administrative Agent on the sameday that the applicable prepayment is required to be made pursuant to suchclause, it being understood that any failure or delay on the part of the ParentBorrower in providing such notice to the Administrative Agent shall not affectthe obligations of the Parent Borrower to make such prepayment, and (C) ifa notice of optional prepayment is given in connection with a conditionalnotice of termination 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 such notice(other than a notice relating solely to Swingline Loans), the AdministrativeAgent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Borrowingshall be in an amount such that the remaining amount of such Borrowing not soprepaid would be permitted in the case of an advance of a Borrowing of the sameType as provided in Section 2.02, except as necessary to applyfully 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 theParent Borrower (the “Cash Amount”), equal to (i) the aggregate amountof “cash and cash equivalents” and “marketable securities” of the Foreign LoanParties (other than Uniplast Canada), 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 (ii) theaggregate amount of payments in such cash and cash equivalents that will bemade (and will reduce such cash and cash equivalents) on such Business Day ismore than $11,000,000, then on such Business Day (A) the Australian SubsidiaryBorrower shall immediately prepay Australian Revolving Loans, (B) the CanadianSubsidiary Borrowers (other

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than Uniplast Canada) shall immediately prepayCanadian Revolving Loans, (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 Foreign Subsidiary Borrower of the proceeds of any ForeignRevolving Loans made or to be made on such Business Day, the Cash Amount willnot exceed $11,000,000.  For purposes ofany calculation required by this clause (g), Section 4.02(e) and Section 6.14,the amount of any cash and cash equivalents and marketable securities held bythe Foreign Loan Parties (other than Uniplast Canada) at any time anddenominated in a currency other than dollars shall be deemed to be the dollarequivalent thereof determined in good faith by the Parent Borrower based uponprevailing exchange rates at such time.

SECTION 2.11.  Fees. (a) The Parent Borrower agrees to pay to the Administrative Agent forthe account of the office (or Affiliate) of each Lender from which such Lenderwould make Revolving Loans of any Class to the Borrowers hereunder (whichoffice or Affiliate shall be specified by each Lender for each Class of suchLender’s Commitments in a notice to the Administrative Agent prior to theinitial payment to such Lender under this paragraph) a commitment fee, whichshall accrue at a per annum rate of 0.375% on the average daily unused amountof the Commitment of such Lender during the period from and including theEffective Date to but excluding the date on which such Commitmentterminates.  Accrued commitment fees withrespect to each Commitment shall be payable in arrears on the first BusinessDay of each month and on the date on which such Commitment terminates,commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on thebasis of a year of 360 days and shall be payable for the actual number ofdays elapsed (including the first day but excluding the last day).  For purposes of determining the unused amountof the Commitment of each Lender for purposes of computing commitment fees withrespect to Commitments, a Commitment of a Lender shall be deemed to be used tothe extent of the (i) the outstanding Revolving Loans and LC Exposure of suchLender (and the Swingline Exposure of such Lender shall be disregarded for suchpurpose) and (ii) the Fixed Asset Revolving Exposure.

(b)           The Parent Borrower agrees to pay(i) to the Administrative Agent for the account of each Domestic Lender aparticipation fee with respect to its participations in Letters of Credit,which shall accrue at the Applicable Rate used to determine the interest rateapplicable to Eurodollar Domestic Revolving Loans on the average daily amountof such Domestic Lender’s LC Exposure (excluding any portion thereofattributable to unreimbursed LC Disbursements) during the period from andincluding the Effective Date to but excluding the later of the date on whichsuch Domestic Lender’s Commitment terminates and the date on which suchDomestic Lender ceases to have any LC Exposure, and (ii) to the IssuingBank a fronting fee, which shall accrue at the rate or rates per annumseparately agreed upon between the Parent Borrower and the Issuing Bank on theaverage daily amount of the LC Exposure (excluding any portion thereofattributable to unreimbursed LC Disbursements) during the period from andincluding the Effective Date to but excluding the later of the date oftermination of the Commitments and the date on which there ceases to be anyLC Exposure, as well as the Issuing Bank’s standard fees with respect tothe issuance, amendment, renewal or extension of any Letter of Credit orprocessing of drawings thereunder. Participation fees and fronting fees accrued through and including thefirst Business Day of each month of each year shall be payable on

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such first Business Day of each month, commencing onthe first such date to occur after the Effective Date; provided that allsuch fees shall be payable on the date on which the Commitments terminate andany such fees accruing after the date on which the Commitments terminate shallbe payable on demand.  Any other feespayable to the Issuing Bank pursuant to this paragraph shall be payable within10 days after demand.  Allparticipation fees and fronting fees shall be computed on the basis of a yearof 360 days and shall be payable for the actual number of days elapsed(including the first day but excluding the last day).

(c)           The Parent Borrower agrees to pay tothe Administrative Agent, for its own account, fees payable in the amounts andat the times separately agreed upon between the Parent Borrower and theAdministrative Agent.

(d)           All fees payable hereunder shall bepaid on the dates due, in immediately available funds, to the AdministrativeAgent (or to the Issuing Bank in the case of fees payable to it) fordistribution, in the case of commitment fees and participation fees, to theLenders entitled thereto.  Fees paidshall not be refundable under any circumstances.

SECTION 2.12.  Interest.  (a) The Loans made by the Lenders comprisingeach ABR Borrowing (including each Swingline Loan) shall bear interest atthe Alternate Base Rate plus the 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)           Each Protective Advance shall bearinterest at the rate applicable to ABR Domestic Revolving Loans as provided inparagraph (a) of this Section.

(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 theParent Borrower, the interest rates applicable to Loans and any fee or otheramount payable by any Borrower hereunder shall bear interest, after as well asbefore judgment, at a rate per annum equal to (i) in the case of overdueprincipal of any Loan, 2.50% plus the rate otherwise applicable to suchLoan as provided in the preceding paragraphs of this Section or (ii) inthe case of any other amount, 2.50% plus the rate applicable to ABRDomestic Revolving Loans as provided in paragraph (a) of this Section.

(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) interest accruedpursuant to paragraph (c) of this Section shall be payable on demand,(B) in the event of any repayment or prepayment of any Loan (other than aprepayment of an ABR Revolving Loan (other than an Australian Revolving Loan)prior to the end of the Revolving Availability Period or an ABR AustralianRevolving Loan prior to the end of the Australian Availability Period), accruedinterest on the principal amount repaid or prepaid shall be payable on the dateof such repayment or prepayment and (C) in the event of any conversion ofany 

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Eurodollar Loan prior to the end of the currentInterest Period therefor, accrued interest on such Loan shall be payable on theeffective date of such conversion.

(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 any rate (the“Specified Rate”), the annual rate of interest to which each suchSpecified Rate is equal is such Specified Rate multipliedby afraction, the numerator of which is the actual number of days in the relevantyear and the denominator of which is 360; (ii) the principle of deemedreinvestment of interest shall not apply to any interest calculation hereunder;and (iii) the rates of interest stipulated herein are intended to be nominalrates 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 Parent Borrower and the Lenders or the Canadian Lenders, asapplicable, by telephone or telecopy as promptly as practicable thereafter and,until the Administrative Agent notifies the Parent Borrower and such Lendersthat the circumstances giving rise to such notice no longer exist, (i) anyInterest Election Request that requests the conversion of any RevolvingBorrowing or Canadian Revolving Borrowing, as applicable, to, or continuationof any such Borrowing as, a Eurodollar Borrowing shall be ineffective and(ii) if any Borrowing Request with respect to any Revolving Borrowing orCanadian Revolving Borrowing, as applicable, requests a Eurodollar Borrowing,such Borrowing shall be made as an ABR Borrowing.

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

(i)            impose, modify or deem 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 the Issuing Bank; or

(ii)           impose on any Lender or the IssuingBank or the London interbank market any other condition affecting thisAgreement or Eurodollar Loans made by such Lender or any Letter of Credit orparticipation therein;

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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 increase thecost to such Lender or the Issuing Bank of participating in, issuing ormaintaining any Letter of Credit or to reduce the amount of any sum received orreceivable by such Lender or the Issuing Bank hereunder (whether of principal,interest or otherwise), then the applicable Borrower(s) will pay to such Lenderor the Issuing Bank, as the case may be, such additional amount or amounts aswill compensate (on an after-tax basis) such Lender or the Issuing Bank, as thecase may be, for such additional costs incurred or reduction suffered.

(b)           If any Lender or the Issuing Bankdetermines that any Change in Law regarding capital requirements has or wouldhave the effect of reducing the rate of return on such Lender’s or the IssuingBank’s capital or on the capital of such Lender’s or the Issuing Bank’s holdingcompany, if any, as a consequence of this Agreement or the Loans made by, orparticipations in Letters of Credit held by, such Lender, or the Letters ofCredit issued by the Issuing Bank, to a level below that which such Lender orthe Issuing Bank or such Lender’s or the Issuing Bank’s holding company couldhave achieved but for such Change in Law (taking into consideration such Lender’sor the Issuing Bank’s policies and the policies of such Lender’s or the IssuingBank’s holding company with respect to capital adequacy), then from time totime the applicable Borrower(s) will pay to such Lender or the Issuing Bank, asthe case may be, following receipt by the Parent Borrower of the certificatereferred to in clause (c) below, such additional amount or amounts as willcompensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’sholding company for any such reduction suffered.

(c)           A certificate of a Lender or theIssuing Bank setting forth the amount or amounts necessary to compensate suchLender or the Issuing Bank or its holding company, as the case may be, asspecified in paragraph (a) or (b) of this Section (and setting forth theunderlying calculations) shall be delivered to the Parent Borrower and shall beconclusive absent manifest error.  Theapplicable Borrower(s) shall pay such Lender or the Issuing Bank, as the casemay be, the amount shown as due on any such certificate within 10 daysafter receipt thereof.

(d)           Failure or delay on the part of anyLender or the Issuing Bank to demand compensation pursuant to this Sectionshall not constitute a waiver of such Lender’s or the Issuing Bank’s right todemand such compensation; provided that the Borrowers shall not berequired to compensate a Lender or the Issuing Bank pursuant to this Sectionfor any increased costs or reductions incurred more than 180 days prior tothe date that such Lender or the Issuing Bank, as the case may be, notifies theParent Borrower of the Change in Law giving rise to such increased costs orreductions and of such Lender’s or the Issuing Bank’s intention to claimcompensation therefor; providedfurther that, if the Change inLaw giving rise to such increased costs or reductions is retroactive, then the180-day period referred to above shall be extended to include the periodof 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

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pursuant hereto (regardless of whether such notice maybe revoked 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 Parent Borrower pursuant to Section 2.18, then, in any suchevent, the applicable Borrower(s) shall compensate each Lender for the loss,cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to anyLender shall be deemed to include an amount reasonably determined by suchLender to be the excess, if any, of (i) the amount of interest that wouldhave accrued on the principal amount of such Loan had such event not occurred,at the LIBO Rate that would have been applicable to such Loan, for the periodfrom the date of such event to the last day of the then current Interest Periodtherefor (or, in the case of a failure to borrow, convert or continue, for theperiod that would have been the Interest Period for such Loan), over(ii) the amount of interest that would accrue on such principal amount forsuch period at the interest rate that such Lender would bid were it to bid, atthe commencement of such period, for dollar deposits of a comparable amount andperiod from other banks in the eurodollar market.  A certificate of any Lender setting forth anyamount or amounts that such Lender is entitled to receive pursuant to thisSection (and setting forth the underlying calculations) shall be delivered tothe Parent 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.

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 Administrative Agent,Lender or Issuing Bank (as the case may be) receives an amount equal to the sumit would 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, each Lender and the Issuing Bank, within 10 daysafter written demand therefor, for the full amount of any Indemnified Taxes orOther Taxes paid by the Administrative Agent, such Lender or the Issuing Bank,as the case may be, on or with respect to any payment by or on account of anyobligation of the Borrowers hereunder or under any other Loan Document(including Indemnified Taxes or Other Taxes imposed or asserted on orattributable to amounts payable under this Section) and any penalties, interestand reasonable expenses arising therefrom or with respect thereto, whether ornot such Indemnified Taxes or Other Taxes were correctly or legally imposed orasserted by the relevant Governmental Authority.  A certificate as to the amount of suchpayment or liability (and setting forth the underlying calculations) deliveredto the Parent Borrower by a Lender or the Issuing Bank, or by theAdministrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank,shall be conclusive absent manifest error.

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(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 Parent 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 Parent Borrower as will permit such payments to bemade without withholding or at a reduced rate. Notwithstanding any other provision of this Section 2.16, nosuch 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 deems confidential)to any Borrower or any other Person.

SECTION 2.17.  Payments Generally; Pro Rata Treatment;Sharing of Setoffs.  (a) The ParentBorrower and each Subsidiary Borrower shall make each payment required to bemade by it hereunder or under any other Loan Document (whether of principal,interest, fees or reimbursement of LC Disbursements, or of amounts payableunder Section 2.14, 2.15 or 2.16, or otherwise) priorto 2:00 p.m., New York City time, on the date when due, by wiretransfer in immediately available funds, without setoff or counterclaim.  Any amounts received after such time on anydate may, in the discretion of the Administrative Agent, be deemed to have beenreceived on the next succeeding Business Day for purposes of calculatinginterest thereon.  All such paymentsshall be made to the Administrative Agent at its offices at 800 Scudders MillRoad, Plainsboro, NJ 08536, except (i) payments by the Canadian SubsidiaryBorrowers shall be made directly to each Canadian Lender at its Canadian LendingOffice, (ii) payments to be made directly to the Issuing Bank or SwinglineLender as expressly provided herein, (iii) payments

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pursuant to Sections 2.14, 2.15, 2.16and 10.03 shall be made directly to the Persons entitled thereto and(iv) payments pursuant to other Loan Documents shall be made to the Personsspecified therein.  The AdministrativeAgent shall distribute any such payments received by it for the account of anyother Person to the appropriate recipient promptly following receipt thereof.  If any payment under any Loan Document shallbe due on a day that is not a Business Day, the date for payment shall beextended to the next succeeding Business Day, and, in the case of any paymentaccruing interest, interest thereon shall be payable for the period of suchextension.  All payments under each LoanDocument shall be made in dollars.

(b)           Any proceeds of Collateral of theDomestic Loan Parties or Uniplast Canada received by the Administrative Agent(i) not constituting either (A) a specific payment of principal, interest, feesor other sum payable under the Loan Documents (which shall be applied asspecified therein), or (B) a mandatory prepayment pursuant to Section2.10(b) or (c) (which shall be applied in accordance with Section 2.10)or (ii) after an Event of Default has occurred and is continuing and theAdministrative Agent so elects or the Required Lenders so direct, such fundsshall be applied, subject to the Intercreditor Agreement, ratably as follows:

first,to pay any fees, indemnities, or expense reimbursements including amounts thendue to the Administrative Agent and the Issuing Bank from the Domestic  Borrowers and Uniplast Canada (other than inconnection with Banking Services or Swap Obligations);

second,to pay any fees or expense reimbursements then due to the Lenders from theDomestic Borrowers and Uniplast Canada (other than in connection with BankingServices or Swap Obligations);

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

fourth,to pay the principal of the Protective Advances;

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

sixth,to pay the principal of the Swingline Loans;

seventh,to pay interest on the Domestic Revolving Loans;

eighth,to pay the principal of the Domestic Revolving Loans and unreimbursed LCDisbursements;

ninth,to pay an amount to the Administrative Agent equal to 105% of the aggregateundrawn face amount of all outstanding Letters of Credit and the aggregateamount of any unpaid LC Disbursements, to be held as cash collateral for suchObligations;

tenth,to pay any amounts owing with respect to Swap Obligations;

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eleventh,to the payment of any other Domestic Obligation due to the Administrative Agentor any Lender by any Domestic Borrower or Uniplast Canada; and

twelfth,if all of the Domestic Obligations (other than contingent obligations for whichno claim has been made) have been indefeasibly paid and performed in full (orwith respect to any outstanding Letters of Credit, a cash deposit has beendelivered to the Administrative Agent as required by this Agreement) and theCommitments have been terminated, to the Loan Parties to be paid pursuant tothe Senior First Lien Note Indenture or the Senior Second Lien Note Indenturepursuant to the terms of such documents.

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 theForeign Loan Parties (other than Uniplast Canada and the German Loan Parties)received by the Administrative Agent (i) not constituting either (A) a specificpayment of principal, interest, fees or other sum payable under the LoanDocuments (which shall be applied as specified therein), or (B) a mandatoryprepayment pursuant to Section 2.10(b) or (c) (which shall beapplied in accordance with Section 2.10) or (ii) after an Event ofDefault has occurred and is continuing and the Administrative Agent so electsor the Required Lenders so direct, such funds shall be applied ratably asfollows:

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

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

third,to pay interest on the Foreign Revolving Loans;

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

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

sixth,if all of the Foreign 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.

To the extent that the terms of this clause (c) 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

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all such proceeds and payments to any portion of theObligations in accordance with the payment priorities established hereby.

(d)           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;

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.

To the extent that the terms of this clause (d) 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 and exclusiveright to apply and reverse and reapply any and all such proceeds and paymentsto any portion of the German Obligations in accordance with the paymentpriorities established hereby.

(e)           At the election of the AdministrativeAgent, all payments of principal, interest, LC Disbursements, fees, premiums,reimbursable expenses (including, without limitation, all reimbursement forfees and expenses pursuant to Section 9.03), and other sums payableunder the Loan Documents, may be paid from the proceeds of Borrowings madehereunder whether made following a request by the Parent 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 suchamounts charged shall constitute Loans (including Swingline Loans, but such aBorrowing may only constitute a Protective Advance if it is to reimburse costs,fees and expenses as described in Section 9.03) and that all suchBorrowings shall be deemed to have been requested pursuant to Section 2.03,2.04 or 2.19, as

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applicable and (ii) the Administrative Agent to chargeany deposit account of the Borrowers maintained with the Administrative Agentfor each payment of principal, interest and fees as it becomes due hereunder orany other amount due under the Loan Documents. If at any time insufficient funds are received by and available to theAdministrative Agent to pay fully all amounts of principal, unreimbursedLC Disbursements, interest and fees then due hereunder, such funds shallbe applied (i) first, towards payment of interest and fees then duehereunder, ratably among the parties entitled thereto in accordance with theamounts of interest and fees then due to such parties, and (ii) second,towards payment of principal and unreimbursed LC Disbursements then duehereunder, ratably among the parties entitled thereto in accordance with theamounts of principal and unreimbursed LC Disbursements then due to suchparties.

(f)            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 or participations inLC Disbursements or Swingline Loans resulting in such Lender receiving paymentof a greater proportion of the aggregate amount of its Revolving Loans andparticipations in LC Disbursements and Swingline Loans and accruedinterest thereon than the proportion received by any other Lender, then theLender receiving such greater proportion shall purchase (for cash at facevalue) participations in the Revolving Loans and participations inLC Disbursements and Swingline Loans of other Lenders to the extentnecessary so that the benefit of all such payments shall be shared by the Lendersratably in accordance with the aggregate amount of principal of and accruedinterest on their respective Revolving Loans and participations inLC Disbursements and Swingline Loans; provided that (i) if anysuch participations are purchased and all or any portion of the payment givingrise thereto is recovered, such participations shall be rescinded and thepurchase price restored to the extent of such recovery, without interest, and(ii) the provisions of this paragraph shall not be construed to apply toany payment made by any Borrower pursuant to and in accordance with the expressterms of this Agreement or any payment obtained by a Lender as considerationfor the assignment of or sale of a participation in any of its Revolving Loansor participations in LC Disbursements 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.

(g)           Unless the Administrative Agent shallhave received notice from the Parent Borrower prior to the date on which anypayment is due to the Administrative Agent for the account of the Lenders or theIssuing Bank hereunder that the applicable Borrower will not make such payment,the Administrative Agent may assume, in its sole discretion, that such Borrowerhas made such payment on such date in accordance herewith and may, in relianceupon such assumption, distribute to the Lenders or the Issuing Bank, as thecase may be, the amount due.  In suchevent, if no Borrower has in fact made such payment, then each of the Lendersor the Issuing Bank, as the case may be, severally agrees to repay to the AdministrativeAgent forthwith on demand the amount so distributed to such Lender or IssuingBank 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

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Effective Rate and a rate determined by theAdministrative Agent in accordance with banking industry rules on interbankcompensation.

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

SECTION 2.18.  Mitigation Obligations.  (a) If any Lender requests compensation underSection 2.14, or if any Borrower is required to pay any additionalamount to any Lender or any Governmental Authority for the account of anyLender pursuant to Section 2.16, then, upon the Parent Borrower’swritten request, such Lender shall use commercially reasonable efforts todesignate a different lending office for funding or booking its Loans hereunderor to assign its rights and obligations hereunder to another of its offices,branches or affiliates (provided that, if such compensation oradditional amounts relate to a particular Class of Loans, such designation orassignment may relate only to such Class of Loans), if, in the reasonablejudgment of such Lender, such designation or assignment (i) wouldeliminate or reduce amounts payable pursuant to Section 2.14 or 2.16,as the case may be, in the future and (ii) would not subject such Lenderto any unreimbursed cost or expense and would not otherwise be disadvantageousto such Lender.  Each Borrower herebyagrees to pay all reasonable costs and expenses incurred by any Lender inconnection with any such designation or assignment.

(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 the ParentBorrower may, at its sole expense and effort, upon notice to such Lender and theAdministrative Agent, require such Lender to assign and delegate, withoutrecourse (in accordance with and subject to the restrictions contained in Section 9.04),all its interests, rights and obligations under this Agreement to an assigneethat shall assume such obligations (which assignee may be another Lender, if aLender accepts such assignment); provided that (i) the ParentBorrower shall have received the prior written consent of the AdministrativeAgent, the Issuing Bank and Swingline Lender, which consent shall notunreasonably be withheld, (ii) such Lender shall have received payment ofan amount equal to the outstanding principal of its Loans and participations inLC Disbursements and Swingline Loans, accrued interest thereon, accruedfees and all other amounts payable to it hereunder, from the assignee (to theextent of such outstanding principal and accrued interest and fees) or theBorrowers (in the case of all other amounts), (iii) in the case of anysuch assignment resulting from a claim for compensation under Section 2.14or payments required to be made pursuant to Section 2.16, suchassignment will result in a reduction in such compensation or payments and(iv) with respect to compensation or additional amounts (but not defaults)in respect of a particular Class of Loans, such assignment may be limited tosuch Class of Loans.  A Lender shall notbe required to make any such assignment and delegation if, prior thereto, as aresult of a waiver by such Lender or otherwise, the circumstances entitling theParent Borrower to require such assignment and delegation cease to apply.

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SECTION 2.19.  Protective Advances.  (a) Subject to the limitations set forthbelow, the Administrative Agent is authorized by the Borrowers and the Lenders,from time to time in the Administrative Agent’s sole discretion (but shall haveabsolutely no obligation to), to make Loans to the Borrowers, on behalf of allLenders, which the Administrative Agent, in its reasonable discretion, deemsnecessary or desirable (i) to preserve or protect the Collateral, or anyportion thereof, (ii) to enhance the likelihood of, or maximize the amount of,repayment of the Loans and other Obligations, or (iii) to pay any other amountchargeable to or required to be paid by the Borrowers pursuant to the terms ofthis Agreement, including payments of reimbursable expenses (including costs,fees, and expenses as described in Section 9.03) and other sums payableunder the Loan Documents (any of such Loans are herein referred to as “ProtectiveAdvances”); provided that, the aggregate amount of ProtectiveAdvances outstanding at any time shall not at any time exceed $15,000,000; and providedfurther that, the aggregate amount of outstanding Protective Advances plusthe aggregate Revolving Exposure shall not exceed the aggregate unusedAvailable Commitments.  ProtectiveAdvances may be made even if the conditions precedent set forth in Section4.02 have not been satisfied.  TheProtective Advances shall be secured by the Liens in favor of the AdministrativeAgent in and to the Collateral and shall constitute Obligations hereunder.  All Protective Advances shall be ABRBorrowings.  The Administrative Agent’sauthorization to make Protective Advances may be revoked at any time by theRequired Lenders.  Any such revocationmust be in writing and shall become effective prospectively upon theAdministrative Agent’s receipt thereof. At any time that the Availability Amount is greater than $0 and theconditions precedent set forth in Section 4.02 have been satisfied, theAdministrative Agent may request the Domestic Revolving Lenders to make aDomestic Revolving Loan to repay a Protective Advance.  At any other time the Administrative Agentmay require the Lenders to fund their risk participations described in Section2.19(b).

(b)           Upon the making of a ProtectiveAdvance by the Administrative Agent (whether before or after the occurrence ofa Default), each Domestic Lender shall be deemed, without further action by anyparty hereto, to have unconditionally and irrevocably purchased from theAdministrative Agent without recourse or warranty, an undivided interest andparticipation in such Protective Advance in proportion to its ApplicablePercentage.  From and after the date, ifany, on which any Domestic Lender is required to fund its participation in anyProtective Advance purchased hereunder, the Administrative Agent shall promptlydistribute to such Lender, such Lender’s Applicable Percentage of all paymentsof principal and interest and all proceeds of Collateral received by theAdministrative Agent in respect of such Protective Advance.

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 Borrower and theSubsidiaries is duly organized, validly existing and, where applicable, in goodstanding under the laws of the jurisdiction of its organization, has allrequisite power and authority to carry on its

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business as now conducted and, except where thefailure 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,any Governmental Authority or any other Person, except such as have beenobtained or made and are in full force and effect and except filings necessaryto perfect Liens created under the Loan Documents, (b) will not violateany applicable law or regulation or the charter, by-laws or otherorganizational documents of the Parent Borrower or any of the Subsidiaries orany order of any Governmental Authority, except, with respect to any violationof applicable 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 Borroweror any of the Subsidiaries or its assets, or give rise to a right thereunder torequire any payment to be made by the Parent Borrower or any of theSubsidiaries, and (d) will not result in the creation or imposition of anyLien on any asset of the Parent Borrower or any of the Subsidiaries, exceptLiens created under the Loan Documents and the Fixed Asset Loan Documents.

SECTION 3.04.  Financial Condition; No Material AdverseChange.  (a) The Parent Borrower 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 Borrower and itsconsolidated Subsidiaries, as of such dates and for such periods in accordancewith GAAP and in the case of clauses (i)(B) and (ii) above, subject to normalyear-end audit adjustments and the absence of footnotes.

(b)           The Parent Borrower has heretoforemade available to the Lenders its pro forma consolidated balance sheet as ofMarch 31, 2006, prepared giving effect to the Transactions as if theTransactions had occurred on such date. Such pro forma consolidated balance sheet (i) has been prepared ingood faith based on the same assumptions used to prepare the applicable proforma financial statements, which were simultaneously made available to the

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Lenders (which assumptions are believed by the ParentBorrower to be reasonable), (ii) is based on the best informationavailable to the Parent Borrower after due inquiry, (iii) accuratelyreflects all material adjustments necessary to give effect to the Transactionsand (iv) presents fairly, in all material respects, the pro formafinancial position of the Parent Borrower and its consolidated Subsidiaries asof March 31, 2006, as if the Transactions 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 Borrower or any of the Subsidiaries has, as ofthe Effective 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 Borrower and the Subsidiaries, taken as a whole,other than the commencement of the Chapter 11 Cases.

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

(b)           Each of the Parent Borrower 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 Borrower and the Subsidiaries, taken asa whole, and the use thereof by the Parent Borrower and the Subsidiaries doesnot infringe upon the rights of any other Person, except for any suchinfringements that, individually or in the aggregate, could not reasonably beexpected to result in a 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 Borrower or any of the Subsidiaries as of theEffective Date.

(d)           As of the Effective Date, neither theParent Borrower nor any of the Subsidiaries has received notice of, or hasknowledge of, any pending or contemplated condemnation proceeding affecting anyMortgaged Property or any sale or disposition thereof in lieu ofcondemnation.  Neither any MortgagedProperty nor any interest therein is subject to any right of first refusal,option or other contractual right to purchase such Mortgaged Property orinterest therein held by any Person, other than any Domestic Loan Party.

SECTION 3.06.  Litigationand Environmental Matters.  (a) Thereare no actions, suits or proceedings by or before any arbitrator orGovernmental Authority pending against or, to the knowledge of the ParentBorrower, threatened against or affecting the Parent Borrower or any of theSubsidiaries (i) as to which there is a reasonable possibility of anadverse determination and that, if adversely determined, could reasonably beexpected, individually or in the aggregate, to result in a Material AdverseEffect or (ii) that involve any of the Loan Documents or the 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 Borrower 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 Borrower and theSubsidiaries is in compliance with all laws, regulations and orders of anyGovernmental Authority applicable to it or its property and all indentures,agreements and other instruments binding upon it or its property, except wherethe failure to do so, individually or in the aggregate, could not reasonably beexpected to result in a Material Adverse Effect.  No Default has occurred and is continuing.

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

SECTION 3.09.  Taxes. Each of the Parent Borrower and the Subsidiaries has timely filed orcaused to be filed all Tax returns and reports required to have been filed andhas paid or caused to be paid all Taxes required to have been paid by it,except (a) Taxes that are being contested in good faith by appropriateproceedings and for which the Parent Borrower or such Subsidiary, asapplicable, has set aside on its books adequate reserves to the extent requiredby GAAP or (b) to the extent that the failure to do so could notreasonably be expected 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 (basedon the assumptions used for purposes of Statement of Financial AccountingStandards No. 87) did not, as of the date of the most recent auditedfinancial statements reflecting such amounts, exceed by more than $30,000,000the fair market value of the assets of such Plan individually, and the presentvalue of all accumulated benefit obligations of all underfunded Plans (based onthe assumptions used for purposes of Statement of Financial AccountingStandards No. 87) did not, as of the date of the most recent auditedfinancial statements reflecting such amounts, exceed by more than $30,000,000the fair market value of the assets of all such underfunded Plans.

SECTION 3.11.  Disclosure.  The Parent Borrower has disclosed to theLenders all agreements, instruments and corporate or other restrictions towhich the Parent Borrower or any of the Subsidiaries is subject, and all othermatters known to any of them, that, individually or in the aggregate, couldreasonably be expected to result in a Material Adverse Effect.  The

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reports, financial statements, certificates and otherwritten information furnished by or on behalf of any Loan Party to theAdministrative Agent, the Arranger or any Lender in connection with thenegotiation of this Agreement or any other Loan Document or delivered hereunderor thereunder (as modified or supplemented by other information so furnished),when made or delivered, did not contain any material misstatement of fact oromit to state any material fact necessary to make the statements therein, inthe light of the circumstances under which they were made, not misleading; providedthat, with respect to projected financial information, the Parent Borrowerrepresents only that such information was prepared in good faith based uponassumptions believed 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 Borrower in, each Subsidiary of the ParentBorrower, in each case 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 Borrowerand the Subsidiaries 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 Borrower believes that the insurance maintained by or onbehalf of the Parent Borrower and the Subsidiaries is adequate.

SECTION 3.14.  Labor Matters.  As of the Effective Date, there are nostrikes, lockouts or slowdowns against the Parent Borrower or any Subsidiarypending or, to the knowledge of the Parent Borrower, threatened that couldreasonably be expected to result in a Material Adverse Effect.  All material payments due from the ParentBorrower or any Subsidiary, or for which any claim may be made against theParent Borrower or any Subsidiary, on account of wages and employee health andwelfare insurance and other benefits, have been paid or accrued as a liabilityon the books of the Parent Borrower 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 ParentBorrower or any Subsidiary 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 and issuance of each Letter of Credit (if any) on theEffective Date or such other date as Loans requested hereunder are made orLetters of Credit are issued, 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 and liabilities,subordinated, contingent or otherwise; (b) the present fair saleable valueof the property of the Loan Parties taken as a whole will be greater than theamount that will be required to pay the probable liability of their debts andother liabilities, subordinated, contingent or otherwise, as such debts andother liabilities become absolute and matured; (c) the Loan Parties takenas a whole will be able to pay their debts and liabilities, subordinated,contingent or otherwise, as such debts and liabilities become absolute andmatured; (d) the Loan Parties taken as a whole will not have unreasonably

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small capital with which to conduct the business inwhich they are engaged as such business is now conducted and is proposed to beconducted following the Effective Date; and (e) the Loan Parties taken as awhole will not be deemed insolvent or bankrupt under any applicable bankruptcyor insolvency legislation under the laws of Australia, Canada, Germany orMexico.

SECTION 3.16.  Security Documents.  (a) The Pledge Agreements are effective (withrespect to the Australian Pledge Agreement, on and after the AustralianEffective Date) to create in favor of the Administrative Agent, for the ratablebenefit of the Secured Parties, a legal, valid and enforceable securityinterest in the Collateral described therein (and the proceeds thereof) and,when such Collateral is delivered to the Administrative Agent and any otherrequirements set forth therein are completed, the Administrative Agent shallhave a fully perfected first-priority Lien on, and security interest in, allright, title and interest of the Loan Parties in such Collateral and theproceeds thereof as security for the Obligations, as applicable, in each caseprior and superior in right to any other Person.

(b)           The Security Agreements are effective(with respect to the Australian Security Agreement, on and after the AustralianEffective Date) to create in favor of the Administrative Agent, for the ratablebenefit of the Secured Parties, a legal, valid and enforceable securityinterest in the Collateral described therein (and the proceeds thereof) and,when financing statements, and/or other filings, notices and registrations, inthe case of Collateral under the Foreign Security Documents in appropriate formare filed, given or obtained with, to or from the appropriate offices in eachrelevant jurisdiction (including those specified on Schedule 6 to thePerfection Certificate), the Administrative Agent shall have a fully perfectedLien on, and security interest in, all right, title and interest of the LoanParties in such Collateral and, subject to Section 9-315 of theNew York Uniform Commercial Code and the legislation in otherjurisdictions, the proceeds thereof, as security for the Obligations, in eachcase prior and superior in right to any other Person, other than with respectto Liens expressly permitted by Section 6.03.

(c)           When the Domestic Security Agreement(or a summary thereof) is filed in the United States Patent and TrademarkOffice and the United States Copyright Office, the Administrative Agentshall have a fully perfected Lien on, and security interest in, all right,title and interest of the Loan Parties in the Intellectual Property (as definedin the Domestic Security Agreement) in which a security interest may beperfected by filing, recording or registering a security agreement, financingstatement or analogous document in the United States Patent and TrademarkOffice or the United States Copyright Office, as applicable, in each caseprior and superior in right to any other Person (it being understood thatsubsequent recordings in the United States Patent and Trademark Office andthe United States Copyright Office may be necessary to perfect a lien onregistered trademarks, trademark applications and copyrights acquired by theLoan Parties after the Effective Date), other than with respect to Lienspermitted by Section 6.03.

(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

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Administrative Agent shall have a fully perfected Lienon, and security interest in, all right, title and interest of the Loan Partiesin such Mortgaged Properties and, to the extent applicable, subject toSection 9-315 of the New York Uniform Commercial Code (and theequivalent legislation in other jurisdictions), the proceeds thereof, in eachcase prior and superior in right to any other Person, other than with respectto the rights of Persons pursuant to Liens expressly permitted by Section 6.03.

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

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

SECTION 3.18.  Senior Secured Obligations.  All the Obligations of the Domestic LoanParties and Uniplast Canada constitute (a) ”Credit Agreement Obligations”under and as defined in the Senior First Lien Note Indenture and the SeniorSecond Lien Note Indenture (in each case with respect to the First PriorityCollateral) and (b) ”Second-Priority Obligations” under and as defined inthe Senior First Lien Note Indenture and “Other Second-Lien Obligations” underand as defined in the Senior Second Lien Note Indenture (in each case withrespect to the Second Priority Collateral).  All the Obligations of the Loan Partiesconstitute “Senior Indebtedness” and “Designated Senior Indebtedness” under andas defined in the Senior Subordinated Note Indenture.  The Liens granted pursuant to the SecurityDocuments (i) in respect of the First Priority Collateral, are prior tothe Liens granted pursuant to the Senior First Lien Note Documents and theSenior Second Lien Note Documents in respect of such Collateral and(ii) in respect of the Second Priority Collateral, are equal in priorityto the Liens granted pursuant to the Senior Second Lien Note Documents inrespect of such Collateral prior to the 2004 Notes First Lien Transition Date(as defined in the Intercreditor Agreement), and are prior to the Liens grantedpursuant to the Senior Second Lien Note Documents in respect of such Collateralon or after the 2004 Notes First Lien Transition Date (as defined in theIntercreditor Agreement).

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

SECTION 3.20.  Permanent Establishment in Canada.  Neither the Parent Borrower nor PliantSolutions Corporation (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.

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SECTION 3.21.  Canadian Pension Plans.   The Canadian Pension Plans are dulyregistered under the Income Tax Act (Canada) and any other applicable lawswhich require registration, have been administered in accordance with theIncome Tax Act (Canada) and such other applicable laws and no event hasoccurred which could reasonably be expected to cause the loss of suchregistered status, except to the extent that any failure to do so could notreasonably 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 Pension Plansand the funding agreements therefor have been performed on a timely basis,except to the extent that any failure to do so could not reasonably be expectedto have a Material Adverse Effect.  Thereare no outstanding disputes concerning the assets of the Canadian PensionPlans.  No promises of benefitimprovements under the Canadian Pension Plans have been made except where suchimprovement could not reasonably be expected to have a Material Adverse Effect.  All contributions or premiums required to be madeor paid by each of the Loan Parties to the Canadian Pension Plans have beenmade on a timely basis in accordance with the terms of such plans and allapplicable laws.  There have been noimproper withdrawals or applications of the assets of the Canadian PensionPlans.  Each of the Canadian PensionPlans is fully funded on a solvency basis and going concern basis (usingactuarial methods and assumptions which are consistent with the valuations lastfiled with the applicable Governmental Authorities and which are consistentwith GAAP).   No Canadian Pension Plan orfund maintained by or on behalf of any Loan Party for the benefit of anyofficer, director or employee of such Loan Party is a so-called defined benefitplan.  For any Canadian Pension Plan or fund,and for any other employee benefit plan, which is a defined contribution planrequiring any Loan Party to contribute thereto, or to deduct from payments toany individual and pay such deductions into or to the credit of such CanadianPension Plan or fund, all required employer contributions have been properlywithheld by such Loan Party and fully paid into the funding arrangements forthe applicable Pension Plan or fund.  Anyassessments owed to the 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 Loansand of the Issuing Bank to issue Letters of Credit hereunder shall not becomeeffective until the date on which each of the following conditions is satisfied(or waived in accordance with Section 9.02):

(a)           The Administrative Agent (or itscounsel) shall have received from the Parent Borrower, the Subsidiary Borrowersand each Lender, a counterpart of this Agreement signed on behalf of suchparty.

(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,

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altered, amended orotherwise changed or supplemented without the prior written consent of theAdministrative 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 as completeand 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 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 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 equivalent organizationaldocument) of such Loan Party as in effect on the date of such certification,and (iv) the resolutions of such Loan Party’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 Effective Date and signed by the President, aVice President or a Financial Officer of the Parent Borrower, (i) confirmingcompliance with the conditions set forth in paragraphs (a) and (b) ofSection 4.02, (ii) certifying that the conditions set forth in paragraphs(b) (other than clauses (v) and (vii) thereof), (c) (other than clause (iii)thereof) and (q) of this Section 4.01 have been satisfied and (iii) certifyingthat the liens registered in favor of Bancomer (now known as BBVA Bancomer)against any Mexican

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Loan Party do not secureany Indebtedness or other 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 each Pledge Agreement (other than the AustralianPledge Agreement) signed on behalf of each Loan Party party thereto, togetherwith certificates (if any) representing all the outstanding Equity Interests ofeach Subsidiary owned by or on behalf of any Loan Party as of the EffectiveDate after giving effect to the Transactions (except that such delivery ofcertificates by a Domestic Loan Party representing Equity Interests of aForeign Subsidiary (i) may be limited to 65% of the outstanding voting EquityInterests of a first-tier Foreign Subsidiary and (ii) shall not include EquityInterests of any second-tier or lower-tier Foreign Subsidiary, in each case, ifa pledge in excess of such Equity Interests would, in the good faith judgmentof the Parent Borrower, result in materially adverse tax consequences to theLoan Parties, taken as a whole), promissory notes evidencing all intercompanyIndebtedness owed to any Loan Party by the Parent Borrower or any Subsidiary asof the Effective Date after giving effect to the Transactions and stock powersand other applicable instruments of transfer, endorsed in blank, with respectto such certificates and promissory notes.

(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 jurisdictions contemplatedby the Perfection Certificate and copies of the financing statements (orsimilar documents) disclosed by such search and evidence reasonablysatisfactory to the Administrative Agent that the Liens indicated by suchfinancing statements (or similar documents) are permitted by Section 6.03or have been released;

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

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(iv)          a UCC fixture financing statement foreach Mortgaged Property to be filed upon the Administrative Agent’s request inthe appropriate jurisdiction as necessary, in the Administrative Agent’scommercially reasonable discretion, to perfect the Administrative Agent’s Lienon such Mortgaged Property;

(v)           a policy or policies of titleinsurance issued by a nationally recognized title insurance company, insuringthe Lien of each such Mortgage as a valid second priority Lien on the MortgagedProperty described therein, free of any other Liens except as permitted bySection 6.03, in form and substance reasonably acceptable to the AdministrativeAgent, together with such endorsements, coinsurance and reinsurance as theAdministrative Agent may reasonably 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 each Guarantee Agreement signed on behalf of each LoanParty party thereto.

(j)            The Administrative Agent shall havereceived a favorable written opinion (addressed to the Administrative Agent,the Issuing Bank and the Lenders and dated the Effective Date) of each of(i) Sidley Austin LLP, counsel for the Parent Borrower and the other LoanParties, (ii) General Counsel of the Parent Borrower and the other LoanParties, (iii) Van Cott, Bagley, Cornwall & McCarthy, P.C., Utahcounsel for certain Loan Parties, (iv) Ontario counsel for the CanadianLoan Parties acceptable to the Administrative Agent, (v)  Nova Scotiacounsel for Uniplast Industries Co. acceptable to the Administrative Agent,(vi) German counsel for the German Loan Parties acceptable to theAdministrative Agent and (vii) Mexican counsel for the Mexican Loan Partiesacceptable to the Administrative Agent and, in the case of each such opinionrequired by this paragraph, covering such other matters relating to the LoanParties, the Loan Documents or the Transactions as the Administrative Agentshall reasonably request and otherwise in form and substance reasonablysatisfactory to the Administrative Agent. Each Borrower hereby 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 Borrower and the Subsidiaries through the fiscal yearending December 31, 2009, presented on a monthly basis through December31, 2006 and on an annual basis thereafter (the “Projections”), whichProjections shall not be materially inconsistent with the projectionspreviously provided to 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)           The Administrative Agent shall havereceived copies of the Senior First Lien Note Documents, Senior Second LienNote Documents, the Senior Subordinated Note Documents and the IntercreditorAgreement, each certified by a Financial Officer as complete and correct.  The Administrative Agent shall be satisfied,in its reasonable discretion, with the terms of the Senior Subordinated NoteDocuments and the Supplemental First Lien Notes Indenture.  The Administrative Agent shall have receivedevidence reasonably satisfactory to it that the Senior First Lien Note Trusteeand the Senior Second Lien Note Trustee have received notice of the ParentBorrower’s designation of this Agreement as the “Senior Credit Agreement” underthe Intercreditor Agreement.

(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 underthis Agreement on or prior to the Effective Date) and all Liens granted inrespect thereof shall have been released and the terms and conditions of anysuch release shall be reasonably satisfactory to the Administrative Agent.  The Administrative Agent shall have receivedpayoff letters in form and substance reasonably satisfactory to theAdministrative Agent from General Electric Capital Corporation with respect tothe Pre-Petition Loan Agreement and the DIP Credit Agreement.

(p)           The Fixed Asset 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 Borrower and the Subsidiaries shall not have anyoutstanding Indebtedness or preferred stock other than (i) Indebtednessincurred under the Loan Documents and the Fixed Asset Loan Documents,(ii) the Senior First Lien Notes, (iii) the Senior Second Lien Notes,(iv) the Senior Subordinated Notes, (v) the Preferred Stock, and(vi) the Indebtedness 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.

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(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 ExecutiveVice President and Chief Operating Officer of the Parent Borrower, to theeffect that immediately after the consummation of the Transactions to occur onthe Effective Date and immediately following the making of each Loan andissuance of each Letter of Credit (if any) on the Effective Date and aftergiving effect to the application of the proceeds of such Loans, (i) thefair value of the assets of the Loan Parties taken as a whole, at a fairvaluation, will exceed their debts and liabilities, subordinated, contingent orotherwise; (ii) the present fair saleable value of the property of theLoan Parties taken as a whole will be greater than the amount that will berequired to pay the probable liability of their debts and other liabilities,subordinated, contingent or otherwise, as such debts and other liabilitiesbecome absolute and matured; (iii) the Loan Parties taken as a whole willbe able to pay their debts and liabilities, subordinated, contingent orotherwise, as such debts and liabilities become absolute and matured; (iv) theLoan Parties taken as a whole will not have unreasonably small capital withwhich to conduct the business in which they are engaged as such business is nowconducted and is proposed to be conducted following the Effective Date; and (v)the Loan Parties taken as a whole will not be deemed insolvent or bankruptunder any applicable bankruptcy or insolvency legislation under the laws ofAustralia, 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 Borrower, with the Parent Borrower as the survivingcorporation.

(w)          The Administrative Agent shall havereceived a Compliance Certificate signed by a Financial Officer and the chieflegal officer of the Parent Borrower, dated the Effective Date (delivered, andcontaining a statement that it was delivered, in good faith after reasonableinvestigation) to the effect that the Loans made and Letters of Credit (if any)issued on the Effective Date do not violate the provisions of the Senior FirstLien Note Indenture, the Senior Second Lien Note Indenture and the SeniorSubordinated Note Indenture (including a reasonably detailed summary as to thecalculations necessary 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(e) shall have been duly appointed by the Foreign SubsidiaryBorrowers.

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

The Administrative Agent shall notify the ParentBorrower and the Lenders of the Effective Date, and such notice shall beconclusive and binding.

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SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loanon the occasion of any Borrowing, and of the Issuing Bank to issue, amend,renew or extend any Letter of Credit, is subject to the satisfaction of 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 or the date ofissuance, amendment, renewal or extension of such Letter of Credit, asapplicable, except to the extent such representations and warranties expresslyrelate to an earlier date in which case such representations and warrantiesshall be true and correct as of such earlier date.

(b)           At the time of and immediately aftergiving effect to such Borrowing or the issuance, amendment, renewal orextension of such Letter of Credit, as applicable, no Default shall haveoccurred and be continuing.

(c)           At the time of, and after givingeffect to, such Borrowing or the issuance, amendment, renewal or extension ofsuch Letter of Credit, (i) the total Domestic Revolving Exposure shall notexceed the lesser of (A) the total amount of the Available Commitments and(B) the Domestic Borrowing Base then in effect, (ii) the totalAustralian Revolving Exposure shall not exceed the lesser of (A) theAustralian Sublimit and (B) the Australian Borrowing Base then in effect,(iii) the total Canadian Revolving Exposure shall not exceed the CanadianSublimit and the Canadian Revolving Exposure with respect to each CanadianSubsidiary Borrower shall not exceed such Canadian Subsidiary Borrower’sCanadian Borrowing Base then in effect, (iv) the total German RevolvingExposure shall not exceed the lesser of (A) the German Sublimit and(B) the German Borrowing Base then in effect, (v) the total MexicanRevolving Exposure shall not exceed the lesser of (A) the Mexican Sublimitand (B) the Mexican Borrowing Base then in effect, (vi) the totalRevolving Exposure shall not exceed the total amount of the AvailableCommitments then in effect and (vii) the total Revolving Exposure plus thetotal Fixed Asset Revolving Exposure shall not exceed the total amount of theCommitments at such time.

(d)           If at the time of, and after givingeffect to, such Borrowing or the issuance, amendment, renewal or extension ofsuch Letter of Credit, the total Revolving Exposure and Fixed Asset RevolvingExposure exceeds 85% of the maximum amount of Indebtedness permitted to beincurred under this Agreement and the Fixed Asset Credit Agreement pursuant tothe Senior First Lien Indenture, the Senior Second Lien Note Indenture and theSenior Subordinated Note Indenture, the Administrative Agent shall havereceived a Compliance Certificate signed by a Financial Officer and the chieflegal officer of the Parent Borrower, dated the date of such Borrowing, or theissuance, amendment, renewal or extension of such Letter of Credit (delivered,and containing a statement that it was delivered, in good faith afterreasonable investigation) to the effect that such Borrowing, or the issuance,amendment, renewal or extension of such Letter of Credit, does not violate theprovisions of the Senior First Lien Note Indenture, the Senior Second Lien NoteIndenture and the Senior Subordinated Note Indenture (including a

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reasonably detailedsummary as to the calculations necessary to determine the absence of any suchviolation).

(e)           With respect to any Borrowing ofForeign Revolving Loans (other than Borrowings of Canadian Revolving Loans byUniplast Canada), at the time of the Borrowing Request with respect to suchBorrowing, the amount that the Parent Borrower reasonably and in good faithestimates will be the Cash Amount at 3:00 p.m., New York City time,on the requested date of such Borrowing (after giving effect to such Borrowing)shall not exceed $11,000,000, and such Borrowing Request shall contain astatement to that effect and that the Parent Borrower reasonably and in goodfaith expects to be in compliance with Section 6.14 as of the date of suchBorrowing.

(f)            The making of such Loan or theissuance, amendment, renewal or extension of such Letter of Credit, asapplicable, does not violate any applicable law or regulation and is notenjoined, temporarily, preliminarily or permanently.

The making of any Loan on the occasion of eachBorrowing and each issuance, amendment, renewal or extension of a Letter ofCredit shall be deemed to constitute a representation and warranty by theParent Borrower on the date thereof as to the matters specified in thisSection.

SECTION 4.03.AustralianEffective Date.  The obligations ofthe Australian Lenders to make Australian Revolving Loans hereunder shall notbecome effective until the date on which each of the following conditions issatisfied:

(a)           The Administrative Agent shall havereceived counterparts of the Australian Pledge Agreement signed on behalf ofthe Parent Borrower and the Australian Subsidiary Borrower.

(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 orrecordation.

(c)           The Administrative Agent shall havereceived a favorable written opinion (addressed to the Administrative Agent,the Issuing Bank and the Lenders and dated the Australian Effective Date) ofAustralian counsel for the Australian Loan Parties acceptable to theAdministrative Agent, covering such other matters relating to the AustralianLoan Parties, the Loan Documents or the Transactions as the AdministrativeAgent shall reasonably request and otherwise in form and substance reasonablysatisfactory to the Administrative Agent. The Australian Subsidiary Borrower hereby requests such counsel todeliver 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

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deliver any Loan Documentor other document required hereunder to be executed and delivered by or onbehalf of the Australian Subsidiary Borrower, (ii) that there have been nochanges 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 (orequivalent governing body) approving and authorizing the execution, deliveryand performance 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 Parent Borrower,confirming compliance with the conditions set forth in paragraphs (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.

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

ARTICLEVAFFIRMATIVE 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 and all Letters ofCredit shall have expired or terminated and all LC Disbursements shall havebeen reimbursed, each Borrower covenants and agrees with the AdministrativeAgent and the Lenders that:

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

(a)           within 90 days after the end ofeach fiscal year of the Parent Borrower, its audited consolidated balance sheetand related statements of operations, stockholders’ equity and cash flows as ofthe end of and for such year, setting forth in each case in comparative formthe figures for the previous fiscal year, all reported on by Ernst &Young LLP or other independent public accountants of recognized nationalstanding (without a “going concern” or like qualification or exception andwithout any

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qualification orexception as to the scope of such audit) to the effect that such consolidatedfinancial statements present fairly in all material respects the financialcondition and results of operations of the Parent Borrower and its consolidatedSubsidiaries on a consolidated basis in accordance with GAAP consistentlyapplied;

(b)           within 45 days after the end ofeach of the first three fiscal quarters of each fiscal year of the ParentBorrower, its consolidated and consolidating balance sheet and related statementsof operations, stockholders’ equity and cash flows as of the end of and forsuch fiscal quarter and the then elapsed portion of the fiscal year, settingforth in each case in comparative form the figures for the corresponding periodor periods of (or, in the case of the balance sheet, as of the end of) theprevious fiscal year, all certified by one of its Financial Officers aspresenting fairly in all material respects the financial condition and resultsof operations of the Parent Borrower and its consolidated Subsidiaries on aconsolidated and consolidating basis in accordance with GAAP consistentlyapplied, subject to normal year-end audit adjustments and the absence offootnotes;

(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 Borrower, its consolidated and consolidatingbalance sheet and related statements of operations as of the end of and forsuch fiscal month and the then elapsed portion of the fiscal year, settingforth in each case in comparative form the figures for the corresponding periodor periods of (or, in the case of the balance sheet, as of the end of) (i) theprevious fiscal year and (ii) the Projections or the most recent forecasts deliveredto the Administrative Agent pursuant to Section 5.01(i) below, all certified byone of its Financial Officers as presenting fairly in all material respects thefinancial condition and results of operations of the Parent Borrower and itsconsolidated Subsidiaries on a consolidated and consolidating basis inaccordance with GAAP consistently applied, subject to normal year-end auditadjustments and the absence of footnotes;

(d)           concurrently with any delivery offinancial statements under clause (a), (b) or (c) above, a certificate ofa Financial Officer of the Parent Borrower (i) certifying as to whether aDefault has occurred and, if a Default has occurred, specifying the detailsthereof and any action taken or proposed to be taken with respect thereto, (ii) duringany FCCR Period, setting forth reasonably detailed calculations of the FixedCharge Coverage Ratio as of the last day of the last fiscal period covered bysuch financial statements and (iii) stating whether any change in GAAP orin the application thereof has occurred since the date of the Parent Borrower’saudited financial statements referred to in Section 3.04 and, ifany such change has occurred, specifying the effect of such change on thefinancial 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 theParent Borrower (delivered, and containing a statement that it was delivered,in good faith after reasonable investigation) to the effect that the thenoutstanding Revolving Exposure and Fixed Asset Revolving Exposure do notviolate the provisions of the Senior First Lien Note Indenture, the SeniorSecond Lien Note

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Indenture and the SeniorSubordinated Note Indenture (including a reasonably detailed summary as to thecalculations necessary to determine 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; provided, however, that(A) the unit cost for Eligible Raw Materials may be calculated as of the lastday of the immediately preceding calendar month and (B) the cost for polyvinylchloride (PVC) resin, polyethylene (PE) resin and polypropylene (PP) resin maybe calculated on a weekly average basis;

(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 ParentBorrower and its Subsidiaries for such fiscal year approved by the Board ofDirectors of the Parent Borrower, and (ii) forecasts  prepared by management of the Parent Borrowerfor such fiscal year and each of the succeeding fiscal years through the fiscalyear in which the Maturity Date is scheduled to occur (including a projectedconsolidated balance sheet and related statements of projected operations andcash flow as of the end of and for each such fiscal year), presented on amonthly basis for such fiscal year and on an annual basis thereafter, and, promptlywhen available, any significant revisions 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 Borrower or any Subsidiary with theSEC, or any Governmental Authority succeeding to any or all of the functions ofthe SEC, or with 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 Borrower or any Subsidiary, or compliancewith the terms of any Loan Document, as the Administrative Agent, theAdministrative Agent or any Lender may reasonably request;

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(l)            as soon as available but in anyevent within fifteen days after the end of each calendar month, and at suchother times as may be requested by the Administrative Agent, as of the periodthen ended:

(i)            with respect to each Loan Party, asummary of Inventory by location and type and, if requested by theAdministrative Agent, a supporting perpetual Inventory report, in each caseaccompanied by such supporting detail and documentation as may be reasonablyrequested by the Administrative Agent;

(ii)           with respect to each Loan Party, amonthly trial balance showing Accounts outstanding aged from invoice date asfollows:  1 to 30 days, 31 to 60 days, 61to 90 days and 91 days or more, accompanied by such supporting detail anddocumentation as may be reasonably requested by the Administrative Agent;

(iii)          with respect to each Loan Party, aschedule and aging of such Loan Party’s accounts payable; and

(iv)          with respect to each Loan Party, areport from the resin integration purchase system (RIPS) listing all resinpayments due as of the date of delivery of such report;

(m)          as soon as available but in any eventwithin five Business Days of after the end of each calendar month, and at suchother times as may be requested by the Administrative Agent, a report settingforth additions and reductions (cash and non-cash) with respect to Accounts ofeach Loan Party, as of the period then ended; and

(n)           promptly after the Parent Borrowerobtains knowledge thereof, notice of the occurrence of any FCCR Period or CashCollection Triggering Event.

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

(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 Parent Borrower, affecting the Parent Borrower or any Affiliatethereof that would reasonably be expected to result in a Material AdverseEffect;

(c)           any downgrade of the ratings of theParent Borrower’s senior secured indebtedness for borrowed money by S&P,Moody’s or any 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 Borrower and theSubsidiaries in an aggregate amount exceeding $5,000,000; and

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(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 Parent Borrower setting forth the details of the event or developmentrequiring such notice and any action taken or proposed to be taken with respectthereto.

SECTION 5.03.  Information Regarding Collateral.  (a) The Parent Borrower will furnish to theAdministrative Agent 10 day’s prior written notice of any change (i) inany Loan Party’s corporate name or in any trade name used to identify it in theconduct of its business or in the ownership of its properties, (ii) in thelocation of any Loan Party’s chief executive office, its principal place ofbusiness, any office in which it maintains books or records relating toCollateral owned by it or any office or facility at which Collateral owned byit having an aggregate fair value in excess of $250,000 with respect to FirstPriority Collateral and $1,000,000 with respect to Second Priority Collateralis located (including the establishment of any such new office or facility),(iii) in any Loan Party’s identity or corporate structure, (iv) inany Loan Party’s Federal Taxpayer Identification Number or other organizationalidentification number (or, with respect to each Foreign Subsidiary, anycomparable identification numbers issued by any Governmental Authority) or(v) in any Loan Party’s jurisdiction of incorporation ororganization.  The Parent Borrower agreesnot to effect or permit any change referred to in the preceding sentence unlessall filings have been made under the Uniform Commercial Code or the applicablelegislation of other jurisdictions or otherwise that are required in order forthe Administrative Agent to continue at all times following such change to havea valid, legal and perfected security 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 Parent Borrower shall deliverto the Administrative Agent a certificate of a Financial Officer and the chieflegal officer of the Parent Borrower, (i) setting forth the informationrequired pursuant to Section 2 of the Perfection Certificate or confirmingthat there has been no change in such information since the date of thePerfection Certificate delivered on the Effective Date or the date of the mostrecent certificate delivered pursuant to this Section and (ii) certifyingthat all Uniform Commercial Code financing statements (including fixturefilings, as applicable) or other appropriate filings, recordings orregistrations, including all refilings, rerecordings and reregistrations,containing a description of the Collateral have been filed of record in each governmental,municipal or other appropriate office in each jurisdiction identified pursuantto clause (i) above to the extent necessary to protect and perfect thesecurity interests under the Security Agreements for a period of not less than18 months after the date of such certificate (except as noted therein withrespect to any continuation statements to be filed within such period).

SECTION 5.04.  Existence; Conduct of Business.  The Parent Borrower will, and will cause eachof the Subsidiaries to, do or cause to be done all things necessary topreserve, renew and keep in full force and effect its legal existence and therights, licenses, permits, privileges, franchises, patents, copyrights,trademarks and trade names material to the conduct of the business of theParent Borrower and the Subsidiaries, taken as a whole; provided thatthe

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foregoing shall not prohibit any merger,consolidation, liquidation or dissolution permitted under Section 6.04.

SECTION 5.05.  Payment of Obligations; Compliance withLeases.  (a) The Parent Borrowerwill, and will cause each of the Subsidiaries to, pay (i) all Taxes andother charges of any Governmental Authority imposed on it or any of itsproperties or assets or in respect of any of its franchises, business, incomeor property before any penalty or interest accrues thereon and (ii) allclaims (including claims for labor, services, materials and supplies) for sumsthat have become due and payable and that by law have or may become a Lien(other than a Lien permitted under Section 6.03) upon any of theproperty or assets of the Parent Borrower or any of the Subsidiaries, prior tothe 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 Borrower or suchSubsidiary has set aside on its books adequate reserves with respect thereto inaccordance with GAAP, (C) such contest effectively suspends collection ofthe contested obligation and the enforcement of any Lien securing suchobligation and (D) the failure to make payment pending such contest wouldnot reasonably be expected to result in a Material Adverse Effect.

(b)           The Parent Borrower will, and willcause each of the Subsidiaries to, comply with all material terms of each leaseunder which the Parent Borrower or any Subsidiary leases any property, aslessee, and at which Accounts or Inventory that has an aggregate fair value inexcess of $250,000 and is included in the calculation of the Borrowing Base islocated.

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

SECTION 5.07.  Insurance.  The Parent Borrower will, and will cause eachof the Subsidiaries to, maintain insurance with respect to its materialproperties and business against loss or damage of the kinds customarily insuredagainst by Persons engaged in the same or similar business, of such types andin such amounts as are customarily carried under similar circumstances by suchother Persons.  Such insurance shall bemaintained with financially sound and reputable insurers, except that a portionof such insurance program (not to exceed that which is customary in the case ofcompanies engaged in the same or similar business or having similar propertiessimilarly situated) may be effected through self-insurance, provided adequatereserves therefor, in accordance with GAAP, are maintained.  All insurance policies or certificates (orcertified copies thereof) with respect to such insurance (A) shall,subject to the terms of the Intercreditor Agreement, be endorsed to theAdministrative Agent’s reasonable satisfaction for the benefit of the Lenders(including by naming the Administrative Agent as loss payee or additionalinsured, as appropriate); and (B) shall state that such insurance policyshall not be canceled without 30 days’ prior written notice thereof (or,in connection with any cancellation resulting from the non-payment of premiums,10 days’ prior written notice thereof). The Parent Borrower shall promptly notify the Administrative Agent ofany material change or revision, or notice of expiration or non-renewal, withrespect to any such insurance policy. The Parent Borrower shall furnish to the Administrative Agent, on theEffective Date and on the date of

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delivery of each annual financial statement, fullinformation as to the insurance carried. At any time that insurance at levels described in Schedule 5.07is not being maintained by or on behalf of the Parent Borrower or any of theSubsidiaries, the Parent Borrower will notify the Administrative Agent inwriting within two Business Days thereof and, if thereafter notified by theAdministrative Agent or the Required Lenders to do so, the Parent Borrower orany such Subsidiary, as the case may be, shall obtain insurance at such levelsat 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 Parent Borrower will furnish to theAdministrative Agent and the Lenders prompt written notice of any casualty orother 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) The Parent Borrowerwill, and will cause each of the Subsidiaries to, keep proper books of recordand account in which full, true and correct entries are made in all materialrespects of all dealings and transactions in relation to its business andactivities.  The Parent Borrower will,and will cause each of the Subsidiaries to, permit any representativesdesignated by the Administrative Agent or any Lender, upon reasonable priornotice, to visit and inspect its properties, to examine and make extracts fromits books and records, and to discuss its affairs, finances and condition withits officers and independent accountants (and the Parent Borrower shall beprovided the opportunity to participate in any such discussions with suchindependent accountants), all at such reasonable times and as often asreasonably requested.  The ParentBorrower shall pay the reasonable fees and expenses of any representativesretained by the Administrative Agent to conduct any such inspection; provided,however that so long as no Event of Default shall have occurred and becontinuing, the Parent Borrower shall only be required to pay for one suchinspection per fiscal year of the Parent Borrower.

(b)           The Parent Borrower will, and willcause each of the Subsidiaries 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 Parent 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 Parent Borrower shall pay the reasonablefees and expenses of any representatives retained by the Administrative Agentto conduct any such evaluation or appraisal; provided, howeverthat so long as no Event of Default shall have occurred and be continuing, theParent Borrower shall only be required to pay for one such evaluation orappraisal pursuant to this clause (b) per calendar year for each category ofCollateral included in each Borrowing Base. The Parent Borrower also agrees to modify or adjust the computation ofthe Borrowing Base (which may include maintaining additional reserves ormodifying the eligibility criteria for the components of the Borrowing Base) tothe extent required by the Administrative Agent or the Required Lenders as aresult of any such evaluation or appraisal or otherwise.

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(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 Parent Borrower will agree to maintain such additionalreserves (for purposes of computing the Borrowing Base) in respect of thecomponents of the Borrowing Base and make such other adjustments to itsparameters for including the components of the Borrowing Base as the AdministrativeAgent or the Required Lenders in their commercially reasonable discretion shallrequire based upon such modifications.

SECTION 5.10.  Compliance with Laws.  The Parent Borrower will, and will cause eachof the Subsidiaries to, comply with all laws, rules, regulations and orders ofany Governmental Authority applicable to it or its property, includingEnvironmental Laws except where the failure to do so, individually or in theaggregate, could not reasonably be expected to result in a Material AdverseEffect.

SECTION 5.11.  Use of Proceeds and Letters of Credit.  (a) The proceeds of the Domestic RevolvingLoans will be used solely (i) to refinance the Pre-Petition Loan Agreement andthe DIP Credit Agreement, (ii) to pay Transaction Costs and (iii) for ordinaryworking capital and general corporate purposes of the Parent Borrower and itsSubsidiaries, including, without limitation, the payment of amounts payablepursuant to the Plan of Reorganization on the Effective Date.

(b)           The proceeds of the Foreign RevolvingLoans will be used solely for ordinary working capital and general corporatepurposes of the applicable Borrower and its subsidiaries.

(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)           Letters of Credit will be issued onlyfor general corporate purposes.

SECTION 5.12.  Additional Subsidiaries.  If any additional Subsidiary is formed oracquired after the Effective Date, the Parent Borrower will notify theAdministrative Agent and the Lenders thereof and (i) if (x) suchSubsidiary is a Domestic Subsidiary, the Parent Borrower will cause suchSubsidiary to become a party to (1) the Domestic Guarantee Agreement, as aGuarantor thereunder, (2) the Domestic Security Agreement, the Domestic PledgeAgreement and each other applicable Security Document in the manner providedtherein and such other mortgages and security, pledge, guarantee andsubordination agreements as reasonably requested by the Administrative Agent toguarantee and secure the Domestic Obligations and (y) if such Subsidiaryis a Foreign Subsidiary, the Parent Borrower will cause such Subsidiary tobecome a party to the applicable Foreign Security Documents in the mannerprovided therein and such other mortgages and security, pledge, guarantee and subordinationagreements as reasonably requested by the Administrative Agent to guarantee andsecure the

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Foreign Obligations, in each case within threeBusiness Days after such Subsidiary is formed or acquired and promptly takesuch actions to create and perfect Liens on such Subsidiary’s assets to securethe Obligations as the Administrative Agent or the Required Lenders shallreasonably request and (ii) if any Equity Interests or Indebtedness ofsuch Subsidiary are owned by or on behalf of any Loan Party, the ParentBorrower will cause certificates and promissory notes evidencing such EquityInterests and Indebtedness to be pledged to secure the Obligations within threeBusiness Days after such Subsidiary is formed or acquired; provided, however,that, subject to the following proviso, if such Subsidiary is a ForeignSubsidiary, Equity Interests of such Subsidiary that are owned by or on behalfof a Domestic Loan Party and that are to be pledged to secure the DomesticObligations may be limited to 65% of the outstanding voting Equity Interests ofa first-tier Foreign Subsidiary and none of the Equity Interests of asecond-tier or lower-tier Foreign Subsidiary, in each case, if a pledge inexcess of such Equity Interests would, in the good faith judgment of the ParentBorrower, result in materially adverse tax consequences to the Loan Parties,taken as a whole; provided, further, that if the FacilitiesAvailability Amount is less than $15,000,000 at any time, the Parent Borrowershall, and shall cause each Domestic Loan Party to, promptly pledge 100% of theoutstanding voting Equity Interests of each Foreign Subsidiary (other than theMexican Subsidiary Borrower and its subsidiaries) owned by it to theAdministrative Agent to secure the Domestic Obligations.

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

(b)           If any material assets (including anyreal property or improvements thereto or any interest therein) are acquired bythe Parent Borrower or any other Loan Party after the Effective Date (otherthan assets constituting Collateral that become subject to the Lien of theappropriate Security Agreements upon acquisition thereof), the Parent Borrowerwill notify the Administrative Agent and the Lenders thereof, and, if requestedby the Administrative Agent or the Required Lenders, the Parent Borrower willcause such assets to be subjected to a Lien securing the Obligations and willtake, 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, except, in each case, if any Loan Party grants a Lien onsuch property to secure any obligation under the Senior First Lien NoteDocuments or the Senior Second Lien Note Documents.

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SECTION 5.14.  Supplemental Disclosure.  From time to time as may be reasonably requestedby the Administrative Agent (which request will not be made more frequentlythan once each year absent the occurrence and continuance of an Event ofDefault) or at the Loan Parties’ election, the Parent Borrower shall supplementeach Schedule, or any representation herein or in any other Loan Document, withrespect to any matter hereafter arising that, if existing or occurring at thedate of this Agreement, would have been required to be set forth or describedin such Schedule or as an exception to such representation or that is necessaryto correct any information in such Schedule or representation which has beenrendered inaccurate thereby (and, in the case of any supplements to anySchedule, such Schedule shall be appropriately marked to show the changes madetherein); provided that (a) no such supplement to any such Schedule orrepresentation shall amend, supplement or otherwise modify any Schedule orrepresentation, or be or be deemed a waiver of any Default or Event of Defaultresulting from the matters disclosed therein, except as consented to by theAdministrative Agent and the Required Lenders in writing, and (b) no supplementshall be required or permitted as to representations and warranties that relatesolely to the Closing Date.

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

SECTION 5.16.  Landlord Lien Waivers, MortgageeAgreements and Bailee Letters.  Asreasonably requested by the Administrative Agent, the Parent Borrower will, andwill cause each of the Subsidiaries 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 converterfacility or other location where (a) First Priority Collateral having anaggregate fair value in excess of $250,000, (b) Second Priority Collateral havingan aggregate fair value in excess of $1,000,000 or (c) Foreign Working CapitalCollateral having an aggregate fair value in excess of $250,000 is stored orlocated, which agreement or letter shall contain a waiver or subordination ofall Liens or claims that the landlord, mortgagee or bailee may assert againstthe First Priority Collateral, Second Priority Collateral, Foreign WorkingCapital Collateral or Foreign Fixed Asset Collateral, as applicable, at thatlocation, and shall otherwise be reasonably satisfactory in form and substanceto the Administrative Agent.  Each LoanParty shall timely and fully pay and perform its obligations under all leasesand other agreements with respect to each leased location or public warehousewhere any Collateral is or may be located.

SECTION 5.17.  Depository Banks.  (a) The ParentBorrower will, and will cause each of the Subsidiaries to, maintain a bankreasonably acceptable to the Administrative Agent as its principal depositorybank, including for the maintenance of operating, administrative, cashmanagement, collection activity, and other deposit accounts for the conduct ofits business.  Schedule 5.17 setsforth as of the Effective Date all deposit accounts, securities accounts andcommodities accounts of the Parent Borrower and the other Loan 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

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maintain any securities account or  commodityaccount that is not a Controlled Securities Account and (iii) not establish ormaintain any deposit account that is not a Controlled Deposit Account; provided,however, that the Loan Parties may maintain (A) payroll, withholding taxand other fiduciary or zero balance accounts, (B) prior to the 2004 Notes FirstLien Transition Date, the Notes Collateral Account (each as defined in theIntercreditor Agreement), (C) prior to August 31, 2006, cash in depositaccounts with Wachovia Bank, National Association in an aggregate amount not toexceed $1,000,000 at any time; provided, further, that the ParentBorrower shall cause all balances in the accounts referred to in clause (C)above to be transferred into a Controlled Deposit Account on a weekly basis and(D) prior to September 30, 2006, cash in deposit accounts with Bank of Montrealin an aggregate amount not to exceed $1,000,000 at any time; provided, further,that the Parent Borrower shall cause all balances in the accounts referred toin clause (D) above to be transferred into a Controlled Deposit Account on aweekly 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 Borrowershall, and shall cause each other Loan Party to, use all reasonable efforts tocause each Account Debtor and every other Person identified in the precedingsentence to make all payments with respect to any Accounts, Inventory or otherCollateral directly to a Controlled Deposit Account.  In the event that a Loan Party directlyreceives any cash or other funds, notwithstanding the arrangements for paymentdirectly into the Controlled Deposit Accounts, such remittances shall be heldfor the benefit of the Administrative Agent and the Secured Parties and shallbe segregated from other funds of such Loan Party, and each Borrower shall, orshall cause each other Loan Party to, cause such remittances and payments to bedeposited into a Controlled Deposit Account as soon as practicable after suchLoan Party’s receipt thereof.  Withoutthe prior written consent of the Administrative Agent, no Loan Party shall,under any circumstances whatsoever, change the general instructions given toAccount Debtors and other Persons obligated to make payments with respect toany Accounts, Inventory or other Collateral regarding the deposit of paymentswith respect 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 First Priority Collateral from being deposited orotherwise commingled with proceeds of Second Priority Collateral and (ii) anyfunds that are proceeds of Foreign Fixed Asset Collateral from being depositedor otherwise commingled with proceeds of Foreign Working Capital 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 Domestic Collateral ProceedsAccount, Foreign Collateral Proceeds Account or German Collateral ProceedsAccount, as applicable.  With respect toany Controlled Deposit Account or Controlled Securities Account that is not thesubject of a Control Agreement, during a Cash Collection Period, at the requestof the Administrative Agent, each Borrower shall, and shall cause each LoanParty to, transfer any funds held in such Controlled Deposit Account orControlled Securities Account on each Business Day to a Domestic CollateralProceeds Account, Foreign Collateral Proceeds

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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 Domestic Collateral Proceeds Account,Foreign Collateral Proceeds Account or German Collateral Proceeds Account.  From time to time after funds are depositedin any Domestic Collateral Proceeds Account, Foreign Collateral ProceedsAccount or German Collateral Proceeds Account, the Administrative Agent mayapply funds then held in such Domestic Collateral Proceeds Account, ForeignCollateral Proceeds Account or German Collateral Proceeds Account to thepayment of Obligations in accordance with Section 2.10(c).  No Loan Party and no Person claiming onbehalf of or through any Loan Party shall have any right to demand payment ofany funds held in any Domestic Collateral Proceeds Account, Foreign CollateralProceeds Account or German Collateral Proceeds Account at any time prior to thetermination of all Commitments and the payment in full of all Obligations.

SECTION 5.18.  ERISA. The Parent Borrower will, and will cause each of the Subsidiaries to,establish, maintain and operate all Plans to comply in all material respectswith the provisions of ERISA, the Code, and all other applicable laws, and theregulations and interpretations thereunder other than to the extent that theLoan Parties are in good faith contesting by appropriate proceedings thevalidity or implication of any such provision, law, rule, regulation or interpretation.

SECTION 5.19.  Post-Closing Conditions.  The Parent Borrower will, and will cause eachof the Subsidiaries to, deliver each of the documents, instruments andagreements, and take each of the actions, set forth on Schedule 5.19 within thetime periods set forth on such Schedule.

SECTION 5.20.  CanadianPension Plans.  No Loan Party will(a) terminate any Canadian Pension Plan in a manner, or take any other actionwith respect to any Canadian Pension Plan, which could reasonably be expectedto result in any material liability of a Loan Party, (b) fail to make fullpayment when due of all amounts which, under the provisions of any CanadianPension Plan, agreement relating thereto or applicable law, such Loan Party isrequired to pay as contributions thereto, except where the failure to make suchpayments could not reasonably be expected to have a Material Adverse Effect,(c) permit to exist any accumulated funding deficiency, whether or not waived,with respect to any Canadian Pension Plan in an amount which could reasonablybe expected to cause a Material Adverse Effect, (d) contribute to or assume anobligation to contribute to any “multi-employer pension plan” as such term isdefined in the Pension Benefits Act (Ontario), (e) acquire an interest in anyPerson if such Person sponsors, maintains or contributes to, or at any time inthe six-year period preceding such acquisition has sponsored, maintained, orcontributed to any “multi-employer pension plan” as such term is defined in thePension Benefits Act (Ontario), or (f) permit the actuarial present value ofthe benefit 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 expectedto cause a Material Adverse Effect.

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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 and all Letters of Credit have expiredor terminated and all LC Disbursements shall have been reimbursed, eachBorrower covenants and agrees with the Administrative Agent and the Lendersthat:

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

(i)            Indebtedness created under the LoanDocuments and the Fixed Asset 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 Borrower toany Subsidiary and of any Subsidiary to the Parent Borrower or any otherSubsidiary; provided, that (A) any such loans and advances made by aLoan Party shall be evidenced by a promissory note pledged to secure theObligations and (B) the aggregate principal amount of loans and advances madeby any German Loan Party to any other Loan Party shall not exceed the amount offree reserves of such German Loan Party;

(iv)          Guarantees by the Parent Borrower ofIndebtedness of any Subsidiary and by any Subsidiary of Indebtedness of theParent Borrower or any other Subsidiary; provided that (A)  anyGuarantee of the Senior Subordinated Notes by a Subsidiary shall besubordinated on the same terms as the Senior Subordinated Notes and (B) anyGuarantee of the Senior Subordinated Notes, the Senior First Lien Notes or theSenior Second Lien Notes shall be given only by a Domestic Subsidiary that is aLoan Party and Uniplast Canada;

(v)           Indebtedness of the Parent Borroweror any Subsidiary incurred to finance the acquisition, construction orimprovement of any fixed or capital assets, including Capital Lease Obligationsand any Indebtedness assumed in connection with the acquisition of any suchassets or secured by a Lien on any such assets prior to the acquisitionthereof, including Capital Lease Obligations incurred pursuant to transactionspermitted by Section 6.07, and extensions, renewals andreplacements of any such Indebtedness that do not increase the outstandingprincipal amount thereof; provided that (A) such Indebtedness isincurred prior to or within 20 days after such acquisition or thecompletion of such construction or improvement and (B) the aggregateprincipal amount of Indebtedness permitted by this clause (v) shall notexceed $25,000,000 at any time outstanding;

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(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 Borrower or any of theSubsidiaries in 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 ParentBorrower in an aggregate principal amount not exceeding $10,000,000 pursuant toan overdraft line of credit in form and substance reasonably satisfactory tothe Administrative Agent; provided, however, that to the extent alegal opinion is delivered by counsel to the Parent Borrower in connection withsuch overdraft line of credit, the Administrative Agent shall receiveconcurrently therewith a reliance letter in favor of the Administrative Agent,the Lenders and the Issuing Banks.

SECTION 6.02.  Certain Equity Securities.  The Parent Borrower will not, nor will itpermit any Subsidiary to, issue any preferred stock (other than (a) QualifiedPreferred Stock of the Parent Borrower 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, acquire ormake any other payment in respect of any Equity Interests of the ParentBorrower or any Subsidiary.

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

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(a)           Liens created under the LoanDocuments and the Fixed Asset Loan Documents;

(b)           Permitted Encumbrances;

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

(d)           any Lien existing on any property orasset prior to the acquisition thereof by the Parent Borrower or any Subsidiaryor existing on any property or asset of any Person that becomes a Subsidiaryafter the 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 Borrower or any Subsidiary and (iii) such Lien shall secure onlythose obligations that it secures on the date of such acquisition or the datesuch Person becomes a Subsidiary, as the case may be and extensions, renewalsand replacements thereof that do not increase the outstanding principal amountthereof;

(e)           Liens on fixed or capital assetsacquired, constructed or improved by the Parent Borrower 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 Borrower or any Subsidiary other thanproperty directly related to such fixed or capital assets and of a typecustomarily covered by such Liens, except that such security interests may notapply to any accounts 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 Borrower 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 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,(ii) such Liens do not apply

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to any asset other thanCollateral that is subject to a Lien granted under a Security Document tosecure the Obligations, (iii) any Liens on any First-Priority Collateralthat secure obligations in respect of the Senior First Lien Notes or SeniorSecond Lien Notes are subordinated to the Liens on such First-PriorityCollateral that secure the Obligations, (iv) any Liens on anySecond-Priority Collateral that secure obligations in respect of the SeniorSecond Lien Notes rank equally and ratably with the Liens on suchSecond-Priority Collateral that secure the Obligations and (v) all suchLiens granted under the Senior First Lien Security Documents and Senior SecondLien Security Documents shall be subject to the terms of the IntercreditorAgreement;

(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 this Agreement;

(i)            Liens on cash deposited with the issuingbank for any letter of credit permitted by clause (xii) of Section 6.01 to cashcollateralize such letter of credit (including with respect to interest, feesand expenses 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 letter of credit and (ii) upon the termination orexpiration of such letter of credit, to the extent there has been no drawingunder such letter of credit that has not been reimbursed at such time, anamount of cash equal to 105% of the face amount of such letter of credit (lessany amounts retained to pay interest, fees and expenses associated therewith)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 of the AustralianRevolving Loans under this Agreement and the Australian Revolving Loans underand as defined in the Fixed Asset Credit Agreement, the proceeds of which havebeen distributed by the Australian Subsidiary Borrower to the Parent Borrowerand its 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 Parent Borrower will not and will notpermit any Subsidiary to, merge into or consolidate with any other Person, orpermit any

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other Person to merge into or consolidate with it, orliquidate 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 Borrower in a transaction inwhich the Parent Borrower is the surviving corporation, (ii) anySubsidiary may merge into any Subsidiary that is a Loan Party; providedthat if any Subsidiary that is party to such transaction is (A) a LoanParty, the surviving entity must be a Loan Party, (B) a SubsidiaryBorrower, the surviving entity must be a Subsidiary Borrower or (C) a DomesticLoan Party, the surviving entity must be a Domestic Loan Party, (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 Subsidiary Borrower) may liquidate or dissolve ifthe Parent Borrower determines in good faith that such liquidation ordissolution is in the best interests of the Parent Borrower and is notmaterially disadvantageous to the Lenders.

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

SECTION 6.05.  Investments, Loans, Advances, Guaranteesand Acquisitions.  The ParentBorrower will not, and will not permit any of the Subsidiaries to, purchase,hold or acquire (including pursuant to any merger with any Person that was 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 Borrowerand the Subsidiaries in the Equity Interests of their respective subsidiaries(that are Subsidiaries prior to such Investment);

(d)           loans or advances made by the ParentBorrower to any Subsidiary and made by any Subsidiary to the Parent Borrower orany other Subsidiary; provided that (i) any such loans and advances madeby a Loan Party shall be evidenced by a promissory note pledged to secure theObligations and (ii) the aggregate principal amount of loans and advances madeby any German Loan Party to any other Loan Party shall not exceed the amount offree reserves of such German Loan Party;

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(e)           Guarantees by the Parent Borrower ofIndebtedness and other obligations of any Subsidiary and Guarantees by anySubsidiary of Indebtedness or other obligations of the Parent Borrower or anyother Subsidiary; provided that (i) no Subsidiary shall Guaranteethe Senior First Lien Notes, Senior Second Lien Notes or Senior SubordinatedNotes unless (A) such Subsidiary also has Guaranteed the DomesticObligations, and (B) with respect to any Guarantee of the SeniorSubordinated Notes, such Guarantee is subordinated to such Guarantee of theDomestic Obligations on terms no less favorable to the Lenders than thesubordination provisions of the Senior Subordinated Notes and (ii) anysuch 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 Borrower or any of the Subsidiaries, in eithercase in compliance 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 thisAgreement;

(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 Borrower or any of theSubsidiaries; and

(l)            Permitted Acquisitions.

SECTION 6.06.  Asset Sales.  The Parent Borrower will not, and will notpermit any of the Subsidiaries to, sell, transfer, lease or otherwise disposeof any asset, including any Equity Interest owned by it (other than any suchsale, transfer, lease or other disposition resulting from any casualty orcondemnation of any assets of the Parent Borrower or any of the Subsidiaries),nor will the Parent Borrower permit 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;

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(b)           sales, transfers, issuances anddispositions to the Parent Borrower or a Subsidiary; provided that anysuch sales, 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;

(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 Borrower or (ii) $50,000,000 in theaggregate during 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 theParent Borrower provides the Administrative Agent with written notice of anysuch sale, transfer or disposition not less than five Business Days prior tothe 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 Borrower), or, in the case of clause (d) above, for an amount,if less, equal to the aggregate cost expended for the property that is thesubject of such sale-leaseback (except that those permitted by clause (a)above shall be made on terms that are customary in the ordinary course) and forconsideration in cash.  For purposes ofthis Section 6.06, the following shall be deemed to be cash:  (a) the assumption of any liabilities ofthe Parent Borrower or any Subsidiary with respect to, and the release of theParent Borrower or such Subsidiary from all liability in respect of, anyIndebtedness of the Parent Borrower or the Subsidiaries permitted hereunder (inthe amount of such Indebtedness) in connection with a sale, transfer, lease orother disposition of Second Priority Collateral permitted under Section 6.06and (b) securities received by the Parent Borrower or any Subsidiary fromthe transferee that are immediately convertible into cash without breach oftheir terms or the agreement pursuant to which they were purchased and that arepromptly converted by the Parent Borrower or such Subsidiary into cash.

For purposes of thisSection 6.06 and for so long as any Senior First Lien Notes that aresecured by a first-priority Lien on the Second-Priority Collateral remainoutstanding, (a) any sale, transfer, lease or other disposition of theEquity Interests of any Loan Party that owns assets constituting First-PriorityCollateral or Second-Priority Collateral shall be deemed to be a sale,transfer, lease or disposition of such First-Priority Collateral orSecond-Priority Collateral, (b) any sale, transfer, lease or otherdisposition of Equity Interests of a Loan Party that owns both First-PriorityCollateral and Second-Priority Collateral shall be deemed to be a

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separate sale, transfer, lease or disposition of suchFirst-Priority Collateral and such Second-Priority Collateral and (c) theproceeds received by the Parent Borrower or any Subsidiary in respect of anysuch sale, transfer, lease or disposition referred to in clause (b) above(or any sale, transfer, lease or other disposition of assets (other than thosedescribed in clause (b) above) including both First-Priority Collateraland Second-Priority Collateral without allocating the purchase price betweenFirst-Priority Collateral and Second-Priority Collateral) shall be allocated tothe First-Priority Collateral and the Second-Priority Collateral pursuant tothe terms of the Intercreditor Agreement.

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

SECTION 6.08.  Swap Agreements.  The Parent Borrower will not, and will notpermit any of the Subsidiaries to, enter into any Swap Agreement, except(a) Swap Agreements entered into to hedge or mitigate risks to which theParent Borrower or any Subsidiary has actual exposure (other than those in respectof Equity Interests of the Parent Borrower or any of the Subsidiaries) and(b) Swap Agreements entered into in order to effectively cap, collar orexchange interest rates (from fixed to floating rates, from one floating rateto another floating rate, to a fixed rate or otherwise) with respect to anyinterest-bearing liability or investment of the Parent Borrower or anySubsidiary.

SECTION 6.09.  Restricted Payments; Certain Payments ofIndebtedness.  (a) The ParentBorrower will not, and will not permit 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 Borrower may, subject to Section 6.02, make dividends withrespect to its Equity Interests consisting solely of additional EquityInterests permitted hereunder, (iii) the Parent Borrower may purchase theParent Borrower’s Equity Interests from present or former officers or employeesof the Parent Borrower or any Subsidiary upon the death, disability ortermination of employment of such officer or employee in an aggregate amountfor all payments under this clause (iii) not to exceed $1,000,000 per fiscalyear of the Parent Borrower; provided, that any such amount not soexpended in the fiscal year for which it is permitted may be carried over forexpenditure in succeeding fiscal years, (iv) the Parent  Borrower may make a payment in connectionwith the settlement of the claims of Richard P. Durham and Durham Capital,L.L.C. in connection with the alleged “put” right of such parties with respectto certain capital stock and warrants issued by Old Pliant in an aggregateamount not to exceed the lesser of (A) the actual amount of such settlement and(B) $12,000,000 and (v) the Parent Borrower may redeem the Series AA PreferredStock with proceeds of Permitted Redemption Indebtedness; provided thatin each case, no Default has occurred and is continuing or would resulttherefrom.

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(b)           The Parent Borrower will not, andwill not permit any Subsidiary to, make or agree to pay or make, directly orindirectly, any payment or other distribution (whether in cash, securities orother 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 SeniorFirst Lien Note, 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 ParentBorrower shall not be permitted to make cash interest payments in respect ofthe Senior First Lien Notes referred to in clause (a) of the definition thereofor the interest payable pursuant to the Supplemental First Lien Notes Indentureand (B) on and prior to June 15, 2007, the Parent Borrower shall not bepermitted to make cash interest payments in respect of the Senior First LienNotes referred to in clause (b) of the definition thereof, (ii) payment ofregularly scheduled interest payments as and when due in respect of the SeniorSecond Lien Notes and (iii) payment of regularly scheduled interest payments asand when due in respect of the Senior Subordinated Notes; provided, however,that on and prior to July 15, 2007, the Parent Borrower shall not be permittedto make cash interest payments in respect of the Senior Subordinated Notes.

SECTION 6.10.  Transactions with Affiliates.  The Parent Borrower will not, and will notpermit any Subsidiary to, sell, lease or otherwise transfer any property orassets to, or purchase, lease or otherwise acquire any property or assets from,or otherwise engage in any other transactions with, any of its Affiliates(including any Subsidiary), except (a) transactions in the ordinary courseof business that are at prices and on terms and conditions not less favorableto the Parent Borrower 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 directors of the Parent Borrower having a majority of the votingpower held by all disinterested members of the board of directors of the ParentBorrower), (b) transactions between or among the Loan Parties and notinvolving any other Affiliate (except to the extent the involvement with theother 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 Parent Borrower will not and will notpermit any Subsidiary to, directly or indirectly, enter into, incur or permitto exist any agreement or other arrangement that prohibits, restricts orimposes any condition upon (a) the ability of the Parent Borrower or anySubsidiary to create, incur or permit to exist any Lien upon any of itsproperty or assets or (b) the ability of any Subsidiary to pay dividendsor other distributions with respect to any of its Equity Interests (it beingunderstood that the priority of any preferred stock in receiving dividends orliquidating distributions prior to dividends or liquidating distributions beingpaid on common stock shall not be deemed a restriction on the ability to makedistributions on capital stock) or to make or repay loans or advances to theParent Borrower or any other Subsidiary (it being understood that thesubordination of loans or advances made to the Parent Borrower or anySubsidiary to other Indebtedness incurred by the Parent Borrower or suchSubsidiary shall not be deemed a restriction on the ability to make loans oradvances) or to Guarantee Indebtedness of the Parent Borrower or any otherSubsidiary; provided that (i) the foregoing shall not apply torestrictions and conditions imposed by law or by any Loan Document or any FixedAsset Loan Document, (ii) the foregoing shall not apply to

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restrictions and conditions existing on the EffectiveDate identified on Schedule 6.11, (iii) the foregoing shallnot apply to any restriction or condition with respect to a Subsidiary pursuantto an agreement relating to any Equity Interests or Indebtedness of suchSubsidiary, in each case incurred by such Subsidiary prior to the date on whichsuch Subsidiary was acquired by the Parent Borrower (other than EquityInterests or Indebtedness incurred as consideration in, in contemplation of, orto provide all or any portion of the funds or credit support utilized toconsummate the transaction or series of related transactions pursuant to whichsuch Subsidiary became a Subsidiary or was otherwise acquired by the ParentBorrower) and outstanding on such date; (iv) the foregoing shall not applyto any restriction or condition pursuant to an agreement refinancing anagreement referred to in clause (i), (ii) or (iii) or thisclause (iv) or contained in any amendment to an agreement referred to inclause (i), (ii) or (iii) or this clause (iv); provided, however,that the conditions and restrictions contained in any such refinancingagreement or amendment are no more restrictive, taken as a whole, than theencumbrances 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 Borrower 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.

SECTION 6.12.  Amendment of Material Documents.  The Parent Borrower will not, and will notpermit 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 the Intercreditor Agreement) or (b) the Senior First Lien NoteDocuments, the Senior Second Lien Note Documents or the Senior SubordinatedNote Documents (other than amendments to the Senior First Lien SecurityDocuments or the Senior Second Lien Security Documents permitted by theIntercreditor Agreement and other amendments and modifications that are notadverse to the interests of the Lenders and do not impair the exercise ofremedies under any Security Document or the Intercreditor Agreement).

SECTION 6.13.  Designated Senior Debt.  The Parent Borrower shall not designate anyIndebtedness (other than indebtedness under the Loan Documents and the FixedAsset Loan Documents, indebtedness in respect of the Senior First Lien Notesincurred in compliance with Section 6.01(vi) and indebtedness in respectof the Senior Second Lien Notes incurred in compliance withSection 6.01(viii)) as “Designated Senior Debt” for purposes of and asdefined in the Senior Subordinated Note Documents.

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SECTION 6.14.  Cash Held by Foreign Loan Parties.  The Parent Borrower will not permit at anytime on any day (a) the aggregate amount of “cash and cash equivalents” and “marketablesecurities” of the Foreign Loan Parties (other than Uniplast Canada), in eachcase that would be required to be reflected on a consolidated balance sheet ofthe Parent Borrower and the Subsidiaries prepared as of such time in accordancewith GAAP (excluding any such “cash” that is “restricted” cash, including,without limitation, any such cash subject to the Liens permitted by Section6.03(j)), minus (b) the aggregate amount of payments in such cash and cashequivalents that the Parent Borrower reasonably and in good faith determineswill be made by the Foreign Loan Parties (and will reduce such cash and cashequivalents) within the next 30 days to exceed $15,000,000.

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

SECTION 6.16.  Cancellation of Indebtedness.  The Parent Borrower will not, and will notpermit any Subsidiary to, cancel any claim or debt owing to it, except (a) forreasonable 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 Parent Borrower will not, and will notpermit any Subsidiary to, change its fiscal year from a year ending December 31unless 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 Parent Borrower will not, and will not permit any Subsidiary to, change itsaccounting policies from those used to prepare the financial statementsdelivered pursuant to Section 4.01(i) without the prior written consentof the Administrative Agent.

SECTION 6.18.  Financial Covenants.

(a)           The Parent Borrower shall have at theend of each fiscal month ending immediately prior to or during any FCCR Period,a Fixed Charge Coverage Ratio for the 12-month period then ended of not lessthan 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 Parent Borrower shall not permitthe Facilities Availability Amount to be less than $10,000,000 at any time.

SECTION 6.19.  [Intentionally Omitted].

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SECTION 6.20.  Pliant Investment, Inc. and AlliantCompany LLC.  (a) Pliant Investment,Inc. shall not hold any assets other than (i) the membership interest ofAlliant Company LLC and (ii) a receivable in the amount of $4,000,000 from theParent Borrower, and may not have any liabilities other than tax androutine administrative liabilities in the ordinary course of business and (b)Alliant Company LLC shall not hold any assets and may not have any liabilitiesother than (i) tax and routine administrative liabilities in the ordinarycourse of business and (ii) assets and liabilities related to the indemnityescrow established in connection with the sale of its assets.  The Parent Borrower shall not make anypayment with respect to the receivable referred to in clause (a)(ii) above.

ARTICLEVII

EVENTSOF 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 or any reimbursement obligation in respect of anyLC Disbursement when and as the same shall become due and payable, whetherat the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)           any Borrower shall fail to(i) pay any interest on any Loan or any fee or any other amount (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 the Parent Borrower or any Subsidiary in orin connection with any Loan Document or any amendment or modification thereofor waiver thereunder, or in any report, certificate, financial statement orother document furnished pursuant to or in connection with any Loan Document orany amendment or modification thereof or waiver thereunder, shall have beenincorrect in any material respect when made or deemed made;

(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 theAdministrative Agent to the Parent Borrower (which notice will be given at therequest of any Lender);

(f)            the Parent Borrower or anySubsidiary shall fail to make any payment (whether of principal or interest andregardless of amount) in respect of any Material

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Indebtedness, when and asthe same shall become 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 the Parent Borrower 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, interimreceiver, administrator, trustee, custodian, sequestrator, conservator orsimilar official for the Parent Borrower 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)            the Parent Borrower or any Subsidiaryshall (i) voluntarily commence any proceeding or file any petition seekingliquidation, reorganization or other relief under any Federal, state or foreignbankruptcy, insolvency, receivership or similar law now or hereafter in effect,(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 forthe Parent Borrower or any Subsidiary or for a substantial part of its assets,(iv) file an answer admitting the material allegations of a petition filedagainst it in any proceeding described in clause (h) of this Article, (v) makea general assignment for the benefit of creditors or (vi) take any action forthe purpose of effecting any of the foregoing;

(j)            the Parent Borrower 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 the Parent Borrower, any Subsidiary or any combination thereofand the same shall remain undischarged for a period of 30 consecutive daysduring which execution shall not be effectively stayed, or any action shall belegally taken by a judgment creditor to attach or levy upon any assets of theParent Borrower or any Subsidiary to enforce any such judgment;

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(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 Borrower and the Subsidiaries in an aggregateamount exceeding (i) $7,000,000 in any year or (ii) $15,000,000during the term of this Agreement;

(m)          (i) any Loan Document shall for anyreason be asserted by the Parent Borrower or any of the Subsidiaries (or, inthe case of the Intercreditor Agreement, any of the other parties thereto) 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 Loan Party not to be, a valid and perfected Lien on anyCollateral, with the priority required by the Loan Documents, except (A) as aresult of the sale or other disposition of the applicable Collateral in atransaction permitted under the Loan Documents, (B) as a result of (1) theAdministrative Agent’s failure to take any action reasonably requested by theParent Borrower in order to maintain a valid and perfected Lien on anyCollateral or (2) any action taken by the Administrative Agent to release anyLien on any Collateral or (C) Liens on Collateral with a fair market value notexceeding $500,000 in the aggregate, (iii) the Guarantees pursuant to theGuarantee Agreements by the Loan Parties of any of the Obligations shall ceaseto be in full force and effect (other than in accordance with the termsthereof), or shall be asserted by any Loan Party not to be in effect or not tobe legal, valid and binding obligations, (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 any Loan Party to be invalid or to cease, to be legal, valid andbinding obligations of the parties thereto or (v) the Intercreditor Agreementshall cease to be a legal, valid and binding agreement 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

(p)           an Event of Default under and asdefined in the Fixed Asset 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 Parent Borrower, take either or both of the following actions, atthe 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

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due and payable, together with accrued interestthereon and all fees and other obligations (other than any remaining Loans) ofeach Borrower accrued hereunder, shall become due and payable immediately,without presentment, demand, protest or other notice of any kind, all of whichare hereby waived by each Borrower; and in case of any event with respect toany Borrower described in clause (h) or (i) of this Article, theCommitments shall automatically terminate and the principal of the Loans thenoutstanding, together with accrued interest thereon and all fees and otherobligations of each Borrower accrued hereunder, shall automatically become dueand payable, without presentment, demand, protest or other notice of any kind,all of which are hereby waived by each Borrower.  In addition to the remedies set forth above,in every such event, the Administrative Agent may exercise any remedies underthe other Loan Documents or at law or equity.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

SECTION 8.01.  Authorization, Action, Etc.  Each of the Lenders and the Issuing Bankhereby 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 Borrower or anySubsidiary or other Affiliate thereof as if it were not the AdministrativeAgent hereunder.

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 any fiduciaryor other implied duties, regardless of whether a Default has occurred and iscontinuing, (b) the Administrative Agent shall not have any duty to takeany 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 in Section 9.02), and(c) except as expressly set forth in the Loan Documents, theAdministrative Agent shall not have any duty to disclose, and shall not beliable for the failure to disclose, any information relating to the ParentBorrower or any of the Subsidiaries that is communicated to or obtained by thebank serving as Administrative Agent or any of its Affiliates in anycapacity.  The Administrative Agent shallnot be liable for any action taken or not taken by it with the consent or atthe request of the Required Lenders (or such other number or percentage of theLenders as shall be necessary under the circumstances as provided in Section9.02) or in the absence of its own gross negligence or willfulmisconduct.  The Administrative Agentshall not be deemed to have knowledge of any Default unless and until writtennotice thereof is given to the Administrative Agent by the Parent Borrower or aLender, and the Administrative Agent

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shall not be responsible for or have any duty toascertain or inquire into (i) any statement, warranty or representation madein or in connection with any Loan Document, (ii) the contents of anycertificate, report or other document delivered thereunder or in connectiontherewith, (iii) the performance or observance of any of the covenants,agreements or other terms or conditions set forth in any Loan Document,(iv) the validity, enforce­ability, effectiveness or genuineness of anyLoan Document or any other agreement, instrument or document, or (v) thesatisfaction of any condition set forth in Article IV or elsewherein any Loan Document, other than to confirm receipt of items expressly requiredto be delivered 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),independent accountants and other experts selected by it, and shall not beliable for any action taken or not taken by it in accordance with the advice ofany such counsel, 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, the Issuing Bank and the Parent Borrower.  Upon any such resignation, the RequiredLenders shall have the right, with the consent of the Parent Borrower (suchconsent not to be unreasonably withheld and which shall not be required duringthe 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 and the Issuing Bank, appoint a successor Administrative Agent selectedfrom among the Lenders or that shall be a bank with an office in New York, NewYork, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunderby a successor, such successor shall succeed to and become vested with all therights, powers, privileges and duties of the retiring Administrative Agent, andthe retiring Administrative Agent shall be discharged from its duties andobligations hereunder.  The fees payableby the Parent Borrower to a successor Administrative Agent shall be the same asthose payable to its predecessor unless otherwise agreed between the ParentBorrower and such successor.  After theAdministrative Agent’s resignation hereunder, the provisions of this Articleand Section 9.03 shall continue in effect for the benefit of suchretiring Administrative Agent, its sub-agents and their respective RelatedParties in respect of any actions taken or omitted to be taken by any of themwhile it was acting as Administrative Agent.

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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 herebyagreed that, in relation to any jurisdiction the courts of which would notrecognize or give effect to the trust (Treuhand) expressed to be created bythis Section 8.02, the relationship of the Secured Party to theAdministrative Agent in relation to any Lien or security interest governed byGerman law shall be construed as one of principal and agent but, to the extentpermissible under the laws of such jurisdiction, all the other provisions ofthis Section 8.02 shall have full force and effect between the partieshereto.

Each Secured Party(with the exception of the Administrative Agent) hereby releases theAdministrative Agent acting on its behalf pursuant to the terms of thisAgreement or any other Loan Document from the restrictions of Section 181 ofthe German Civil Code (Bürgerliches Gesetzbuch) (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

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hereby acknowledges that, for purposes of holding anysecurity granted by any Loan Party on property pursuant to the laws of theProvince of Quebec to secure obligations of such Loan Party under any bond, theAdministrative Agent shall be the holder of an irrevocable power of attorney(fondé de pouvoir) (within the meaning of the Civil Code of Québec) for allpresent and future Lenders and in particular for all present and future holdersof any such bond.  Each Lender herebyirrevocably constitutes, to the extent necessary, the Administrative Agent asthe holder of an irrevocable power of attorney (fondé de pouvoir) (within themeaning of Article 2692 of the Civil Code of Québec) in order to hold securitygranted by any Loan Party in the Province of Quebec to secure the obligationsof such Loan Party under any bond.  Eachassignee of a Lender shall be deemed to have confirmed and ratified theconstitution of the Administrative Agent as the holders of such irrevocable powerof 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 the ParentBorrower at 1475 Woodfield Road, Suite 700, Schaumberg, Illinois 60173,Attention: Chief Financial Officer (Telecopy No. (847) 969-3338), with acopy to Sidley Austin LLP, One South Dearborn Street, Chicago, Illinois 60603,Attention: Michael L. Gold (Telecopy No. (312) 853-7036);

(ii)           if to the Administrative Agent or theSwingline Lender, to Merrill Lynch Bank USA, 4 World Financial Center, Floor10, New York, New York 10080, Attention: Ryan D. Bell (Telecopy No. (212)449-6673), with a copy for notices related to borrowings and payments toMerrill Lynch Bank USA, 800 Scudders Mill Road, Plainsboro, New Jersey 08536,Attention: Joseph Sandford (Telecopy No. (609) 282-3809), and with furthercopies (other than for notices related to borrowings and payments) to MerrillLynch Bank USA, 4 World Financial Center, Floor 10, New York, New York 10080,Attention: Paul Tufaro (Telecopy No. (212) 738-1070), and Weil, Gotshal &Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention: Douglas R.Urquhart (Telecopy No. (212) 310-8007);

(iii)          if to the Issuing Bank, c/o MerrillLynch Bank USA, 4 World Financial Center, Floor 10, New York, New York 10080,Attention: Ryan D. Bell (Telecopy No. (212) 449-6673), with a copy to MerrillLynch Bank USA, 800 Scudders Mill Road, Plainsboro, New Jersey 08536,Attention: Joseph Sandford (Telecopy No. (609) 282-3809); and

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(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 applicable Lenderor Issuing Bank.  The AdministrativeAgent or the Parent Borrower may, in its discretion, agree to accept noticesand other communications to it hereunder by electronic communications pursuantto procedures approved by it; provided that approval of such proceduresmay be 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, the Issuing Bank or any Lender in exercising any right or powerhereunder or under any other Loan Document shall operate as a waiver thereof,nor shall any single or partial exercise of any such right or power, or anyabandonment or discontinuance of steps to enforce such a right or power,preclude any other or further exercise thereof or the exercise of any otherright or power.  The rights and remediesof the Administrative Agent, the Issuing Bank and the Lenders hereunder andunder the other Loan Documents are cumulative and are not exclusive of anyrights or remedies that they would otherwise have.  No waiver of any provision of any LoanDocument or consent to any departure by any Loan Party therefrom shall in anyevent be effective unless the same shall be permitted by paragraph (b) ofthis 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 or issuance or a Letter of Credit shall not beconstrued as a waiver of any Default, regardless of whether the AdministrativeAgent, any Lender or the Issuing Bank may have had notice or knowledge of suchDefault 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 consent ofthe Required Lenders; provided that no such agreement shall have theeffect of:

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

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(ii)           reducing the principal amount of anyLoan or LC Disbursement or reducing the rate of interest thereon, orreducing any fees payable hereunder, without the written consent of each Lenderaffected thereby and the Administrative Agent;

(iii)          postponing the maturity of any Loan,or any scheduled date of payment of the principal amount of any Loan, or therequired date of reimbursement of any LC Disbursement, or any date for thepayment of any interest thereon, or any fees payable hereunder, or reducing theamount of, waiving or excusing any such payment, or postponing the scheduleddate of expiration of any Commitment, without the written consent of eachLender affected thereby and the Administrative Agent;

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

(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 any 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 applicableGuarantee Agreement), or limiting its liability in respect of such Guarantee,without the written consent of each Lender; provided, however,that if the Required Lenders have approved the sale of the Equity Interests ofsuch Loan Party, the consent of the Required Lenders (and not each Lender)shall be required for such release;

(vii)         releasing all or substantially all theCollateral from the Liens of the Security Documents (except as expresslyprovided therein or in the Intercreditor Agreement), without the writtenconsent of each Lender;

(viii)        changing any provision of any LoanDocument to permit the Parent Borrower or any of the Subsidiaries to enter intoany accounts receivable or inventory securitization transaction or othersimilar financing arrangement, including any sale of, or any grant of asecurity interest in, accounts receivable or inventory in connection with anyasset securitization or other similar financing arrangement, without thewritten consent of Lenders having Commitments representing in the aggregatemore than 66-2/3% 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 consent of Lenders holdinga majority in interest of the outstanding Loans and unused Commitments of eachaffected Class; or

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(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, the Issuing Bank or the Swingline Lender without theprior written consent of the Administrative Agent, the Issuing Bank or theSwingline Lender, as the case may be.

(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 Parent Borrower and theAdministrative Agent shall agree, as of such date, to purchase for cash theLoans 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; Joint and Several Obligations.  (a) The Borrowers jointly and severally shallpay (i) all reasonable out-of-pocket expenses incurred by theAdministrative Agent, the Arranger and their respective Affiliates, includingthe reasonable fees, charges and disbursements of outside counsel for theAdministrative Agent and the Arranger, in connection with the preparation andadministration of the Loan Documents or any amendments, modifications orwaivers of the provisions thereof (whether or not the transactions contemplatedhereby or thereby shall be consummated), (ii) all reason­ableout-of-pocket expenses incurred by the Issuing Bank in connection with theissuance, amendment, renewal or extension of any Letter of Credit or any demandfor payment thereunder and (iii) all reasonable out-of-pocket expensesincurred by the Administrative Agent, the Issuing Bank, the Arranger or anyLender, including the reasonable fees, charges and disbursements of any outsidecounsel for the Administrative Agent, the Issuing Bank, the Arranger or anyLender, in connection with the enforcement or protection of its rights inconnection with the Loan Documents, including its rights under this Section, orin connection with the Loans made or Letters of Credit issued hereunder,including all such reasonable out-of-pocket expenses incurred during anyworkout, restructuring or negotiations in respect of such Loans or Letters ofCredit.

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(b)           The Borrowers jointly and severallyshall indemnify the Administrative Agent, the Issuing Bank, the Arranger andeach Lender, and each Related Party of any of the foregoing Persons (each suchPerson being called an “Indemnitee”) against, and hold each Indemniteeharmless from, any and all losses, claims, damages, liabilities and relatedexpenses, 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 Letter of Credit or theuse of the proceeds therefrom (including any refusal by the Issuing Bank tohonor a demand for payment under a Letter of Credit if the documents presentedin connection with such demand do not strictly comply with the terms of suchLetter of Credit), (iii) any actual or alleged presence or Release ofHazardous Materials on or from any Mortgaged Property or any other propertycurrently or formerly owned or operated by the Parent Borrower or any of theSubsidiaries, or any Environmental Liability related in any way to the ParentBorrower or any of the Subsidiaries, or (iv) any actual or prospectiveclaim, litigation, investigation or proceeding relating to any of theforegoing, whether based on contract, tort or any other theory and regardlessof whether any Indemnitee is a party thereto; provided that suchindemnity shall not, as to any Indemnitee, be available to the extent that suchlosses, claims, damages, liabilities or related expenses are determined by acourt of competent jurisdiction by final and nonappealable judgment to haveresulted from the gross negligence or willful misconduct of such Indemnitee orany Affiliate of such Indemnitee (or of any officer, director, employee,advisor or agent of such Indemnitee or any such Indemnitee’s Affiliates) or tothe extent such damages constitute special, indirect or consequential damages(as opposed to direct or actual damages).

(c)           To the extent that the Borrowers failto pay any amount required to be paid by it to the Administrative Agent, theIssuing Bank, the Arranger or the Swingline Lender under paragraph (a) or(b) of this Section, each Lender severally agrees to pay to the AdministrativeAgent, the Issuing Bank, the Arranger or the Swingline Lender, as the case maybe, 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, the Issuing Bank or the Swingline Lender in its capacityas such.  For purposes hereof, a Lender’s“pro rata share” shall be determined based upon its share of the sum of thetotal Revolving Exposure and unused Commitments 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)arising out of, in connection with, or as a result of, this Agreement or anyagreement or instrument contemplated hereby, the Transactions, any Loan orLetter of Credit or the use of the proceeds 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

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obligations under this Section 9.03 shall notexceed the amount of free reserves of the German Subsidiary Borrower.

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 and assigns permitted hereby (including any Affiliate ofthe Issuing Bank that issues any Letter of Credit), 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 (including anyAffiliate of the Issuing Bank that issues any Letter of Credit), 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 Issuing Bank, the Arranger and the Lenders) any legalor equitable right, 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 Parent Borrower; providedthat no consent of the Parent Borrower shall be required (1) for an assignmentto a Lender, an Affiliate of a Lender or an Approved Fund or (2) if an Event ofDefault has occurred and is continuing;

(B)           the Administrative Agent; and

(C)           the Swingline Lender.

(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 Parent 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

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assignment of aproportionate part of all the assigning Lender’s rights and obligations inrespect of one Class of Commitments 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.

(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 assigneethereunder shall be a party hereto and, to the extent of the interest assignedby such Assignment and Assumption, have the rights and obligations of a Lenderunder this Agreement, and the assigning Lender thereunder shall, to the extentof the interest assigned by such Assignment and Assumption, be released fromits obligations 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 and LC Disbursements owing to, each Lenderpursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Parent Borrower, each Subsidiary Borrower, the AdministrativeAgent, the Issuing Bank and the Lenders may treat each Person whose name isrecorded in the Register pursuant to the terms hereof as a Lender hereunder forall purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by the Parent Borrower, the Issuing Bank and any Lender, at anyreasonable time and from time to time upon reasonable prior notice.  Each Lender selling a participation to aParticipant shall, as a non-fiduciary agent of the Borrowers, keep a register(substantially similar in form to the Register) of each such Participant,specifying such Participant’s entitlement to payments of principal and interestwith respect to such Participation.  Theentries in such register shall be conclusive, and each Lender shall treat eachPerson whose name is recorded in such Lender’s register as the Participant,notwithstanding any notice to the contrary.

(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

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be a Lender hereunder),the processing and recordation fee referred to in this Section and any written consentto such assignment required by this Section, the Administrative Agent shallaccept such Assignment and Assumption and record the information containedtherein in the Register.  No assignmentshall be effective for purposes of this Agreement unless it has been recordedin the Register as provided in this paragraph.

(c)           (i)            AnyLender may, without the consent of any Borrower, the Administrative Agent, theIssuing Bank or the Swingline Lender, sell participations to one or more banksor other entities (a “Participant”) in all or a portion of such Lender’srights and obligations under this Agreement (including all or a portion of itsCommitment and the Loans owing to it); provided that (A) suchLender’s obligations under this Agreement shall remain unchanged, (B) suchLender shall remain solely responsible to the other parties hereto for theperformance of such obligations and (C) each Borrower, the AdministrativeAgent, the Issuing Bank and the other Lenders shall continue to deal solely anddirectly with such Lender in connection with such Lender’s rights andobligations under this Agreement.  Anyagreement or instrument pursuant to which a Lender sells such a participationshall provide that such Lender shall retain the sole right to enforce the LoanDocuments and to approve any amendment, modification or waiver of any provisionof the Loan Documents; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant,agree to any amendment, modification or waiver described in clauses (ii),(iii) or (vii) of the first proviso to Section 9.02(b) that affects suchParticipant.  Subject toparagraph (c)(ii) of this Section, the Borrowers agree that eachParticipant shall be entitled to the benefits of Sections 2.14, 2.15and 2.16 to the same extent as if it were a Lender and had acquired itsinterest by assignment pursuant to paragraph (b) of this Section; providedsuch Participant agrees to be subject to Section 2.18(a) as thoughit were a Lender.  To the extentpermitted by law, each Participant also shall be entitled to the benefits of Section9.08 as though it were a Lender; provided such Participant agrees tobe subject to Section 2.17(f) as though it 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 Fixed Asset Credit Agreement exceeds $50,000,000 (the “ParticipationAmount”) or (B) the aggregate payments to a Participant under Section 2.14or 2.16 of this Agreement and Section 2.14 or 2.16 ofthe Fixed Asset Credit Agreement in excess of the payments the applicableLender would have been entitled to receive with respect to the participationsold to such Participant is greater than $500,000 per year (the “AdditionalPayment Amount”), a Participant with respect to any amount in excess of theParticipation Amount or any payment in excess of the Additional Payment Amountshall not be entitled to receive greater payment under Section 2.14or 2.16 than the Initial Lender would have been entitled to receive withrespect to the participation sold to such Participant unless the ParentBorrower consents to such participation in excess of the Participation Amountor payment in excess of the Additional Payment Amount (which consent shall notbe unreasonably withheld).  A Participantthat would be a Foreign Lender if it were a Lender shall not be entitled to thebenefits of Section 2.16 unless such Participant agrees, for thebenefit of the Borrowers, to comply with Section 2.16(e) as thoughit were a Lender.

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(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 Section shallnot 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 Parent Borrower, the option to provide to the Borrowers all or any partof any Loan that such Granting Lender would otherwise be obligated to make tothe Borrowers pursuant to this Agreement; provided, however, that(i) nothing herein shall constitute a commitment by any SPC to make any Loanand (ii) if an SPC elects not to exercise such option or otherwise fails toprovide all or any part of such Loan, the Granting Lender shall be obligated tomake such Loan pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall utilize the applicableCommitment of the Granting Lender to the same extent, and as if, such Loan weremade by such Granting Lender.  Each partyhereto hereby agrees that no SPC shall be liable for any indemnity or similarpayment obligation under this Agreement (all liability for which shall remainwith the Granting Lender).  Infurtherance of the foregoing, each party hereto hereby agrees (which agreementshall survive the termination of this Agreement) that, prior to the date thatis one year and one day after the payment in full of all outstanding commercialpaper or other senior indebtedness of any SPC, it will not institute against,or join any other person in instituting against, such SPC any bankruptcy,reorganization, arrangement, insolvency or liquidation proceedings under thelaws of the United States or any State thereof, or the laws of Canada or anyprovince or territory thereof.  Inaddition, notwithstanding anything to the contrary contained in this Section9.04, any SPC may (i) with notice to, but without the prior written consentof, the Parent Borrower and the Administrative Agent and without paying anyprocessing fee therefor, assign all or a portion of its interests in any Loansto the Granting Lender or to any financial institutions (consented to by theParent Borrower 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 and issuance of anyLetters of Credit, regardless of any investigation made by any such other partyor on its behalf and not­with­standing that the Administrative Agent, theIssuing Bank or any Lender may have had notice or knowledge of any Default orincorrect representation or warranty at the time any credit is extendedhereunder, and shall continue in full force and effect as long as the principalof or any accrued interest on any Loan or any fee or any other amount payableunder this Agreement is outstanding and unpaid or any Letter of Credit isoutstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.14, 2.15,2.16,

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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 Letters of Credit and the Commitments or the termination of thisAgreement or any provision hereof.

SECTION 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be executed in counter­parts(and by different parties hereto on different counter­parts), each of whichshall constitute an original, but all of which when taken together shallconstitute a single contract.  ThisAgreement, the other Loan Document and any separate letter agreements withrespect to fees payable to the Administrative Agent, the Arranger or theIssuing Bank constitute the entire contract among the parties relating to thesubject matter hereof and supersede any and all previous agreements and under­standings,oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01,this Agreement shall become effective when it shall have been executed by theAdministrative Agent and when the Administrative Agent shall have receivedcounterparts hereof that, when taken together, bear the signatures of each ofthe other parties hereto, and thereafter shall be binding upon and inure to thebenefit of the parties hereto 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 such jurisdiction,be ineffective to the extent of such invalidity, illegality or unenforceabilitywithout affecting the validity, legality and enforceability of the remainingprovisions hereof; and the invalidity of a particular provision in a particularjurisdiction shall not invalidate such provision in any other jurisdiction.

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 under thisAgreement 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

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claims in respect of any such action or proceeding maybe heard and determined in such New York State or, to the extent permitted bylaw, in such Federal court.  Each of theparties hereto agrees that a final judgment in any such action or proceedingshall be conclusive and may be enforced in other jurisdictions by suit on thejudgment or in any other manner provided by law.  Nothing in this Agreement or any other LoanDocument shall affect any right that the Administrative Agent, the Issuing Bankor 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 have to thelaying of venue of any suit, action or proceeding arising out of or relating tothis Agreement or any other Loan Document in any court referred to inparagraph (b) of this Section.  Eachof the parties hereto hereby irrevocably waives, to the fullest extentpermitted by law, the defense of an inconvenient forum to the maintenance ofsuch action or proceeding in any such court.

(d)           Each party to this Agreementirrevocably consents to service of process in the manner provided for noticesin Section 9.01.  Nothing in thisAgreement or any other Loan Document will affect the right of any party to thisAgreement to serve process in any other manner permitted by law.

(e)           Each Foreign Subsidiary Borrowerhereby irrevocably designates, appoints and empowers CT Corporation System, 111Eighth Avenue, New York, NY 10011 (telephone: (212) 894-8800) (the “ProcessAgent”), in the case of any suit, action or proceeding brought in theUnited States of America as its designee, appointee and agent to receive,accept and acknowledge for and on its behalf, and in respect of its property,service of any and all legal process, summons, notices and documents that maybe served in any action or proceeding arising out of or in connection with thisAgreement or any Loan Document.  Suchservice may be made by mailing (by registered or certified mail, postageprepaid) or delivering a copy of such process to such Foreign SubsidiaryBorrower in care of the Process Agent at the Process Agent’s above address, andsuch Foreign Subsidiary Borrower hereby irrevocably authorizes and directs theProcess Agent to accept such service on its behalf.

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.

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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, the IssuingBank and the Lenders agrees to maintain the confidentiality of the Information(as defined below), except that Information may be disclosed (a) to itsand its Affiliates’ investment advisors, directors, officers, employees andagents, including accountants, 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 contractual counterparty’s professional advisor (it being understood thatthe Persons to whom such disclosure is made will be informed of theconfidential nature of such Information and instructed to keep such Informationconfidential and, in the case of any such contractual counterparty or its professionaladvisor, such persons shall agree in writing to be bound by the provisions ofthis Section 9.12), (b) to the extent requested or demanded by anyGovernmental Authority or any self-regulatory organization (including theNational Association of Insurance Commissioners or other similar organization),(c) to the extent required by applicable laws or regulations or by anysubpoena, order or similar legal process; provided that, to the extentreasonably practicable and not prohibited by applicable laws or regulations orby any judicial or administrative order, such Person will provide the ParentBorrower with prior notice of such disclosure, (d) any nationallyrecognized rating agency that requires access to information about a Lender’sinvestment portfolio in connection with ratings issued with respect to suchLender, (e) to any other party to this Agreement, (f) in connectionwith the exercise of any remedies hereunder or any suit, action or proceedingrelating to this Agreement or any other Loan Document or the enforcement ofrights hereunder or thereunder, (g) subject to an agreement containingprovisions substantially the same as those of this Section, to (i) anyassignee of or Participant in, or any prospective assignee of or Participant in,any of its rights or obligations under this Agreement, or (ii) any actualor prospective counterparty (or its advisors) to any swap or derivativetransaction relating to any Borrower and its obligations, (h) with theconsent of the Parent 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, the IssuingBank or any Lender on a nonconfidential basis from a source other than theParent Borrower, any Subsidiary or any of their Representatives that is notknown to such Person to be subject to any obligation of confidentiality to theParent Borrower or any Subsidiary.  Forthe purposes of this Section, “Information” means all information receivedfrom the Parent Borrower, any Subsidiary or any of their Representativesrelating to the Parent Borrower, the Subsidiaries or their businesses, otherthan any such information that is available to the Administrative Agent, theIssuing Bank or any Lender on a nonconfidential basis prior to disclosure bythe Parent Borrower or any Subsidiary. Any Person required to maintain the confidentiality of Information asprovided in this Section shall be considered to have complied with itsobligation to do so if such Person has exercised the same degree of care tomaintain the confidentiality of such Information as such Person would accord toits 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

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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 with normal banking proceduresin the relevant jurisdiction purchase the Agreement Currency with the JudgmentCurrency; if the amount of the Agreement Currency so purchased is less than thesum originally due to the Applicable Creditor in the Agreement Currency, eachof the Borrowers agrees, as a separate obligation and notwithstanding any suchjudgment, to indemnify 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 inaccordance with applicable law, the rate of interest payable in respect of suchLoan hereunder, together with all Charges payable in respect thereof, shall belimited to the Maximum Rate and, to the extent lawful, the interest and Chargesthat would have been payable in respect of such Loan but were not payable as aresult of the operation of this Section shall be cumulated and the interest andCharges payable to such Lender in respect of other Loans or periods shall beincreased (but not above the Maximum Rate therefor) until such cumulatedamount, together with interest thereon at the Federal Funds Effective Rate tothe date of repayment, shall have been received by such Lender.

SECTION 9.15.  Parallel Obligations.  For the purposes of taking and ensuring thecontinuing validity of security (the “Parallel Debt Security”) under theSecurity Documents subject to the laws of (or to the extent affecting assetssituated in) Germany and such other jurisdictions as the Administrative Agentand the Parent Borrower (each acting reasonably) agree, notwithstanding anycontrary provision in any Loan Document:

(a)           Abstract Acknowledgement ofIndebtedness.

(i)            Each Borrower undertakes (suchundertakings, the “Parallel Obligations”) to pay to the AdministrativeAgent amounts equal to all present and future amounts (the “OriginalObligations”) 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;

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(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 ofits Original Obligations to the relevant Secured Parties shall to the sameextent decrease and be a good discharge of the Parallel Obligations owing by itto the Administrative 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 or preservationof rights under, or to enforce any Security Agreement as contemplated by, thisAgreement and/or the relevant Security Agreement (or to do any act reasonablyincidental 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                 |
|--------|------------------------------------|
|   |                               |   |
|   |                               |   |
|   | By:                                |   |   |
|   |                               | Name: |   |
|   |                               | Title |   |
|   |                               |   |   |
|   | UNIPLAST HOLDINGS, INC.            |
|   |                               |
|   |                               |   |   |
|   | By:                                |   |   |
|   |                               | Name: |   |
|   |                               | Title |   |
|   |                               |   |   |
|   | PLIANT CORPORATION PTY LTD.        |
|   |                               |
|   |                               |   |   |
|   | By:                                |   |   |
|   |                               | Name: |   |
|   |                               | Title |   |
|   |                               |   |   |
|   | PLIANT CORPORATION OF CANADA  LTD. |
|   |                               |
|   |                               |   |   |
|   | By:                                |   |   |
|   |                               | Name: |   |
|   |                               | Title |   |
|   |                               |   |   |
|   | UNIPLAST INDUSTRIES CO.            |
|   |                               |
|   |                               |   |   |
|   | By:                                |   |   |
|   |                               | Name: |   |
|   |                               | Title |   |

 

 

[SIGNATURE PAGE TOWORKING CAPITAL CREDIT AGREEMENT]

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

 

 

[SIGNATURE PAGE TOWORKING CAPITAL CREDIT AGREEMENT]

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|        | UNIPLAST U.S., INC. |
|--------|---------------------|
|   |                |   |   |
|   |                |   |   |
|   | By:                 |   |   |
|   |                | Name: |   |
|   |                | Title |   |

 

 

[SIGNATURE PAGE TOWORKING CAPITAL CREDIT AGREEMENT]

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|        | MERRILL LYNCH BANK USA, as  Administrative Agent, Swingline Lender,

and Domestic 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 TOWORKING CAPITAL CREDIT AGREEMENT]

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|        | MERRILL LYNCH BANK USA, as Issuing  Bank |
|--------|------------------------------------------|
|   |                                     |
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|   | By:                                      |   |   |
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[SIGNATURE PAGE TOWORKING CAPITAL CREDIT AGREEMENT]

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