EXHIBIT 10.27
INDEMNITY, SUBROGATION and
CONTRIBUTION AGREEMENT dated as of February 17, 2004, among
PLIANT CORPORATION, a Utah corporation (the “ Parent
Borrower ”), UNIPLAST INDUSTRIES CO. (the “Canadian
Subsidiary Borrower”), each Subsidiary of the Parent Borrower
listed on Schedule I hereto (together with the Canadian
Subsidiary Borrower, the “ Guarantors ”) and
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as administrative agent (in such capacity, the “
Administrative Agent ”) for the Lenders (as defined in
the Credit Agreement referred to below).
Reference is made
to (a) the Credit Agreement dated as of February 17,
2004 (as amended, supplemented or otherwise modified from time to
time, the “ Credit Agreement ”), among the
Parent Borrower, the subsidiaries of the Parent Borrower party
thereto as domestic subsidiary borrowers (the “ Domestic
Subsidiary Borrowers ”), the Canadian Subsidiary Borrower
(together with the Parent Borrower and the Domestic Subsidiary
Borrowers, the “ Borrowers ”), the lenders from
time to time party thereto (the “ Lenders ”),
the Administrative Agent, Deutsche Bank Trust Company Americas, as
collateral agent (the “ Collateral Agent ”),
General Electric Capital Corporation, as co-collateral agent, and
JPMorgan Chase Bank, as syndication agent and, (b) the
Guarantee Agreement dated as of February 17, 2004, among the
Parent Borrower, the Guarantors and the Administrative Agent (the
“ Guarantee Agreement ”). Capitalized
terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
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. The Guarantors have guaranteed such
Loans and the other Obligations (as defined in the Guarantee
Agreement) of the Borrowers under the Credit Agreement pursuant to
the Guarantee Agreement; the Parent Borrower has guaranteed such
Loans and the other Obligations of the Domestic Subsidiary
Borrowers and the Canadian Subsidiary Borrower under the Credit
Agreement pursuant to the Guarantee Agreement; the Parent Borrower
and the Guarantors also have granted Liens on and security
interests in certain of their assets to secure such
guarantees. 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 Parent
Borrower and the Guarantors of an agreement in the form
hereof.
Accordingly, the Parent Borrower,
the Canadian Subsidiary Borrower, each other Guarantor and the
Administrative Agent agree as follows:
SECTION 1.
Indemnity and Subrogation. In addition to all such
rights of indemnity and subrogation as the Guarantors may have
under applicable law (but subject
to Section 3), the
Parent Borrower agrees that (a) in the event a payment shall
be made by any Guarantor under the Guarantee Agreement, the Parent
Borrower shall indemnify such Guarantor for the full amount of such
payment and such Guarantor shall be subrogated to the rights of the
Person to whom such payment shall have been made to the extent of
such payment and (b) in the event any assets of any Guarantor
shall be sold pursuant to any Security Document to satisfy a claim
of any Secured Party (other than any such claim against such
Guarantor in respect of Loans made to such Guarantor), the Parent
Borrower shall indemnify such Guarantor in an amount equal to the
greater of the book value or the fair market value of the assets so
sold.
SECTION 2.
Contribution and Subrogation. Each Guarantor (a
“ Contributing Guarantor ”) agrees (subject to
Section 3) that, in the event a payment shall be made by any
other Guarantor under the Guarantee Agreement or assets of any
other Guarantor shall be sold pursuant to any Security Document to
satisfy a claim of any Secured Party and such other Guarantor (the
“ Claiming Guarantor ”) shall not have been
fully indemnified by the Parent Borrower as provided in
Section 1, the Contributing Guarantor shall (unless such claim
related to Loans made to a Borrower that is a Subsidiary of such
Claiming Guarantor) indemnify the Claiming Guarantor in an amount
equal to the amount of such payment or the greater of the book
value or the fair market value of such assets, as the case may be,
in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Guarantor on the date hereof
and the denominator shall be the aggregate net worth of all the
Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 12, the date of
the Supplement hereto executed and delivered by such
Guarantor). Any Contributing Guarantor making any payment to
a Claiming Guarantor pursuant to this Section 2 shall (subject
to Section 3) be subrogated to the rights of such Claiming
Guarantor under Section 1 to the extent of such
payment.
SECTION 3.
Subordination. Notwithstanding any provision of this
Agreement to the contrary, all rights of the Guarantors under
Sections 1 and 2 and all other rights of indemnity,
contribution or subrogation under applicable law or otherwise shall
be fully subordinated to the indefeasible payment in full in cash
of the Obligations. No failure on the part of the Parent
Borrower or any Guarantor to make the payments required by
Sections 1 and 2 (or any other payments required under
applicable law or otherwise) shall in any respect limit the
obligations and liabilities of any Guarantor with respect to its
obligations hereunder, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor
hereunder.
SECTION 4.
Termination. Subject to the provisions of the last
sentence of Section 8 of this Agreement, this Agreement shall
survive and be in full force and effect so long as any Obligation
is outstanding and has not been indefeasibly paid in full in cash,
and so long as the LC Exposure has not been reduced to zero or any
of the Commitments under the Credit Agreement have not been
terminated, and 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 any
Secured Party or any Guarantor upon the bankruptcy or
reorganization of the Parent Borrower, any Guarantor or
otherwise.
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SECTION 5. Governing
Law . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 6. No
Waiver; Amendment. (a) No failure on the
part of the Administrative Agent or any Guarantor to exercise, and
no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy by the Administrative
Agent or any Guarantor preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by law. None of the Administrative
Agent and the Guarantors shall be deemed to have waived any rights
hereunder unless such waiver shall be in writing and signed by such
parties.
(b) Neither this
Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into
between the Parent Borrower, the Guarantors and the Administrative
Agent, with the prior written consent of the Required Lenders
(except as otherwise provided in the Credit Agreement).
SECTION 7.
Notices. All communications and notices hereunder
shall be in writing and given as provided in the Guarantee
Agreement and addressed as specified therein.
SECTION 8.
Binding
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