Document:

<PAGE>

                                                                    EXHIBIT 10.1

                                                                  CONFORMED COPY

                           WAIVER AND AMENDMENT NO. 3

         WAIVER AND AMENDMENT NO. 3 (the "Amendment") dated as of December 10,
2001 of the Credit Agreement dated as of April 7, 1994 and amended and restated
as of March 15, 1999, as amended by Waiver and Amendment No. 1 dated as of
December 16, 1998, further amended and restated as of March 15, 1999, further
amended by Amendment No. 1 dated as of April 23, 1999, further amended and
restated as of April 12, 2000 and September 30, 2000, further amended by
Amendment No. 1 dated as of December 31, 2000, further amended and restated as
of April 15, 2001 and further amended by Waiver and Amendment No. 1 dated as of
June 15, 2001 and Amendment No. 2 dated as of September 28, 2001 (the "Credit
Agreement"), among APPLIED EXTRUSION TECHNOLOGIES, INC. (the "Company"), the
LENDERS party thereto (the "Lenders") and JPMORGAN CHASE BANK, formerly known as
THE CHASE MANHATTAN BANK, as Administrative Agent (the "Administrative Agent").

                                   WITNESSETH:

         WHEREAS, the Company and the Lenders have agreed to amend the net worth
and leverage ratio covenants and to permit the termination of the current Tenter
I Assets sale-leaseback arrangement;

         NOW, THEREFORE, the parties hereto agree as follows:

         Section 1. Definitions; References. Unless otherwise specifically
defined in the recitals above, each term used herein which is defined in the
Credit Agreement shall have the meaning assigned to such term in the Credit
Agreement.

         Section 2. Amendment of Section 9.09. Section 9.09 of the Credit
Agreement is amended to replace "$85,000,000" with "$68,000,000" and "September
30, 1997" with "December 31, 2001".

<PAGE>

     Section 3. Amendment of Section 9.11. The chart set forth in Section
9.11(a) of the Credit Agreement is amended for the period set forth below to
read as follows:

     Period                                               Ratio

     October 1, 2001 through December 31, 2001            6:00:1

     Section 4. Waiver of Sections 3.02(b)(i)(4), 9.12 and 9.18. Sections
3.02(b)(i)(4), 9.12 and 9.18 of the Credit Agreement are waived to the extent
(and only to the extent) necessary to permit the Company (i) to repurchase the
Tenter I Assets without the cost of such repurchase, not to exceed $20,000,000,
counting as a Capital Expenditure, and (ii) once the Company has repurchased the
Tenter I Assets and terminated its current sale-leaseback arrangement with
respect to the Tenter I Assets, to enter into a new sale-leaseback arrangement
with respect to such assets, as permitted pursuant to Section 9.12(viii),
without being required to deposit the Net Cash Proceeds thereof with the
Administrative Agent or to prepay the Loans or provide cover for Letter of
Credit Liabilities therewith.

     Section 5. Representations of Company. The Company represents and warrants
that (i) the representations and warranties of the Company and its Subsidiaries
made in each Basic Document shall be true (or, in the case of Basic Documents
which are not Financing Documents, true in all material respects) on and as of
the Amendment Effective Date (as hereinafter defined) to the same extent as they
would be required to be under Section 7.01(b) on the occasion of any Loan or
issuance of any Letter of Credit and (ii) no Default will have occurred and be
continuing on such date.

     Section 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     Section 7. Counterparts; Effectiveness. This Amendment may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Amendment shall become effective as of the date first above written (the
"Amendment Effective Date") when the Administrative Agent shall have received
(i) from each of the Company and the Majority Lenders a counterpart hereof
signed by such party or facsimile or other written confirmation (in form
satisfactory to the Administrative Agent) that such party has signed a
counterpart hereof and (ii) from the Company for the account of each Lender
which has delivered an executed counterpart hereof (or satisfactory confirmation
thereof) to the Administrative Agent on or before December 14, 2001 an amendment
fee

                                        2

<PAGE>

equal to 0.05% of such Lender's Working Capital Commitment as in effect
immediately prior to December 14, 2001.

                                       3

<PAGE>

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

                                        APPLIED EXTRUSION TECHNOLOGIES, INC.

                                        By /s/ Anthony J. Allott
                                           ------------------------------------
                                           Name: Anthony J. Allott
                                           Title: Senior Vice President and
                                                  Chief Financial Officer

                                        JPMORGAN CHASE BANK, formerly known as
                                           THE CHASE MANHATTAN BANK

                                        By /s/ Lawrence Palumbo, Jr.
                                           ------------------------------------
                                           Name: Lawrence Palumbo, Jr.
                                           Title: Vice President

                                        LASALLE BUSINESS CREDIT, INC.

                                        By /s/ Karoline A. Moxham
                                           ------------------------------------
                                           Name: Karoline A. Moxham
                                           Title: Assistant Vice President

        `                               FLEET NATIONAL BANK

                                        By /s/ Daniel Durkin
                                           ------------------------------------
                                           Name: Daniel Durkin
                                           Title: Authorized Officer

                                        4

<PAGE>

                                        PNC BANK, N.A.

                                        By /s/ Susanne Raschner
                                           -----------------------------------
                                           Name:  Susanne Raschner
                                           Title: Vice President

                                        FIRST UNION NATIONAL BANK

                                        By /s/ John T. Trainor
                                           -----------------------------------
                                           Name:  John T. Trainor
                                           Title: Vice President

                                        PROVIDENT BANK

                                        By /s/ Cary M. Sierzputowski
                                           -----------------------------------
                                           Name:  Cary M. Sierzputowski
                                           Title: Vice President

                                        5<PAGE>

                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                                 AMENDMENT NO. 2

                                       TO

                            ASSET PURCHASE AGREEMENT

     This Amendment No. 2 (the "Amendment No. 2") is entered into as of December
_____, 2001, by and among (i) Applied Extrusion Technologies, Inc., a Delaware
corporation (the "Buyer"), and (ii) QPF, LLC, a Mississippi limited liability
company (the "Seller"), and Hood Companies, Inc., a Mississippi corporation (the
"Parent"; each of the Seller and the Parent is sometimes referred to herein as
the "Selling Parties"). The Buyer and the Selling Parties are collectively
referred to herein as the "Parties".

     The Parties entered into an Asset Purchase Agreement dated as of May 3,
2001 (the "Asset Purchase Agreement") and entered into Amendment No. 1 to the
Asset Purchase Agreement dated as of June 12, 2001 ("Amendment No. 1"). The
Parties now desire to enter into this Amendment No. 2 in order to amend and
supplement certain of the terms and provisions of such Asset Purchase Agreement
as amended by Amendment No. 1. Such Asset Purchase Agreement as amended by
Amendment No. 1 as in effect immediately prior to the effectiveness of this
Amendment No 2 is referred to herein as the "Prior Agreement", and such Asset
Purchase Agreement as in effect immediately after the effectiveness of this
Amendment No 2 is referred to herein as the "Amended Agreement".

     The purpose of this Amendment No. 2 is to amend Section 5.12 of the Prior
Agreement to provide the Buyer the ability to continue to store the Acquired
Assets at the Seller's Streamwood Facility for a period of time from and after
December 31, 2001 as currently provided for in the Prior Agreement.

     Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.

     1.  Amendments to Prior Agreement. Effective as of the date of this
         -----------------------------
Amendment No. 2, the Prior Agreement is hereby amended as follows:

     1.1 Section 5.12 (c)(i) of the Prior Agreement is amended to read in its
entirety as follows:

         (i) Seller shall, and (if applicable) shall cause the Third Party Owner
to, continue to allow the Acquired Assets to remain in the Streamwood Facility
for a period of not less than six (6) months after June 30, 2001 which six (6)
month period will

<PAGE>

end on December 31, 2001; provided that any Inventory at the Streamwood Facility
will be removed in accordance with Section 2.9(d) hereof.

Notwithstanding the above and foregoing, if the Buyer has not removed the
Acquired Assets from the Streamwood Facility on or before December 31, 2001
then, in that event, the Buyer may elect to continue to store the Acquired
Assets in the Streamwood Facility for a period of time of ninety (90) days from
December 31, 2001 which ninety (90) days will end on March 31, 2001. If the
Buyer elects to continue to store the Acquired Assets in the Streamwood Facility
then in such event in order for the Buyer's election to be effective the Buyer
must at least five (5) days before December 31, 2001 (a) notify the Seller in
writing of Buyer's desire to continue to store the Acquired Assets in the
Streamwood Facility for the additional ninety (90) day period and (b) along with
such written notice wire transfer to Seller the amount of Three Hundred Ninety
Thousand and 00/100 ($390,000.00) dollars which represents rent for the
Streamwood Facility for the additional ninety (90) days. In the event that
during the additional ninety (90) days the Buyer removes all of the Acquired
Assets from the Streamwood Facility the Seller shall refund to the Buyer the
prorata amount of rent for the days remaining of the additional ninety (90) day
time period only if the Buyer has given Seller written notice at least sixty
            -------
(60) days prior to the time the Buyer has completely removed all of the Acquired
Assets from the Streamwood Facility that the Buyer is vacating the Streamwood
Facility.

         At least thirty (30) days prior to March 31, 2002 the Seller may elect
to rent the Streamwood Facility for storage of the Acquired Assets for an
additional period of thirty (30) days giving Seller irrevocable written notice
of Buyer's election to continue to rent and store the Acquired Assets in the
Streamwood Facility for an additional thirty (30) day period from and after
March 31, 2001. Buyer's written notice to Seller regarding its desire to
continue to store the Acquired Assets in the Streamwood Facility for an
additional thirty (30) day period shall be irrevocable and thereafter rent shall
be due regardless of whether or not Buyer actually stores the Acquired Assets in
the Streamwood Facility or removes the Acquired Assets prior to the start of the
additional thirty (30) day time period. In the event the Buyer gives irrevocable
notice to Seller pursuant to this paragraph then in such event Buyer agrees to
pay to Seller on April 1, 2002 by wire transfer to Seller the amount of One
Hundred Thirty Thousand and 00/100 ($130,000.00) Dollars which represents rent
for the Streamwood Facility for the additional thirty days from and after March
31, 2002. In no event shall rent be prorated if during the thirty days the
Seller is able to remove the Acquired Assets from the Streamwood Facility.

         From and after May 1, 2002 the Buyer may rent the Streamwood Facility
for the storage of the Acquired Assets on a month to month basis for a monthly
rental amount of One Hundred Thirty Thousand and 00/100 ($130,000.00) Dollars
per month. In order for the Buyer's election to rent the Streamwood Facility for
each preceding month to be effective the Buyer must give the Seller irrevocable
written notice to Buyer's election to rent the Streamwood Facility for the
additional month by giving Seller irrevocable written notice no later than
thirty (30) days prior to the start of the month for which the Buyer desires to
rent the Streamwood Facility. Buyer's written notice to Seller regarding

<PAGE>

its desire to continue to store the Acquired Assets in the Streamwood Facility
for an additional thirty (30) day period shall be irrevocable and thereafter
rent shall be due regardless of whether or not Buyer actually stores the
Acquired Assets in the Streamwood Facility or removes the Acquired Assets prior
to the start of the additional thirty (30) day time period. In the event the
Buyer gives irrevocable notice to Seller pursuant to this paragraph then in such
event Buyer agrees to pay to Seller on the first day of the month for which
irrevocable written notice has been given by Buyer to Seller by wire transfer to
Seller the amount of One Hundred Thirty Thousand and 00/100 ($130,000.00)
Dollars which represents rent for the Streamwood Facility for the additional
thirty days. In no event shall rent be prorated if during the thirty days the
Seller is able to remove the Acquired Assets from the Streamwood Facility.

     At any time from and after January 31, 2002 the Seller may, and (if
applicable) the Third Party Owner may elect to terminate the right of the Buyer
to continue to rent the Acquired Assets at the Streamwood Facility by giving
written notice to the Buyer and thereafter allowing the Buyer sixty (60) days
from and after Buyer's receipt of Seller's written notice to remove the Acquired
Assets. Buyer shall continue to be responsible for rent during the sixty (60)
days but any rent previously paid by Buyer to Seller which relates to rent for
time periods beyond the sixty (60) days shall be refunded by Seller to Buyer by
wire transfer on the day that the Buyer has completely removed the Acquired
Assets from the Streamwood Facility in accordance with Seller's notice to Buyer.

At such time as the Acquired Assets are no longer allowed to remain in the
Streamwood Facility pursuant to the immediately preceding paragraphs, the Buyer
will remove all Acquired Assets from the Streamwood Facility in accordance with
the other provisions of this Section 5.12.

     All terms and conditions of the Prior Agreement regarding the Acquired
Assets and their storage at the Streamwood Facility shall remain in full force
and effect and shall specifically be deemed to be applicable to any and all
extensions of the time period during which the Acquired Assets may be stored at
the Streamwood Facility in accordance with this section and all terms and
conditions of the Prior Agreement regarding the Acquired Assets and their
removal from the Streamwood Facility shall be remain in full force and effect
and shall specifically be deemed to be applicable to any and all extensions of
the time period for any of the additional rent days and time periods from and
after December 31, 2001.

     2.   Miscellaneous.
          -------------

     2.1. Entire Agreement. This Amendment and the Amended Agreement (including
          ----------------
the documents referred to herein and therein) constitute the entire agreement
between the Parties and supersedes any prior understandings, agreements, or
representations by or between the Parties, written or oral, to the extent they
relate in any way to the subject matter hereof.

<PAGE>

     2.2. Counterparts. This Agreement may be executed in one or more
          ------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

     2.3. Headings. The section headings contained in this Agreement are
          --------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

     2.4. Governing Law. This Amendment shall be governed by and construed in
          -------------
accordance with the domestic laws of the State of New York without giving effect
to any choice or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.

     2.5. Effect of Amendments. Except as specifically amended hereby, the Prior
          --------------------
Agreement shall remain unchanged, and the Amended Agreement is hereby confirmed
by each Party as being in full force and effect.

     2.6. Severability. Any term or provision of this Agreement that is invalid
          ------------
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

     2.7. Construction. The Parties have participated jointly in the negotiation
          ------------
and drafting of this Amendment. In the event an ambiguity or question of intent
or interpretation arises, this Amendment shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring either Party by virtue of the authorship of any of the
provisions of this Amendment.

     2.8. Incorporation of Exhibits. The Exhibits identified in this Amendment
          -------------------------
are incorporated herein by reference and made a part hereof.

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.

                                    APPLIED EXTRUSION TECHNOLOGIES, INC.

                                    By: ___________________________________
                                    Title: ________________________________

                                    HOOD COMPANIES, INC.

                                    By: ___________________________________
                                    Title: Vice President
                                          ---------------------------------

<PAGE>

                                   QPF, LLC

                                   By: _____________________________________
                                   Title:    Vice President
                                          ----------------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00033-of-00352.parquet"}]]