Document:

Exhibit
10.20

 

REAFFIRMATION
AGREEMENT

 

REAFFIRMATION AGREEMENT
dated as of November 21, 2005 (as it may be amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”), among PLIANT
CORPORATION, a Utah corporation (the “Parent Borrower”) and GENERAL
ELECTRIC CAPITAL CORPORATION, as Collateral Agent (in such capacity, the “Collateral
Agent”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, Parent Borrower and
the Domestic Subsidiary Borrowers (as defined in the Prior Credit Agreement
described below) are parties to that certain Credit Agreement dated as of
February 17, 2004 (as amended, restated, supplemented or otherwise modified
from time to time prior to the date hereof, the “Prior Credit Agreement”)
among the Parent Borrower, Uniplast Industries Co., a Nova Scotia corporation
(the “Canadian Subsidiary Borrower”), certain Domestic Subsidiary
Borrowers party thereto, the Lenders party thereto (the “Prior Lenders”),
Credit Suisse First Boston, acting through its Cayman Islands Branch, as Administrative
Agent and Documentation Agent (the “Prior Administrative Agent”),
Deutsche Bank Trust Company Americas, as Collateral Agent (the “Prior
Collateral Agent”), General Electric Capital Corporation, as Co-Collateral
Agent, and JPMorgan Chase Bank, as Syndication Agent; and

 

WHEREAS, in connection
with the Prior Credit Agreement, the Parent Borrower executed and delivered one
or more Mortgages in favor of the Prior Collateral Agent (as amended, restated,
supplemented or otherwise modified from time to time, the “Mortgages”)
to secure the payment and performance of all obligations of the Loan Parties
(as defined in the Prior Credit Agreement) under the Prior Credit Agreement and
the other Loan Documents (as defined in the Prior Credit Agreement); and

 

WHEREAS, prior to the
execution of this Agreement, the Prior Collateral Agent resigned as “Collateral
Agent” under the Prior Credit Agreement, the Security Documents (as defined in
the Prior Credit Agreement) and the other Loan Documents (as defined in the Prior
Credit Agreement) and the Collateral Agent succeeded the Prior Collateral Agent
as the “Collateral Agent” thereunder, all pursuant to that certain Consent and
Amendment dated as of March 8, 2004 by and among the Prior Administrative
Agent, the Prior Collateral Agent, the Collateral Agent, Deutsche Bank Trust
Company Americas, as replaced Issuing Bank, LaSalle Business Credit, LLC, as
replacement Issuing Bank, the Borrowers and the Prior Lenders; and

 

WHEREAS, the parties wish
to amend and restate the Prior Credit Agreement in the form of that certain
Amended and Restated Credit Agreement dated as of even date herewith (as
amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Parent Borrower, the Canadian Subsidiary Borrower,
the Domestic Subsidiary Borrowers party thereto, the Lenders Party thereto,
Morgan Stanley Senior Funding, Inc., as Domestic B Agent, the Collateral Agent
and General Electric Capital Corporation, as Domestic A Agent and Administrative
Agent.

 

 

ACCORDINGLY, in
connection with the amendment and restatement of the Prior Credit Agreement,
the parties hereto agree as follows:

 

1.             The Parent Borrower acknowledges that the Mortgages have
been assigned to the Collateral Agent. The Mortgages executed by the Parent
Borrower and the security interests created thereby given in favor of the Prior
Collateral Agent in connection with the Prior Credit Agreement are, and shall remain,
outstanding and in full force and effect without interruption or impairment of
any kind, and shall secure and guarantee, and shall continue to secure and
guarantee, the Obligations (as defined in the Credit Agreement) and all other
obligations expressed to be secured by the Mortgages to which the Parent
Borrower is a party.

 

2.             All Liens (as defined in the Prior Credit Agreement)
created or evidenced by the Mortgages are hereby ratified, confirmed and
continued.

 

3.             The Parent Borrower hereby acknowledges (i) that all
references to the “Credit Agreement” contained in any of the Mortgages and
other agreements to which it is a party shall be references to the Credit
Agreement as defined herein, (ii) that all references to the “Administrative
Agent” shall be references to the Administrative Agent as defined herein and
(iii) that all references to the “Collateral Agent” shall be references to the
Collateral Agent as defined herein.

 

4.             This Agreement may be executed in any number of
counterparts, each of which shall constitute an original but all of which taken
together shall constitute one agreement. Delivery of an executed signature page
to this Agreement by facsimile transmission or other electronic transmission
shall be effective as a manually executed counterpart hereof.

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 

 

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

 

 

	
  PARENT BORROWER:

  	
  PLIANT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  COLLATERAL AGENT:

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION,
  as Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

REAFFIRMATION AGREEMENTExhibit 10.21

 

AMENDED AND RESTATED GUARANTEE
AGREEMENT

 

This AMENDED AND RESTATED GUARANTEE AGREEMENT dated as
of November 21, 2005 (as it may be amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”), among the
entities listed on the signature page hereof (each individually, a “Subsidiary
Guarantor” and, collectively, the “Subsidiary Guarantors”) and
GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent (the “Administrative
Agent”) for the Lenders under the Credit Agreement referred to below.

 

W  I
T  N  E  S  S  E  T  H:

 

WHEREAS, Pliant Corporation, a Utah corporation (the “Parent
Borrower”), Uniplast Industries Co., a Nova Scotia company (the “Canadian
Subsidiary Borrower”) and the Domestic Subsidiary Borrowers (as defined in
the Prior Credit Agreement described below) are parties to that certain Credit
Agreement dated as of February 17, 2004 (as amended, restated, supplemented or
otherwise modified from time to time prior to the date hereof, the “Prior
Credit Agreement”) among Parent Borrower, Canadian Subsidiary Borrower,
certain Domestic Subsidiary Borrowers party thereto, the Lenders party thereto
(the “Prior Lenders”), Credit Suisse First Boston, acting through its
Cayman Islands Branch, as Administrative Agent and Documentation Agent (the “Prior
Administrative Agent”), Deutsche Bank Trust Company Americas, as Collateral
Agent (the “Prior Collateral Agent”), General Electric Capital
Corporation, as Co-Collateral Agent, and JPMorgan Chase Bank, as Syndication
Agent; and

 

WHEREAS, certain Domestic Subsidiary Borrowers, the
Subsidiary Guarantors and the Prior Administrative Agent are parties to that
certain Guarantee Agreement dated as of February 17, 2004 (as amended,
restated, supplemented or otherwise modified from time to time prior to the
date hereof, the “Prior Guarantee Agreement”), pursuant to which such
Domestic Subsidiary Borrowers and the Subsidiary Guarantors guaranteed the
Obligations (as defined in the Prior Guarantee Agreement); and

 

WHEREAS, the Prior Collateral Agent and the trustees
for the holders of the Senior Secured Discount Notes and the Existing Senior
Secured Notes entered into an Intercreditor Agreement dated as of February 17,
2004 (as amended, restated, supplemented or otherwise modified from time to
time, the “Intercreditor Agreement”), which confirms the relative
priority of the security interests of the Secured Parties, the holders of the
Senior Secured Discount Notes and the holders of the Existing Senior Secured
Notes in the Collateral; and

 

WHEREAS, prior to the execution of this Agreement, the
Prior Collateral Agent resigned as “Collateral Agent” under the Prior Credit
Agreement, the Security Documents (as defined in the Prior Credit Agreement)
and the other Loan Documents (as defined in the Prior Credit Agreement) and the
Collateral Agent succeeded the Prior Collateral Agent as the “Collateral Agent”
thereunder, all pursuant to that certain Consent and Amendment, dated as of
March 8, 2004, by and among the Prior Administrative Agent, the Prior
Collateral Agent, the Collateral Agent, Deutsche Bank Trust Company Americas,
as

 

 

replaced Issuing Bank, LaSalle Business Credit, LLC,
as replacement Issuing Bank, the Borrowers and the Prior Lenders; and

 

WHEREAS, the parties wish to amend and restate the
Prior Credit Agreement in the form of 
that certain Amended and Restated Credit Agreement dated as of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among the Parent Borrower, the Canadian
Subsidiary Borrower, the Domestic Subsidiary Borrowers party thereto, the
Lenders party thereto, Morgan Stanley Senior Funding, Inc., as Domestic B
Agent, the Collateral Agent, and General Electric Capital Corporation, as
Domestic A Agent and the Administrative Agent; and

 

WHEREAS, in connection with the amendment and
restatement of the Prior Credit Agreement, the parties hereto desire to amend
and restate the Prior Guarantee Agreement in its entirety as set forth herein;
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, the Borrowers have requested that the
Subsidiary Guarantors guarantee the Obligations (as defined below) by entering
into this Agreement and each of the Subsidiary Guarantors is a Subsidiary of
the Parent Borrower and an affiliate of the Domestic Subsidiary Borrowers and
the Canadian Subsidiary Borrower and acknowledges that it will derive
substantial benefit from the making of the Loans by the Lenders and the
issuance of the Letters of Credit by the Issuing Bank; and

 

WHEREAS, the obligations of the Lenders to make Loans
and of the Issuing Bank to issue Letters of Credit are conditioned on, among
other things, the execution and delivery by the Subsidiary Guarantors of a
Guarantee Agreement in the form hereof; and

 

WHEREAS, as consideration for the foregoing and in
order to induce the Lenders to make Loans and the Issuing Bank to issue Letters
of Credit, the Subsidiary Guarantors are willing to execute this Agreement;

 

ACCORDINGLY, the parties hereto agree that capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Credit Agreement and agree to amend and restate the Prior
Guarantee Agreement in its entirety as follows:

 

1.             Guarantee. 
Each Subsidiary Guarantor unconditionally guarantees, jointly with the other
Subsidiary Guarantors and severally, as a primary obligor and not merely as a
surety, (a) the due and punctual payment 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 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) or Wachovia Bank, National Association (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 collectively called the “Obligations”). 
Each Subsidiary Guarantor further agrees that the Obligations may be extended
or renewed, in whole or in part, without notice to or further assent from it,
and that it will remain bound upon its guarantee notwithstanding any extension
or renewal of any Obligation.

 

2.             Obligations
Not Waived.  To the fullest extent permitted by applicable law, each
Subsidiary Guarantor waives presentment to, demand of payment from and protest
to each of the Borrowers of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment.  To the
fullest extent permitted by applicable law, the obligations of each Subsidiary
Guarantor hereunder shall not be affected by (a) the failure of the
Administrative Agent, the Collateral Agent or any other Secured Party to assert
any claim or demand or to enforce or exercise any right or remedy against any
of the Borrowers or any other Subsidiary Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise, (b) any
rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of this Agreement, any other Loan Document, any
Guarantee or any other agreement, including with respect to any other
Subsidiary Guarantor under this Agreement, or (c) the failure to perfect
any security interest in, or the release of, any of the security held by or on
behalf of the Collateral Agent or any other Secured Party.

 

3.             Security. 
Each of the Subsidiary Guarantors authorizes the Collateral Agent and each of
the other Secured Parties to (a) take and hold security pursuant to the
Security Documents for the payment of this Guarantee and the Obligations and
exchange, enforce, waive and release any such security, (b) apply such
security and direct the order or manner of sale thereof as they in their sole
discretion may determine and (c) release or substitute any one or more
endorsees, other Subsidiary Guarantors or other obligors.

 

 

4.             Guarantee
of Payment.  Each Subsidiary Guarantor further agrees that its
guarantee constitutes a guarantee of payment in dollars when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any other Secured Party to any of the security held for
payment of the Obligations or to any balance of any deposit account or credit
on the books of the Administrative Agent or any other Secured Party in favor of
any of the Borrowers or any other Person.

 

5.             No
Discharge or Diminishment of Guarantee.  The obligations of each
Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim
of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise.  Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of the Administrative Agent, the Collateral Agent or any other Secured
Party to assert any claim or demand or to enforce any remedy under the Credit
Agreement, any other Loan Document or any other agreement, by any waiver or
modification of any provision of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by any other
act or omission that may or might in any manner or to any extent vary the risk
of any Subsidiary Guarantor or that would otherwise operate as a discharge of
any Subsidiary Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).

 

6.             Defenses
of the Borrowers Waived.  To the fullest extent permitted by
applicable law, each of the Subsidiary Guarantors waives any defense based on
or arising out of any defense of any of the Borrowers or the unenforceability
of the Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of any of the Borrowers, other than the final and
indefeasible payment in full in cash of the Obligations.  The Collateral
Agent and the other Secured Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with any of the Borrowers or any other guarantor or exercise any other right or
remedy available to them against any of the Borrowers or any other guarantor,
without affecting or impairing in any way the liability of any Subsidiary
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash.  Pursuant to applicable law, each
of the Subsidiary Guarantors waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other
right or remedy of such Subsidiary Guarantor against any of the Borrowers or
any other Subsidiary Guarantor or guarantor, as the case may be, or any
security.

 

Each of the Subsidiary Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the

 

 

Administrative Agent or any other Secured Party upon
the bankruptcy or reorganization of any of the Borrowers, any other Loan Party
or otherwise.

 

7.             Agreement
to Pay; Subordination.

 

(a)           In
furtherance of the foregoing and not in limitation of any other right that the
Administrative Agent or any other Secured Party has at law or in equity against
any Subsidiary Guarantor by virtue hereof, upon the failure of any of the
Borrowers or any other Loan Party to pay any Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Subsidiary Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Administrative Agent or such other
Secured Party as designated thereby in same day funds the amount of such unpaid
Obligations.

 

(b)           Notwithstanding
anything to the contrary in this Agreement or in any other Loan Document, each
Subsidiary Guarantor:

 

(1)           expressly and irrevocably waives, on
behalf of itself and its successors and assigns (including any surety), any and
all rights at law or in equity to subrogation, to reimbursement, to
exoneration, to contribution, to indemnification, to set off or to any other
rights that could accrue to a surety against a principal, to a guarantor
against a principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, to a holder or transferee
against a maker, or to the holder of any claim against any Person, and which
such Subsidiary Guarantor may have or hereafter acquire against any Secured
Party in connection with or as a result of such Subsidiary Guarantor’s execution,
delivery and/or performance of this Agreement, or any other documents to which
such Subsidiary Guarantor is a party or otherwise; and

 

(2)           acknowledges and agrees (A) that this
waiver is intended to benefit the Administrative Agent and Lenders and shall
not limit or otherwise affect any Subsidiary Guarantor’s liability hereunder or
the enforceability of this Agreement, and (B) that Administrative Agent,
Lenders and their respective successors and assigns are intended third party
beneficiaries of waivers and agreements set forth in this Section 7 and
their rights under this Section 7 shall survive payment in full of the
Obligations.

 

(c)           Any
indebtedness of any of the Borrowers now or hereafter held by any Subsidiary
Guarantor is hereby subordinated in right of payment to the prior payment in
full of the Obligations.

 

(d)           If
any amount shall erroneously be paid to any Subsidiary Guarantor on account of
(i) such subrogation, contribution, reimbursement, indemnity or similar
right or (ii) any such indebtedness of any of the Borrowers, such amount
shall be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Administrative Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in accordance with
the terms of the Loan Documents.

 

 

8.             Information. 
Each of the Subsidiary Guarantors assumes all responsibility for being and
keeping itself informed of the financial condition and assets of each of the
Borrowers, and of all other circumstances bearing upon the risk of nonpayment
of the Obligations and the nature, scope and extent of the risks that such
Subsidiary Guarantor assumes and incurs hereunder, and agrees that none of the
Administrative Agent or the other Secured Parties will have any duty to advise
any of the Subsidiary Guarantors of information known to it or any of them
regarding such circumstances or risks.

 

9.             Representations
and Warranties.  Each of the Subsidiary Guarantors represents and
warrants as to itself that all representations and warranties relating to it
contained in the Credit Agreement are true and correct in all material
respects.

 

10.           Termination.

 

(a)           This
Agreement shall continue in effect (notwithstanding the fact that from time to
time there may be no Obligations outstanding) until (i) the Credit Agreement
has been 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 Lender 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 guarantee granted hereby
shall terminate.

 

(b)           A
Subsidiary Guarantor shall be automatically released from its obligations
hereunder in the event that all capital stock of such Subsidiary Guarantor
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.

 

11.           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 the Subsidiary Guarantors that are contained
in this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns.  This Agreement shall become
effective as to any Subsidiary Guarantor when a counterpart hereof executed on
behalf of such Subsidiary Guarantor shall have been delivered to the
Administrative Agent, and a counterpart hereof shall have been executed on
behalf of the Administrative Agent, and thereafter shall be binding upon such
Subsidiary Guarantor and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of such Subsidiary
Guarantor, the Administrative Agent and the other Secured Parties, and their
respective successors and assigns, except that no Subsidiary Guarantor shall
have the right to assign its rights or obligations hereunder or any interest
herein (and any such attempted assignment shall be void).  If all of the
capital stock of a Subsidiary Guarantor is sold, transferred or otherwise
disposed of pursuant to a transaction permitted by Section 6.06 of
the Credit Agreement, such Subsidiary Guarantor 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 Subsidiary Guarantor and may be amended, modified, supplemented,
waived or released with respect to any Subsidiary Guarantor without the
approval of any other Subsidiary Guarantor and without affecting the
obligations of any other Subsidiary Guarantor hereunder.

 

12.           Waivers;
Amendment.  (a)  No failure or delay of the Administrative 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 Administrative 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 provision of this Agreement or consent
to any departure by any Subsidiary Guarantor 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
Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor 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 Subsidiary
Guarantors with respect to which such waiver, amendment or modification relates
and the Administrative Agent, with the prior written consent of the Required
Lenders (except as otherwise provided in the Credit Agreement).

 

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

 

14.           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 each Subsidiary Guarantor shall be
given to it at its address set forth in Schedule I.

 

15.           Survival
of Agreement; Severability.  (a)  All covenants, agreements,
representations and warranties made by the Subsidiary Guarantors 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 Administrative 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 or in
any other Loan Document should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein 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.

 

16.           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 11. 
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 of this Agreement.

 

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

 

18.           Jurisdiction;
Consent to Service of Process.  (a)  Each Subsidiary
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City,
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 all claims in respect of any
such action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal 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 Administrative 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 Subsidiary Guarantor or its properties
in the courts of any jurisdiction.

 

(b)           Each
Subsidiary Guarantor 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 any
New York State or Federal 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 14.  Nothing in this
Agreement will

 

 

affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

 

19.           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 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 19.

 

20.           Additional
Subsidiary Guarantors.  Pursuant to Section 5.12 of the
Credit Agreement, each Subsidiary Loan Party (other than a Foreign Subsidiary
not organized under the laws of Canada or any province thereof) that was not in
existence or not a Subsidiary Loan Party on the date of the Credit Agreement is
required to enter into this Agreement as a Subsidiary Guarantor upon becoming a
Subsidiary Loan Party.  Upon execution and delivery after the date hereof
by the Administrative Agent and such a Subsidiary of an instrument in the form
of Annex 1, such Subsidiary shall become a Subsidiary Guarantor
hereunder with the same force and effect as if originally named as a Subsidiary
Guarantor herein.  The execution and delivery of any instrument adding an
additional Subsidiary Guarantor as a party to this Agreement shall not require
the consent of any other Subsidiary Guarantor hereunder.  The rights and
obligations of each Subsidiary Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Subsidiary Guarantor as a
party to this Agreement.

 

21.           Right
of Setoff.  If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other Indebtedness at any time owing by such Lender
or Affiliate to or for the credit or the account of any Subsidiary Guarantor
against any or all the obligations of such Subsidiary Guarantor now or
hereafter existing under this Agreement and the other Loan Documents held by
such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations may be unmatured.  The rights of each Lender under this Section 21
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

22.           Taxes. 
Any and all payments by or on account of any obligation of the Borrowers
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Subsidiary
Guarantor shall be

 

 

required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such
Subsidiary Guarantor shall make such deductions and (iii) such Subsidiary
Guarantor shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

 

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

 

(b)           The
obligations of the Subsidiary Guarantors in respect of any sum due to any party
hereto or any holder of the obligations owing hereunder (the “Applicable
Creditor”) shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than the currency in which such sum is stated to be due
hereunder (the “Agreement Currency”), be discharged only to the extent
that, on the Business Day following receipt by the Applicable Creditor of any
sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may
in accordance with normal banking procedures in the relevant jurisdiction
purchase the Agreement Currency with the Judgment Currency; if the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, each of the Subsidiary Guarantors
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Applicable Creditor against such loss.  The obligations of
the Subsidiary Guarantors contained in this Section 23 shall
survive the termination of this Agreement and the payment of all other amounts
owing hereunder.

 

24.           Reaffirmation
of Subsidiary Guarantor Obligations. This Agreement constitutes an
amendment and restatement of the Prior Guarantee Agreement. Each of the parties
hereto acknowledges and agrees that the Obligations represent, among other
things, the amendment, restatement, renewal, extension, consolidation and
modification of the obligations of the Subsidiary Guarantors under the Prior
Guarantee Agreement. Each of the parties hereto further acknowledges and agrees
that this Agreement supercedes and replaces the Prior Guarantee Agreement but
does not extinguish the obligations thereunder and that by entering into and
performing its obligations hereunder, this transaction shall not constitute a
novation. Each of the parties hereto further acknowledges and agrees that the
guarantee granted to the Prior Administrative Agent for the benefit of itself
and the parties entitled to benefits of the Prior Guarantee Agreement
(including, without limitation, each Lender, Issuing Bank or Agent party to the
Prior Credit Agreement, and their respective successors and assigns) shall
remain outstanding and in full force and effect in accordance with the terms
hereof and the other Loan Documents and shall continue to secure the
Obligations without interruption or impairment of any kind and all such
security interests are hereby ratified, confirmed and continued.

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

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

 

	
  SUBSIDIARY GUARANTORS:

  	
  PLIANT CORPORATION

  
	
   

  	
  INTERNATIONAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLIANT FILM PRODUCTS OF MEXICO,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLIANT SOLUTIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  ADMINISTRATIVE AGENT:

  	
  GENERAL ELECTRIC CAPITAL

  
	
   

  	
  CORPORATION, as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						

 

AMENDED AND RESTATED GUARANTEE AGREEMENT

 

 

SCHEDULE I
TO THE

AMENDED AND RESTATED GUARANTEE AGREEMENT

 

	
  Subsidiary
  Guarantor

  	
   

  	
  [Address]

  
	
  Pliant Corporation International

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Pliant Film Products of Mexico, Inc.

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  
	
   

  	
   

  	
   

  
	
  Pliant Packaging of Canada, LLC

  	
   

  	
  1475 Woodfield Road, Suite 700

  Schaumburg, Illinois 60173

  

 

 

ANNEX 1
TO THE

AMENDED AND RESTATED GUARANTEE AGREEMENT

 

SUPPLEMENT NO.  dated as of                          ,
20      , to the Amended and Restated Guarantee
Agreement (as amended, restated, supplemented or otherwise modified from time
to time, the “Guarantee Agreement”) dated as of November 21, 2005, among
each of the parties listed on the signature page thereto and those additional
entities that thereafter become parties thereto (each, individually, a “Subsidiary
Guarantor” and collectively, the “Subsidiary Guarantors”), and
GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent (the “Administrative
Agent”) for the Lenders under the Credit Agreement referred to below.

 

A. Reference is made to the Amended and Restated
Credit Agreement dated as of November 21, 2005, (as amended, supplemented
or otherwise modified from time to time, the “Credit Agreement”), among
the Parent Borrower, the domestic subsidiary borrowers party thereto, Uniplast
Industries Co., a Nova Scotia company (the “Canadian Subsidiary Borrower”),
the lenders from time to time party thereto (the “Lenders”), Morgan
Stanley Senior Funding, Inc., as Domestic B Agent, General Electric Capital
Corporation, as Domestic A Agent and the Administrative Agent and the
Collateral Agents.

 

B. The Parent Borrower and the Subsidiary Guarantors
have entered into the Guarantee 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 Subsidiary Loan Party (other than a Foreign
Subsidiary not organized under the laws of Canada or any province thereof) that
was not in existence or not a Subsidiary Loan Party on the date of the Credit
Agreement is required to enter into the Guarantee Agreement as a Subsidiary
Guarantor upon becoming a Subsidiary Loan Party.  Section 20
of the Guarantee Agreement provides that additional Subsidiaries of the Parent
Borrower may become Subsidiary Guarantors under the Guarantee Agreement by
execution and delivery of an instrument in the form of this Supplement. 
The undersigned Subsidiary of the Parent Borrower (the “New Subsidiary
Guarantor”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Guarantor under the
Guarantee 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 Administrative Agent and the New
Subsidiary Guarantor agree as follows:

 

SECTION 1. In accordance with Section 20
of the Guarantee Agreement, the New Subsidiary Guarantor by its signature below
becomes a Subsidiary Guarantor under the Guarantee Agreement with the same
force and effect as if originally named therein as a Subsidiary Guarantor and
the New Subsidiary Guarantor hereby (a) agrees to all the terms and
provisions of the Guarantee Agreement applicable to it as a Subsidiary
Guarantor thereunder and (b) represents and warrants that the
representations and warranties made by it as a Subsidiary Guarantor thereunder
are true and correct on and as of the date hereof.  Each reference to a “Subsidiary
Guarantor” or “Guarantor” in the Guarantee Agreement shall be

 

 

deemed to include the New Subsidiary Guarantor. 
The Guarantee Agreement is hereby incorporated herein by reference.

 

SECTION 2. The New Subsidiary Guarantor represents and
warrants to the Administrative 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 Administrative Agent shall have received counterparts
of this Supplement that, when taken together, bear the signatures of the New
Subsidiary Guarantor and the Administrative 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 executed counterpart
of this Supplement.

 

SECTION 4. Except as expressly supplemented hereby,
the Guarantee Agreement shall remain in full force and effect.

 

SECTION 5. THIS
SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

SECTION 6. 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 Guarantee Agreement shall not in any way
be affected or impaired thereby (it being understood that the invalidity of a
particular provision hereof 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 7. All communications and notices hereunder
shall be in writing and given as provided in Section 14 of the
Guarantee Agreement.  All communications and notices hereunder to the New
Subsidiary Guarantor shall be given to it at the address set forth under its
signature below, with a copy to the Parent Borrower.

 

SECTION 8. The New Subsidiary Guarantor agrees to
reimburse the Administrative Agent for its out-of-pocket expenses in connection
with this Supplement, including the fees, disbursements and other charges of
counsel for the Administrative Agent.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the New Subsidiary Guarantor and
the Administrative Agent have duly executed this Supplement to the Guarantee
Agreement as of the day and year first above written.

 

	
   

  	
  [NAME OF NEW SUBSIDIARY

  GUARANTOR],

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as the Administrative Agent,

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

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