Document:

Exhibit 10.3

                           DOMESTIC PLEDGE AGREEMENT

      DOMESTIC PLEDGE AGREEMENT dated as of January 4, 2006 (as it may be
amended, restated, supplemented or modified from time to time, this
"Agreement"), among the entities listed on the signature page hereof
(collectively referred to as the "Pledgors" and individually as a "Pledgor")
and GENERAL ELECTRIC CAPITAL CORPORATION, as Collateral Agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).

                             W I T N E S S E T H:

            WHEREAS, Pliant Corporation (the "Parent Borrower"), the Domestic
Subsidiary Borrowers (as defined therein), the Lenders party thereto (the
"Lenders"), and General Electric Capital Corporation, as Administrative Agent
and Collateral Agent, are parties to that certain Senior Secured, Super
Priority, Priming Debtor-In-Possession Credit Agreement dated as of January 4,
2006 (as amended, restated, supplemented or otherwise modified from time to
time prior to the date hereof, the "Credit Agreement"); and

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

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

            WHEREAS, the obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit are conditioned upon, among other
things, the execution and delivery by the Pledgors of a Pledge Agreement in
the form hereof to secure (a) the due and punctual payment by the Borrowers of
(i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii)
each payment required to be made by the Borrowers under the Credit Agreement
in respect of any Letter of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and obligations to
provide cash collateral and (iii) all other monetary obligations, including
fees, costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
each Loan Party to the Secured Parties under the Credit Agreement and the
other Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of each Loan Party under or pursuant
to the Credit Agreement and the other Loan Documents, (c) the due and punctual
payment and performance of all obligations of the

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Borrowers, monetary or otherwise, under each Swap Agreement that (i) is
effective on the Effective Date with a counterparty that is a Lender (or an
affiliate of a Lender) as of the Effective Date or (ii) is entered into after
the Effective Date with any counterparty that is a Lender (or an Affiliate
thereof) at the time such Swap Agreement is entered into and (d) the due and
punctual payment and performance of all monetary obligations of each Loan
Party in respect of overdrafts and related liabilities owed to any of the
Lenders (or any Affiliates thereof) arising from treasury, depositary and cash
management services or in connection with any automated clearinghouse
transfers of funds (all the monetary and other obligations referred to in the
preceding clauses (a) through (d) being referred to collectively as the
"Obligations").

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

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

            Upon delivery to the Collateral Agent, (a) any stock certificates,
notes or other securities now or hereafter included in the Collateral (the
"Pledged Securities") shall be accompanied by stock powers duly executed in
blank or other instruments of transfer satisfactory to the Collateral Agent
and by such other instruments and documents as the Collateral Agent may
reasonably request and (b) all other property comprising part of the
Collateral shall be accompanied by proper instruments of assignment duly
executed by the applicable Pledgor and such other instruments or documents as
the Collateral Agent may reasonably request. Each delivery of Pledged
Securities shall be accompanied by a schedule describing the securities then

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being pledged hereunder, which schedule shall be attached hereto as Schedule
II and made a part hereof. Each schedule so delivered shall supplement any
prior schedules so delivered.

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

            SECTION 2. Delivery of the Collateral.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

            "The Partnership/Company hereby irrevocably elects that all
            membership interests in the Partnership/Company shall be
            securities governed by Article 8 of the Uniform Commercial Code of
            [jurisdiction of organization or formation, as applicable]. Each
            certificate evidencing partnership/membership interests in the
            Partnership/Company shall bear the following legend: "This
            certificate evidences an interest in [name of Partnership/LLC] and
            shall be a security for purposes of Article 8 of the Uniform
            Commercial Code." No change to this provision shall be

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            effective until all outstanding certificates have been surrendered
            for cancelation and any new certificates thereafter issued shall
            not bear the foregoing legend.

For each interest in any limited liability company or limited partnership
controlled by any Pledgor and pledged hereunder that is not represented by a
certificate, the applicable Pledgor agrees that it shall not, (a) at any time,
elect to treat any such interest as a "security" within the meaning of Article
8 of the Uniform Commercial Code of its jurisdiction of organization or
formation, as applicable, or (b) issue any certificate representing such
interest, unless (i) in the case of clause (a), such Pledgor provides prior
written notification to the Collateral Agent of such election and (ii) in the
case of clause (b), such Pledgor immediately complies with the requirements of
the second paragraph of this Section 4 with respect to such interest and
immediately pledges any such certificate to the Collateral Agent pursuant to
the terms hereof.

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

            SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless
and until an Event of Default shall have occurred and be continuing:

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

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

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

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

            (c) Upon the occurrence and during the continuance of an Event of
Default, all rights of any Pledgor to exercise the voting and consensual
rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of
this Section 5, and the obligations of the Collateral Agent

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under paragraph (a)(ii) of this Section 5, shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall have the
sole and exclusive right and authority to exercise such voting and consensual
rights and powers, provided that, unless otherwise directed by the Required
Lenders, the Collateral Agent shall have the right from time to time following
and during the continuance of an Event of Default to permit the Pledgors to
exercise such rights. After all Events of Default have been cured or waived,
such Pledgor will have the right to exercise the voting and consensual rights
and powers that it would otherwise be entitled to exercise pursuant to the
terms of paragraph (a)(i) above.

            SECTION 6. Remedies upon Default. Upon the occurrence and during
the continuance of an Event of Default, subject to applicable regulatory and
legal requirements and the terms of the Interim Order and the Final Order, the
Collateral Agent may sell the Collateral, or any part thereof, at public or
private sale or at any broker's board or on any securities exchange, for cash,
upon credit or for future delivery as the Collateral Agent shall deem
appropriate and pursuant to the Interim Order and the Final Order, the
automatic stay of Section 362 of the Bankruptcy Code or the Canadian Stay
Order shall be modified and vacated to permit Collateral Agent to exercise its
remedies under this Agreement and the Loan Documents, without further
application or motion to, or order from, the Bankruptcy Court or the Canadian
Court; provided, however, notwithstanding anything to the contrary contained
herein, Collateral Agent shall be permitted to exercise any remedy in the
nature of a liquidation of, or foreclosure on, any interest of any Pledgor in
the Collateral only upon three (3) Business Days' prior written notice to such
Pledgor and counsel approved by the Bankruptcy Court for the Committee. The
Collateral Agent shall be authorized at any such sale (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing the Collateral
for their own account for investment and not with a view to the distribution
or sale thereof, and upon consummation of any such sale the Collateral Agent
shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Collateral so sold. Each such purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on
the part of any Pledgor, and, to the extent permitted by applicable law, the
Pledgors hereby waive all rights of redemption, stay, valuation and appraisal
any Pledgor now has or may at any time in the future have under any rule of
law or statute now existing or hereafter enacted. Upon the occurrence and
during the continuance of an Event of Default and the exercise by Collateral
Agent of its rights and remedies under this Agreement and the other Loan
Documents, the Pledgors shall assist Collateral Agent in effecting a sale or
other disposition of the Collateral upon such terms as are designed to
maximize the proceeds obtainable from such sale or other disposition.

            The Collateral Agent shall give a Pledgor 10 days' prior written
notice (which each Pledgor agrees is reasonable notice within the meaning of
Section 9-611 of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of such Pledgor's Collateral. Such notice, in the
case of a public sale, shall state the time and place for such sale and, in
the case of a sale at a broker's board or on a securities exchange, shall
state the board or exchange at which such sale is to be made and the day on
which the Collateral, or portion thereof, will first be offered for sale at
such board or exchange. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the
Collateral Agent may fix and state in the notice of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one

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lot as an entirety or in separate parcels, as the Collateral Agent may (in its
sole and absolute discretion) determine. The Collateral Agent shall not be
obligated to make any sale of any Collateral if it shall determine not to do
so, regardless of the fact that notice of sale of such Collateral shall have
been given. The Collateral Agent may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid in full by the purchaser or
purchasers thereof, but the Collateral Agent shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be
sold again upon like notice. At any public (or, to the extent permitted by
applicable law, private) sale made pursuant to this Section 6, any Secured
Party may bid for or purchase, free from any right of redemption, stay or
appraisal on the part of any Pledgor (all said rights being also hereby waived
and released), the Collateral or any part thereof offered for sale and may
make payment on account thereof by using any claim then due and payable to it
from such Pledgor as a credit against the purchase price, and it may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to such Pledgor therefor. For purposes hereof,
(a) a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof, (b) the Collateral Agent shall be free to
carry out such sale pursuant to such agreement and (c) such Pledgor shall not
be entitled to the return of the Collateral or any portion thereof subject
thereto, notwithstanding the fact that after the Collateral Agent shall have
entered into such an agreement all Events of Default shall have been remedied
and the Obligations paid in full. As an alternative to exercising the power of
sale herein conferred upon it, the Collateral Agent may proceed by a suit or
suits at law or in equity to foreclose upon the Collateral and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this Section
6 shall be deemed to conform to the commercially reasonable standards as
provided in Section 9-611 of the Uniform Commercial Code as in effect in the
State of New York or its equivalent in other jurisdictions.

            SECTION 7. Application of Proceeds of Sale. The proceeds of any
sale of Collateral pursuant to Section 6, as well as any Collateral consisting
of cash, shall be applied by the Collateral Agent pursuant to Section 2.17(b)
of the Credit Agreement.

            SECTION 8. Reimbursement of Collateral Agent.

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

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

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

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

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directors, employees or agents shall be responsible to any Pledgor for any act
or failure to act hereunder, except for their own gross negligence or wilful
misconduct.

            SECTION 10. Waivers; Amendment.

            (a) No failure or delay of the Collateral Agent in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Collateral Agent hereunder and of the other Secured
Parties under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or consent to any departure by any Pledgor
therefrom shall in any event be effective unless the same shall be permitted
by paragraph (b) below, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice
or demand on any Pledgor in any case shall entitle such Pledgor to any other
or further notice or demand in similar or other circumstances.

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

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

                                      10
<PAGE>

that the Collateral Agent, in its discretion, may in good faith deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a single purchaser were
approached. The provisions of this Section 11 will apply notwithstanding the
existence of a public or private market upon which the quotations or sales
prices may exceed substantially the price at which the Collateral Agent sells.

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

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

                                      11
<PAGE>

to, or a discharge of, any Pledgor in respect of the Obligations or in respect
of this Agreement (other than the indefeasible payment in full of all the
Obligations).

            SECTION 14. Termination or Release.

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

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

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

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

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

                                      12
<PAGE>

            SECTION 16. Further Assurances. Each Pledgor agrees to do such
further acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments, as the Collateral Agent
may at any time reasonably request in connection with the administration and
enforcement of this Agreement or with respect to the Collateral or any part
thereof or in order better to assure and confirm unto the Collateral Agent its
rights and remedies hereunder.

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

            SECTION 18. Survival of Agreement; Severability.

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

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

                                      13
<PAGE>

or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

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

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

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

            SECTION 22. Jurisdiction; Consent to Service of Process.

            (a) Each Pledgor hereby irrevocably and unconditionally submits,
for itself and its property, to the exclusive jurisdiction of the Bankruptcy
Court, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Loan Documents, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that, to the extent permitted by
applicable law, all claims in respect of any such action or proceeding may be
heard and determined in such the Bankruptcy Court; provided, however that the
Collateral Agent and the Pledgors acknowledge that any appeals from the
Bankruptcy Court may have to be heard by a court other than the Bankruptcy
Court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against any Pledgor or
its properties in the courts of any jurisdiction.

            (b) Each Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in the Bankruptcy Court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

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

                                      14
<PAGE>

            SECTION 23. Waiver Of Jury Trial. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.

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

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

            SECTION 25. Intentionally Omitted

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

                                      15
<PAGE>

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

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      16
<PAGE>

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

PLEDGORS:                           PLIANT CORPORATION

                                    By:______________________________________
                                       Name:
                                       Title:

                                    PLIANT SOLUTIONS CORPORATION

                                    By:______________________________________
                                       Name:
                                       Title:

                                    PLIANT CORPORATION INTERNATIONAL

                                    By:______________________________________
                                       Name:
                                       Title:

                                    PLIANT FILM PRODUCTS OF MEXICO, INC.

                                    By:______________________________________
                                       Name:
                                       Title:

                                    PLIANT PACKAGING OF CANADA, LLC

                                    By:______________________________________
                                       Name:
                                       Title:

DOMESTIC PLEDGE AGREEMENT

<PAGE>

                                    UNIPLAST HOLDINGS INC.

                                    By:______________________________________
                                       Name:
                                       Title:

                                    UNIPLAST U.S., INC.

                                    By:______________________________________
                                       Name:
                                       Title:

                                    PLIANT INVESTMENT, INC.

                                    By:______________________________________
                                       Name:
                                       Title:

                                    ALLIANT COMPANY LLC

                                    By:______________________________________
                                       Name:
                                       Title:

COLLATERAL AGENT:                   GENERAL ELECTRIC CAPITAL
                                      CORPORATION

                                    By:______________________________________
                                       Name:
                                       Title:

DOMESTIC PLEDGE AGREEMENT

<PAGE>

                                                             Schedule I to the
                                                     Domestic Pledge Agreement

                              SUBSIDIARY PLEDGORS
                              -------------------

<PAGE>

                                                            Schedule II to the
                                                     Domestic Pledge Agreement

                                 CAPITAL STOCK
                                 -------------

--------------------------------------------------------------------------------

                                                            Number
                                                              and
                                                           Class of
        Issuer           Number of     Registered Owner     Shares   Percentage
                        Certificate                                   of Shares

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                DEBT SECURITIES
                                ---------------

--------------------------------------------------------------------------------

                                Intercompany Note                       Date
                                -----------------                       ----

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

<PAGE>

                                                                Annex 1 to the
                                                              Pledge Agreement

            SUPPLEMENT NO. ___ dated as of __________, 20___, to the DOMESTIC
PLEDGE AGREEMENT (as amended, restated, supplemented or otherwise modified
from time to time, the "Domestic Pledge Agreement") dated as of January 4,
2006, among each of the parties listed on the signature pages thereto and
those additional entities that thereafter become parties thereto (each a
"Pledgor" and collectively, the "Pledgors") and GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent (in such capacity, the "Collateral Agent")
for the Secured Parties (as defined in the Credit Agreement referred to below)

            A. Reference is made to (a) the Senior Secured, Super Priority,
Priming Debtor-In-Possession Credit Agreement dated as of January 4, 2006 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrower, the Domestic Subsidiary Borrowers, the
Lenders party thereto (the "Lenders"), and General Electric Capital
Corporation, as Administrative Agent and Collateral Agent and (b) the
Guarantee Agreement dated as of January 4, 2006 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee Agreement"), among the
certain of the Pledgors and the Administrative Agent.

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

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

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

            SECTION 1. In accordance with Section 24 of the Pledge Agreement,
the New Pledgor by its signature below becomes a Pledgor under the Domestic
Pledge Agreement with the same force and effect as if originally named therein
as a Pledgor and the New Pledgor hereby agrees (a) to all the terms and
provisions of the Domestic Pledge Agreement applicable to it as a Pledgor
thereunder and (b) represents and warrants that the representations and
warranties made by it as a Pledgor thereunder are true and correct on and as
of the date hereof. In furtherance of the foregoing, the New Pledgor, as
security for the payment and performance in full of the Obligations (as
defined in the Domestic Pledge Agreement), does hereby create and grant to the

<PAGE>

Collateral Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all
of the New Pledgor's right, title and interest in and to the Collateral (as
defined in the Domestic Pledge Agreement) of the New Pledgor. Each reference
to a "Subsidiary Pledgor" or a "Pledgor" in the Domestic Pledge Agreement
shall be deemed to include the New Pledgor. The Domestic Pledge Agreement is
hereby incorporated herein by reference.

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

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

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

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

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

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

            SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 15 of the Domestic Pledge Agreement.
All communications and notices hereunder to the New Pledgor shall be given to
it at the address set forth under its signature hereto.

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

                                      2

<PAGE>

                                                                             3

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      3
<PAGE>

                                                                Annex 1 to the
                                                              Pledge Agreement

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

                            [NAME OF NEW PLEDGOR],

                                By:___________________________________________
                                   Name:
                                   Title:
                                   Address:

                             GENERAL ELECTRIC CAPITAL CORPORATION, AS
                             COLLATERAL AGENT,

                                By:___________________________________________
                                   Name:
                                   Title:

<PAGE>

                                                                 Schedule I to
                                                             Supplement No __.
                                              to the Domestic Pledge Agreement

                     Pledged Securities of the New Pledgor
                     -------------------------------------

                                 CAPITAL STOCK

Issuer         Number of        Registered      Number and      Percentage
------         Certificate      Owner           Class of        of Shares
               -----------      -----           Shares          ---------
                                                ------

                                DEBT SECURITIES

         Issuer         Principal       Date of         Maturity
         ------         Amount          Note            Date
                        ------          ----            ----Exhibit 10.4

                          CANADIAN SECURITY AGREEMENT

          CANADIAN SECURITY AGREEMENT dated as of January 4, 2006 (as it may
be amended, restated, supplemented or modified from time to time, this
"Agreement"), among the entities listed on the signature page hereof
(collectively referred to as the "Grantors" and individually as a "Grantor")
and GENERAL ELECTRIC CAPITAL CORPORATION, as collateral agent (in such
capacity, the "Collateral Agent") for the Secured Parties (as defined herein).

                             W I T N E S S E T H:
                             - - - - - - - - - -

          WHEREAS, Pliant Corporation (the "Parent Borrower"), the Domestic
Subsidiary Borrowers (as defined therein), the Lenders party thereto (the
"Lenders"), and General Electric Capital Corporation, as Administrative Agent
and Collateral Agent are parties to that certain Senior Secured, Super
Priority, Priming Debtor-In-Possession Credit Agreement dated as of January 4,
2006 (as amended, restated, supplemented or otherwise modified from time to
time prior to the date hereof, the "Credit Agreement");

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

          WHEREAS, the obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit under the Credit Agreement are
conditioned upon, among other things, the execution and delivery by the
Grantors of an agreement in the form hereof to secure (a) the due and punctual
payment by the Borrowers of (i) the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates set for
prepayment, or otherwise, (ii) each payment required to be made by the
Borrowers under the Credit Agreement in respect of any Letter of Credit, when
and as due, including payments in respect of reimbursement of disbursements,
interest thereon and obligations to provide cash collateral and (iii) all
other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of each Loan Party to the Secured
Parties under the Credit Agreement and the other Loan Documents, (b) the due
and punctual performance of all covenants, agreements, obligations and
liabilities of each Loan Party under or pursuant to the Credit Agreement and
the other Loan Documents, (c) the due and punctual payment and performance of
all obligations of each Loan Party, monetary or otherwise, under each Swap
Agreement that (i) is effective on the Effective Date with a counterparty that
is a Lender (or an Affiliate of a Lender) as of the Effective Date or (ii) is
entered into after the Effective Date with any counterparty that is a

<PAGE>

Lender (or an Affiliate thereof) at the time such Swap Agreement is entered
into and (d) the due and punctual payment and performance of all monetary
obligations of each Loan Party in respect of overdrafts and related
liabilities owed to any of the Lenders (or any Affiliates thereof) arising
from treasury, depositary and cash management services or in connection with
any automated clearinghouse transfers of funds (all the monetary and other
obligations described in the preceding clauses (a) through (d) being
collectively called the "Obligations").

          ACCORDINGLY, each of the Grantors and the Collateral Agent, on
behalf of itself and each Secured Party (and each of their respective
successors or assigns), hereby agrees as follows:

                                  ARTICLE I

                                  Definitions

     SECTION 1.01. Definition of Terms Used Herein. Unless the context
otherwise requires, all capitalized terms used but not defined herein shall
have the meanings set forth in the Credit Agreement.

     SECTION 1.02. Definition of Certain Terms Used Herein. As used herein,
the following terms shall have the following meanings:

     "Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.

     "Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.

     "Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities
and guarantees with respect thereto, including any rights to stoppage in
transit, replevin, reclamation and resales, and all related security
interests, liens and pledges, whether voluntary or involuntary, in each case
whether now existing or owned or hereafter arising or acquired.

     "Chattel Paper" shall mean all "chattel paper" as such term is defined in
the PPSA.

     "Collateral" means all of the present and future undertaking, personal
property (including any personal property that may be described in any
Schedule to this Agreement or any schedules, documents or listings that a
Grantor may from time to time sign and provide to the Collateral Agent in
connection with this Agreement) of the Grantor (including all such property at
any time owned, leased or licensed by the Grantor, or in which the Grantor at
any time has any interest or to which the Grantor is or may at any time become
entitled) and all Proceeds thereof, wherever located including, without
limiting the generality of the foregoing, the following:

          (a) all Accounts Receivable;

                                     -2-
<PAGE>

          (b) all Chattel Paper;

          (c) all Documents;

          (d) all Equipment;

          (e) all fixtures;

          (f) all General Intangibles;

          (g) all Instruments;

          (h) all Inventory;

          (i) all money, cash and cash accounts;

          (j) all Investment Property;

          (k) all books and records pertaining to the Collateral;

          (l) all letter-of-credit rights; and

          (m) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing.

          "Consumer Goods" shall mean goods that are used or bought for use
primarily for personal, family or household purposes.

          "Copyright License" shall mean any written agreement, now or
hereafter in effect, granting any right to any third party under any Copyright
now or hereafter owned by any Grantor or which such Grantor otherwise has the
right to license, or granting any right to such Grantor under any Copyright
now or hereafter owned by any third party, and all rights of such Grantor
under any such agreement.

          "Copyrights" shall mean all of the following now owned or hereafter
acquired by any Person: (a) all copyright rights in any work subject to the
copyright laws of the United States or Canada, whether as author, assignee,
transferee or otherwise, and (b) all registrations and applications for
registration of any such copyright in the United States or Canada, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office or the Canadian
Intellectual Property Office, including those listed on Schedule II.

          "Credit Agreement" shall have the meaning assigned to such term in
the preliminary statement of this Agreement.

          "Credit Card Payments" shall mean all payments received or
receivable by or on behalf of any Grantor in respect of sales of Inventory
paid for by credit card charges, including payments from financial
institutions that process credit card transactions for any of the Grantors.

                                     -3-
<PAGE>

          "Daily Receipts" shall mean all amounts received by the Grantors,
whether in the form of cash, checks, any moneys received or receivable in
respect of charges made by means of credit cards, and other negotiable
instruments, in each case as a result of the sale of Inventory or in respect
of Accounts Receivable.

          "Documents" shall mean all instruments, files, records, ledger
sheets and documents covering or relating to any of the Collateral.

          "Entitlement Holder" shall mean a Person identified in the records
of a Security Intermediary as the Person having a Security Entitlement against
the Security Intermediary.

          "Equipment" shall mean all "equipment" as such term is defined in
the PPSA, and in any event, all equipment, furniture, fixtures and
furnishings, including tools, parts and supplies of every kind and
description, and all improvements, accessions or appurtenances thereto, that
are now or hereafter owned by any Grantor.

          "Farm Products" shall mean goods, other than standing timber, with
respect to which the debtor is engaged in a farming operation and which are:
(a) crops grown, growing or to be grown, including: (i) crops produced on
trees, vines and bushes; and (ii) aquatic goods produced in aquacultural
operations; (b) livestock, born or unborn, including aquatic goods produced in
aquacultural operations; (c) supplies used or produced in a farming operation;
and (d) products of crops or livestock in their unmanufactured states.

          "Financial Asset" shall mean (a) a Security, (b) an obligation of a
Person or a share, participation or other interest in a Person or in property
or an enterprise of a Person, which is, or is of a type, dealt with in or
traded on financial markets, or which is recognized in any area in which it is
issued or dealt in as a medium for investment or (c) any property that is held
by a Security Intermediary for another Person in a Securities Account. As the
context requires, the term Financial Asset shall mean either the interest
itself or the means by which a Person's claim to it is evidenced, including a
certificated or uncertificated Security, a certificate representing a Security
or a Security Entitlement.

          "General Intangibles" shall mean all "intangibles" as such term is
defined in the PPSA, and in any event, with respect to any Grantor, all choses
in action and causes of action and all other assignable intangible personal
property of any Grantor of every kind and nature (other than Accounts
Receivable) now owned or hereafter acquired by any Grantor, including
corporate or other business records, indemnification claims, contract rights
(including rights under leases, whether entered into as lessor or lessee, Swap
Agreements and other agreements but excluding contract rights in contracts
which contain an enforceable prohibition on assignment or the granting of a
security interest), Intellectual Property, goodwill, registrations,
franchises, tax refund claims and any letter of credit, guarantee, claim,
security interest or other security held by or granted to any Grantor to
secure payment by an Account Debtor of any of the Accounts Receivable.

          "Goods" shall mean all things that are movable when a security
interest attaches. This term includes (i) fixtures, (ii) standing timber that
is to be cut and removed under a conveyance or contract for sale, (iii) the
unborn young of animals, (iv) crops grown, growing or

                                     -4-
<PAGE>

to be grown, even if the crops are produced on trees, vines, or bushes, and
(v) manufactured homes. This term also includes a computer program embedded in
goods and any supporting information provided in connection with a transaction
relating to the program if (i) the program is associated with the goods in
such a manner that is customarily is considered part of the goods, or (ii) by
becoming the owner of the goods, a person acquires a right to use the program
in connection with the goods. The term does not include a computer program
embedded in goods that consists solely of the medium in which the program is
embedded. The term also does not include accounts, chattel paper, commercial
tort claims, deposit accounts, documents, general intangibles, instruments,
investment property, letter-of-credit rights, letters of credit, money or oil,
gas, or other minerals before extraction.

          "Instrument" shall mean "instrument" as such term is defined in the
PPSA.

          "Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how, show-how or other data or information,
software and databases and all embodiments or fixations thereof and related
documentation and registrations, and all additions, improvements and
accessions to, and books and records describing or used in connection with,
any of the foregoing.

          "Intellectual Property Rights" shall have the meaning assigned to
such term in Section 3.01.

          "Inventory" shall mean all "inventory" as such term is defined in
the PPSA, and in any event, all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing
supplies and spare parts, and all such goods that have been returned to or
repossessed by or on behalf of any Grantor.

          "Investment Property" shall mean all Securities (whether
certificated or uncertificated), Security Entitlements and Securities
Accounts, whether now owned or hereafter acquired by any Grantor.

          "License" shall mean any Patent License, Trademark License,
Copyright License or other franchise agreement, license or sublicense to which
any Grantor is a party, including those listed on Schedule III.

          "Obligations" shall have the meaning assigned to such term in the
preliminary statement of this Agreement.

          "PPSA" shall mean the Personal Property Security Act (Ontario), as
such legislation may be amended, renamed or replaced from time to time (and
includes all regulations from time to time made under such legislation).

                                     -5-
<PAGE>

          "Patent License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a Patent, now or hereafter owned by any Grantor or which
any Grantor otherwise has the right to license, is in existence, or granting
to any Grantor any right to make, use or sell any invention on which a Patent,
now or hereafter owned by any third party, is in existence, and all rights of
any Grantor under any such agreement.

          "Patents" shall mean all of the following now owned or hereafter
acquired by any Person: (a) all letters patent of the United States or Canada,
all registrations and recordings thereof, and all applications for letters
patent of the United States or Canada, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or the
Canadian Intellectual Property Office, including those listed on Schedule IV,
and (b) all reissues, continuations, divisions, continuations-in-part,
renewals or extensions thereof, and the inventions disclosed or claimed
therein, including the right to make, use and/or sell the inventions disclosed
or claimed therein.

          "Perfection Certificate" shall mean a certificate substantially in
the form of Annex 1 (or any other form approved by the Collateral Agent),
completed and supplemented with the schedules and attachments contemplated
thereby, and duly executed by a Financial Officer and the chief legal officer
of the Parent Borrower.

          "Proceeds" shall mean all "proceeds" as such term is defined in the
PPSA and, in any event, shall include with respect to any Grantor any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that constitutes Collateral, any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property which constitutes Collateral, and shall
include, (a) any claim of any Grantor against any third party for (and the
right to sue and recover for and the rights to damages or profits due or
accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution
of any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by
any Trademark now or hereafter owned by any Grantor, (iii) past, present or
future breach of any License and (iv) past, present or future infringement of
any Copyright now or hereafter owned by any Grantor or licensed under a
Copyright License and (b) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.

          "Receiver" shall mean a receiver, a manager or a receiver and
manager.

          "Secured Parties" shall mean (a) the Lenders, (b) the Administrative
Agent, (c) the Collateral Agent, (d) the Issuing Bank, (e) each counterparty
to a Swap Agreement with a Loan Party the obligations under which constitute
Obligations, (f) the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Loan Document, (g) each lender in respect
of overdrafts and related liabilities owed to any of the Lenders (or any
Affiliates thereof) and arising from treasury, depositary and cash management
services or in connection

                                     -6-
<PAGE>

with any automated clearinghouse transfers of funds and (h) the permitted
successors and assigns of each of the foregoing.

          "Securities" shall mean the plural of "security" as such term is
defined in the PPSA, and in any event, any obligations of an issuer or any
shares, participations or other interests in an issuer or in property or an
enterprise of an issuer which (a) are represented by a certificate
representing a security in bearer or registered form, or the transfer of which
may be registered upon books maintained for that purpose by or on behalf of
the issuer, (b) are one of a class or series or by its terms is divisible into
a class or series of shares, participations, interests or obligations or
(c)(i) are, or are of a type, dealt with or traded on securities exchanges or
securities markets or (ii) are a medium for investment.

          "Securities Account" shall mean an account to which a Financial
Asset is or may be credited in accordance with an agreement under which the
Person maintaining the account undertakes to treat the Person for whom the
account is maintained as entitled to exercise rights that comprise the
Financial Asset.

          "Security Entitlements" shall mean the rights and property interests
of an Entitlement Holder with respect to a Financial Asset.

          "Security Interest" shall have the meaning assigned to such term in
Section 2.01.

          "Security Intermediary" shall mean (a) a clearing corporation or (b)
a Person, including a bank or broker, that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

          "Trademark License" shall mean any written agreement, now or
hereafter in effect, granting to any third party any right to use any
Trademark now or hereafter owned by any Grantor or which any Grantor otherwise
has the right to license, or granting to any Grantor any right to use any
Trademark now or hereafter owned by any third party, and all rights of any
Grantor under any such agreement.

          "Trademarks" shall mean all of the following now owned or hereafter
acquired by any Person: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith,
including registrations and registration applications in the United States
Patent and Trademark Office, any State of the United States or the Canadian
Intellectual Property Office, and all extensions or renewals thereof,
including those listed on Schedule V, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that
uniquely reflect or embody such goodwill.

          "U.S.$" refers to the lawful currency of the United States of
America.

          "U.S. Intellectual Property" shall have the meaning assigned to such
term in Section 3.02(b).

                                     -7-
<PAGE>

     SECTION 1.03. Rules of Interpretation. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.

                                  ARTICLE II

                               Security Interest

     SECTION 2.01. Security Interest. (a) As general and continuing collateral
security for the due payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of all Obligations, each Grantor
hereby mortgages, charges and assigns to the Collateral Agent, and grants to
the Collateral Agent, for the ratable benefit of the Secured Parties, a
security interest (the "Security Interest") in, the Collateral.

     (b) The grant of any Security Interest in respect of the Collateral shall
not include with respect to any Grantor, any item of property to the extent
the grant by such Grantor of a security interest pursuant to this Agreement in
such Grantor's right, title and interest in such item of property is
prohibited by an applicable enforceable contractual obligation (including but
not limited to a Capital Lease Obligation) or requirement of law or would give
any other Person the enforceable right to terminate its obligations with
respect to such item of property and provided, further, that the limitation in
the foregoing proviso shall not affect, limit, restrict or impair the grant by
any Grantor of a security interest pursuant to this Agreement in any money or
other amounts due or to become due under any Account, contract, agreement or
General Intangible. In addition, the Security Interests created by this
Agreement do not extend to the last day of the term of any lease or agreement
for lease of real property. Such last day shall be held by the Grantor in
trust for the Collateral Agent and, on the exercise by the Collateral Agent of
any of its rights under this Agreement following the occurrence and during the
continuance of an Event of Default, will be assigned by the Grantor as
directed by the Collateral Agent.

     (c) Each Grantor confirms that value has been given by the Collateral
Agent and the other Secured Parties to the Grantor, that the Grantor has
rights in the Collateral (other than after-acquired property) and that the
Grantor and the Collateral Agent have not agreed to postpone the time for
attachment of the Security Interests created by this Agreement to any of the
Collateral.

     (d) Each Grantor hereby irrevocably authorizes the Collateral Agent at
any time and from time to time to file in any relevant jurisdiction any
financing statements with respect to the Collateral or any part thereof and
amendments thereto. Each Grantor also ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any financing statements
or amendments thereto if filed prior to the date hereof.

     The Collateral Agent is further authorized to file with the United States
Patent and Trademark Office, the United States Copyright Office or the
Canadian Intellectual Property Office such documents as may be necessary or
advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest in and to the Intellectual Property granted
by each Grantor, without the signature of any Grantor (but, prior to the
occurrence of any Event of Default or Default, the Collateral Agent shall
provide notice of such

                                     -8-
<PAGE>

filing to such Grantor), and naming any Grantor or the Grantors as debtors and
the Collateral Agent as secured party.

     SECTION 2.02. No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Collateral Agent or any
other Secured Party to, or in any way alter or modify, any obligation or
liability of any Grantor with respect to or arising out of the Collateral.

                                 ARTICLE III

                        Representations and Warranties

     The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:

     SECTION 3.01. Title and Authority. Each Grantor has good and valid rights
in and title to the Collateral with respect to which it has purported to grant
a Security Interest hereunder and has full power and authority to grant to the
Collateral Agent the Security Interest in such Collateral pursuant hereto and
to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other Person other
than any consent or approval which has been obtained or the failure of which
to obtain could not reasonably be expected to have a Material Adverse Effect.

     Each Grantor further represents and warrants that all Intellectual
Property owned by such Grantor, and all rights of the Grantor pursuant to any
Trademark License, Patent License or Copyright License to use any Intellectual
Property (collectively, "Intellectual Property Rights"), are described in the
attached schedules and the Perfection Certificate. To the best of the
Grantor's knowledge, each such Intellectual Property Right is valid,
subsisting, unexpired, enforceable and has not been abandoned. Except as set
out in the Perfection Certificate and the schedules hereto, none of such
Intellectual Property Rights has been licensed or franchised by the Grantor to
any Person.

     SECTION 3.02. (a) Filings. The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Personal Property Security Act financing statements in
each relevant jurisdiction are all the filings, recordings and registrations
(other than filings, recordings and registrations required to be made in the
United States Patent and Trademark Office, the United States Copyright Office
or the Canadian Intellectual Property Office in order to perfect the Security
Interest in Collateral consisting of Intellectual Property) that are necessary
to publish notice of and protect the validity of and to establish a legal,
valid and perfected security interest in favor of the Collateral Agent (for
the ratable benefit of the Secured Parties) in respect of all Collateral in
which the Security Interest may be perfected by filing, recording or
registration in any relevant jurisdiction, and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary in any such jurisdiction, except as provided under applicable law
with respect to the filing of continuation statements and such filings,
recordings and registrations as may be necessary to perfect the Security
Interest as a result of any event described in Section 5.03 of the Credit
Agreement.

                                     -9-
<PAGE>

                   (b) Each Grantor represents and warrants that fully
executed security agreements in the form hereof (or a fully executed
short-form agreement in form and substance reasonably satisfactory to the
Collateral Agent) and containing a description of all Collateral consisting of
Intellectual Property shall have been received and recorded within 10 days
after the execution of this Agreement with respect to United States Patents,
United States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
by the United States Patent and Trademark Office and the United States
Copyright Office, in each case pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss.
1060 or 17 U.S.C. ss. 205 and the regulations thereunder (or in any similar
office in Canada within the time period prescribed by applicable law and
regulations), as applicable, to protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral
consisting of Patents, Trademarks and Copyrights in which a security interest
may be perfected by filing, recording or registration in the United States or
Canada (or any political subdivision of either) and no further or subsequent
filing, refiling, recording, rerecording, registration or reregistration is
necessary (other than such actions as are necessary to perfect the Security
Interest with respect to any Collateral consisting of Patents, Trademarks and
Copyrights (or registration or application for registration thereof) acquired
or developed after the date hereof).

     SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording
or registering a financing statement or analogous document in the United
States or Canada (or any political subdivision of either) pursuant to the
Uniform Commercial Code, the PPSA or other applicable law in such
jurisdictions and (c) a security interest that shall be perfected in all
Collateral in which a security interest may be perfected in the United States
Patent and Trademark Office and the United States Copyright Office upon the
receipt and recording of this Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, within
the period provided in Section 3.02(b) pursuant to 35 U.S.C. ss. 261, 15
U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and otherwise as may be required pursuant
to the laws of any other necessary jurisdiction. The Security Interest is and
shall be prior to any other Lien on any of the Collateral, other than Liens
expressly permitted to be prior to the Security Interest pursuant to Section
6.03 of the Credit Agreement and subject only to (i) the Senior Claims and
(ii) the Carve-Out Expenses limited to the Carve-Out Amount..

     SECTION 3.04. Absence of Other Liens. Except for the Security Interest
created by this Agreement and other Liens expressly permitted pursuant to
Section 6.03 of the Credit Agreement, the Grantors own (or, with respect to
any leased or licensed property forming part of the Collateral, hold a valid
leasehold or licensed interest in) the Collateral free and clear of any Liens.
No security agreement, financing statement or other notice with respect to any
or all of the Collateral is on file or on record in any public office, except
for filings in favour of the Collateral Agent or with respect to Liens
expressly permitted pursuant to Section 6.03 of the Credit Agreement.

                                     -10-
<PAGE>

                                  ARTICLE IV

                                   Covenants

     SECTION 4.01. Records. Each Grantor agrees to maintain, at its own cost
and expense, such complete and accurate records with respect to the Collateral
owned by it as is consistent with its current practices and in accordance with
such prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged, but in any event to include
complete accounting records indicating all payments and proceeds received with
respect to any part of the Collateral, and, at such time or times as the
Collateral Agent may reasonably request, promptly to prepare and deliver to
the Collateral Agent a duly certified schedule or schedules in form and detail
reasonably satisfactory to the Collateral Agent showing the identity, amount
and location of any and all Collateral.

     SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
not expressly permitted pursuant to Section 6.03 of the Credit Agreement.

     SECTION 4.03. Further Assurances. Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent may from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection
with the execution and delivery of this Agreement, the granting of the
Security Interest and the filing of any financing statements or other
documents in connection herewith or therewith. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to the Collateral Agent, duly endorsed in a
manner satisfactory to the Collateral Agent.

     Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors,
to supplement this Agreement by supplementing Schedule II, III, IV or V or
adding additional schedules hereto to specifically identify any registered
asset or item that may constitute Copyrights, Patents or Trademarks; provided,
however, that any Grantor shall have the right, exercisable within 30 days
after it has been notified by the Collateral Agent of the specific
identification of such Collateral, to advise the Collateral Agent in writing
of any inaccuracy of the representations and warranties made by such Grantor
hereunder with respect to such Collateral. Each Grantor agrees that it will
use its best efforts to take such action as shall be necessary in order that
all representations and warranties hereunder shall be true and correct with
respect to such Collateral within 30 days after the date it has been notified
by the Collateral Agent of the specific identification of such Collateral.

     SECTION 4.04. Inspection and Verification. Subject to the limitations set
forth in Section 5.09 of the Credit Agreement, any Agent and such Persons as
such Agent may

                                     -11-
<PAGE>

reasonably designate shall have the right, at the Grantors' own cost and
expense, to inspect the Collateral, all records related thereto (and to make
extracts and copies from such records) and the premises upon which any of the
Collateral is located, to discuss the Grantors' affairs with the officers of
the Grantors and their independent accountants and to verify under reasonable
procedures the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to, the Collateral, including, in the
case of Accounts or Collateral in the possession of any third party, by
contacting Account Debtors or the third person possessing such Collateral for
the purpose of making such a verification. The Agents shall have the absolute
right to share any information it gains from such inspection or verification
with any Secured Party (it being understood that any such information shall be
deemed to be "Information" subject to the provisions of Section 10.12 of the
Credit Agreement).

     SECTION 4.05. Taxes; Encumbrances. At its option, the Collateral Agent
may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not permitted pursuant to Section 6.03 of the Credit Agreement, and may
pay for the maintenance and preservation of the Collateral to the extent any
Grantor fails to do so as required by the Credit Agreement or this Agreement,
and each Grantor jointly and severally agrees to reimburse the Collateral
Agent on demand for any payment made or any expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing
in this Section 4.05 shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any
Grantor with respect to taxes, assessments, charges, fees, Liens, security
interests or other encumbrances and maintenance as set forth herein or in the
other Loan Documents.

     SECTION 4.06. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any
other Person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Collateral Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.

     SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.

     SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except
as expressly permitted by Section 6.03 of the Credit Agreement. Unless and
until the Collateral Agent shall notify the Grantors that (i) an Event of
Default shall have occurred and be continuing and (ii) during the continuance
thereof the Grantors shall not sell, convey, lease, assign, transfer or
otherwise dispose of any Collateral (which notice may be given by telephone if
promptly confirmed in writing), the Grantors may use and dispose of the
Collateral in any lawful manner not inconsistent with the provisions of

                                     -12-
<PAGE>

this Agreement, the Credit Agreement or any other Loan Document. Without
limiting the generality of the foregoing, each Grantor agrees that it shall
not permit any Inventory to be in the possession or control of any
warehouseman, bailee, agent or processor at any time, other than Inventory
that is in transit by any means, unless such warehouseman, bailee, agent or
processor shall have been notified of the Security Interest and each Grantor
shall, to the extent not otherwise addressed to Collateral Agent's reasonable
satisfaction in the Interim Order, the Canadian Interim Order, the Final Order
and the Canadian Final Order, use commercially reasonable efforts to obtain a
Bailee Letter from such warehouseman, bailee, agent or processor.

     SECTION 4.09. Limitation on Modification of Accounts. None of the
Grantors will, without the Collateral Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than extensions, credits,
discounts, compromises or settlements granted or made in the ordinary course
of business and consistent with its current practices and in accordance with
such prudent and standard practices used in industries that are the same as or
similar to those in which such Grantor is engaged.

     SECTION 4.10. Insurance. The Grantors, at their own expense, shall
maintain or cause to be maintained insurance covering physical loss or damage
to the Inventory and Equipment in accordance with Section 5.07 of the Credit
Agreement. Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and
attorney-in-fact) for the purpose, during the continuance of an Event of
Default, of making, settling and adjusting claims in respect of Collateral
under policies of insurance, endorsing the name of such Grantor on any check,
draft, instrument or other item of payment for the proceeds of such policies
of insurance and for making all determinations and decisions with respect
thereto. In the event that any Grantor at any time or times shall fail to
obtain or maintain any of the policies of insurance required hereby or to pay
any premium in whole or part relating thereto, the Collateral Agent may,
without waiving or releasing any obligation or liability of the Grantors
hereunder or any Event of Default, in its sole discretion, obtain and maintain
such policies of insurance and pay such premium and take any other actions
with respect thereto as the Collateral Agent deems reasonably advisable. All
sums disbursed by the Collateral Agent in connection with this Section 4.10,
including reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured hereby.

     SECTION 4.11. Legend. Each Grantor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, its Accounts Receivable and
its books, records and documents evidencing or pertaining thereto with an
appropriate reference to the fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and
that the Collateral Agent has a security interest therein.

     SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor agrees that it will not, nor will it permit any
of its licensees to, do any act, or omit to do any act, whereby any Patent
which is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees, to the extent practicable,

                                     -13-
<PAGE>

that it shall continue to mark any products covered by a Patent with the
relevant patent number as necessary and sufficient to establish and preserve
its maximum rights under applicable patent laws.

     (b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such
Grantor's business, (i) maintain such Trademark in full force free from any
claim of abandonment or invalidity for nonuse, (ii) maintain the quality of
products and services offered under such Trademark, (iii) display such
Trademark with notice of Federal or foreign registration to the extent
necessary and sufficient to establish and preserve its maximum rights under
applicable law and (iv) not knowingly use or knowingly permit the use of such
Trademark in violation of any third party rights.

     (c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary
and sufficient to establish and preserve its maximum rights under applicable
copyright laws.

     (d) Each Grantor shall notify the Collateral Agent promptly if it knows
that any Patent, Trademark or Copyright material to the conduct of its
business may become abandoned, lost or dedicated to the public, or of any
adverse determination or development (including the institution of, or any
such determination or development in, any proceeding in the United States
Patent and Trademark Office or United States Copyright Office for U.S.
Intellectual Property, or the Canadian Intellectual Property Office for
Intellectual Property) regarding such Grantor's ownership of any Patent,
Trademark or Copyright, its right to register the same, or to keep and
maintain the same.

     (e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark
or Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office for
U.S. Intellectual Property or the Canadian Intellectual Property Office for
Intellectual Property, unless it (i) in the case of any Patent or Trademark,
promptly informs the Collateral Agent and (ii) in the case of any Copyright,
gives five (5) Business Days prior written notice thereof to the Collateral
Agent, and, upon request of the Collateral Agent, executes and delivers any
and all agreements, instruments, documents and papers as the Collateral Agent
may request to evidence the Collateral Agent's security interest in such
Patent, Trademark or Copyright, and each Grantor hereby appoints the
Collateral Agent as its attorney-in-fact to execute and file such writings for
the foregoing purposes (and, prior to the occurrence of any Event of Default
or Default, such Grantor shall be notified of such filing), all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with
an interest, is irrevocable.

     (f) Each Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, United States Copyright Office for U.S. Intellectual Property or the
Canadian Intellectual Property Office for Intellectual Property, to maintain
and pursue each material application relating to the Patents, Trademarks
and/or Copyrights (and to obtain the relevant grant or registration) and to
maintain each issued Patent and each registration of the Trademarks and
Copyrights that is material to the conduct of

                                     -14-
<PAGE>

any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.

     (g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall
notify the Collateral Agent and shall, if consistent with good business
judgment, promptly sue for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the
circumstances to protect such Collateral.

     (h) Upon and during the continuance of an Event of Default, each Grantor
shall use its reasonable best efforts to obtain all requisite consents or
approvals by the licensor of each Copyright License, Patent License or
Trademark License to effect the assignment of all of such Grantor's right,
title and interest thereunder to the Collateral Agent or their designees for
the benefit of the Secured Parties.

     SECTION 4.13. Deposit Accounts. The deposit accounts of each Guarantor
which is a Canadian Guarantor shall be subject to the cash sweep as provided
in the Interim Order, the Canadian Interim Order, the Final Order and the
Canadian Final Order.

     SECTION 4.14. Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a letter of credit now or hereafter issued in favor of such
Grantor in an amount exceeding U.S.$1,000,000, such Grantor shall promptly
notify the Collateral Agent thereof and, at the request and option of the
Collateral Agent, such Grantor shall, pursuant to an agreement in form and
substance reasonably satisfactory to the Collateral Agent, either (i) arrange
for the issuer and any confirmer of such letter of credit to consent to an
assignment to the Collateral Agent of the proceeds of any drawing under the
letter of credit or (ii) arrange for the Collateral Agent to become the
transferee beneficiary of the letter of credit, with the Collateral Agent
agreeing, in each case, that the proceeds of any drawing under the letter of
credit are to be paid to the applicable Grantor unless an Event of Default has
occurred or is continuing.

                                  ARTICLE V

                                  Collections

     SECTION 5.01. Cash Management Accounts. Each Guarantor which is a
Canadian Guarantor shall comply with the provisions of the Interim Order, the
Canadian Interim Order, the Final Order and the Canadian Final Order with
respect to its deposit accounts.

     SECTION 5.02. Collections. (a) Each Grantor agrees promptly to notify and
direct each Account Debtor and every other Person obligated to make payments
with respect to the Accounts Receivable or Inventory to make all such payments
directly to a deposit account in such Grantor's name. Each Grantor shall use
all reasonable efforts to cause each Account Debtor and every other Person
identified in the preceding sentence to make all payments with

                                     -15-
<PAGE>

respect to the Accounts Receivable or Inventory directly to a deposit account
in such Grantor's name.

     (b) Without the prior written consent of the Collateral Agent, no Grantor
which is a Canadian Grantor shall, under any circumstances whatsoever, change
the general instructions given to Account Debtors and other Persons obligated
to make payments with respect to the Accounts Receivable or Inventory
regarding the deposit of payments with respect to the Accounts Receivable or
Inventory in a deposit account in the name of such Grantor. Each Grantor
shall, and the Collateral Agent hereby authorizes each Grantor to, enforce and
collect all amounts owing with respect to the Accounts Receivable or Inventory
for the benefit and on behalf of the Collateral Agent and the other Secured
Parties; provided, however, that such privilege may at the option of the
Collateral Agent be terminated upon the occurrence and during the continuance
of an Event of Default.

                                  ARTICLE VI

                               Power of Attorney

     SECTION 6.01. Each Grantor irrevocably makes, constitutes and appoints
the Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and
attorney-in-fact, and in such capacity the Collateral Agent shall have the
right, with power of substitution for each Grantor and in each Grantor's name
or otherwise, for the use and benefit of the Collateral Agent and the Secured
Parties, upon the occurrence and during the continuance of an Event of Default
(a) to receive, endorse, assign and/or deliver any and all notes, acceptances,
checks, drafts, money orders or other evidences of payment relating to the
Collateral or any part thereof; (b) to demand, collect, receive payment of,
give receipt for and give discharges and releases of all or any of the
Collateral; (c) to sign the name of any Grantor on any invoice or bill of
lading relating to any of the Collateral; (d) to send verifications of
Accounts Receivable to any Account Debtor; (e) to commence and prosecute any
and all suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect or otherwise realize on all or any of the
Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral; (g) to notify, or to
require any Grantor to notify, Account Debtors to make payment directly to the
Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any
agreement with respect to or otherwise deal with all or any of the Collateral,
and to do all other acts and things necessary to carry out the purposes of
this Agreement, as fully and completely as though the Collateral Agent were
the absolute owner of the Collateral for all purposes; provided, however, that
nothing herein contained shall be construed as requiring or obligating the
Collateral Agent or any Secured Party to make any commitment or to make any
inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent or any Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part
thereof or the moneys due or to become due in respect thereof or any property
covered thereby, and no action taken or omitted to be taken by the Collateral
Agent or any Secured Party with respect to the Collateral or any part thereof
shall give rise to any defense, counterclaim or offset in favor of any Grantor
or (unless such action is the result of gross negligence or willful
misconduct) to any claim or action against the Collateral Agent or any Secured
Party. It is understood and agreed that the appointment of the Collateral

                                     -16-
<PAGE>

Agent as the agent and attorney-in-fact of the Grantors for the purposes set
forth above is coupled with an interest and is irrevocable. The provisions of
this Section shall in no event relieve any Grantor of any of its obligations
hereunder or under any other Loan Document with respect to the Collateral or
any part thereof or impose any obligation on the Collateral Agent or any
Secured Party to proceed in any particular manner with respect to the
Collateral or any part thereof, or in any way limit the exercise by the
Collateral Agent or any Secured Party of any other or further right which it
may have on the date of this Agreement or hereafter, whether hereunder, under
any other Loan Document, by law or otherwise.

                                 ARTICLE VII

                                   Remedies

     SECTION 7.01. Remedies upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver each item
of Collateral to the Collateral Agent on demand, and subject to the terms of
the Interim Order, the Canadian Interim Order, the Final Order and the
Canadian Final Order, it is agreed that the Collateral Agent shall have the
right to take any of or all the following actions at the same or different
times: (a) with respect to any Collateral consisting of Intellectual Property,
on demand, to cause the Security Interest to become an assignment, transfer
and conveyance of any of or all such Collateral by the applicable Grantors to
the Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral throughout the world on such terms and conditions and in such
manner as the Collateral Agent shall determine (other than in violation of any
then-existing licensing or contractual arrangements to the extent that waivers
cannot be obtained), and (b) notwithstanding the provisions of Section 362 of
the Bankruptcy Code, with or without legal process and with or without prior
notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may
be located for the purpose of taking possession of or removing the Collateral
and, generally, to exercise any and all rights afforded to a secured party
under the PPSA or other applicable law and, pursuant to the Interim Order, the
Canadian Interim Order, the Final Order and the Final Canadian Order, the
automatic stay of Section 362 of the Bankruptcy Code or the Canadian Stay
Order shall be modified and vacated to permit Lenders to exercise their
remedies under this Agreement and the Loan Documents, without further
application or motion to, or order from, the Bankruptcy Court or the Canadian
Court; provided, however, notwithstanding anything to the contrary contained
herein, Agent shall be permitted to exercise any remedy in the nature of a
liquidation of, or foreclosure on, any interest of any Grantor in the
Collateral only upon three (3) Business Days' prior written notice to such
Grantor and counsel approved by the Bankruptcy Court for the Committee.
Without limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements
of applicable law, to sell or otherwise dispose of all or any part of the
Collateral, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict
the prospective bidders or purchasers to persons who will represent and agree
that they are purchasing the Collateral for their own account for investment
and not with a view to the distribution or sale thereof, and upon consummation
of any such sale the Collateral Agent shall have the right to assign, transfer
and deliver to the purchaser or purchasers thereof the

                                     -17-
<PAGE>

Collateral so sold. Each such purchaser at any such sale shall hold the
property sold absolutely, free from any claim or right on the part of any
Grantor, and each Grantor hereby waives (to the extent permitted by law) all
rights of redemption, stay and appraisal which such Grantor now has or may at
any time in the future have under any rule of law or statute now existing or
hereafter enacted. Upon the occurrence and during the continuance of an Event
of Default and the exercise by Lenders of their rights and remedies under this
Agreement and the other Loan Documents, the Grantors shall assist Lenders in
effecting a sale or other disposition of the Collateral upon such terms as are
designed to maximize the proceeds obtainable from such sale or other
disposition.

          The Collateral Agent shall give the Grantors such prior written
notice of the Collateral Agent's intention to make any sale of Collateral as
may be required by the PPSA or other applicable law. Such notice, in the case
of a public sale, shall state the time and place for such sale and, in the
case of a sale at a broker's board or on a securities exchange, shall state
the board or exchange at which such sale is to be made and the day on which
the Collateral, or portion thereof, will first be offered for sale at such
board or exchange. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the Collateral
Agent may fix and state in the notice (if any) of such sale. At any such sale,
the Collateral, or portion thereof, to be sold may be sold in one lot as an
entirety or in separate parcels, as the Collateral Agent may (in its sole and
absolute discretion) determine. The Collateral Agent shall not be obligated to
make any sale of any Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent shall not incur any liability in case any
such purchaser or purchasers shall fail to take up and pay for the Collateral
so sold and, in case of any such failure, such Collateral may be sold again
upon like notice. At any public (or, to the extent permitted by law, private)
sale made pursuant to this Section, any Secured Party may bid for or purchase,
free (to the extent permitted by law) from any right of redemption, stay,
valuation or appraisal on the part of any Grantor (all said rights being also
hereby waived and released to the extent permitted by law), the Collateral or
any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to such Secured Party from any Grantor as
a credit against the purchase price, and such Secured Party may, upon
compliance with the terms of sale, hold, retain and dispose of such property
without further accountability to any Grantor therefor. For purposes hereof, a
written agreement to purchase the Collateral or any portion thereof shall be
treated as a sale thereof; the Collateral Agent shall be free to carry out
such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto,
notwithstanding the fact that after the Collateral Agent shall have entered
into such an agreement all Events of Default shall have been remedied and the
Obligations paid in full. As an alternative to exercising the power of sale
herein conferred upon it, the Collateral Agent may (i) proceed by a suit or
suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver or (ii) appoint by instrument in writing one or more
Receivers of

                                     -18-
<PAGE>

any Grantor or any or all of the Collateral with such rights, powers and
authority (including any or all of the rights, powers and authority of the
Collateral Agent under this Agreement) as may be provided for in the
instrument of appointment or any supplemental instrument, and remove and
replace any such Receiver from time to time to the extent permitted by
applicable law. Any Receiver appointed by the Collateral Agent will (for
purposes relating to responsibility for the Receiver's acts or omissions) be
considered to be the agent of such Grantor and not of the Collateral Agent.

     SECTION 7.02. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent an irrevocable, non-exclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to the extent that
such license does not violate any then existing licensing arrangements (to the
extent that waivers cannot be obtained) to use, license or sub-license any of
the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer software and programs used
for the compilation or printout thereof and sufficient rights of quality
control in favor of Grantor to avoid the invalidation of the Trademarks
subject to the license. The use of such license by the Collateral Agent shall
be exercised, at the option of the Collateral Agent, upon the occurrence and
during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.

                                 ARTICLE VIII

                                 Miscellaneous

     SECTION 8.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 10.01 of the Credit Agreement. All communications and
notices hereunder to any Grantor shall be given to it at its address or
telecopy number set forth on Schedule I, with a copy to the Parent Borrower.

     SECTION 8.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document,
any agreement with respect to any of the Obligations or any other agreement or
instrument relating to any of the foregoing, (b) any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any
Lien on other collateral, or any release or amendment or waiver of or consent
under or departure from any guarantee, securing or guaranteeing all or any of
the Obligations, or (d) any other circumstance that might otherwise constitute
a defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement.

                                     -19-
<PAGE>

     SECTION 8.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the making by the Lenders of the Loans, and
the execution and delivery to the Lenders of any notes evidencing such Loans,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect until this Agreement shall terminate.

     SECTION 8.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on
behalf of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of
such Grantor, the Collateral Agent and the other Secured Parties and their
respective successors and assigns, except that no Grantor shall have the right
to assign or transfer its rights or obligations hereunder or any interest
herein or in the Collateral (and any such assignment or transfer shall be
void) except as expressly contemplated by this Agreement or the Credit
Agreement. This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.

     SECTION 8.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.

     SECTION 8.06. Collateral Agent's Expenses; Indemnification. (a) each
Grantor jointly and severally agrees to pay upon demand to the Collateral
Agent the amount of any and all reasonable expenses, including the reasonable
fees, disbursements and other charges of its counsel and of any experts or
agents, which the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from or other realization upon any of the Collateral,
(iii) the exercise, enforcement or protection of any of the rights of the
Collateral Agent hereunder or (iv) the failure of any Grantor to perform or
observe any of the provisions hereof.

     (b) Without limitation of its indemnification obligations under the other
Loan Documents, each Grantor jointly and severally agrees to indemnify the
Collateral Agent and the other Indemnitees against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, disbursements and other charges of
counsel, incurred by or asserted against any of them arising out of, in any
way connected with, or as a result of, the execution, delivery or performance
of this Agreement or any claim, litigation, investigation or proceeding
relating hereto or to the Collateral, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses have resulted from the gross negligence or willful misconduct
of such Indemnitee.

                                     -20-
<PAGE>

     (c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this Section 8.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document,
the consummation of the transactions contemplated hereby, the repayment of any
of the Loans, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Collateral Agent or any Lender. All amounts due under this
Section 8.06 shall be payable on written demand therefor.

     SECTION 8.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE PROVINCE OF ONTARIO AND THE
FEDERAL LAWS OF CANADA APPLICABLE THEREIN.

     SECTION 8.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right
or power, preclude any other or further exercise thereof or the exercise of
any other right or power. The rights and remedies of the Collateral Agent
hereunder and of the Collateral Agent, the Issuing Bank, the Administrative
Agent, the other Agents and the Lenders under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or any other
Loan Document or consent to any departure by any Grantor therefrom shall in
any event be effective unless the same shall be permitted by paragraph (b)
below, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Grantor in any case shall entitle such Grantor or any other Grantor to any
other or further notice or demand in similar or other circumstances.

     (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except (i) pursuant to an agreement or agreements in
writing entered into by the Collateral Agent and the Grantor or Grantors with
respect to which such waiver, amendment or modification is to apply, subject
to any consent required in accordance with Section 10.02 of the Credit
Agreement.

     SECTION 8.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION 8.09.

                                     -21-
<PAGE>

     SECTION 8.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

     SECTION 8.11. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section
8.04), and shall become effective as provided in Section 8.04. Delivery of an
executed signature page to this Agreement by facsimile transmission or other
electronic transmission shall be effective as delivery of a manually executed
counterpart hereof,

     SECTION 8.12. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.

     SECTION 8.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Bankruptcy Court or the
Canadian Court, if required, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in the Bankruptcy Court or the Canadian Court, as applicable;
provided, however that the Collateral Agent and the Grantors acknowledge that
any appeals from the Bankruptcy Court or the Canadian Court, as applicable,
may have to be heard by a court other than the Bankruptcy Court or the
Canadian Court, as applicable. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent, the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Grantor or its properties in the courts
of any jurisdiction.

     (b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in the Bankruptcy
Court or the Canadian Court, if required. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

     (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

                                     -22-
<PAGE>

     SECTION 8.14. Termination. (a) This Agreement and the Security Interest
shall continue in effect (notwithstanding the fact that from time to time
there may be no Obligations outstanding) until (i) the Credit Agreement has
terminated pursuant to its express terms and (ii) all of the Obligations
(other than contingent obligations for which no claim has been made) have been
indefeasibly paid and performed in full (or with respect to any outstanding
Letters of Credit, a cash deposit has been delivered to the Administrative
Agent as required by the Credit Agreement) and no commitments of the Agents or
the Lenders which would give rise to any Obligations are outstanding. Upon
payment in full in cash of the outstanding Obligations and the expiration or
termination of the Commitments, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to the Grantors or any
other Person entitled thereto. Upon such termination, the Administrative Agent
will authorize the filing of appropriate PPSA financing change statements and
UCC termination statements to discharge and terminate such security interests
and shall, at the expense of the Grantors, execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence the
termination of such security interests or the release of such Collateral, as
applicable.

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

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

     (d) In connection with any termination or release pursuant to paragraph
(a), (b) or (c) above, the Collateral Agent shall execute and deliver to the
Grantors, at the Grantors' expense, all Personal Property Security Act
financing change statements and similar documents which the Grantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of termination statements or release documents pursuant to this
Section 8.14 shall be without recourse to or warranty by the Collateral Agent.

     SECTION 8.15. Additional Grantors. Upon execution and delivery by the
Collateral Agent and a Subsidiary organized under the laws of Canada or any
province thereof of an instrument in the form of Annex 2, such Subsidiary
shall become a Grantor hereunder with the same force and effect as if
originally named as a Grantor herein. The execution and delivery of any such
instrument shall not require the consent of any Grantor hereunder. The rights
and obligations of each Grantor hereunder shall remain in full force and
effect notwithstanding the addition of any new Grantor as a party to this
Agreement.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                     -23-
<PAGE>

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

GRANTORS:                           UNIPLAST INDUSTRIES CO.

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT CORPORATION

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT PACKAGING OF CANADA, LLC

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT SOLUTIONS CORPORATION

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

GRANTORS:                           PLIANT CORPORATION

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT CORPORATION INTERNATIONAL

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT FILM PRODUCTS OF MEXICO, INC.

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT PACKAGING OF CANADA, LLC

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT SOLUTIONS CORPORATION

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

DOMESTIC SECURITY AGREEMENT

<PAGE>

                                    UNIPLAST HOLDINGS INC.

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    UNIPLAST U.S., INC.

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    PLIANT INVESTMENT, INC.

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

                                    ALLIANT COMPANY LLC

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

COLLATERAL AGENT:                   GENERAL ELECTRIC CAPITAL
                                       CORPORATION, as Collateral Agent

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

CANADIAN SECURITY AGREEMENT

<PAGE>

                                    PLAINT CORPORATION OF CANADA LTD.

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

COLLATERAL AGENT:                   GENERAL ELECTRIC CAPITAL
                                       CORPORATION, as Collateral Agent

                                    By:
                                       ----------------------------------
                                       Name:
                                       Title:

CANADIAN SECURITY AGREEMENT

<PAGE>

                                                             Schedule I to the
                                                   Canadian Security Agreement

                                   GRANTORS
                                   --------

------------------------- --------------------------- -----------------------

        Grantor              Address for Notices            Fascimile
------------------------- --------------------------- -----------------------

------------------------- --------------------------- -----------------------

------------------------- --------------------------- -----------------------

------------------------- --------------------------- -----------------------

------------------------- --------------------------- -----------------------

                                     -24-
<PAGE>

                                                                    Schedule 1

                              PLIANT CORPORATION

                              Copyright Schedule

<PAGE>

                                                           Schedule III to the
                                                   Canadian Security Agreement

                                   LICENSES
                                   --------

                                      NIL

<PAGE>

                                                            Schedule IV to the
                                                   Canadian Security Agreement

                                    PATENTS
                                    -------

                                      NIL

<PAGE>

                                                             Schedule V to the
                                                   Canadian Security Agreement

                                  TRADEMARKS
                                  ----------

<PAGE>

                                                                Annex 2 to the
                                                   Canadian Security Agreement

          SUPPLEMENT NO. _____dated as of _____________, 20___ to the Canadian
Security Agreement (as amended, restated, supplemented or otherwise modified
from time to time, the "Domestic Security Agreement") dated as of January 4,
2006, each of the parties listed on the signature pages thereto and those
additional entities that thereafter become parties thereto (each a "Grantor"
and collectively, the "Grantors") and GENERAL ELECTRIC CAPITAL CORPORATION, as
collateral agent (in such capacity, the "Collateral Agent") for the Secured
Parties (as defined therein).

          A     Reference is made to (a) the Senior Secured, Super Priority,
Priming Debtor-In-Possession Credit Agreement dated as of January 4, 2006 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Parent Borrower, the Domestic Subsidiary Borrowers, the
Lenders party thereto (the "Lenders"), and General Electric Capital
Corporation, as Administrative Agent and Collateral Agent, and (b) the
Guarantee Agreement dated as of January 4, 2006 (as amended, supplemented or
otherwise modified from time to time, the "Guarantee Agreement"), among, inter
alia, the certain Grantors and the Collateral Agent.

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

          C     The Grantors have entered into the Canadian Security Agreement
in order to induce the Lenders to make Loans and the Issuing Bank to issue
Letters of Credit. Section 8.15 of the Canadian Security Agreement provides
that additional Subsidiaries organized under the laws of Canada or any
province thereof may become Grantors under the Canadian Security Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the "New Grantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Grantor
under the Canadian Security Agreement in order to induce the Lenders to make
additional Loans and the Issuing Bank to issue additional Letters of Credit
and as consideration for Loans previously made and Letters of Credit
previously issued.

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

     SECTION 1. In accordance with Section 8.15 of the Canadian Security
Agreement, the New Grantor by its signature below becomes a Grantor under the
Canadian Security Agreement with the same force and effect as if originally
named therein as a Grantor and the New Grantor hereby (a) agrees to all the
terms and provisions of the Canadian Security Agreement applicable to it as a
Grantor thereunder and (b) represents and warrants that the representations
and warranties made by it as a Grantor thereunder are true and correct on and
as of the date hereof. In furtherance of the foregoing, the New Grantor, as
security for the payment and performance in full of the Obligations (as
defined in the Canadian Security Agreement), does hereby create and grant to
the Collateral Agent, its successors and assigns, for the benefit of the
Secured Parties, their successors and assigns, a security interest in and lien
on all of the New Grantor's right, title

<PAGE>

and interest in and to the Collateral (as defined in the Canadian Security
Agreement) of the New Grantor. Each reference to a "Grantor" in the Canadian
Security Agreement shall be deemed to include the New Grantor. The Canadian
Security Agreement is hereby incorporated herein by reference.

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

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

     SECTION 4. The New Grantor hereby represents and warrants that (a) set
forth on Schedule I attached hereto is a true and correct schedule of the
location of any and all Collateral of the New Grantor and (b) set forth under
or above its signature hereto, is the true and correct legal name of the New
Grantor, its jurisdiction of formation, its organizational identification
number (if any) and the location of the chief executive office of the New
Grantor.

     SECTION 5. Except as expressly supplemented hereby, the Canadian Security
Agreement shall remain in full force and effect.

     SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF
CANADA APPLICABLE THEREIN.

     SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein and in the Canadian Security Agreement shall not in any way
be affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

     SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 10.01 of the Credit Agreement. All
communications and notices hereunder to the New Grantor shall be given to it
at the address set forth under its signature below.

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

<PAGE>

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

     IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Canadian Security Agreement as of the day and
year first above written.

                                    [Name Of New Grantor],

                                    By:____________________________________
                                         Name:
                                         Title:
                                         Address:
                                         Organizational I.D.:

                                    GENERAL ELECTRIC CAPITAL
                                      CORPORATION, as the Collateral Agent,

                                    By:____________________________________
                                         Name:
                                         Title:
                                         Address:
                                         Organizational I.D.:

<PAGE>

                                                                    SCHEDULE I
                                                  to Supplement No.____ to the
                                                   Canadian Security Agreement

                            LOCATION OF COLLATERAL

            Description                                 Location
            -----------                                 --------

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