EXHIBIT 10.25
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of May 30, 2003,
among DEUTSCHE BANK TRUST COMPANY AMERICAS, as Credit Agent,
WILMINGTON TRUST COMPANY, as Trustee, and PLIANT
CORPORATION.
W I T N E S S E T H :
WHEREAS, the Company (such term and each other capitalized term used
herein having the meanings set forth in Section 1 below), certain lenders,
Deutsche Bank Trust Company Americas, as administrative agent and collateral
agent, JPMorgan Chase Bank, as syndication agent, and The Bank of Nova Scotia,
as documentation agent, are parties to the Credit Agreement dated as of
September 30, 1997, as amended and restated as of May 31, 2000, as amended (as
further amended, supplemented or otherwise modified from time to time, the
"Existing Credit Agreement");
WHEREAS, the Obligations of the Company under the Existing Credit
Agreement are secured (together with certain other obligations) by various
assets of the Company and certain Subsidiaries thereof;
WHEREAS, the Company, certain Subsidiaries of the Company and the
Trustee have entered into the Indenture dated as of May 30, 2003 (as amended,
supplemented or otherwise modified from time to time, the "Indenture"), pursuant
to which the Notes shall be governed;
WHEREAS, the Company and certain lenders under the Existing Credit
Agreement have entered into an Amendment dated as of May 22, 2003 (the
"Amendment"), to the Existing Credit Agreement that, among other things,
permits, subject to certain terms and conditions, (a) the issuance of
$250,000,000 in principal amount of the Notes by the Company and (b) a second
priority Lien on the Common Collateral to secure certain of the Noteholder
Claims; and
WHEREAS, it is a condition precedent to the effectiveness of the
Amendment that the parties hereto enter into this Agreement;
Now, THEREFORE, in consideration of the foregoing, the mutual covenants
and obligations herein set forth and for other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
Section 1. (a) Definitions. As used in this Agreement, the following
terms have the meanings specified below:
"Agreement" means this Agreement, as amended, renewed, extended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Amendment" has the meaning set forth in the recitals hereto.
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"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreement and any Refinancing Indebtedness (as defined in
the Indenture) with respect thereto, as amended from time to time, including
principal, premium (if any), interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof. It is understood and
agreed that Refinancing Indebtedness in respect of the Credit Agreement may be
Incurred (as defined in the Indenture) from time to time after termination of
the Credit Agreement.
"Bankruptcy Law" means Title 11 of the United States Code and any
similar Federal, state or foreign law for the relief of debtors.
"Business Day" means any day other than a Saturday, a Sunday or a day
that is a legal holiday under the laws of the State of New York or on which
banking institutions in the State of New York are required or authorized by law
or other governmental action to close.
"Cash Management Obligations" means, with respect to any Person, all
obligations of such Person in respect of overdrafts and related liabilities owed
to any other Person that arise from treasury, depositary or cash management
services in connection with any automated clearing house transfers of funds or
any similar transactions.
"Commodity Hedge Obligations" means, with respect to any Person, all
obligations of such Person in respect of any commodity price protection
agreement or other commodity price hedging arrangement or other similar
agreement or arrangement.
"Common Collateral" means all of the assets of any Grantor, whether
real, personal or mixed, constituting both Senior Lender Collateral and
Noteholder Collateral.
"Company" means Pliant Corporation, a Utah corporation.
"Comparable Noteholder Collateral Document" means, in relation to any
Common Collateral subject to any Lien created under any Senior Collateral
Document, that Noteholder Collateral Document that creates a Lien on the same
Common Collateral, granted by the same Grantor.
"Credit Agent" means Deutsche Bank Trust Company Americas (formerly
known as Bankers Trust Company) in its capacity as collateral agent under the
Existing Credit Agreement and the Security Documents (as defined in the Existing
Credit Agreement) and also includes its successors hereunder as collateral agent
for the Senior Lenders (or if there is more than one such successor agent, such
agents representing the Senior Lenders holding a majority of the Senior Lender
Claims) under the Senior Credit Agreement in accordance with Section 5.6,
exercising substantially the same rights and powers, or if there is no acting
Credit Agent under the Senior Credit Agreement, the Required Lenders.
"Credit Agreement" means the credit agreement dated as of September 30,
1997, as amended and restated as of May 31, 2000 (and further amended by
Amendments No. 1 through 6), among the Company, Aspen Industrial, S.A. de C.V.,
the financial institutions party
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thereto as lenders, Deutsche Bank Trust Company Americas, as administrative
agent and collateral agent, and JPMorgan Chase Bank, as syndication agent,
together with related documents thereto including any guarantee agreements and
security documents, as further amended, modified, supplemented, restated,
renewed, refunded, replaced, restructured, repaid or refinanced from time to
time (including any agreement extending the maturity thereof or increasing the
amount of available borrowings thereunder or adding Restricted Subsidiaries (as
defined in the Indenture) of the Company as additional borrowers or guarantors
thereunder) whether with the original agents and lenders or otherwise and
whether provided under the original credit agreement or other credit agreements
or otherwise.
"Credit Facilities" means one or more (a) debt facilities (including the
Credit Agreement) or commercial paper facilities providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to lenders or to special purpose entities formed to borrow from
lenders against such receivables) or letters of credit, (b) debt securities,
indentures or other forms of debt financing (including convertible or
exchangeable debt instruments), or (c) instruments or agreements evidencing any
other Indebtedness, in each case, as amended, supplemented, modified, extended,
renewed, restated or refunded in whole or in part from time to time.
"Discharge of Senior Lender Claims" means, except to the extent
otherwise provided in Section 5.6, payment in full in cash of (a) the principal
of and interest and premium, if any, on all Indebtedness outstanding under the
First-Lien Credit Facilities or, with respect to letters of credit outstanding
thereunder, delivery of cash collateral or backstop letters of credit in respect
thereof in compliance with such First-Lien Credit Facilities, as applicable, in
each case after or concurrently with termination of all commitments to extend
credit thereunder and (b) any other Senior Lender Claims that are due and
payable or otherwise accrued and owing at or prior to the time such principal
and interest are paid.
"Existing Credit Agreement" has the meaning set forth in the recitals
hereto.
"First-Lien Credit Facilities" means (a) the Credit Facilities provided
pursuant to the Credit Agreement and (b) any other Credit Facility, that, in the
case of both clauses (a) and (b), is secured by a Permitted Lien (as defined in
the Indenture) described in clause (a) of the definition thereof and (except for
the Credit Facilities provided pursuant to the Existing Credit Agreement) is
designated by the Company as a "First-Lien Credit Facility" for purposes of the
Indenture.
"Future First-Lien Credit Facility" means any First-Lien Credit Facility
(other than the Existing Credit Agreement) that is designated by the Company as
a "First-Lien Credit Facility" for purposes of the Indenture.
"Future Other First-Lien Obligations" means all Obligations of the
Company or any other Grantor in respect of Cash Management Obligations or
Hedging Obligations that are designated by the Company as "Credit Agreement
Obligations" for purposes of the Indenture (other than any Senior Lender Cash
Management Obligations and Senior Lender Hedging Obligations).
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"Grantors" means the Company and each of the Subsidiaries that has
executed and delivered a Noteholder Collateral Document or a Senior Collateral
Document.
"Hedging Obligations" means, with respect to any Person, all obligations
and liabilities of such Person in respect of (a) interest rate or currency swap
agreements, interest rate or currency cap agreements, interest rate or currency
collar agreements, (b) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates and/or currency exchange rates or
(c) Commodity Hedge Obligations.
"Indebtedness" means and includes all obligations that constitute
"Indebtedness" within the meaning of the Indenture or the Senior Credit
Agreement.
"Indenture" has the meaning set forth in the recitals hereto.
"Insolvency or Liquidation Proceeding" means (a) any voluntary or
involuntary case or proceeding under any Bankruptcy Law with respect to any
Grantor, (b) any other voluntary or involuntary insolvency, reorganization or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization
or other similar case or proceeding with respect to any Grantor or with respect
to any of their respective assets, (c) any liquidation, dissolution,
reorganization or winding up of any Grantor whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of any
Grantor.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Noteholder Claims" means all Obligations in respect of the Notes or
arising under the Noteholder Documents or any of them.
"Noteholder Collateral" means all of the assets of any Grantor, whether
real, personal or mixed, with respect to which a Lien is granted as security for
any Noteholder Claim.
"Noteholder Collateral Documents" means the Noteholder Pledge Agreement,
the Noteholder Security Agreement, the Noteholder Mortgages and any other
document or instrument pursuant to which a Lien is granted by any Grantor to
secure any Noteholder Claims or under which rights or remedies with respect to
any such Lien are governed.
"Noteholder Documents" means (a) the Indenture, the Notes, the
Noteholder Collateral Documents and any document or instrument evidencing or
governing any Other Second-Lien Obligations (as defined in the Indenture) and
any (b) other related document or instrument executed and delivered pursuant to
any Noteholder Document described in clause (a) above evidencing or governing
any Obligations thereunder.
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"Noteholder Mortgages" means a collective reference to each mortgage,
deed of trust and any other document or instrument under which any Lien on real
property owned by any Grantor is granted to secure any Noteholder Claims or
under which rights or remedies with respect to any such Liens are governed.
"Noteholder Pledge Agreement" means the Second Priority Pledge
Agreement, dated as of May 30, 2003, among the Company, the other Grantors and
the Trustee.
"Noteholder Security Agreement" means the Second Priority Security
Agreement, dated as of May 30, 2003, among the Company, the other Grantors and
the Trustee.
"Noteholders" means the Persons holding Noteholder Claims.
"Notes" means (a) the initial $250,000,000 in principal amount of
11 1/8% Senior Secured Notes due 2009 to be issued by the Company, (b) the
exchange notes issued in exchange therefor as contemplated by the Registration
Rights Agreement dated as of May 30, 2003, and the Initial Purchasers (as
defined therein) and (c) any additional notes issued under the Indenture by the
Company, to the extent permitted by the Indenture and the Senior Credit
Agreement.
"Obligations" means any and all obligations with respect to the payment
of (a) any principal of or interest (including interest accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not a claim
for post-filing interest is allowed in such proceeding) or premium on any
Indebtedness, including any reimbursement obligation in respect of any letter of
credit, (b) any fees, indemnification obligations, expense reimbursement
obligations or other liabilities payable under the documentation governing any
Indebtedness, (c) any obligation to post cash collateral in respect of letters
of credit and any other obligations or (d) any Cash Management Obligations or
Hedging Obligations.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, entity or
other party, including any government and any political subdivision, agency or
instrumentality thereof.
"Pledged Collateral" means (a) the Common Collateral in the possession
of the Credit Agent (or its agents or bailees), to the extent that possession
thereof is necessary to perfect a Lien thereon under the Uniform Commercial
Code, and (b) the "Pledged Securities" under, and as defined in, the Noteholder
Pledge Agreement.
"Recovery" has the meaning set forth in Section 6.5.
"Required Lenders" means, with respect to any amendment or modification
of the Senior Credit Agreement, or any termination or waiver of any provision of
the Senior Credit Agreement, or any consent or departure by the Company or any
of the Subsidiaries therefrom, or consent of the Required Lenders required under
this Agreement, those Senior Lenders the approval of which is required to
approve such amendment or modification of, termination or waiver of any
provision of or consent or departure from the Senior Credit Agreement (or would
be required to effect such consent under this Agreement if such consent were
treated as an amendment of the Senior Credit Agreement).
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"Senior Collateral Documents" means the Security Documents (as defined
in the Existing Credit Agreement) and any other agreement, document or
instrument pursuant to which a Lien is granted securing any Senior Lender Claims
or under which rights or remedies with respect to such Liens are governed.
"Senior Credit Agreement" means the Existing Credit Agreement; provided
that if at any time a Discharge of Senior Lender Claims occurs with respect to
the Existing Credit Agreement (without giving effect to Section 5.6), then, to
the extent provided in Section 5.6, the term "Senior Credit Agreement" means the
Future First-Lien Credit Facility designated by the Company as the "Senior
Credit Agreement" in accordance with such Section.
"Senior Lender Cash Management Obligations" means any Cash Management
Obligations secured by any Common Collateral under the same Senior Collateral
Documents that secure Obligations under the Senior Credit Agreement.
"Senior Lender Claims" means (a) all Bank Indebtedness and all other
Indebtedness outstanding under one or more of any other First-Lien Credit
Facilities, including any Future First-Lien Credit Facilities, the Indebtedness
under each of which (i) constitutes Permitted Debt (as defined in the Indenture)
or is otherwise permitted by the Indenture, (ii) is designated by the Company as
"Credit Agreement Obligations" for purposes of the Indenture and (iii) is
secured by a Permitted Lien (as defined in the Indenture) described in clause
(a) of the definition thereof, (b) all other Obligations (not constituting
Indebtedness) of the Company or any Grantor under the Credit Agreement or any
such other First-Lien Credit Facility, including all Senior Lender Hedging
Obligations and Senior Lender Cash Management Obligations, and (c) all Future
Other First-Lien Obligations. Senior Lender Claims shall include all interest
accrued or accruing (or that would, absent the commencement of an Insolvency or
Liquidation Proceeding, accrue) after the commencement of an Insolvency or
Liquidation Proceeding in accordance with and at the rate specified in the
relevant Senior Lender Document whether or not the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding. Notwithstanding
anything to the contrary contained in the first sentence of this definition, any
Obligation under the Senior Lender Documents or any Future First-Lien Credit
Facility (including any Cash Management Obligations or Hedging Obligations)
shall constitute a "Senior Lender Claim" if the Credit Agent or the relevant
Senior Lender or Senior Lenders shall have received a written representation
from the Company in or in connection with the Senior Lender Documents evidencing
such Obligation that such Obligation constitutes a "Credit Agreement Obligation"
under and as defined in the Indenture (whether or not such Obligation is at any
time determined not to have been permitted to be incurred under the Indenture).
"Senior Lender Collateral" means all of the assets of any Grantor,
whether real, personal or mixed, with respect to which a Lien is granted as
security for any Senior Lender Claim.
"Senior Lender Documents" means the Senior Credit Agreement, the Senior
Collateral Documents, and each of the other agreements, documents and
instruments (including each agreement, document or instrument providing for or
evidencing a Senior Lender Hedging Obligation or Senior Lender Cash Management
Obligation) providing for or evidencing any other Obligation under the Credit
Agreement or any Future First-Lien Credit Facility or any
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Future Other First-Lien Obligations, and any other related document or
instrument executed or delivered pursuant to any Senior Lender Document at any
time or otherwise evidencing any Indebtedness arising under any Senior Lender
Document.
"Senior Lender Hedging Obligations" means any Hedging Obligations
secured by any Common Collateral under the same Senior Collateral Documents that
secure Obligations under the Senior Credit Agreement.
"Senior Lenders" means the Persons holding Senior Lender Claims,
including the Credit Agent.
"Subsidiary" means any "Subsidiary" of the Company, as defined in the
Indenture or the Senior Credit Agreement.
"Trustee" means Wilmington Trust Company, in its capacity as trustee
under the Indenture and collateral agent under the Noteholder Collateral
Documents, and also includes its successors hereunder as collateral agent for
the Noteholders under the Noteholder Collateral Documents.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code as
from time to time in effect in the State of New York.
(b) Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified in accordance with this Agreement, (b) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (c) the words "herein", "hereof" and "hereunder", and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Sections shall be construed to refer to Sections of this Agreement and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
Section 2. Lien Priorities.
2.1 Subordination. Notwithstanding the date, manner or order of
grant, attachment or perfection of any Liens granted to the Trustee or the
Noteholders on the Common Collateral or of any Liens granted to the Credit Agent
or the Senior Lenders on the Common Collateral and notwithstanding any provision
of the UCC, or any applicable law or the Noteholder Documents or the Senior
Lender Documents or any other circumstance whatsoever, the Trustee, on behalf of
itself and the Noteholders, hereby agrees that: (a) any Lien on the Common
Collateral securing any Senior Lender Claims now or hereafter held by or on
behalf of
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the Credit Agent or any Senior Lenders or any agent or trustee therefor shall be
senior in all respects and prior to any Lien on the Common Collateral securing
any of the Noteholder Claims; and (b) any Lien on the Common Collateral now or
hereafter held by or on behalf of the Trustee or any Noteholders or any agent or
trustee therefor regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Common Collateral securing any Senior Lender
Claims. All Liens on the Common Collateral securing any Senior Lender Claims
shall be and remain senior in all respects and prior to all Liens on the Common
Collateral securing any Noteholder Claims for all purposes, whether or not such
Liens securing any Senior Lender Claims are subordinated to any Lien securing
any other obligation of the Company, any other Grantor or any other Person.
2.2 Prohibition on Contesting Liens. Each of the Trustee, for itself
and on behalf of each Noteholder, and the Credit Agent, for itself and on behalf
of each Senior Lender, agrees that it shall not (and hereby waives any right to)
contest or support any other Person in contesting, in any proceeding (including
any Insolvency or Liquidation Proceeding), the priority, validity or
enforceability of (a) a Lien held by or on behalf of any of the Senior Lenders
in the Senior Lender Collateral or (b) a Lien held by or on behalf of any of the
Noteholders in the Common Collateral (in the case of this clause (b), to secure
Obligations in respect of Notes referred to in clause (a), (b) or (c) of the
definition of the term "Notes" in Section 1(a)), as the case may be; provided
that nothing in this Agreement shall be construed to prevent or impair the
rights of the Credit Agent or any Senior Lender to enforce this Agreement,
including the priority of the Liens securing the Senior Lender Claims as
provided in Section 2.1.
2.3 No New Liens. So long as the Discharge of Senior Lender Claims
has not occurred, the parties hereto agree that, after the date hereof, if the
Trustee shall hold any Lien on any assets of the Company or any other Grantor
securing any Noteholder Claims that are not also subject to the first-priority
Lien of the Credit Agent under the Senior Lender Documents, the Trustee, upon
demand by the Credit Agent or the Company, will either release such Lien or
assign it to the Credit Agent as security for the Senior Lender Claims (in which
case the Trustee may retain a junior lien on such assets subject to the terms
hereof).
Section 3. Enforcement.
3.1 Exercise of Remedies.
(a) So long as the Discharge of Senior Lender Claims has not
occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against the Company or any other Grantor, (i) the Trustee and
the Noteholders will not exercise or seek to exercise any rights or remedies
(including set-off) with respect to any Common Collateral, institute any action
or proceeding with respect to such rights or remedies (including any action of
foreclosure), contest, protest or object to any foreclosure proceeding or action
brought by the Credit Agent or any Senior Lender, the exercise of any right
under any lockbox agreement, control agreement, landlord waiver or bailee's
letter or similar agreement or arrangement to which the Trustee or any
Noteholder is a party, or any other exercise by any such party, of any rights
and remedies relating to the Common Collateral under the Senior Lender Documents
or otherwise, or object to the forbearance by the Senior Lenders from bringing
or pursuing any foreclosure proceeding or action or any other exercise of any
rights or remedies relating to the
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Common Collateral and (ii) the Credit Agent and the Senior Lenders shall have
the exclusive right to enforce rights, exercise remedies (including set-off and
the right to credit bid their debt) and make determinations regarding the
release, disposition, or restrictions with respect to the Common Collateral
without any consultation with or the consent of the Trustee or any Noteholder;
provided, that (A) in any Insolvency or Liquidation Proceeding commenced by or
against the Company or any other Grantor, the Trustee may file a claim or
statement of interest with respect to the Noteholder Claims, and (B) the Trustee
may take any action (not adverse to the prior Liens on the Common Collateral
securing the Senior Lender Claims, or the rights of the Credit Agent or the
Senior Lenders to exercise remedies in respect thereof) in order to preserve or
protect its Lien on the Common Collateral. In exercising rights and remedies
with respect to the Common Collateral, the Credit Agent and the Senior Lenders
may enforce the provisions of the Senior Lender Documents and exercise remedies
thereunder, all in such order and in such manner as they may determine in the
exercise of their sole discretion. Such exercise and enforcement shall include
the rights of an agent appointed by them to sell or otherwise dispose of Common
Collateral upon foreclosure, to incur expenses in connection with such sale or
disposition, and to exercise all the rights and remedies of a secured lender
under the Uniform Commercial Code of any applicable jurisdiction and of a
secured creditor under Bankruptcy Laws of any applicable jurisdiction.
(b) The Trustee, on behalf of itself and the Noteholders, agrees
that it will not take or receive any Common Collateral or any proceeds of Common
Collateral in connection with the exercise of any right or remedy (including
set-off) with respect to any Common Collateral, unless and until the Discharge
of Senior Lender Claims has occurred. Without limiting the generality of the
foregoing, unless and until the Discharge of Senior Lender Claims has occurred,
except as expressly provided in the proviso in clause (ii) of Section 3.1(a),
the sole right of the Trustee and the Noteholders with respect to the Common
Collateral is to hold a Lien on the Common Collateral pursuant to the Noteholder
Documents for the period and to the extent granted therein and to receive a
share of the proceeds thereof, if any, after the Discharge of the Senior Lender
Claims has occurred.
(c) Subject to the proviso in clause (ii) of Section 3.1(a), (i) the
Trustee, for itself and on behalf of the Noteholders, agrees that the Trustee
and the Noteholders will not take any action that would hinder any exercise of
remedies undertaken by the Credit Agent or the Senior Lenders under the Senior
Loan Documents, including any sale, lease, exchange, transfer or other
disposition of the Common Collateral, whether by foreclosure or otherwise, and
(ii) the Trustee, for itself and on behalf of the Noteholders, hereby waives any
and all rights it or the Noteholders may have as a junior lien creditor or
otherwise to object to the manner in which the Credit Agent or the Senior
Lenders seek to enforce or collect the Senior Lender Claims or the Liens granted
in any of the Senior Lender Collateral, regardless of whether any action or
failure to act by or on behalf of the Credit Agent or Senior Lenders is adverse
to the interest of the Noteholders.
(d) The Trustee hereby acknowledges and agrees that no covenant,
agreement or restriction contained in any Noteholder Document shall be deemed to
restrict in any way the rights and remedies of the Credit Agent or the Senior
Lenders with respect to the Common Collateral as set forth in this Agreement and
the Senior Lender Documents.
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3.2 Cooperation. Subject to the proviso in clause (ii) of Section
3.1(a), the Trustee, on behalf of itself and the Noteholders, agrees that,
unless and until the Discharge of Senior Lender Claims has occurred, it will not
commence, or join with any Person (other than the Senior Lenders and the Credit
Agent upon the request thereof) in commencing, any enforcement, collection,
execution, levy or foreclosure action or proceeding with respect to any Lien
held by it under any of the Noteholder Documents or otherwise.
Section 4. Payments.
4.1 Application of Proceeds. As long as the Discharge of Senior
Lender Claims has not occurred, the Common Collateral or proceeds thereof
received in connection with the sale or other disposition of, or collection on,
such Common Collateral upon the exercise of remedies, shall be applied by the
Credit Agent to the Senior Lender Claims in such order as specified in the
relevant Senior Lender Documents until the Discharge of Senior Lender Claims has
occurred. Upon the Discharge of the Senior Lender Claims, the Credit Agent shall
deliver to the Trustee any proceeds of Common Collateral held by it in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct to be applied by the Trustee to the Noteholder
Claims in such order as specified in the relevant Noteholder Documents.
4.2 Payments Over. Any Common Collateral or proceeds thereof
received by the Trustee or any Noteholder in connection with the exercise of any
right or remedy (including set-off) relating to the Common Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Credit Agent for the benefit of the Senior Lenders in
the same form as received, with any necessary endorsements or as a court of
competent jurisdiction may otherwise direct. The Credit Agent is hereby
authorized to make any such endorsements as agent for the Trustee or any such
Noteholder. This authorization is coupled with an interest and is irrevocable.
Section 5. Other Agreements.
5.1 Releases.
(a) If:
(i) all other Liens (other than Permitted Liens (as defined in
the Indenture) under clauses (b) - (aa) of the definition of Permitted Liens
in the Indenture) on any Common Collateral securing Credit Agreement
Obligations or any Other Second-Lien Obligations then secured by that Common
Collateral (including all commitments thereunder) are released; provided
that after giving effect to the release, Senior Secured Claims secured by
Liens on the remaining Common Collateral remain outstanding;
(ii) any Common Collateral is disposed of pursuant to a
transaction permitted or not prohibited under the Indenture;
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(iii) the Company provides substitute collateral for any Common
Collateral with at least an equivalent fair value, as determined in good
faith by the Board of Directors of the Company;
(iv) all of the stock of any of the Subsidiaries that is Common
Collateral is released or any Subsidiary that is a Note Guarantor (as
defined in the Indenture) is released from its Note Guarantee (as defined in
the Indenture); or
(v) the Company so requests in respect of Common Collateral with
a fair value, as determined in good faith by the Board of Directors of the
Company, of up to $2.0 million in any calendar year; subject to a cumulative
carryover for any amount not used in any prior calendar year,
then
the Liens, if any, of the Trustee, for itself or for the benefit of the
Noteholders, on such Common Collateral (and, in the case of clause (iv) above,
on the assets of such Subsidiary that constitute Common Collateral) shall be
automatically, unconditionally and simultaneously released and the Trustee, for
itself and on behalf of any such Noteholder, promptly shall execute and deliver
to the Credit Agent or such Grantor such termination statements, releases and
other documents as the Credit Agent or such Grantor may request to effectively
confirm such release; provided that a Grantor shall not be released from its
guaranty of the Noteholder Claims pursuant to this Section if such Grantor will
remain liable under a guaranty in respect of the Senior Subordinated Notes or
other Subordinated Obligations (each as defined in the Indenture).
(b) The Trustee, for itself and on behalf of the Noteholders, hereby
irrevocably constitutes and appoints the Credit Agent and any officer or agent
of the Credit Agent, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Trustee or such holder or in the Credit Agent's own name, from time
to time in the Credit Agent's discretion, for the purpose of carrying out the
terms of this Section 5.1, to take any and all appropriate action and to execute
any and all documents and instruments that may be necessary or desirable to
accomplish the purposes of this Section 5.1, including any termination
statements, endorsements or other instruments of transfer or release.
5.2 Insurance. Unless and until the Discharge of Senior Lender
Claims has occurred, the Credit Agent and the Senior Lenders shall have the sole
and exclusive right, subject to the rights of the Grantors under the Senior
Lender Documents, to adjust settlement for any insurance policy covering the
Common Collateral in the event of any loss thereunder and to approve any award
granted in any condemnation or similar proceeding affecting the Common
Collateral. Unless and until the Discharge of Senior Lender Claims has occurred,
all proceeds of any such policy and any such award if in respect to the Common
Collateral shall be paid to the Credit Agent for the benefit of the Senior
Lenders to the extent required under the Senior Lender Documents and thereafter
to the Trustee for the benefit of the Noteholders to the extent required under
the applicable Noteholder Documents and then to the owner of the subject
property or as a court of competent jurisdiction may otherwise direct. If the
Trustee or any Noteholder shall, at any time, receive any proceeds of any such
insurance policy or any such award in contravention
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of this Agreement, it shall pay such proceeds over to the Credit Agent in
accordance with the terms of Section 4.2.
5.3 Amendments to Noteholder Collateral Documents.
(a) Without the prior written consent of the Credit Agent and the
Required Lenders, no Noteholder Collateral Document may be amended, supplemented
or otherwise modified or entered into to the extent such amendment, supplement
or modification, or the terms of any new Noteholder Collateral Document, would
be prohibited by or inconsistent with any of the terms of the Senior Lender
Documents. The Trustee agrees that each Noteholder Collateral Document shall
include the following language (or language to similar effect approved by the
Credit Agent):
"Notwithstanding anything herein to the contrary, the lien and
security interest granted to the Trustee pursuant to this Agreement and the
exercise of any right or remedy by the Trustee hereunder are subject to the
provisions of the Intercreditor Agreement, dated as of May 30, 2003 (as
amended, supplemented or otherwise modified from time to time, the
"Intercreditor Agreement"), among Pliant Corporation, Deutsche Bank Trust
Company Americas (formerly known as Bankers Trust Company), as Credit Agent,
and Wilmington Trust Company, as Trustee. In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the
terms of the Intercreditor Agreement shall govern."
In addition, the Trustee agrees that each Noteholder Mortgage covering any
Common Collateral shall contain such other language as the Credit Agent may
reasonably request to reflect the subordination of such Noteholder Mortgage to
the Senior Collateral Document covering such Common Collateral.
(b) In the event that the Credit Agent or the Senior Lenders enter
into any amendment, waiver or consent in respect of any of the Senior Collateral
Documents for the Senior Credit Agreement or, if no Senior Credit Agreement then
exists, for the other Senior Lender Documents for the purpose of adding to, or
deleting from, or waiving or consenting to any departures from any provisions
of, any Senior Collateral Document or changing in any manner the rights of the
Credit Agent, the Senior Lenders, the Company or any other Grantor thereunder,
then such amendment, waiver or consent shall apply automatically to any
comparable provision of the Indenture and the Comparable Noteholder Collateral
Document without the consent of the Trustee or the Noteholders and without any
action by the Trustee, the Company or any other Grantor, provided, that (A) no
such amendment, waiver or consent shall have the effect of removing assets
subject to the Lien of the Noteholder Collateral Documents, except to the extent
that a release of such Lien is permitted by Section 5.1, and (B) notice of such
amendment, waiver or consent shall have been given to the Trustee.
5.4 Rights As Unsecured Creditors. Notwithstanding anything to the
contrary in this Agreement, the Trustee and the Noteholders may exercise rights
and remedies as an unsecured creditor against the Company or any Subsidiary that
has guaranteed the Noteholder Claims in accordance with the terms of the
Noteholder Documents and applicable law as if the Common Collateral was not
Noteholder Collateral. Nothing in this Agreement shall prohibit the
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receipt by the Trustee or any Noteholders of the required payments of interest
and principal so long as such receipt is not the direct or indirect result of
the exercise by the Trustee or any Noteholder of rights or remedies as a secured
creditor or enforcement in contravention of this Agreement of any Lien held by
any of them. In the event the Trustee or any Noteholder becomes a judgment lien
creditor in respect of Common Collateral as a result of its enforcement of its
rights as an unsecured creditor, such judgment lien shall be subordinated to the
Liens securing Senior Lender Claims on the same basis as the other Liens
securing the Noteholder Claims are so subordinated to such Senior Lender Claims
under this Agreement. Nothing in this Agreement impairs or otherwise adversely
affects any rights or remedies the Credit Agent or the Senior Lenders may have
with respect to the Senior Lender Collateral.
5.5 Bailee for Perfection.
(a) The Credit Agent agrees to hold the Pledged Collateral that is
part of the Common Collateral in its possession or control (or in the possession
or control of its agents or bailees) as bailee for the Trustee and any assignee
solely for the purpose of perfecting the security interest granted in such
Pledged Collateral pursuant to the Noteholder Pledge Agreement, subject to the
terms and conditions of this Section 5.5.
(b) Except as otherwise specifically provided herein, until the
Discharge of Senior Lender Claims has occurred, the Credit Agent shall be
entitled to deal with the Pledged Collateral in accordance with the terms of the
Senior Lender Documents as if the Liens under the Noteholder Collateral
Documents did not exist. The rights of the Trustee and the Noteholders shall at
all times be subject to the terms of this Agreement and to the Credit Agent's
rights under the Senior Lender Documents.
(c) The Credit Agent shall have no obligation whatsoever to the
Trustee or any Noteholder to assure that the Pledged Collateral is genuine or
owned by any of the Grantors or to preserve rights or benefits of any Person
except as expressly set forth in this Section 5.5. The duties or
responsibilities of the Credit Agent under this Section 5.5 shall be limited
solely to holding the Pledged Collateral as bailee for the Trustee for purposes
of perfecting the Lien held by the Trustee.
(d) The Credit Agent shall not have by reason of the Noteholder
Collateral Documents or this Agreement or any other document a fiduciary
relationship in respect of the Trustee or any Noteholder.
(e) Upon the Discharge of Senior Lender Claims, the Credit Agent
shall deliver to the Trustee the remaining Pledged Collateral (if any) together
with any necessary endorsements (or otherwise allow the Trustee to obtain
control of such Pledged Collateral) or as a court of competent jurisdiction may
otherwise direct.
5.6 When Discharge of Senior Lender Claims Deemed to Not Have
Occurred. If at any time after the Discharge of Senior Lender Claims has
occurred with respect to the Existing Credit Agreement the Company designates
any Future First-Lien Credit Facility to be the "Senior Credit Agreement"
hereunder, then such Discharge of Senior Lender Claims shall automatically be
deemed not to have occurred for all purposes of this Agreement (other than
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with respect to any actions taken prior to the date of such designation as a
result of the occurrence of such first Discharge of Senior Lender Claims), and
such Future First-Lien Credit Facility shall automatically be treated as the
Senior Credit Agreement for all purposes of this Agreement, including for
purposes of the Lien priorities and rights in respect of Common Collateral set
forth herein and the granting by the Credit Agent of amendments, waivers and
consents hereunder. Upon receipt of notice of such designation (including the
identity of the new Credit Agent), the Trustee shall promptly (i) enter into
such documents and agreements (including amendments or supplements to this
Agreement) as the Company or such new Credit Agent shall request in order to
provide to the new Credit Agent the rights of the Credit Agent contemplated
hereby and (ii) deliver to the Credit Agent the Pledged Collateral together with
any necessary endorsements (or otherwise allow such Credit Agent to obtain
control of such Pledged Collateral).
Section 6. Insolvency or Liquidation Proceedings.
6.1 Financing Issues. If the Company or any other Grantor shall be
subject to any Insolvency or Liquidation Proceeding and the Credit Agent shall
desire to permit the use of cash collateral or to permit the Company or any
other Grantor to obtain financing under Section 363 or Section 364 of Title 11
of the United States Code or any similar Bankruptcy Law ("DIP Financing"), then
the Trustee, on behalf of itself and the Noteholders, agrees that it will raise
no objection to such use of cash collateral or DIP Financing and will not
request adequate protection or any other relief in connection therewith (except
to the extent permitted by Section 6.3) and, to the extent the Liens securing
the Senior Lender Claims under the Senior Credit Agreement or, if no Senior
Credit Agreement exists, under the other Senior Lender Documents are
subordinated or pari passu with such DIP Financing, will subordinate its Liens
in the Common Collateral to such DIP Financing (and all Obligations relating
thereto) on the same basis as the other Liens securing the Noteholder Claims are
so subordinated to Senior Lender Claims under this Agreement.
6.2 Relief from the Automatic Stay. Until the Discharge of Senior
Lender Claims has occurred, the Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency or Liquidation Proceeding in respect of the
Common Collateral, without the prior written consent of the Credit Agent and the
Required Lenders.
6.3 Adequate Protection. The Trustee, on behalf of itself and the
Noteholders, agrees that none of them shall contest (or support any other Person
contesting) (a) any request by the Credit Agent or the Senior Lenders for
adequate protection or (b) any objection by the Credit Agent or the Senior
Lenders to any motion, relief, action or proceeding based on the Credit Agent's
or the Senior Lenders' claiming a lack of adequate protection. Notwithstanding
the foregoing contained in this Section 6.3, in any Insolvency or Liquidation
Proceeding, (i) if the Senior Lenders (or any subset thereof) are granted
adequate protection in the form of additional collateral in connection with any
DIP Financing or use of cash collateral under Section 363 or Section 364 of
Title 11 of the United States Code or any similar Bankruptcy Law, then the
Trustee, on behalf of itself and any of the Noteholders, may seek or request
adequate protection in the form of a replacement Lien on such additional
collateral,
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which Lien is subordinated to the Liens securing the Senior Lender Claims and
such DIP Financing (and all Obligations relating thereto) on the same basis as
the other Liens securing the Noteholder Claims are so subordinated to the Senior
Lender Claims under this Agreement, and (ii) in the event the Trustee, on behalf
of itself and the Noteholders, seeks or requests adequate protection and such
adequate protection is granted in the form of additional collateral, then the
Trustee, on behalf of itself or any of the Noteholders, agrees that the Credit
Agent shall also be granted a senior Lien on such additional collateral as
security for the Senior Lender Claims and any such DIP Financing and that any
Lien on such additional collateral securing the Noteholder Claims shall be
subordinated to the Liens on such collateral securing the Senior Lender Claims
and any such DIP Financing (and all Obligations relating thereto) and any other
Liens granted to the Senior Lenders as adequate protection on the same basis as
the other Liens securing the Noteholder Claims are so subordinated to such
Senior Lender Claims under this Agreement.
6.4 No Waiver. Nothing contained herein shall prohibit or in any way
limit the Credit Agent or any Senior Lender from objecting in any Insolvency or
Liquidation Proceeding or otherwise to any action taken by the Trustee or any of
the Noteholders, including the seeking by the Trustee or any Noteholder of
adequate protection or the asserting by the Trustee or any Noteholder of any of
its rights and remedies under the Noteholder Documents or otherwise.
6.5 Preference Issues. If any Senior Lender is required in any
Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay
to the estate of the Company or any other Grantor (or any trustee, receiver or
similar person therefor), because the payment of such amount was declared to be
fraudulent or preferential in any respect or for any other reason, any amount (a
"Recovery"), whether received as proceeds of security, enforcement of any right
of set-off or otherwise, then the Senior Lender Claims shall be reinstated to
the extent of such Recovery and deemed to be outstanding as if such payment had
not occurred and the Senior Lenders shall be entitled to a Discharge of Senior
Lender Claims with respect to all such recovered amounts. If this Agreement
shall have been terminated prior to such Recovery, this Agreement shall be
reinstated in full force and effect, and such prior termination shall not
diminish, release, discharge, impair or otherwise affect the obligations of the
parties hereto.
Section 7. Reliance; Waivers; etc.
7.1 Reliance. The consent by the Senior Lenders to the execution and
delivery of the Noteholder Documents to which the Senior Lenders have consented
and the grant to the Trustee on behalf of certain of the Noteholders of a Lien
on the Common Collateral and all loans and other extensions of credit made or
deemed made on and after the date hereof by the Senior Lenders to the Company or
any Subsidiary shall be deemed to have been given and made in reliance upon this
Agreement. The Trustee, on behalf of itself and the Noteholders, acknowledges
that it and the Noteholders have, independently and without reliance on the
Credit Agent or any Senior Lender, and based on documents and information deemed
by them appropriate, made their own credit analysis and decision to enter into
the Indenture, this Agreement and the transactions contemplated hereby and
thereby and they will continue to make their own credit decision in taking or
not taking any action under the Indenture or this Agreement.
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7.2 No Warranties or Liability. The Trustee, on behalf of itself and
the Noteholders, acknowledges and agrees that each of the Credit Agent and the
Senior Lenders have made no express or implied representation or warranty,
including with respect to the execution, validity, legality, completeness,
collectibility or enforceability of any of the Senior Lender Documents, the
ownership of any Common Collateral or the perfection or priority of any Liens
thereon. The Senior Lenders will be entitled to manage and supervise their
respective loans and extensions of credit under the Senior Lender Documents in
accordance with law and as they may otherwise, in their sole discretion, deem
appropriate, and the Senior Lenders may manage their loans and extensions of
credit without regard to any rights or interests that the Trustee or any of the
Noteholders have in the Common Collateral or otherwise, except as otherwise
provided in this Agreement. Neither the Credit Agent nor any Senior Lender shall
have any duty to the Trustee or any of the Noteholders to act or refrain from
acting in a manner that allows, or results in, the occurrence or continuance of
an event of default or default under any agreements with the Company or any
Subsidiary thereof (including the Noteholder Documents), regardless of any
knowledge thereof that they may have or be charged with.
7.3 No Waiver of Lien Priorities.
(a) No right of the Senior Lenders, the Credit Agent or any of them
to enforce any provision of this Agreement or any Senior Lender Document shall
at any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or any other Grantor or by any act or failure to act by
any Senior Lender or the Credit Agent, or by any noncompliance by any Person
with the terms, provisions and covenants of this Agreement, any of the Senior
Lender Documents or any of the Noteholder Documents, regardless of any knowledge
thereof that the Credit Agent or the Senior Lenders, or any of them, may have or
be otherwise charged with;
(b) Without in any way limiting the generality of the foregoing
paragraph (but subject to the rights of the Company and the other Grantors under
the Senior Lender Documents), the Senior Lenders, the Credit Agent and any of
them, may, at any time and from time to time, without the consent of, or notice
to, the Trustee or any Noteholder, without incurring any liabilities to the
Trustee or any Noteholder and without impairing or releasing the Lien priorities
and other benefits provided in this Agreement (even if any right of subrogation
or other right or remedy of the Trustee or any Noteholder is affected, impaired
or extinguished thereby) do any one or more of the following:
(i) change the manner, place or terms of payment or change or
extend the time of payment of, or amend, renew, exchange, increase or alter,
the terms of any of the Senior Lender Claims or any Lien on any Senior
Lender Collateral or guaranty thereof or any liability of the Company or any
other Grantor, or any liability incurred directly or indirectly in respect
thereof (including any increase in or extension of the Senior Lender Claims,
without any restriction as to the amount, tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify
or supplement in any manner any Liens held by the Credit Agent or any of the
Senior Lenders, the Senior Lender Claims or any of the Senior Lender
Documents;
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(ii) sell, exchange, release, surrender, realize upon, enforce or
otherwise deal with in any manner and in any order any part of the Senior
Lender Collateral or any liability of the Company or any other Grantor to
the Senior Lenders or the Credit Agent, or any liability incurred directly
or indirectly in respect thereof;
(iii) settle or compromise any Senior Lender Claim or any other
liability of the Company or any other Grantor or any security therefor or
any liability incurred directly or indirectly in respect thereof and apply
any sums by whomsoever paid and however realized to any liability (including
the Senior Lender Claims) in any manner or order; and
(iv) exercise or delay in or refrain from exercising any right or
remedy against the Company or any security or any other Grantor or any other
Person, elect any remedy and otherwise deal freely with the Company, any
other Grantor or any Senior Lender Collateral and any security and any
guarantor or any liability of the Company or any other Grantor to the Senior
Lenders or any liability incurred directly or indirectly in respect thereof.
(c) The Trustee, on behalf of itself and the Noteholders, also
agrees that the Senior Lenders and the Credit Agent shall have no liability to
the Trustee or any Noteholder, and the Trustee, on behalf of itself and the
Noteholders, hereby waives any claim against any Senior Lender or the Credit
Agent, arising out of any and all actions that the Senior Lenders or the Credit
Agent may take or permit or omit to take with respect to: (i) the Senior Lender
Documents, (ii) the collection of the Senior Lender Claims or (iii) the
foreclosure upon, or sale, liquidation or other disposition of, any Senior
Lender Collateral. The Trustee, on behalf of itself and the Noteholders, agrees
that the Senior Lenders and the Credit Agent have no duty to them in respect of
the maintenance or preservation of the Senior Lender Collateral, the Senior
Lender Claims or otherwise; and
(d) The Trustee, on behalf of itself and the Noteholders, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or otherwise claim the benefit of,
any marshalling, appraisal, valuation or other similar right that may otherwise
be available under applicable law or any other similar rights that a junior
secured creditor may have under applicable law.
7.4 Obligations Unconditional. All rights, interests, agreements and
obligations of the Credit Agent and the Senior Lenders and the Trustee and the
Noteholders, respectively, hereunder shall remain in full force and effect
irrespective of:
(a) any lack of validity or enforceability of any Senior Lender
Documents or any Noteholder Documents;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Lender Claims or Noteholder Claims, or
any amendment or waiver or other modification, including any increase in the
amount thereof, whether by course of conduct or otherwise, of the terms of the
Senior Credit Agreement or any other Senior Lender Document or of the terms of
the Indenture or any other Noteholder Document;
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(c) any exchange of any security interest in any Common Collateral
or any other collateral, or any amendment, waiver or other modification, whether
in writing or by course of conduct or otherwise, of all or any of the Senior
Lender Claims or Noteholder Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of the Company or any other Grantor; or
(e) any other circumstances that otherwise might constitute a
defense available to, or a discharge of, the Company or any other Grantor in
respect of the Senior Lender Claims, or of the Trustee or any Noteholder in
respect of this Agreement.
Section 8. Miscellaneous.
8.1 Conflicts. (a) Subject to Section 8.20, in the event of any
conflict between the provisions of this Agreement and the provisions of the
Senior Lender Documents or the Noteholder Documents, the provisions of this
Agreement shall govern.
(b) The parties hereto agree that if any amendments to this
Agreement (i) are required to comply with any amendment to the Trust Indenture
Act made after the date hereof and (ii) are reasonably determined by the Credit
Agent not to be adverse to the Credit Agent or the other Senior Lenders, then
such parties shall cooperate and act in good faith to effect such amendments as
promptly as practicable.
8.2 Continuing Nature of this Agreement; Severability. This
Agreement shall continue to be effective until the Discharge of Senior Lender
Claims shall have occurred. This is a continuing agreement of lien subordination
and the Senior Lenders may continue, at any time and without notice to the
Trustee or any Noteholder, to extend credit and other financial accommodations
and lend monies to or for the benefit of the Company or any other Grantor
constituting Senior Lender Claims on reliance hereof. The Trustee, on behalf of
itself and the Noteholders, hereby waives any right it may have under applicable
law to revoke this Agreement or any of the provisions of this Agreement. The
terms of this Agreement shall survive, and shall continue in full force and
effect, in any Insolvency or Liquidation Proceeding. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall not
invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.3 Amendments; Waivers. No amendment, modification or waiver of any
of the provisions of this Agreement by the Trustee or the Credit Agent shall be
deemed to be made unless the same shall be in writing signed on behalf of the
party making the same or its authorized agent and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall in no way
impair the rights of the parties making such waiver or the obligations of the
other parties to such party in any other respect or at any other time. The
Company and other Grantors shall not have any right to consent to or approve any
amendment, modification or waiver of any provision of this Agreement except to
the extent their rights are affected.
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8.4 Information Concerning Financial Condition of the Company and
the Subsidiaries. The Credit Agent and the Senior Lenders, on the one hand, and
the Trustee and the Noteholders, on the other hand, shall each be responsible
for keeping themselves informed of (a) the financial condition of the Company
and the Subsidiaries and all endorsers and/or guarantors of the Noteholder
Claims or the Senior Lender Claims and (b) all other circumstances bearing upon
the risk of nonpayment of the Noteholder Claims or the Senior Lender Claims. The
Credit Agent and the Senior Lenders shall have no duty to advise the Trustee or
any Noteholder of information known to it or them regarding such condition or
any such circumstances or otherwise. In the event that the Credit Agent or any
of the Senior Lenders, in its or their sole discretion, undertakes at any time
or from time to time to provide any such information to the Trustee or any
Noteholder, it or they shall be under no obligation (w) to make, and the Credit
Agent and the Senior Lenders shall not make, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of any such information so provided, (x)
to provide any additional information or to provide any such information on any
subsequent occasion, (y) to undertake any investigation or (z) to disclose any
information that, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.
8.5 Subrogation. The Trustee, on behalf of itself and the
Noteholders, hereby waives any rights of subrogation it may acquire as a result
of any payment hereunder until the Discharge of Senior Lender Claims has
occurred.
8.6 Application of Payments. All payments received by the Senior
Lenders may be applied, reversed and reapplied, in whole or in part, to such
part of the Senior Lender Claims as the Senior Lenders, in their sole
discretion, deem appropriate, consistent with the terms of the Senior Lender
Documents. The Trustee, on behalf of itself and the Noteholders, assents to any
extension or postponement of the time of payment of the Senior Lender Claims or
any part thereof and to any other indulgence with respect thereto, to any
substitution, exchange or release of any security that may at any time secure
any part of the Senior Lender Claims and to the addition or release of any other
Person primarily or secondarily liable therefor.
8.7 Consent to Jurisdiction; Waivers. The parties hereto consent to
the jurisdiction of any state or federal court located in New York, New York,
and consent that all service of process may be made by registered mail directed
to such party as provided in Section 8.8 for such party. Service so made shall
be deemed to be completed three days after the same shall be posted as
aforesaid. The parties hereto waive any objection to any action instituted
hereunder in any such court based on forum non conveniens, and any objection to
the venue of any action instituted hereunder in any such court. Each of the
parties hereto waives any right it may have to trial by jury in respect of any
litigation based on, or arising out of, under or in connection with this
Agreement or any other Senior Lender Document or Noteholder Document, or any
course of conduct, course of dealing, verbal or written statement or action of
any party hereto.
8.8 Notices. All notices to the Noteholders and the Senior Lenders
permitted or required under this Agreement may be sent to the Trustee and the
Credit Agent, respectively.
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Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and may be
personally served, telecopied, electronically mailed or sent by courier service
or U.S. mail and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of a telecopy or electronic mail or four
Business Days after deposit in the U.S. mail (registered or certified, with
postage prepaid and properly addressed). For the purposes hereof, the addresses
of the parties hereto shall be as set forth below each party's name on the
signature pages hereto, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties.
8.9 Further Assurances. The Trustee, on behalf of itself and the
Noteholders, agrees that each of them shall take such further action and shall
execute and deliver to the Credit Agent and the Senior Lenders such additional
documents and instruments (in recordable form, if requested) as the Credit Agent
or the Senior Lenders may reasonably request to effectuate the terms of and the
lien priorities contemplated by this Agreement.
8.10 Governing Law. This Agreement has been delivered and accepted at
and shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
8.11 Binding on Successors and Assigns. This Agreement shall be
binding upon the Credit Agent, the Senior Lenders, the Trustee, the Noteholders,
the Company and their respective permitted successors and assigns.
8.12 Specific Performance. The Credit Agent may demand specific
performance of this Agreement. The Trustee, on behalf of itself and the
Noteholders, hereby irrevocably waives any defense based on the adequacy of a
remedy at law and any other defense that might be asserted to bar the remedy of
specific performance in any action that may be brought by the Credit Agent.
8.13 Section Titles. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Agreement.
8.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document.
8.15 Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.
8.16 No Third Party Beneficiaries. This Agreement and the rights and
benefits hereof shall inure to the benefit of each of the parties hereto and
their respective successors and assigns and shall inure to the benefit of each
of the holders of Senior Lender
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Claims and Noteholder Claims. No other Person shall have or be entitled to
assert rights or benefits hereunder.
8.17 Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto. This Agreement shall be effective
both before and after the commencement of any Insolvency or Liquidation
Proceeding. All references to the Company or any other Grantor shall include the
Company or any other Grantor as debtor and debtor-in-possession and any receiver
or trustee for the Company or any other Grantor (as the case may be) in any
Insolvency or Liquidation Proceeding.
8.18 Credit Agent and Trustee. It is understood and agreed that (a)
Deutsche Bank Trust Company Americas is entering into this Agreement in its
capacity as Credit Agent and the provisions of Article VIII of the Existing
Credit Agreement applicable to Deutsche Bank Trust Company Americas as
administrative agent thereunder shall also apply to Deutsche Bank Trust Company
Americas as Credit Agent hereunder, and (b) Wilmington Trust Company is entering
in this Agreement in its capacity as Trustee and the provisions of Article 7 of
the Indenture applicable to the Trustee thereunder shall also apply to the
Trustee hereunder.
8.19 Designations. For purposes of the provisions hereof and the
Indenture requiring the Company to designate Indebtedness for the purposes of
the term "Credit Agreement Obligations" under the Indenture, "First-Lien Credit
Facilities" or any other designations for any other purposes hereunder or under
the Indenture, any such designation shall be sufficient if the relevant
designation is set forth in writing, signed on behalf of the Company by an
officer thereof and delivered to the Trustee and the Credit Agent. For all
purposes hereof and the Indenture, the Company hereby designates the Credit
Facilities provided pursuant to the Existing Credit Agreement as the First-Lien
Credit Facility and any Obligations (as defined in the Security Documents (as
defined in the Existing Credit Agreement)), including any Obligations in respect
of the Existing Credit Agreement, as "Credit Agreement Obligations" under the
Indenture.
8.20 Relative Rights. Notwithstanding anything in this Agreement to
the contrary, nothing in this Agreement is intended to or will (a) amend, waive
or otherwise modify the provisions of the Senior Credit Agreement or any other
Senior Lender Documents entered into in connection with the Senior Credit
Agreement or permit the Company or any Subsidiary to take any action, or fail to
take any action, to the extent such action or failure would otherwise constitute
a breach of, or default under, the Senior Credit Agreement or any other Senior
Lender Documents entered into in connection with the Senior Credit Agreement,
(b) change the relative priorities of the Senior Lender Claims or the Liens
granted under the Senior Lender Documents on the Common Collateral (or any other
assets) as among the Senior Lenders, (c) otherwise change the relative rights of
the Senior Lenders in respect of the Common Collateral as among such Senior
Lenders or (d) obligate the Company or any Subsidiary to take any action, or
fail to take any action, that would otherwise constitute a breach of, or default
under, the Senior Credit Agreement or any other Senior Lender Document entered
into in connection with the Senior Credit Agreement..
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
Credit Agent:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Credit Agent,
By: /s/ Marco Orlando
------------------------
Name: Marco Orlando
Title: Director
Address:
222 S. Riverside Plaza
MS CH105-2900
Chicago, IL 60606
Attention: Marla Heller
Telecopy No.: (312) 537-1324
Trustee:
WILMINGTON TRUST COMPANY,
as Trustee,
By: /s/ James D. Nesci
------------------------
Name: James D. Nesci
Title: Authorized Officer
Address:
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Mary St. Amand
Telecopy No.: (302) 636-4140
PLIANT CORPORATION
By: /s/ Brian E. Johnson
------------------------
Name:
Title:
Address:
1475 Woodsfield Road, Suite 700
Schamburg, IL 60173
Attention: Chief Financial Officer
Telecopy No.: (847) 969-3361