MILLER TABAK ROBERTS SECURITIES, LLC

331 MADISON AVENUE NEW YORK, NEW YORK 10017 (212) 867-7959 FAX (212) 867-6492 (800) 452-4528 (888) HI-YIELD

www.MTRdirect.com Please refer to the last page of this report for important disclosures

HIGH YIELD RESEARCH

REPORT

_________________________________________________________

Tekni-Plex, Inc. (TEKNI)

Mdy's/ Current BondCoupon Description Maturity CUSIP S&P Amt O/S Yield YTW Price Opinion10.875% 1st Lien Senior Secured Notes, Reg S/144A 08/15/12 87910PAK6 B3 / CCC- $ 150MM 10.0% 8.8% 109.00 Sell8.750% 2nd Lien Senior Secured Notes, Reg S/144A 11/15/13 87910PAG5 Caa2 / C $ 275MM 9.7% 10.6% 90.00 Hold

12.750% Senior Subordinated Notes 06/15/10 87910PAF7 Ca / C $ 315MM 21.6% 29.8% 59.00 SellMoody's and S&P's outlook is negative. December 5, 2005 Ronald A. Rich (212) 692-5185 rrich@mtrdirect.com OPINION We initiate coverage of Tekni-Plex with a SELL recommendation on the 10.875% 1st Lien Notes and 12.75% Senior Subordinated Notes, and a HOLD recommendation on the 8.75% 2nd Lien Notes. Our SELL recommendation is premised on our belief that a purchase at these levels does not adequately compensate the investor for the commensurate risk. In the near-term, we expect the Subordinated Notes to trade in conjunction with the news related to the success of price increases in the company’s garden hose business, as well as the direction of resin pricing. Ultimately, though, we expect that Tekni-Plex will be faced with a liquidity crisis in the second quarter of fiscal 2007 ending December 31, 2006 that will lead to an asset sale or a financial restructuring. Our recommendation is based upon a required rate of return of 9.0%, 13.0% and 25.0% for the 1st Lien, 2nd Lien and Subordinated Notes, respectively. As opposed to the 1st Lien Notes and the Subordinated Notes, we have issued a HOLD recommendation on the 2nd Lien Notes because, at an expected internal rate of return of 13.5%, we find them fully valued. SUMMARY • Headquartered in Coppell, TX, Tekni-Plex is a manufacturer and distributor of flexible

packaging and tubing products with $715 million in revenue. The company is majority-owned by Weston Presidio and its affiliates.

• The company maintains a leading market share across a broad range of products that includes egg cartons, pharmaceutical blister films, closure liners, foam plates and trays, garden hose, medical tubing and specialty resin.

• Tekni-Plex is highly leveraged as a result of acquisition and recapitalization financing with an LTM adjusted net leverage ratio of 10.2x and an LTM adjusted net interest coverage ratio of 0.71x for the period ending September 30, 2005.

• The company has been adversely affected by rapidly rising raw material costs and has had difficulty passing-through price increases in its garden hose business (25% of fiscal 2005 net

2

sales) due to a concentrated customer base. Adjusted EBITDA for the fiscal year-ended 2005 was $72.4 million, down from $118.0 million in fiscal 2003.

• Liquidity at the end of the first quarter of fiscal 2006 was $100.4 million, comprised of $40.4 million of cash and $60.0 million of revolver availability. We project that Tekni-Plex completes fiscal 2006 with $6.8 million in liquidity. On a projected rebounded adjusted EBITDA base of $91.1 million in fiscal 2007, the company would still be faced with supporting an estimated $90.0 million in cash interest payments and $20.0 million in capital expenditures. We project Tekni-Plex to run out of liquidity in the second quarter of fiscal 2007.

• While we anticipate a liquidity crisis, we also foresee a fundamental turnaround in Tekni-Plex’s business given a backdrop of moderate success in pricing pass-throughs in its garden hose business and an abating of raw material costs. Company options to bridge the liquidity gap would include borrowing additional debt, selling assets, as well as structuring some form of financing with Weston Presidio. We have estimated the likelihood of a fiscal 2007 restructuring at 75%.

• Given our evaluation of the current risks associated with Tekni-Plex’s turnaround, our recommendations for Tekni-Plex’s debt securities are based upon required returns of 9.0%, 13.0% and 25.0% for the 10.875% Senior Secured Notes, 8.75% Senior Secured Notes and 12.75% Senior Subordinated Notes, respectively.

BUSINESS OVERVIEW Headquartered in Coppell, TX, Tekni-Plex (“Tekni” or the “Company”) is an international manufacturer of packaging, packaging products and plastics materials, primarily for the food, healthcare and consumer markets. With operations in the United States, Europe, Argentina and Canada, Tekni employs approximately 3,200 employees, about a third of which are represented by labor unions. Since its purchase in March 1994 by Dr. F. Patrick Smith and a group of investors, Tekni-Plex has acquired 10 companies and added a number of product lines (see Figure 2). For the twelve-month period ended September 30, 2005, Tekni-Plex posted an adjusted EBITDA of $67.8 million on a revenue base of $714.8 million. The Company currently reports its results through three business segments: Packaging (50% of net sales), Tubing Products (30% of net sales) and Other, which reports Tekni’s materials compounding business. The Packaging segment currently includes egg cartons, pharmaceutical blister films, poultry and meat processing trays, closure liners, aerosol and pump packaging components, and foam plates; Tubing Products encompasses garden, irrigation, vacuum and pool hose, as well as medical tubing. Tekni’s Other business segment produces recycled polyethylene terepthalate (“PET”), specialty resins and vinyl compounds for downstream converters. In practically all of its product lines, Tekni maintains a leading share of the market (see Figure 1). Tekni-Plex is currently struggling with a highly leveraged balance sheet, soaring feedstock costs, a limited ability to pass-through pricing in its garden hose business (25% of net sales), and soon to be reduced liquidity. Much of the Company’s current debt load was incurred in connection

Figure 1 TEKNI-PLEX Market Share

Packaging PositionFoam Egg Carton 1Pharmaceutical Blister Films 1Aerosol & Pump Components 1Closure Liners 1Poultry & Meat Processor Trays 2TubingGarden and Irrigation Hose 1Vinyl Medical Tubing 1OtherVinyl Medical Device Materials 1Source: Company reports.

3

with the March 1998 acquisition of PureTec Corporation and the June 2000 recapitalization of the Company. Figure 2

TEKNI-PLEX Growth Through Acquisition

PRICE DATE($ millions) ACQUIRED

General Felt Products, division of Standard

Packaging CorporationBrooklyn, NY

Laminated closure liners for pharmaceutical and

food industriesNA 1967

Hargro Flexible Packaging Corp.;

Flemington plant and business.

Flemington, NJ Packaging materials for pharmaceutical industry $ 7.5 December 1995

Dolco Packaging Corp. Sherman Oaks, CA Foam egg processor trays $ 39.0 February 1996

PurePlast Inc.; Ontario facility

Cambridge, Ontario, Canada

Food and electronics packaging, as well as,

vinyl sheet for pharmaceutical industry

$ 2.3 July 1997

PureTec Corporation Ridgefield, NJ

Garden and irrigation hose, precision tubing and

gaskets for aerosol packaging industry, vinyl medical tubing, and vinyl

compounds for the production of medical

devices

$ 325.0 March 1998

Tri-Seal International, Inc.; assets. Blauvelt, NY Extruded and co-extruded

capliners and seals $ 20.2 January 1999

Natvar; assets. Clayton, NC Disposable medical tubing and electrical sheathing $ 26.0 April 1999

Super Plastics division of RCR International Inc.

Longueuil, Quebec, Canada Garden hose $ 10.2 October 2000

Swan Hose division of Mark IV Industries, Inc.;

assets.Bucyrus, OH Garden hose $ 64.2 October 2001

Elm Packaging Company, assets Memphis, TN

Polystyrene foam plates, bowls, and meat and

bakery trays$ 16.4 July 2002

Genpak; carton business. Glens Falls, NY Egg cartons $ 5.8 July 2004

Source: Company reports.

BUSINESS LOCATION PRODUCTS

4

INDUSTRY The packaging industry is very diverse, comprised of companies that pursue distinct lines of business, such as metal containers, glass containers, flexible packaging, food service packaging, protective packaging and dispensing closures. Each segment is typically made up of a unique group of competitors that employs specialized machinery, services distinct customers, and utilizes different raw materials. Barriers to entry, innovation cycles, product differentiation, competitive dynamics, and pricing power also vary tremendously among the various packaging segments. Flexible Packaging The flexible packaging industry has evolved over the past 25 years as an alternative to rigid packaging. As plastics have become more sophisticated, flexible packaging companies have been able to provide product manufacturers with packaging that has allowed them to further differentiate their products to the consumer through package graphics, added shelf life and increased package convenience. According to the Flexible Packaging Association, the United States market for flexible packaging was approximately $21.3 billion in 2004, and had grown at a compounded annual growth rate of 3.9% over the prior ten years. A subset of specialty packaging, flexible packaging is used for a variety of applications, from food wrappers to mattress covers. In industrial markets, stretch and shrink films are often used instead of corrugated boxes and metal strapping to unitize, bundle and protect items during shipping and storage. The diversity of applications has led to the development of a fragmented industry, with the top ten companies accounting for less than 50% of sales. With most packaging converters possessing less market power than their substantially larger suppliers and customers, consolidation is likely, especially within today’s compressed

Figure 3 TEKNI-PLEX VALUE CHAIN

Producers and Select Consumers

PACKAGING TUBING PRODUCTS

Dow ChemicalExxonMobil Occidental Chemical

FEEDSTOCK Chevron Phillips Chemical Georgia GulfShell ChemicalsNova Chemicals

Dow Chemical ShintechRESIN Total Petrochemicals Occidental Chemical

Nova Chemicals FormosaChevron Phillips Chemical Georgia Gulf

CONVERTER TEKNI-PLEX

3M PharmaceuticalsPfizer Home DepotEli Lilly Wal-Mart

END-MARKET Boston Scientific Lowe'sKraft Foods Target

Cal-Maine Foods Ace HardwareRose Acres

MoArk

Source: Company reports and MTR.

5

margin environment resulting from rapidly rising raw material costs. Figure 3 delineates Tekni-Plex’s position along the value chain, placing the company between considerably larger suppliers and customers. Competitors to Tekni-Plex include Pactiv, Bemis and Sealed Air. Discussed later in Macro Drivers, flexible packaging companies use plastic resins in the manufacture of their products. Resins, which utilize crude oil and natural gas in their formation, have experienced substantial price increases along with rising energy prices. With resin accounting for approximately 50% of flexible packaging cost of goods sold, converters have worked to pass-through price increases to their customer base with varied success. Foodservice Packaging Foodservice packaging refers to packaging designed and manufactured for customers in the food industry that process and prepare food for consumption, also known as food packers and processors; it also includes customers in the food distribution business such as wholesalers and supermarkets. With estimated annual sales exceeding $10 billion in the United States, the foodservice packaging industry produces products that protect food during distribution, assist retailers in merchandising food, and help customers prepare and serve meals at home. Foodservice packaging includes everyday items such as egg cartons, meat processing trays, clamshell containers and fast-food carryout trays. Historical growth rates of this segment have exceeded 5%, driven by evolving consumer dietary patterns. PRODUCT LINES While Tekni-Plex manufactures a broad line of products (see Figures 5,6), we have chosen to focus on its garden hose and egg carton lines due to the material nature of their businesses, their shared challenges, and the varied success that Tekni-Plex has had in dealing with each within the current environment. Garden Hose Tekni-Plex established its leadership position in the garden hose market through the acquisitions of PureTec Corporation ($345 million in sales), the Super Plastics division of RCR International, and the Swan Hose division of Mark IV Industries. For the year ending July 2, 2005, garden hose net sales of $179.5 million comprised 25.7% of Tekni’s net sales and 86.5% of Tubing Products net sales. We estimate its gross contribution for the same period to be minimal at approximately $2 million, as compared with an estimated $19 million in fiscal 2004 and $51 million in fiscal 2003. Construction. Hose, as compared with tubing, is considered a more complex structure, usually consisting of three layers: an inner liner (the tube itself), a reinforcement layer and an outer jacket (see Figure 4). The raw materials that make up these structural elements include recycled polyvinyl chloride (“PVC”) for the inner liner, nylon (feedstock is polypropylene) for the reinforcement layer and plasticizer (a resin additive is used to create flexibility; feedstock is natural gas) for the outer coating. Additional additives are used to produce color in the hose, as well as resistance to abrasion and sunlight. Other raw materials that comprise the final product are used to make

Figure 4

Source: Ajay Industrial.

6

couplings and packaging. On the whole, resin and plasticizer account for approximately 50% of total raw material costs. Product Differentiation. Manufacturers of garden hose differentiate their hose through a combination of quality and benefits. High quality hose has synthetic rubber mixed with the PVC used for the inner liner, employs a reinforcement layer around the inner tube to prevent bursting, and has fittings made of brass. From a benefits perspective, quality hose is very flexible and seldom kinks. While not every consumer is sophisticated or caring enough to vet these attributes, most consumers typically focus on price, diameter and length of hose. In speaking with the retail community, we get the sense that brand is practically irrelevant in the consumer’s purchase decision. Customer Concentration. According to the 2003 National Gardening Survey, home centers, such as Home Depot and Lowe’s, have become the most important distribution channel in the lawn and garden products industry. Industry participants have estimated that big-box retailers comprise 68% of Tekni’s garden hose sales, with Home Depot and Wal-Mart accounting for 45%. Customer concentration has been an extremely important component of Tekni’s financial problems. Well aware of the rising cost of petrochemical-based raw materials, large retailers have nevertheless resisted price increase pass-throughs. Their success in doing so is somewhat surprising given that Tekni-Plex is one of only two major domestic producers of garden hose in a market that is not currently impacted by imports (see Garden Hose: Imports).

Figure 5 TEKNI-PLEX Product Lines

EGG CARTONS GARDEN HOSE

BLISTER FILMS FOAM PLATES

MEDICAL TUBING CLOSURE LINERS

Source: Company reports.

7

Figure 6 TEKNI-PLEX Business Description

SEGMENT PRODUCT PRODUCT CHARACTERISTICS SALES CHANNEL CUSTOMERS COMPETITION NOTES SALES

Foam Egg Cartons

Thermoformed foam polystyrene packaging offers a combination of high strength, minimum material content and superior moisture

barrier performance.

Direct sales force Most domestic egg packagers.

Pactiv manufactures pulp-based egg cartons.

Somewhat seasonal with

weighting on fiscal Q2 and Q3. Higher margins than other packaging product

lines.

Pharmaceutical Blister Films

Transparent, high-barrier blister packaging is primarily used to

protect drugs from moisture vapor infiltration and dehydrating. Blister

packaging is preferred when dispenser handling can affect shelf like or drug efficacy, or when unit

dose packaging is

Global network of sales and marketing

personnel on six continents.

Major pharmaceutical companies.

Two main competitors:

Pactiv, Klockner Pentaplast.

Poultry and Meat Processor Trays

Thermoformed foam polystyrene packaging offers a combination of high strength, minimum material content and superior moisture

barrier performance.

Poultry industry.Pactiv and Formpac

division of W.R. Grace

Closure LinersClosure liners perfect the seal between a container and its

closure, i.e. a bottle and its cap.Direct sales force

Packagers of pharmaceutical,

healthcare and food products.

Selig. Two principal

competitors in North America, but also

compete with several smaller

companies.

Dip tubes which transmit contents of the container to the nozzle.

Rubber-based valve gaskets that control the release of product from

the container.Writing instrument products such as pen barrels, ink tubing and ink

reservoirs for felt-tip pens.

Foam Plates

Thermoformed foam polystyrene disposable plates, bowls, and

hinged-lid containers, as well as, agricultural packaging products.

Consumer, agricultural and foodservice

industries.

Pactiv. Numerous.

Garden and Irrigation HoseHigh quality lines that utilize

medical-grade plastics and brass couplings.

Direct sales force and independent representatives.

Retailers such as home centers,

hardware cooperatives, food,

auto, drug and mass merchandising chains

and catalog companies throughout the U.S.

and Canada.

Teknor Apex Ames True Temper

Flexon

Highly seasonal with 75% of sales occurring in spring and early summer

months.

Medical Tubing High quality, close tolerance tubing for surgical procedures. Direct sales force Manufacturers of

medical devices.

Kelcourt Plastics. Customers upgrading

machinery and increasing capacity.

OTHER Recycled PET, Vinyl Compounds, Specialty Resins

Used for floor coverings, automotive sealants and

adhesives, coil coatings, plastisol and medical device compounding,

and vinyl packaging

Direct sales force and independent representatives.

Teknor Apex. Large chemical

companies.$ 138MM

Source: Company reports and MTR.

$ 352MM

$ 225MM

PACKAGING

TUBING

Aerosol and Pump Packaging Components

Customers moving to internal

production.

Manufacturers of aerosol valves,

dispenser pumps and writing instruments

such as AptarGroup and Rexam.

Direct sales force

Pricing. Wholesale pricing on garden hose has historically been established one time per year in the summer months, and is scheduled to take effect the following January 1st. According to Tekni-Plex, the actual setting of price is not contractual (nor are volumes), but is more of a gentleman’s agreement with customers. Price increases have typically ranged between 3% and 5%, with some years having no increase. On October 7, 2005, Teknor Apex, Tekni’s primary garden hose competitor, announced that, effective January 1, 2006, it would institute a 7.5% surcharge on its standard annual price increase, citing rapidly rising raw material, energy and transportation costs (see Macro Drivers). Teknor Apex’s pricing action and its subsequent acceptance is difficult to confirm, given the secretive nature of retail buyers. Until a recent

8

change in market approach discussed on its fourth quarter fiscal 2005 conference call, Tekni had appeared unwilling to increase prices, fearful of losing market share. Given the dire nature of its liquidity situation, the Company has stated that it is going to market with a double-digit price increase, as well as a potential second increase, ranging between 7.5% and 10.0%, effective January 1, 2006. The announced increases have evidently led to some loss of market share; the amount is unknown to the public. Future price increases may result in further market share loss. Competition. It has been estimated by market participants that Tekni-Plex has historically had a 55% share of the garden hose market, with Teknor Apex holding a 30% share. Teknor Apex, a compounder of PVC and engineering resins headquartered in Pawtucket, R.I., is estimated to have generated $500 million of revenue in fiscal 2004, with approximately $95 million derived from the sale of garden hose. Other competitors in the marketplace include Ames True Temper and Flexon, based in New Jersey. Imports. Imports comprise a very small portion of domestic market share, currently estimated at approximately 3%. Reasons given by market participants for the low level of imports include insufficient quality, minimal cost savings due to a non-labor intensive production process, the difficulty associated with refilling retail inventory channels upon short notice, and the offset of product price savings by transportation costs. On the other hand, we held a conversation with the garden products buyer of a second-tier retail chain who revealed that imports will comprise 40% of the chain’s upcoming year’s garden hose line. While the buyer believes that domestic quality is superior to that of imports and that imports are not an appropriate substitute for high-end hose, he believes that overseas-produced mid-range hose is of sufficient quality and price point to warrant importation. He further commented that the quality of product produced by China is getting increasingly better. Citing hose endings as a category that is no longer produced domestically, a sweeping change from just five years prior, he believes that garden hose will eventually be greatly trade impacted. Recounting a recent trip to China, he spoke of factories the size of football fields and numerous lines of new hose extrusion machinery. The disparity between domestic and China recycled PVC pricing may widen in the coming years given our view of China’s changing raw material landscape. Currently, China lacks a developed waste management industry, which impedes the supply of recycled PVC, garden hose’s main raw material. As China continues to bring additional prime PVC capacity online (see Macro Drivers) and builds-out its waste management infrastructure, the difference between domestic and foreign raw material pricing may widen to the point where the importation of garden hose makes economic sense. While there is no indication that the garden hose supply landscape will change overnight, the macro picture may depress reorganization values in the event of a bankruptcy filing or limit the interest of potential buyers should an asset sale be pursued. An asset sale of the garden hose business, though, would be difficult given that it is not discrete, but rather shares physical plant space with Tekni’s materials compounding business. Seasonality. The sale of garden hose is an extremely seasonal business with approximately 70% of sales occurring in the spring and early summer (Tekni’s third and fourth fiscal quarters). Maintaining service levels requires year-round production of garden hose and drives fluctuations in working capital accounts. Tekni inventory levels typically reach their low point in the fourth

9

fiscal quarter, the end of the main selling season, and then build to their peak in the second fiscal quarter in advance of the beginning of the selling season. Accounts receivable also move in conjunction with these cycles, reaching a peak in the fourth fiscal quarter and a trough in the second fiscal quarter. Egg Cartons Tekni-Plex’s egg carton business is a fundamentally strong business. Manufactured and sold by Tekni’s Dolco Packaging division (merged into Tekni-Plex in August 1997), egg cartons accounted for 17% of total net sales and 36% of Packaging net sales in fiscal 2003 (fiscal 2004 is not representative), with sales of cartons that year reaching $104 million. Prior to the recent run-up in raw material costs, gross margins had typically ranged between 30% and 35%, higher than other Packaging segment products (~25%). We estimate LTM adjusted EBITDA for the period ending September 30, 2005 at $20.8 million. Product Differentiation. Tekni-Plex manufactures its egg cartons from expandable polystyrene, producing a foam carton, versus other cartons that are pulp or molded-fiber based. Each has its own distinct characteristics and market following. Foam egg cartons typically run better on automated packaging equipment resulting in fewer broken eggs, are easier to print on and more visually appealing, and can be colorized to enhance marketing. Pulp-based egg cartons, a favorite of environmentalists, absorb moisture from the egg (extending freshness) and are thought to deliver fewer broken eggs to the retail store. Estimated at 55%, the foam egg carton market share has gradually increased, taking share from pulp-based egg cartons. Pricing. As with most products in Tekni’s Packaging segment, foam egg cartons are made from polystyrene. Along with other petrochemical-based raw materials, polystyrene pricing has been increasing over the past two years (see Figure 8). Within this environment, Tekni-Plex has been successful in passing through price increases to its customer base. Pricing is typically done at the time of a customer order and does not involve long-term contracts. The magnitude of the pass-throughs is intended to maintain Tekni’s gross profit dollar, as opposed to its gross margin. The Company’s success in this area, as opposed to its garden hose line, appears to be a reflection of 1) a superior product, 2) customer acceptance, 3) competitor practice, and 4) high Tekni production capacity utilization. While probably more diverse than that of the Company’s garden hose business, Tekni’s egg carton customer base is comprised of large egg farm/packagers such as Cal-Maine Foods, Rose Acres and MoArk. Competition. Tekni-Plex is currently the leading U.S. producer of foam egg cartons, with approximately 40% of the egg carton market and more than 80% of the foam egg carton market. Pactiv, a leading flexible packaging company known for brands such as Hefty and Baggies, is the top producer of pulp-based egg cartons. Together, the two companies represent a duopoly in the egg carton market. Recently, Hartmann of Denmark has entered the North America market with limited initial success. Seasonality. Egg demand, and thus egg carton demand, is somewhat seasonal in nature. Demand typically increases over Thanksgiving, Christmas, New Year’s, the Superbowl and Easter. This seasonality does not translate into a meaningful variance in Tekni’s egg carton sales because the Company is currently producing at capacity.

10

MACRO DRIVERS Due to the Company’s inability to pass through pricing in its garden hose line, Tekni-Plex has been greatly affected by the rise in pricing of petrochemicals and their derivative products. The following section will focus on the two resins which feed the majority of Tekni-Plex’s businesses and the dynamics that drive their pricing mechanism, and in turn, Tekni-Plex’s near-term future. Introduction Plastics are polymers (poly-styrene, poly-vinyl chloride) that are built up from monomers, which are derived from crude oil and natural gas (see Figure 7). Polymers that have been dried and shaped into pellets are referred to as plastic resins. These resins are further treated in plastics processing facilities to produce different physical characteristics in the material, such as strength, toughness and flexibility. Resins comprise a very large portion of Tekni-Plex’s cost of goods sold. On a historical basis, resins have typically made up 98% of Tekni-Plex’s cost of raw materials, which in turn, have accounted for 64% of Packaging cost of goods sold. Given that resin prices have dramatically increased, this percentage is most likely higher. Figure 7

TEKNI-PLEX Raw Material Value Chain

PACKAGING TUBING PRODUCTS

FEEDSTOCK CRUDE OIL NATURAL GAS

CHEMICALS BENZENE ETHYLENE CHLORINE ETHYLENE

MONOMER STYRENE VINYL CHLORIDE MONOMER

POLYMER RESIN POLYSTYRENE POLYVINYL CHLORIDE

Egg Cartons Garden HoseTEKNI-PLEX PRODUCTS Food Trays Medical Tubing

Flexible Packaging Blister Packaging

Source: Company reports and MTR. Polystyrene The majority of Tekni-Plex’s packaging segment revenue is derived from the sale of products that use polystyrene as their primary raw material input. These products include foam egg cartons, poultry and meat processor trays, and foam plates. Structurally, polystyrene is a molecular chain of styrene monomer, which is formed through the processing of benzene and ethylene. Benzene is a natural constituent of crude oil, but it is usually synthesized from other compounds present in petroleum.

11

Pricing. As can be readily deduced, the cost of producing polystyrene is related to the cost of crude oil, though its selling price is another matter. As with most downstream products, the pricing of polystyrene is subject to supply/demand dynamics that can be disconnected from those affecting its feedstock. Polystyrene pricing has been on an uptrend over the past three years, rising from 57 cents per pound in the first quarter of fiscal 2003 to an estimated average price of 88 cents per pound in the second quarter of fiscal 2006 (see Figure 8). Recent announcements of price increases include 5 cents, 6 cents and 5 cents commencing October 1, 2005, November 1, 2005 and November 15, 2005, respectively. With a correlation of 0.95 (statistical measure by which 1.00 is perfect correlation), the pricing movement of polystyrene parallels that of crude oil (see Figure 9). We have chosen not to use this correlation for polystyrene forecasting purposes due to our belief that the NYMEX Light Sweet Crude Oil futures contracts pricing is not indicative of future crude oil pricing. Instead, our view to future pricing has been shaped through conversations with polystyrene producers. In general, producers have been selling polystyrene at low profitability levels, which does not bode well for price decreases should input costs decrease. Polystyrene pricing is being driven by styrene, which is made up of benzene and ethylene (see Figure 7). While the price of benzene has been coming down, due to high inventory levels in Europe and Asia, ethylene pricing has been moving up, a result of low inventory levels caused by production outages due to the hurricanes. Given our feedback, our projections for polystyrene incorporate flat pricing going forward at 94 cents per pound through fiscal 2007. Contrary to this view, CMAI projects that polystyrene pricing will decrease due to oversupply in Asia. Hurricane Rita. Hurricane Rita caused significant supply channel and production disruptions to chemical facilities located on the U.S. Gulf Coast, which produce styrene. In many cases, producers such as Dow Chemical, BASF and Nova Chemical were forced to declare force majeure, a contractual provision that allows producers to depart from the terms of a contract due to events that are neither foreseeable nor controllable. Styrene monomer production, in particular, was sharply reduced due to the lack of ethylene feedstock. Polyvinyl Chloride Polyvinyl chloride, or “PVC” as it is more commonly known, is a widely used plastic found in products ranging from clothing to piping and plumbing fixtures to garden hose. Its presence is so pervasive in the building industry through its use in pipe, conduit, frames and siding, that its

Figure 9FEEDSTOCK

CORRELATIONFiscal Lt.Swt.Crude PS *Period ($/barrel) (cts/lb)1Q03 28.3 56.02Q03 28.3 57.03Q03 34.0 60.04Q03 29.0 56.01Q04 30.2 56.02Q04 31.2 62.03Q04 35.3 68.04Q04 38.3 74.01Q05 43.9 82.02Q05 48.3 81.53Q05 49.9 79.04Q05 53.1 83.0

Correlation: 0.95* Polystyrene pricing reflects the forward period.Source: MTR analysis.

Figure 8

* X-axis reflects Company's fiscal calendar.

Source: Plastics News (Crystal Injection GP) and NYMEX.

POLYSTYRENE vs. LIGHT SWEET CRUDE OIL PRICING

5055606570758085

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

Poly

styr

ene

(cen

ts/lb

)

20

30

40

50

60

70

Lt.

Swt.

Cru

de O

il ($

/bar

rel)

Polystyrene Lt. Sweet Crude Oil

12

demand cycles with construction trends. The American Plastics Council estimates that rigid pipe and tubing account for half of all domestic PVC sales in the United States and Canada, while other construction-related uses account for almost 22%. Tekni-Plex makes use of PVC in its medical packaging business and throughout its Tubing Products and Other (compounding) reported segments. PVC is produced from its monomer, vinyl chloride, which is dependent upon natural gas, chlorine and ethylene (see Figure 7). During the manufacturing process (as with garden hose), PVC is often mixed with plasticizers, stabilizers and pigments to produce a variety of physical qualities. Pricing. While Tekni-Plex uses recycled PVC in the production of garden hose, our analysis utilizes the market pricing of prime PVC (also known as virgin PVC) as a proxy for recycled PVC, due to the difficulty associated with sourcing pricing information on the recycled derivative (prime and recycled PVC are highly correlated). Pricing on prime PVC has increased 61.5% since the first quarter of fiscal 2003, moving from 39 cents per pound to 63 cents per pound in the first quarter of fiscal 2006. The extremely high correlation between prime PVC and light sweet crude oil is delineated in Figure 10 and graphed in Figure 11. As with polystyrene, PVC pricing is not only dependent on petrochemical pricing but also on the supply and demand dynamic of its chemical and monomer feeds. Dow Chemical will soon be taking vinyl chloride monomer capacity out of the marketplace, accounting for a 10% reduction in domestic production capacity. It has been speculated that PVC pricing has risen so high that current pricing may spur the use of substitutes such as concrete and ductile iron for rigid pipe in the construction industry. While there appears to be a number of opposing forces on pricing, we have based our projections on our conversations with PVC producers which predict some pricing relief over the coming year. Forecasted PVC pricing is an extremely important driver in our model for Tekni-Plex’s Tubing Products segment profitability. Tekni’s near-term future is highly dependent on its success in recovering raw material price increases. This will, of course, be made all the more unlikely should PVC pricing continue to rise. We have forecast PVC pricing to increase to 72 cents per pound in the second quarter of fiscal 2006, remain flat into the third quarter of fiscal 2006, and thereafter decline by 4 cents per pound each quarter to 61 cents per pound in the second quarter of fiscal 2007.

Figure 10FEEDSTOCK

CORRELATIONFiscal Lt.Swt.Crude PVC *Period ($/barrel) (cts/lb)1Q03 28.3 36.02Q03 28.3 38.03Q03 34.0 43.04Q03 29.0 39.71Q04 30.2 41.02Q04 31.2 43.03Q04 35.3 47.74Q04 38.3 49.01Q05 43.9 51.52Q05 48.3 55.53Q05 49.9 57.54Q05 53.1 63.0

Correlation: 0.98* PVC pricing reflects the forward period.Source: MTR analysis.

Figure 11

* X-axis reflects Company's fiscal calendar.

Source: Plastics News and NYMEX.

PRIME PVC vs. LIGHT SWEET CRUDE OIL PRICING

354045505560657075

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

E3Q

06E4Q

06E1Q

07E2Q

07E

PVC

(cen

ts/lb

)

25303540455055606570

Lt.

Swt.

Cru

de O

il ($

/bar

rel)

Prime PVC Lt. Sweet Crude Oil

13

Hurricane Rita. According to Chemical Market Resources, over 60% of PVC production is based in the U.S. Gulf Coast region. PVC (as well as polystyrene) is produced with raw materials that are transported by barges to the ports of New Orleans, LA and Gulfport, MS. According to CMAI, as of September 29, 2005, North American PVC capacity had been reduced by 20% due to Hurricane Rita, but as of the writing of this report, normal production levels had been resumed. The problems that will be encountered with PVC pricing in the near-term have more to do with the damage Rita caused to natural gas and ethylene production facilities, rather than to PVC plants. With limited supply of natural gas and ethylene, PVC producers were unable to manufacture PVC. This resulted in inventory being driven to low levels across the supply chain and through to the end-user markets. While inventories are usually built up during the calendar first quarter, we believe they will, at best, be maintained in the first quarter of fiscal 2006. This dynamic may serve to support PVC pricing at current levels. China. China will be a key determinant in the future worldwide supply and demand equation for PVC. Fueled by infrastructure projects, as well as the export of fabricated goods, Chinese annual PVC demand is expected to exceed that of the United States in 2005 at 16.5 billion pounds. By 2010, China PVC demand is projected to grow to more than 22 billion pounds. With an outlook to self-sufficiency, China is aggressively adding PVC production capacity. In 2005, CMAI forecasted an increase of 9.6% for Chinese demand for PVC, with capacity projected to increase over 35% during the same period and 17% in 2006. Capacity increases in China are expected to reduce worldwide PVC price levels. CMAI forecasts that by 2010, China PVC imports will decline to 1.0 million metric tons, down 47% from 2000. Increased China PVC production will ultimately lead to greater recycled PVC supply. CORPORATE STRUCTURE

Figure 12

TEKNI-PLEX MANAGEMENT LLCControlled by Dr. F. Patrick Smith

Sole Managing Member ofTekni-Plex Partners and MST/TP Partners

TEKNI-PLEX PARTNERS LLC MST/TP PARTNERS LLCOwns 94% of Tekni-Plex Common Stock Owns 6% of Tekni-Plex Common Stock

(91.7% fully diluted) (5.8% fully diluted)

TEKNI-PLEX, INC.Revolving Credit Facility

10.875% Senior Secured Notes8.75% Senior Secured Notes12.75% Senior Sub. Notes

DOMESTIC SUBSIDIARIES FOREIGN SUBSIDIARIESGuarantors of:

Revolving Credit Facility PurePlast Acquisition Limited (Nova Scotia)10.875% Senior Secured Notes PurePlast Inc. (Ontario)8.75% Senior Secured Notes Tekni-Plex Europe, N.V. (Belgium)12.75% Senior Sub. Notes Action Technology Italia S.p.A (Italy)

Colorite Europe, Ltd. (Northern Ireland)PureTec Corporation Colorite Plastics Canada Ltd. (Ontario)

Plastic Specialties and Technologies, Inc. Tekni-Plex Holdings (Canada) Ltd. (Nova Scotia)Plastic Specialties and Technologies Investments, Inc. Tekni-Plex Argentina, S.A. (Argentina)

Burlington Resins, Inc. Tekni-Plex, Inc. (Singapore)Natvar Holdings, Inc.

Tri-Seal Holdings, Inc.TP-Elm Acquisition Subsidiary, Inc.

TPI Acquisition Subsidiary, Inc.Source: Company reports.

14

CAPITAL STRUCTURE Each of Tekni-Plex’s debt instruments has been borrowed by or issued at the parent, Tekni-Plex, Inc. Tekni-Plex, Inc. is operational, comprising five plant locations, a result of the 1997 merger with Dolco Packaging Corp. (26.0% of consolidated net sales). Additionally, Tekni-Plex, Inc.’s debt is guaranteed by all domestic subsidiaries. Revolving Credit Facility On June 10, 2005, Tekni-Plex entered into a new four-year $65 million asset-based credit facility with Citicorp USA. The new facility was part of a refinancing of the Company’s old $100 million revolver and $70 million term loan. As of September 30, 2005, there were no outstanding borrowings under the facility. Net of $5 million of LC’s, revolver availability was $60 million. Tekni-Plex, Inc. is the borrower of the revolving credit facility, and each of its domestic subsidiaries is a guarantor of the facility. The credit facility is secured on a first priority basis by the accounts receivable, inventory, general intangibles and certain other assets of the borrower and the guarantors (“ABL Facility Priority Collateral”) (see Figure 13). Additionally, it contains a letter of credit sub-limit of $25 million and a swing loan sub-limit of $15 million. Outstanding borrowings are charged an interest rate equal to the sum of a Base Rate, which is approximately 0.5% plus the Federal Funds Rate, and an applicable margin ranging from 1.25% to 1.75%, depending upon the Monthly Available Credit. The facility’s Borrowing Base is calculated as the sum of 1) 85% of Eligible Receivables; 2) the lesser of (a) 85% of the orderly liquidation value of Eligible Finished Goods and (b) 75% of Eligible Finished Goods; and 3) the lesser of (a) 85% of the orderly liquidation value of Eligible Raw Materials, and (b) 75% of Eligible Raw Materials, less an Eligibility Reserve. Asset sales are governed under a negative covenant provision in the credit agreement. To the extent that an asset sale includes credit facility collateral, the sale must include substantially all of the assets constituting the unit of operation, and 1) net cash proceeds shall neither exceed $25 million in any fiscal year nor $50 million during the term of the Agreement, 2) consideration must be at least 75% cash and 3) net cash proceeds must be applied to repay borrowings under the facility. The credit agreement also limits capital expenditures to $55 million, $40 million, $35 million and $35 million for the fiscal years 2006 through 2009, respectively; the covenant does incorporate a spending rollover provision.

Figure 13 TEKNI-PLEX

Debt Collateral

ABL FACILITY PRIORITY COLLATERAL NOTE PRIORITY COLLATERALAccounts Receivable Instruments, Accounts

Inventory PP&EGeneral Intangibles Certain Real Property

Certain Other Assets Equity(Domestic subs, 65% Foreign subs.)

REVOLVING CREDIT FACILITYAmount: $ 65 million

10.875% SENIOR SECURED NOTESAmount: $ 150 million

8.75% SENIOR SECURED NOTESAmount: $ 275 million

Source: Company reports.

15

10.875% 1st Lien Senior Secured Notes Tekni-Plex issued $150 million of 1st Lien Notes on June 10, 2005 as part of the refinancing of its old senior secured credit facility. The Notes bear interest at an annual rate of 10.875%, payable semiannually on February 15 and August 15, and are scheduled to mature on August 15, 2012. The Company will make its first coupon payment on February 15, 2006. The 1st Lien Notes are issued by Tekni-Plex, Inc. and are guaranteed by all domestic subsidiaries. The obligations are secured on a first priority basis by all instruments and accounts, PP&E and real property of both Tekni-Plex, Inc. and the guarantors, as well as the equity of all the domestic subsidiaries and 65% of the capital stock of all the foreign subsidiaries (“Note Priority Collateral”) (see Figure 13). The Notes are also secured on a second priority basis by the ABL Facility Priority Collateral and are thus effectively subordinated to the Credit Facility. The 1st Lien Notes indenture allows the Company to incur indebtedness such that, prior to June 10, 2006, the calculated pro forma Fixed Charge Coverage Ratio for the most recent four full fiscal quarters is not greater than 2.0x; after June 10, 2006, ratio compliance is achieved at 2.25x. The Note indenture defines the Fixed Charge Coverage Ratio as the ratio of the Consolidated Cash Flow to Fixed Charges for the prior four-quarter period. Consolidated Cash Flow is defined as Consolidated Net Income plus, to the extent deducted, extraordinary losses, taxes, Fixed Charges, depreciation and amortization, non-cash items that do not relate to accruals or reserves. Fixed Charges are defined as consolidated interest expense plus preferred stock dividends adjusted for taxes. Indebtedness under the credit facility is limited to $125 million less the aggregate amount of asset sale net proceeds applied by the Company to permanently repay term debt or revolving debt which leads to a corresponding commitment reduction. Permitted debt also includes a basket for the incurrence of additional unsecured indebtedness in an amount, at any time outstanding, of $40 million, which has already been used. As specified in the 1st Lien Note indenture, net proceeds from an asset sale may be applied, within 365 days, to the following: 1) to the extent the asset sale involves ABL Facility Priority Capital, to reduce commitments under the revolving credit facility, 2) to acquire the assets or capital stock of a Permitted Business, 3) to make capital expenditures, and 4) to acquire useful assets. Any proceeds in excess of $15 million not applied to the aforementioned will be used to purchase the 1st Lien Notes and other indebtedness that is secured equally and ratably with the Notes. The Notes are callable on or after August 15, 2009 at $105.438, August 15, 2010 at $102.719, and August 15, 2011 and thereafter at $100. The Notes carry a change of control put at 101%. 8.75% 2nd Lien Senior Secured Notes The Company issued $275 million of 2nd Lien Senior Secured Notes on November 21, 2003, the proceeds of which were used to pay down the term loan of a previous credit facility. The Notes bear interest at an annual rate of 8.75%, payable semiannually on May 15 and November 15, and are scheduled to mature on November 15, 2013. The 2nd Lien Notes were issued by Tekni-Plex, Inc. and are guaranteed by all domestic subsidiaries. The Notes are secured by liens junior to that of the 1st Lien Notes on the ABL Facility Priority Collateral and the Note Priority Collateral and are effectively subordinated to the 1st Lien Notes (see Figure 13). The 2nd Lien Notes’ indenture contains a number of

16

provisions that govern additional indebtedness. The Company may incur indebtedness such that the calculated pro forma Fixed Charge Coverage Ratio for the most recent four full fiscal quarters is not greater than 2.25x. The Note indenture defines the Fixed Charge Coverage Ratio using similar language to that found in the 1st Lien Note indenture. Indebtedness under the credit facility is limited to $275 million (as compared with $125 million under the 1st Lien Note indenture) less the aggregate amount of asset sale net proceeds applied by the Company to permanently repay term debt or revolving debt which leads to a corresponding commitment reduction. Permitted debt also includes a basket for the incurrence of additional unsecured indebtedness in an amount, at any time outstanding, of $40 million, which has already been used.

The language governing the net proceeds from an asset sale is similar to that in the 1st Lien Note indenture. Any proceeds in excess of $15 million not applied to the aforementioned will be used to purchase the 2nd Lien Notes and other indebtedness that is secured equally and ratably with the Notes. The Notes are callable on or after November 15, 2008 at $104.375, November 15, 2009 at $102.917, November 15, 2010 at $101.458, and November 15, 2011 and thereafter at $100. The Notes carry a change of control put at 101%. 12.75% Senior Subordinated Notes In June 2000 and May 2002, the Company issued $275 million and $40 million of 12.75% Senior Subordinated Notes, respectively. The proceeds from the initial issuance were part of a recapitalization of Tekni-Plex, Inc. and that of the second issue were used to repay borrowings under the old revolving credit facility. The Notes bear interest at an annual rate of 12.75%, payable semiannually on June 15 and December 15, and are scheduled to mature on June 15, 2010. The Subordinated Notes are issued by Tekni-Plex, Inc. and are guaranteed by all domestic subsidiaries on a subordinated basis to the guarantees of the Senior Debt. The Notes are contractually subordinated to all Senior Debt and thus rank junior in right of payment to the Credit Facility, 1st Lien Notes and 2nd Lien Notes. They are also structurally subordinated to indebtedness and other liabilities of all the non-guarantor foreign subsidiaries. The Subordinated Notes are callable on or after June 15, 2005 at $106.375, June 15, 2006 at $104.25, June 15, 2007 at $102.125, and June 15, 2008 and thereafter at $100. The Notes carry a change of control put at 101%. Additional Indebtedness. Effective June 10, 2005, an amendment to the Subordinated Note indenture, which had been approved through a consent solicitation, allowed Tekni-Plex to borrow up to an incremental $90 million at any one time outstanding, in a ratio of 1.5:1.0 for every dollar of equity received after April 1, 2005. Having received an equity infusion in the amount of $37.2 million in the form of Series A Preferred Stock (see following page), Tekni-Plex was able to issue an additional $55.8 million of debt (see Figure 14). At current equity infusion levels, we estimate that the Company has provided for an additional $11.5 million of debt. Along with a basket provision in the Note indentures to which the Company can allocate its letters of credit, we calculate that Tekni can issue a total of $16.5 million of

Figure 14 TEKNI-PLEX Additional Indebtedness

Equity Received Post-4/15/05 37.2$ Available Additional Debt (1.5x) 55.8 New Debt Issued: Credit Facility 65.0 1st Lien Notes 150.0 Subtotal 215.0 Less: Old Debt Refinanced: Revolver 100.0 Term Loan 70.7 Subtotal 170.7 Additional Debt Used 44.3 Calculated Additional Debt, net 11.5$ LC Basket Provision 5.0 Total Available Additional Debt 16.5$ Source: Company reports and MTR analysis.

17

additional debt. Additional debt beyond the $16.5 million will require additional equity; the Subordinated Note supplemental indenture provides for additional debt of $34.2 million (totaling $90 million), which would require an additional equity investment of $22.8 million. This is more restrictive than the language in the Senior Secured Notes’ indentures, which will allow an additional $60 million of Credit Facility debt. Thirty million of the post-4/15/05 $37.2 million Series A Preferred investment was made by Weston Presidio. It is unclear who will invest additional equity in future financing rounds, given Weston’s unrequited desire to reduce its Series A exposure from $30 million to $15 million and its co-investors’ disinterest in participating in the prior investment round. Series A Preferred Stock As part of the Subordinated Note consent solicitation requiring the investment of additional equity, Tekni authorized 82,500 shares of Series A Preferred Stock through an Amended and Restated Certificate of Incorporation dated May 13, 2005. To-date, a total of $37.2 million of Series A Preferred Stock has been purchased, comprised of $30 million of equity contributed by Weston Presidio, $1.8 million by Dr. F. Patrick Smith, $5 million from Forrest Binkley & Brown Capital Partners, $230,527 by Michael Cronin, managing partner of Weston Presidio, and $192,249 by other existing investors. Missing in the investor roster is a number of large institutional investors that had previously co-invested alongside Weston Presidio in prior investment rounds. Accreting at an estimated 16% per annum, there was $64.0 million Series A Preferred outstanding as of September 30, 2005. The Series A Preferred Stock is to be redeemed at three times the purchase price upon the occurrence of a sale of the Company or its subsidiaries, whether by merger, asset sale, change in equity control, or liquidation; in addition, the Preferred Stock is to be redeemed at three times the purchase price upon the earlier of i) of February 15, 2014 and ii) to the extent such redemption is permitted under the Company’s new asset-based credit facility, the payment in full of the Company’s Senior Subordinated Notes and existing Senior Secured Notes. Upon a Triggering Event, the Preferred Stock will be entitled to receive cumulative dividends at a rate of 12% per annum, compounded quarterly. A Triggering Event is defined, in part, as the failure of the Company to redeem Series A Preferred shares, the failure to comply with covenants in the Series A Stock Purchase Agreement, the failure to service Company debt, a Chapter 11 filing, and the date April 30, 2007. Upon a Triggering Event, the Series A Preferred Stockholders assume control of the Company’s board of directors. Leverage / Liquidity As of the first quarter of fiscal 2006 ended September 30, 2005, Tekni had $693.4 million of net debt. Using an LTM adjusted EBITDA of $67.8 million, the Company’s net interest coverage and net leverage ratios were 0.71x and 10.2x, respectively, for the period (see Figure 15). At the end of the quarter, there were no borrowings under the $65 million revolving credit facility. Net of approximately $5.0 million of letters of credit, facility availability was $60 million. Together with cash on hand in the

Figure 15 TEKNI-PLEX

Leverage As of September 30, 2005

Amount Leverage($ millions) Thru

Revolving Credit Facility -$ 0.0x10.875% Senior Secured Notes 146.7 2.2x8.75% Senior Secured Notes 268.8 6.1x12.75% Senior Sub. Notes 313.5 10.8xForeign Term Loan 4.8 10.8x

Total Debt 733.8$ 10.8x

Series A Preferred Stock 64.0 11.8xTotal Obligations 797.8$ 11.8x

LTM Adjusted EBITDA 67.8$ Source: Company reports and MTR analysis.

18

amount of $40.4 million, total liquidity as of September 30, 2005 was $100.4 million. MANAGEMENT / OWNERSHIP / CONTROL It has been estimated that, prior to the issuance of the Series A Preferred Stock, Weston Presidio and its co-investors had approximately $300 million invested in Tekni-Plex, translating into approximately a 60% ownership stake in Tekni-Plex’s equity; Dr. F. Patrick Smith is estimated to own more than 20% of the Company’s equity. Since the issuance of the Series A Preferred Stock and the amendment of the Certificate of Incorporation, day-to-day control has effectively shifted to Weston Presidio. As long as shares of the Preferred Stock are issued and outstanding, the Company is not permitted, without the approval of the Series A Preferred stockholders, to engage in the following: 1) consummate the sale of the Company or any significant subsidiary; 2) issue any securities other than 45.752 shares of common stock and certain refinancing securities; 3) liquidate or dissolve the Company or any subsidiary; 4) declare or pay any dividend, or redeem any securities other than Series A Preferred Stock; 5) change the number of Company directors; 6) incur any indebtedness that would prohibit the redemption of the Preferred Stock; and 7) hire, terminate or modify the compensation of the CEO, CFO and COO. As stated previously, upon a Triggering Event, the Series A Preferred Stockholders assume control of the Company’s board of directors. RELATIVE VALUE While Tekni-Plex faces competition across each of its product categories, the fragmented nature of the flexible packaging industry allows a relatively small company such as Tekni to identify and dominate niches within its markets. While Tekni’s direct competitors are few in number, this section will briefly address direct and indirect public competitors that share similar industry dynamics. As shown in Figure 16, the range of EV/EBITDA multiples, from 7.3x to 8.3x, is narrow. Within a historical context, these multiples compare favorably to a twenty-year industry average of 7.5x. There is a significant valuation premium attributed to size in the packaging industry and as such when applied, the multiples delineated need to be adjusted downward to account for Tekni’s relatively lower product line volume and revenue base. Figure 16

Specialty Packaging - Public ComparablesFinancials as of September 30, 2005

Stock Price as of November 18, 2005 (In Millions of Dollars)

LTM LTM EBITDA Enterprise EV / EV / Net Debt /Company Ticker Specialty Sales EBITDA Margin Net Debt Value EBITDA Sales EBITDATekni-Plex TEKNI Flexible packaging 714.8$ 67.8$ 9.5% 693.3$ NA NA NA 10.2xPactiv PTR Flexible packaging 3,516.0 544.0 15.5% 1,112.0 3,955.0 7.3x 1.12x 2.0xAptarGroup ATR Dispensing pumps 1,384.5 255.4 18.4% 65.3 1,939.0 7.6x 1.40x 0.3xBemis BMS Flexible packaging 3,307.5 433.5 13.1% 688.5 3,518.0 8.1x 1.06x 1.6xSealed Air SEE Protective packaging 4,026.5 708.5 17.6% 1,626.0 5,850.0 8.3x 1.45x 2.3xSonoco Products SON Packaging 3,458.7 455.9 13.2% 756.9 3,552.0 7.8x 1.03x 1.7xSource: Company Reports and MTR analysis. Pactiv (PTV). Pactiv is a global supplier of specialty packaging and consumer products. Operating through three segments, Consumer Products, Foodservice/Food Packaging, and Protective and Flexible Packaging, the company produces molded-fiber egg cartons, foam trays

19

for meat, plastic cutlery, take-out service containers, plastic bags under names such as Hefty, Baggies, and EZ Foil, as well as padded mailers and medical packaging. LTM sales for the period ending September 30, 2005 were $3.5 billion with LTM EBITDA of $544 million, or 15.5% of sales. The company’s net leverage ratio was 2.04x. AptarGroup (ATR). AptarGroup is a leading global supplier of dispensing pumps for the personal care, pharmaceutical, household and food/beverage markets. The company’s subsidiaries, which include Emsar, Pfeiffer, SeaquistPerfect Dispensers, and Valois, produce pumps, closures and aerosol valves. LTM sales for the period ending September 30, 2005 were $1.4 billion with LTM EBITDA of $255 million, or 18.4% of sales. Its net leverage ratio was 0.26x. Bemis (BMS). Bemis operates through two segments: the Flexible Packaging segment and the Pressure Sensitive Materials segment. Accounting for 79% of fiscal 2004 sales, the Flexible Packaging segment manufactures a broad range of consumer and industrial packaging, including flexible film structures and laminates, sealing tapes and paper bags. These products are sold to the food and beverage industry, agribusiness, minerals, and medical device packaging. The Pressure Sensitive Materials segment manufactures pressure sensitive materials that are sold into label, graphic and technical markets. For the period ending September 30, 2005, LTM sales were $3.3 billion, and LTM EBITDA was $434 million, or 13.1% of sales. The net leverage ratio is calculated at 1.59x. Sealed Air (SEE). Sealed Air’s Food Packaging segment primarily produces bags, films and laminates which customers use to package a broad range of perishable foods. In conjunction with its materials offerings, Sealed Air also sells food-packaging equipment. Its Protective and Specialty Packaging segment produces Bubble Wrap, Instapak foam, Jiffy envelopes and Rapid Fill inflatable packaging systems. LTM sales for the period ending September 30, 2005 were $4.0 billion, while LTM EBITDA was $709 million, or 17.6% of sales. The company’s net leverage ratio was 2.29x. Sonoco Products (SON). Sonoco Products is one of the world’s largest manufacturers of industrial and consumer packaging products. Through its Engineered Carriers and Paper segment, the company makes tubes, cores and recycled paperboard for the construction, textile, beverage and paper manufacturing industries. Its Consumer Packaging segment makes ends and closures for containers, rigid packaging for the food and non-food markets, as well as printed flexible packaging. For the period ending September 25, 2005, LTM sales were $3.5 billion with EBITDA of $456 million, or 13.2% of sales. Its net leverage ratio was 1.66x. RECENT FINANCIAL RESULTS Packaging Over the past two years, Tekni’s Packaging segment has come under margin pressure due to the rising cost of polystyrene (see Figure 8). Polystyrene has increased 12% during the last four fiscal quarters and 64% over the past eight quarters to an estimated 92 cents per pound in the second fiscal quarter of 2006. In response, Tekni has successfully passed through the dollar increase in rising raw material costs, resulting in lower gross margin. Gross profit for fiscal 2004 and 2005 was $80.1 million and $83.1 million, respectively, while gross margin declined from 26.2% to 23.8% over the same period (see Figure 17). Quarterly adjusted SG&A expense rose substantially over the two-year period, increasing from $6.6 million in the first quarter of fiscal

20

2004 to $9.7 million in the fourth quarter of fiscal 2005, accounting for the decrease in adjusted EBITDA from $66.4 million in fiscal 2004 to $64.2 million in fiscal 2005. Packaging segment net sales grew 4.0% year-over-year to $85.1 million in the first quarter of fiscal 2006, primarily due to the pass-through of higher selling prices. Gross profit was basically flat at $20.7 million, as compared with the prior year’s quarter, reflecting the dollar-for-dollar pass-throughs. SG&A expense decreased $1.8 million from the prior quarter ended July 1, 2005, primarily due to lower executive compensation. Adjusted EBITDA for the first quarter of fiscal 2006 was flat at $16.3 million, compared with $16.4 million in the first quarter of fiscal 2005. Tubing Products Tekni’s Tubing Products segment has been adversely affected by the performance of the garden hose business (86.5% of Tubing Products net sales). Rising PVC prices, combined with management’s previous unwillingness to pass-through price increases, has greatly hurt financial results. Since September 2003, Prime PVC has increased from 39 cents per pound to 72 cents per pound, or 84.6%, while Tekni’s pricing of garden hose has increased an estimated 8.2% (see Figure 11). This has resulted in a gross profit decline from $23.3 million in fiscal 2004 to $10.0 million in fiscal 2005 (see Figure 17). Adjusted EBITDA has decreased in concert with gross profit, declining from $18.6 million in fiscal 2004 to $5.7 million in fiscal 2005. Tubing Product segment net sales increased 39.3% to $43.2 million in the first quarter of 2006 from $31.0 million in the first quarter of 2005. The increase was driven by a weather-related shift in timing, moving volumes from the fourth quarter of fiscal 2005 to the first quarter of fiscal 2006. Gross profit declined to negative $0.5 million in the quarter from $6.7 million in the prior year’s quarter as a result of Tekni’s unwillingness to raise prices sufficiently to compensate for significantly higher raw material costs. Adjusted EBITDA for the quarter ended September 30, 2005 was negative $1.3 million, down $6.8 million from the prior year’s quarter. Other Tekni’s Other segment, which comprises the Company’s materials compounding businesses, has improved slightly over the past two years. With gross profit increasing from $4.5 million in fiscal 2004 to $5.2 million in fiscal 2005, it is likely that Tekni has grown unit volume. Adjusted EBITDA increased 16% over the prior year to $5.8 million in fiscal 2005. Other segment net sales grew 12.4% year-over-year to $34.5 million in the quarter. Gross margins increased 50bps to 6.7%, as higher sales volumes provided greater absorption of the operation’s fixed costs. Adjusted EBITDA improved to $2.8 million, or 8.0% of net sales, for the quarter ended September 30, 2005, up from $2.0 million, or 6.4% of net sales, in the prior year’s quarter.

21

Figure 17 TEKNI-PLEX

Adjusted Historical Quarterly Segment Operating Statement(In Millions of Dollars)

PACKAGING SEGMENT

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q069/26/03 12/26/03 3/26/04 7/2/04 10/1/04 12/31/04 4/1/05 7/1/05 9/30/05 2004 2005

Net Sales 68.7$ 72.0$ 78.4$ 87.1$ 81.8$ 83.3$ 92.2$ 91.4$ 85.1$ 306.1$ 348.7$ Cost of Goods Sold 52.1 53.2 56.6 64.2 61.0 63.0 69.3 72.3 64.4 226.0 265.6 Gross Profit 16.6 18.8 21.8 22.9 20.8 20.3 22.9 19.1 20.7 80.1 83.1 SG&A 6.6 6.6 8.0 7.6 8.1 8.0 8.4 9.7 7.9 28.8 34.1 Operating Profit 10.0 12.2 13.8 15.3 12.7 12.3 14.5 9.4 12.8 51.3 49.0 Depreciation and Amortization 3.4 4.4 3.4 3.9 3.7 3.6 3.6 4.3 3.5 15.0 15.3 Adjusted EBITDA 13.4$ 16.6$ 17.2$ 19.1$ 16.4$ 16.0$ 18.1$ 13.8$ 16.3$ 66.4$ 64.2$

Net Sales Growth, Y/Y - - - - 19.1% 15.7% 17.6% 5.0% 4.0% - 13.9%Gross Margin 24.2% 26.1% 27.8% 26.3% 25.4% 24.4% 24.8% 20.9% 24.3% 26.2% 23.8%SG&A as % Net Sales 9.6% 9.1% 10.2% 8.8% 9.9% 9.6% 9.1% 10.6% 9.3% 9.4% 9.8%Adjusted EBITDA Margin 19.5% 23.1% 21.9% 22.0% 20.0% 19.2% 19.7% 15.1% 19.2% 21.7% 18.4%

TUBING PRODUCTS SEGMENT

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2004 2005Net Sales 39.4$ 24.9$ 61.3$ 84.7$ 31.0$ 25.3$ 64.2$ 92.5$ 43.2$ 210.2$ 213.1$ Cost of Goods Sold 27.8 16.0 41.1 102.1 24.3 19.4 59.5 99.8 43.7 186.9 203.1 Gross Profit 11.6 8.9 20.2 (17.4) 6.7 5.9 4.7 (7.3) (0.5) 23.3 10.0 SG&A 3.3 2.7 3.9 4.3 3.3 2.8 3.4 4.0 3.0 14.1 13.6 Operating Profit 8.3 6.2 16.3 (21.7) 3.4 3.1 1.3 (11.3) (3.5) 9.2 (3.6) Depreciation and Amortization 2.0 3.3 2.0 2.1 2.1 2.1 2.2 3.0 2.2 9.4 9.3 Adjusted EBITDA 10.2$ 9.6$ 18.3$ (19.5)$ 5.5$ 5.2$ 3.4$ (8.3)$ (1.3)$ 18.6$ 5.7$

Net Sales Growth, Y/Y - - - - -21.2% 1.9% 4.7% 9.2% 39.3% - 1.3%Gross Margin 29.4% 35.8% 32.9% -20.5% 21.6% 23.3% 7.3% -7.9% -1.2% 11.1% 4.7%SG&A as % Net Sales 8.4% 10.7% 6.3% 5.0% 10.6% 11.2% 5.4% 4.3% 6.9% 6.7% 6.4%Adjusted EBITDA Margin 26.0% 38.5% 29.9% -23.1% 17.7% 20.5% 5.3% -9.0% -2.9% 8.9% 2.7%

OTHER SEGMENT

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2004 2005Net Sales 28.0$ 25.9$ 29.4$ 36.0$ 30.7$ 29.6$ 37.8$ 35.7$ 34.5$ 119.3$ 133.8$ Cost of Goods Sold 26.4 24.6 26.9 36.9 28.8 28.9 36.2 34.7 32.2 114.8 128.6 Gross Profit 1.6 1.3 2.5 (0.9) 1.9 0.7 1.6 1.0 2.3 4.5 5.2 SG&A 1.5 1.5 1.6 1.7 1.5 1.6 1.6 1.7 1.4 6.3 6.4 Operating Profit 0.1 (0.2) 0.9 (2.6) 0.4 (0.9) (0.0) (0.7) 0.9 (1.8) (1.2) Depreciation and Amortization 1.5 2.1 1.5 1.7 1.6 1.7 1.7 2.1 1.9 6.8 7.1 Adjusted EBITDA 1.5$ 1.9$ 2.4$ (0.9)$ 2.0$ 0.8$ 1.7$ 1.4$ 2.8$ 5.0$ 5.8$

Net Sales Growth, Y/Y - - - - 9.5% 14.5% 28.5% -0.8% 12.4% - 12.2%Gross Margin 5.7% 5.0% 8.5% -2.5% 6.2% 2.4% 4.2% 2.8% 6.7% 3.8% 3.9%SG&A as % Net Sales 5.5% 5.7% 5.5% 4.6% 5.0% 5.3% 4.3% 4.8% 4.1% 5.3% 4.8%Adjusted EBITDA Margin 5.5% 7.5% 8.2% -2.4% 6.4% 2.7% 4.4% 3.9% 8.0% 4.2% 4.4%

CONSOLIDATED

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2004 2005Net Sales 136.1$ 122.7$ 169.1$ 207.7$ 143.5$ 138.2$ 194.2$ 219.6$ 162.8$ 635.6$ 695.5$ Cost of Goods Sold 106.3 93.7 124.6 203.1 114.1 111.3 165.0 206.8 140.3 527.7 597.2 Gross Profit 29.8 29.0 44.5 4.6 29.4 26.9 29.2 12.8 22.5 107.9 98.3 SG&A 15.4 14.4 16.4 13.0 15.8 14.2 15.5 15.1 14.3 59.2 60.7 Operating Profit 14.4 14.6 28.1 (8.4) 13.6 12.7 13.7 (2.3) 8.2 48.7 37.6 Other (Income) Expense 0.1 0.6 0.1 (0.3) 0.4 0.4 (3.1) 0.1 (0.0) 0.6 (2.2) Depreciation and Amortization 7.1 10.1 7.2 8.0 7.6 7.7 7.7 9.7 7.9 32.3 32.7 Adjusted EBITDA 21.4$ 24.0$ 35.1$ (0.1)$ 20.8$ 20.0$ 24.5$ 7.3$ 16.1$ 80.4$ 72.5$

Net Sales Growth, Y/Y - - - - 5.4% 12.7% 14.8% 5.7% 13.4% - 9.4%Gross Margin 21.9% 23.6% 26.3% 2.2% 20.5% 19.5% 15.0% 5.8% 13.8% 17.0% 14.1%SG&A as % Net Sales 11.3% 11.8% 9.7% 6.2% 11.0% 10.3% 8.0% 6.9% 8.8% 9.3% 8.7%Adjusted EBITDA Margin 15.7% 19.6% 20.8% -0.1% 14.5% 14.4% 12.6% 3.3% 9.9% 12.7% 10.4%Source: Company reports and MTR.

22

OUTLOOK Our view to Tekni-Plex’s future is mixed. While we project that Tekni’s available liquidity will diminish with each successive quarter, resulting in some form of restructuring by the second quarter of fiscal 2007 ending December 31, 2006, we also foresee an improved fundamental picture for its garden hose business and the company as a whole. Packaging Tekni’s Packaging segment has proven to be extremely resilient with regard to raw material price increases. We do not anticipate that this dynamic will change and have forecasted that Tekni will have continued success in passing through price increases and decreases to its customer base. Given recent historical trends, we anticipate flat unit volumes in the Company’s egg carton business and minimal volume growth in all other packaging lines. Projected top-line growth between fiscal 2006 and 2007 primarily reflects polystyrene price increase pass-throughs. Net sales for the Packaging segment are projected to grow 5.1% to $366.4 million in fiscal 2006 and 3.9% to $380.8 million in fiscal 2007 (see Figure 19). Gross profit is maintained at $84.0 million and $85.4 million over the same period, while gross margins are forecast to decline to 22.9% and 22.4%, respectively. Adjusted EBITDA for the segment is projected to be near flat at $65.3 million and $65.9 million for fiscal 2006 and 2007, respectively. Tubing Products We anticipate that the Company’s Tubing Products segment will continue to be challenged in the near-term. The Company has stated that it has put through a double-digit price increase, effective January 1, 2006 (and a possible additional 7.5% to 10.0% increase to follow), on its garden hose product line. This, combined with a projected decline in recycled PVC pricing, should allow Tekni to begin to recover raw material price increases. The Company should also benefit from continued growth in its other tubing product lines, which we project should contribute $14.7 million in gross profit in fiscal 2007. Garden Hose. Based upon our belief that Teknor Apex has been successful in raising prices, our analysis assumes that Tekni passes through garden hose price increases of 10.0% and 5.0% effective January 1, 2006 and January 1, 2007, respectively (see Figure 18). Given recent trends in Company garden hose sales, as well as feedback from the marketplace, we anticipate that unit volumes will decline. Year-over-year quarterly volume losses have been projected at 10.0% in calendar year 2006, declining to 5% in 2007. As shown on the following page, gross contribution is forecast to become positive in the second quarter of fiscal 2007, resulting in a gross profit of negative $9.6 million and $13.6 million in fiscal 2006 and 2007, respectively.

23

Figure 18 TEKNI-PLEX

Projected Quarterly Product Gross Contribution (In Millions of Dollars)

GARDEN HOSE LINE

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q0710/1/05 12/31/05 4/1/06 7/2/06 10/1/06 12/31/06 4/1/07 7/2/07 2006 2007

Net Sales 30.6$ 15.5$ 54.0$ 82.5$ 29.3$ 15.4$ 53.9$ 82.3$ 182.7$ 180.9$ Cost of Goods Sold 33.6 16.5 56.3 85.9 29.5 15.0 48.8 73.9 192.3 167.3 Gross Profit (3.0) (1.0) (2.2) (3.4) (0.2) 0.4 5.1 8.4 (9.6) 13.6

Prime PVC (cents per lb.) 63.0$ 72.0$ 72.0$ 68.0$ 64.0$ 61.0$ 60.0$ 60.0$ 68.8$ 61.3$ Garden Hose Price Index 100.0 100.0 110.0 110.0 110.0 110.0 115.5 115.5 105.0 112.8 Unit Volume, Y/Y 26.8% -2.0% -10.0% -10.0% -10.0% -10.0% -5.0% -5.0% 1.2% -7.5%

Net Sales Growth, Y/Y 32.9% -3.3% 0.1% 2.1% -4.4% -1.0% -0.2% -0.2% 5.1% -1.0%Gross Margin -9.9% -6.4% -4.1% -4.1% -0.8% 2.5% 9.4% 10.2% -5.3% 7.5%Source: MTR analysis. Given our current outlook to future PVC pricing, we forecast accelerating fundamental improvement throughout fiscal 2007 (see Figures 18,19). Coupled with continued profitable volume growth in Tekni-Plex’s other tubing product lines, we anticipate positive adjusted EBITDA for the Tubing Products segment in the first quarter of fiscal 2007 and forward, increasing to $11.4 million in the fourth quarter of fiscal 2007. Adjusted EBITDA for the segment is projected to recover to $24.3 million in fiscal year 2007, as compared with $18.6 million and $5.7 million in fiscal 2004 and 2005, respectively. In the medium-term, though, it is conceivable that the sale of domestically produced garden hose will be materially impacted by imports. Other Tekni’s Other segment is expected to slowly grow unit volumes through fiscal 2006 and 2007 and maintain unit gross contribution with dollar-for-dollar pass-throughs of price increases. Net sales are projected to grow 12.4% and 12.6% for fiscal 2006 and 2007, respectively. Gross margin is forecast to increase to 4.4% from 3.9% in fiscal 2005 as fixed costs are absorbed over higher volumes. Resulting adjusted EBITDA for fiscal 2006 and 2007 is projected at $7.6 million and $7.9 million, respectively, as compared with $5.8 million in fiscal 2005. Consolidated Consolidated figures reflect the sum total of Tekni’s reporting segments plus corporate SG&A, depreciation and amortization expenses. Consolidated net sales are projected to grow 8.7% to $756.3 million in fiscal 2006 from $695.5 million in fiscal 2005 and 6.4% to $804.6 million in fiscal 2007. The vast majority of the growth stems from the pass-through of price increases. Gross margin is expected to decline further in fiscal 2006 to 12.2%, recovering to 15.1% in fiscal 2007. Adjusted EBITDA is projected to decline in fiscal 2006 at $64.3 million, rebounding to $91.1 million in fiscal 2007.

24

Figure 19 TEKNI-PLEX

Adjusted Projected Quarterly Segment Operating Statement(In Millions of Dollars)

PACKAGING SEGMENT

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q0712/31/05 4/1/06 7/2/06 10/1/06 12/31/06 4/1/07 7/2/07 2006 2007

Net Sales 87.4$ 97.0$ 97.0$ 90.6$ 90.7$ 99.8$ 99.8$ 366.4$ 380.8$ Cost of Goods Sold 66.9 73.9 77.3 70.3 70.3 77.4 77.5 282.5 295.5 Gross Profit 20.5 23.1 19.7 20.3 20.4 22.3 22.3 84.0 85.4 SG&A 7.9 7.9 7.9 7.9 7.9 7.9 7.9 31.7 31.7 Operating Profit 12.6 15.2 11.8 12.4 12.4 14.4 14.4 52.3 53.6 Depreciation and Amortization 3.2 3.2 3.1 3.1 3.1 3.0 3.0 13.1 12.2 Adjusted EBITDA 15.8$ 18.4$ 14.9$ 15.5$ 15.5$ 17.4$ 17.4$ 65.3$ 65.9$

Net Sales Growth, Y/Y 4.9% 5.2% 6.1% 6.5% 3.8% 2.8% 2.9% 5.1% 3.9%Gross Margin 23.4% 23.8% 20.3% 22.5% 22.4% 22.4% 22.4% 22.9% 22.4%SG&A as % Net Sales 9.1% 8.2% 8.2% 8.8% 8.7% 7.9% 7.9% 8.6% 8.3%Adjusted EBITDA Margin 18.1% 18.9% 15.4% 17.1% 17.1% 17.5% 17.4% 17.8% 17.3%

TUBING PRODUCTS SEGMENT

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Net Sales 29.2$ 68.7$ 98.4$ 46.1$ 33.2$ 72.8$ 102.3$ 239.5$ 254.5$ Cost of Goods Sold 27.4 68.0 98.6 43.0 29.3 63.9 89.9 237.7 226.2 Gross Profit 1.7 0.7 (0.2) 3.1 3.9 8.9 12.4 1.8 28.3 SG&A 3.0 3.0 3.0 3.0 3.0 3.0 3.0 11.9 11.8 Operating Profit (1.2) (2.2) (3.2) 0.2 1.0 5.9 9.5 (10.1) 16.5 Depreciation and Amortization 2.1 2.0 2.0 2.0 2.0 1.9 1.9 8.3 7.8 Adjusted EBITDA 0.8$ (0.2)$ (1.2)$ 2.1$ 2.9$ 7.8$ 11.4$ (1.8)$ 24.3$

Net Sales Growth, Y/Y 15.1% 7.0% 6.4% 6.7% 14.0% 5.9% 4.0% 12.4% 6.3%Gross Margin 5.9% 1.1% -0.2% 6.8% 11.9% 12.2% 12.1% 0.7% 11.1%SG&A as % Net Sales 10.1% 4.3% 3.0% 6.4% 8.9% 4.1% 2.9% 5.0% 4.6%Adjusted EBITDA Margin 2.8% -0.3% -1.2% 4.7% 8.9% 10.8% 11.1% -0.7% 9.5%

OTHER SEGMENT

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Net Sales 33.7$ 42.0$ 40.1$ 39.0$ 38.4$ 46.8$ 45.0$ 150.4$ 169.2$ Cost of Goods Sold 32.8 40.0 38.8 36.4 37.3 44.6 43.6 143.8 161.8 Gross Profit 1.0 2.0 1.3 2.6 1.1 2.2 1.5 6.6 7.4 SG&A 1.5 1.5 1.5 1.5 1.5 1.5 1.5 5.8 5.9 Operating Profit (0.5) 0.5 (0.1) 1.1 (0.4) 0.7 0.0 0.8 1.5 Depreciation and Amortization 1.7 1.7 1.6 1.6 1.6 1.6 1.6 6.9 6.4 Adjusted EBITDA 1.2$ 2.2$ 1.5$ 2.8$ 1.2$ 2.3$ 1.6$ 7.6$ 7.9$

Net Sales Growth, Y/Y 13.9% 11.3% 12.3% 13.1% 13.8% 11.4% 12.3% 12.4% 12.6%Gross Margin 2.9% 4.7% 3.3% 6.7% 2.9% 4.7% 3.3% 4.4% 4.4%SG&A as % Net Sales 4.3% 3.5% 3.7% 3.8% 3.8% 3.1% 3.3% 3.9% 3.5%Adjusted EBITDA Margin 3.5% 5.2% 3.8% 7.1% 3.2% 5.0% 3.5% 5.1% 4.7%

CONSOLIDATED

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Net Sales 150.3$ 207.8$ 235.5$ 175.7$ 162.3$ 219.4$ 247.2$ 756.3$ 804.6$ Cost of Goods Sold 127.1 182.0 214.7 149.6 136.9 186.0 210.9 664.0 683.5 Gross Profit 23.2 25.8 20.8 26.1 25.4 33.4 36.2 92.3 121.1 SG&A 14.3 14.3 14.3 14.3 14.3 14.3 14.3 57.3 57.3 Operating Profit 8.9 11.5 6.5 11.8 11.1 19.1 21.9 35.1 63.9 Depreciation and Amortization 7.2 7.1 7.0 6.9 6.9 6.8 6.7 29.2 27.3 Adjusted EBITDA 16.1$ 18.6$ 13.5$ 18.7$ 17.9$ 25.9$ 28.6$ 64.3$ 91.1$

Net Sales Growth, Y/Y 8.7% 7.0% 7.2% 8.0% 8.0% 5.6% 5.0% 8.7% 6.4%Gross Margin 15.4% 12.4% 8.8% 14.8% 15.6% 15.2% 14.7% 12.2% 15.1%SG&A as % Net Sales 9.5% 6.9% 6.1% 8.1% 8.8% 6.5% 5.8% 7.6% 7.1%Adjusted EBITDA Margin 10.7% 9.0% 5.7% 10.6% 11.1% 11.8% 11.6% 8.5% 11.3%Source: MTR analysis.

25

Liquidity The fundamental recovery we project in Tekni-Plex’s business may be too little too late. Tekni-Plex must pay approximately $90 million of cash interest over the next four quarters while managing volatile working capital accounts (see Figure 20). Management’s success in driving down days inventory over the past two quarters is impressive given the already lower inventory levels of fiscal 2005. The Company’s control of its working capital leads us to believe that it will likely be successful in navigating our projected diminished liquidity levels through fiscal 2006. For the fourth quarter of fiscal 2005 and the first quarter of fiscal 2006, we calculate days inventory on LTM cost of goods sold at 79 days and 80 days, respectively. Unfortunately, as in the past, these low levels of inventory may result in labor overtime and machine changeover, leading to compromised margins. Our concern increases for fiscal 2007, which we project Tekni will enter with considerably lower liquidity levels than it possessed entering fiscal 2006. Assuming comparable inventory levels to fiscal 2006, we project a liquidity crisis occurring in the second quarter of fiscal 2007 during the seasonal inventory build. In order to forestall a restructuring, we foresee Tekni as being able to avail itself of three courses of action: 1) raise more equity and debt, 2) sell assets, and 3) obtain rescue financing from Weston Presidio. Additional Debt. As discussed above, the Subordinated Note consent solicitation allows Tekni to borrow another $16.5 million alongside the already-raised Series A Preferred, which would most likely be accomplished through an expansion of the credit facility; in addition, another equity investment of $22.8 million would allow for additional debt of $34.2 million (see Figure 14). The tepid interest in Tekni’s last investment round may prove telling of its next one. Asset Sales. Given the discrete nature of its businesses and the fragmented competitive structure of the flexible packaging industry, asset sales are clearly a feasible option for Tekni-Plex. Sale of the garden hose business, though, is unlikely because the proceeds from the transaction would not be sufficiently de-leveraging. Weston Presidio. Weston Presidio is a wildcard. Under other circumstances, it may be reasonable to assume that this venture capital firm would have had its fill of Tekni-Plex. But in the winter of 2007, when we believe the Company will face a shortfall of cash, Michael Cronin, managing partner of Weston Presidio, will have to conclude whether he is throwing good money after bad. Having invested with Tekni-Plex since 1994, Mr. Cronin certainly understands the Company’s business well. In the scenario that we have constructed for the second fiscal quarter of 2007, Weston may be looking at abating raw material prices, an additional 5% garden hose price increase, and five months until the April 30th Trigger Event, at which time it can implement some drastic measures.

26

Figure 20 TEKNI-PLEX

Adjusted Projected Quarterly Liquidity Analysis(In Millions of Dollars)

CASH FLOW

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q0712/31/05 4/1/06 7/2/06 10/1/06 12/31/06 4/1/07 7/2/07 2006 2007

Adjusted EBITDA 16.1$ 18.6$ 13.5$ 18.7$ 17.9$ 25.9$ 28.6$ 64.4$ 91.1$

Integration Expense (3.0) (2.0) (2.0) (1.0) (1.0) (1.0) (1.0) (9.1) (4.0) Cash Interest Expense (33.3) (12.5) (33.8) (10.1) (33.7) (10.2) (34.1) (81.3) (88.1) Cash Income Taxes (0.8) (0.8) (0.8) (0.8) (0.8) (0.8) (0.8) (2.8) (3.0) Working Capital (39.7) (5.8) 8.4 27.9 (45.5) (4.3) 10.9 14.4 (11.1) Capital Expenditures (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (5.0) (18.3) (20.0) Other - - - - - - - (31.5) - Total Uses of Cash (81.8) (26.1) (33.2) 11.0 (86.0) (21.2) (30.0) (128.5) (126.2)

FREE CASH FLOW (65.7)$ (7.5)$ (19.6)$ 29.7$ (68.1)$ 4.7$ (1.4)$ (64.1)$ (35.0)$

Net Changes in Debt (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.1) (0.5) (0.4) Revolver Draw (Repayment) 30.4 7.6 19.7 (29.6) 31.4 - - 45.7 1.8 Equity Investment - - - - - - - 5.4 - NET CHANGE IN CASH (35.4) (0.0) 0.0 0.0 (36.7) 4.6 (1.5) (13.6) (33.6)

Beginning Cash Balance 40.4 5.0 5.0 5.0 5.0 (31.7) (27.2) 18.6 5.0 Ending Cash Balance 5.0 5.0 5.0 5.0 (31.7) (27.2) (28.6) 5.0 (28.6)

LIQUIDITY

2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 2006 2007Cash Balance 5.0$ 5.0$ 5.0$ 5.0$ (31.7)$ (27.2)$ (28.6)$ 5.0$ (28.6)$ Revolving Facility Availability 29.6 22.0 1.8 31.4 - - - 1.8 - TOTAL LIQUIDITY 34.6$ 27.0$ 6.8$ 36.4$ (31.7)$ (27.2)$ (28.6)$ 6.8$ (28.6)$

Source: MTR analysis. RATING AGENCIES On May 31, 2005, Moody’s assigned a B3 rating to Tekni’s 10.875% 1st Lien Senior Secured Notes and affirmed the ratings of the 8.75% 2nd Lien Senior Secured Notes and the 12.75% Senior Subordinated Notes at Caa2 and Ca, respectively. The B3 rating assigned to the 10.875% Senior Notes reflects its first lien security on U.S. domestic PP&E and the stock of the domestic subsidiaries, as well as a second lien on domestic current assets. The affirmation of the ratings on Tekni’s other securities reflects continued pressure on profitability and concerns regarding competition and the Company’s inability to pass-through price increases sufficiently to keep pace with higher resin and energy costs. Moody’s maintains a negative ratings outlook on the Company. Standard and Poor’s, on October 5, 2005, lowered its corporate credit rating on Tekni-Plex to CCC- from CCC+. In the same action, S&P rated the 1st Lien Notes a CCC- and the 2nd Lien and Subordinated Notes a C. The downgrade reflected the Company’s weaker-than-expected performance for fiscal 2005, as well as concerns regarding elevated raw material costs and high debt load. S&P maintains a negative outlook on the Company.

27

VALUATION In order to value Tekni-Plex, we have attempted to separate its various businesses. Since management does not report its business lines to this level of detail, the figures presented are estimates (see Figure 21). In utilizing the public comparables in Figure 16, we have discounted the EBITDA multiples to account for the large difference in revenue base between the comparables and Tekni. Compounding this factor is the fact that Tekni is an amalgam of a number of relatively smaller businesses. As for its garden hose business, we have applied a 0.40x revenue multiple (a figure we have estimated) to LTM net sales of $181.5, to arrive at an enterprise value of $72.6 million. Excluding garden hoses, the weighted average EBITDA multiple for the balance of the Company is calculated at 6.5x. Total enterprise value is estimated at $563.5 million, with a corresponding equity value of negative $129.8 million. RECOVERY ANALYSIS Distributable Value Our recovery analysis reflects our view that Tekni-Plex is a fundamentally sound business that is suffering at the hands of external forces, some questionable business decisions with regard to its garden hose business, and an over-leveraged balance sheet. Our base case assumes that the Company’s current situation will normalize during the 2007-2008 timeframe in which we project a restructuring. The value that would be distributed to Tekni creditors in a workout scenario will come from three sources: 1) the going-concern value of Tekni-Plex, Inc. and its domestic subsidiaries, 2) Tekni-Plex, Inc.’s equity interest in its foreign subsidiaries, and 3) the cash build that is projected to occur during bankruptcy. In deriving an enterprise value for the restructured entity, we have applied the same multiples used in our valuation analysis (except for the garden hose business). With a stabilized EBITDA of $102.0 million, the Company’s enterprise value is calculated at $647.3 million, or an average EBITDA multiple of 6.3x. The multiple represents a discount to the average 7.8x EBITDA multiple in our public comparables analysis and the industry historical average of 7.5x (see Figure 16). A 5.5x EBITDA multiple has been applied to the garden hose business to reflect its weak pricing power, its vulnerability to customer concentration, and the possible future impact of imports. We have assumed that the foreign subsidiaries do not file bankruptcy and that distributable value from these entities is not diluted by trade claims. With a projected cash build of $30.3 million in bankruptcy, a distributable value of $677.6 million has been calculated.

Figure 21 TEKNI-PLEX VALUATION Estimated LTM Ending September 30, 2005

(In Millions of Dollars)

Adjusted EBITDA Net SalesRevenue EBITDA * Multiple Multiple EV

Egg Cartons 107.2$ 20.8$ 6.5x -$ 135.4$ Other Packaging 244.7 41.1 6.5x - 267.4 Garden Hose 181.5 (10.1) - 0.40x 72.6 Other Tubing Products 43.8 7.7 7.0x - 54.2 Compounding 137.6 5.7 6.0x - 34.0 Total 714.8$ 65.2$ 563.5$ Less: Debt 733.8 Plus: Cash 40.4 Total Equity Value (129.8)

Weighted Avg EBITDA Multiple excl. Hose 6.5x* Does not include Other Expenses/Income.

Source: Company reports and MTR analysis.

28

Figure 22 TEKNI-PLEX Recovery Analysis (In Millions of Dollars)

DISTRIBUTABLE VALUE SUMMARYEnterprise Value 647.3$ Filing Date 11/15/06Cash Build / (DIP Financing) 30.3 Length of Bankruptcy (months) 12 Total Distributable Value 677.6

VALUE ALLOCATION Cash Build / (DIP Financing)Revolving Credit Facility 81.5$ Beginning Cash Balance 5.0$ Foreign Term Loan 5.0 Working Capital - Upfront 18.2 10.875% Sr. Secured Notes plus Accrued 154.1 Ongoing Cash Build / (Burn) 6.1 8.75% Sr. Secured Notes plus Accrued 281.0 Subtotal 29.3 Total Secured Claims 521.6 Interest Income / (DIP Interest Expense) 1.0

Total Cash Build / (Burn) 30.3$ Value to Unsecureds 156.0$

8.75% Undersecured Claim - Annual Cash Build / (Burn)12.75% Sr. Sub. Notes plus Accrued 325.0 Near-Term EBITDA 91.1$ Trade Payables 13.6 Post-Petition Interest (45.1) Total Unsecured Claims 338.7 Professional Fees (10.0)

Capital Expenditures (25.0) Recovery to Unsecured Claims as % Face 46.1% Working Capital (5.0)

Annual Cash Build / (Burn) 6.1$ 10.875% Senior Secured Notes RecoveryValue Allocation 154.1$ Working Capital - Upfront Breakdown DaysPost-Petition Interest 16.3 Beginning Payables, Issuer/Gt 50.0$ 28 Total Recovery 170.4$ Pay. Post-Paydown (20 days) 13.6 8

Payables Rebuild 54.5 30 FV Recovery to 10.875% Notes as % Face 113.6% Change in Cash 18.2$

8.75% Senior Secured Notes RecoveryValue Allocation - Secured 281.0$ Initial Value Allocation - Undersecured - Value Allocaton from Sub Notes - Post-Petition Interest 24.1 Total Recovery 305.1$

FV Recovery to 8.75% Notes as % Face 110.9%

12.75% Senior Subordinated Notes RecoveryNet Value Allocation 149.8$

FV Recovery to 12.75% Notes as % Face 47.5%

Stabilized Enterprise ValueAdjusted EBITDA EBITDA

Revenue EBITDA Multiple EV MarginEgg Cartons 122.3 21.2 6.5x 137.6 17.3%Other Packaging 258.5 41.4 6.5x 269.1 16.0%Garden Hose 180.9 18.1 5.5x 99.5 10.0%Other Tubing Products 73.6 12.9 7.0x 90.4 17.5%Compounding 169.2 8.5 6.0x 50.8 5.0%Total 804.6 102.0 647.3 12.7%

Source: MTR analysis.

29

Value Allocation In our base case scenario, we have assumed that the Company increases its borrowing capacity under its revolver by $16.5 million, drawing upon it prior to a filing. The calculated distributable value fully covers the claims of the banks, the 10.875% Senior Secured Notes and the 8.75% Senior Secured Notes. In addition to pre-petition accrued interest, the Secured Notes receive post-petition interest under an order of adequate protection, given their full collateral coverage. As a result, the 10.875% Senior Secured Notes receive a future value recovery of 113.6% as a percentage of face and the 8.75% Senior Secured Notes receive a 110.9% future value recovery as a percentage of their face amount. The 12.75% Senior Subordinated Notes are compromised and receive a future value recovery of 47.5%. The strength of these recoveries is premised upon our view that Tekni-Plex EBITDA will bottom in fiscal 2006 and recover in fiscal 2007 and through the twelve-month bankruptcy period, benefiting from continued growth in the Company’s Tubing Products segment and relief due to abating raw material costs. Sensitivity Analysis The following sensitivity analyses examine the future value recovery to the three Note issues under varying valuation scenarios. It is clear that substantial recovery to both Senior Secured Note issues is maintained across most valuation multiple assumptions (see Figures 23,24). Meaningful impairment to the 8.75% 2nd Lien Notes occurs at a valuation which implies continued fundamental distress. Figure 23

Sensitivity Analysis FV Recovery of 10.875% Senior Secured Notes

Stabilized EBITDA ($ millions)114% 115.00 110.00 105.00 100.00 95.00 90.00 85.00 80.00 75.00

8.0x 114% 114% 114% 114% 114% 114% 114% 114% 114%Average 7.5x 114% 114% 114% 114% 114% 114% 114% 114% 114%EBITDA 7.0x 114% 114% 114% 114% 114% 114% 114% 114% 114%Multiple 6.5x 114% 114% 114% 114% 114% 114% 114% 114% 114%

6.0x 114% 114% 114% 114% 114% 114% 114% 114% 114%5.5x 114% 114% 114% 114% 114% 114% 114% 114% 114%5.0x 114% 114% 114% 114% 114% 114% 114% 114% 114%

Source: MTR analysis. Figure 24

Sensitivity Analysis FV Recovery of 8.75% Senior Secured Notes

Stabilized EBITDA ($ millions)111% 115.00 110.00 105.00 100.00 95.00 90.00 85.00 80.00 75.00

8.0x 111% 111% 111% 111% 111% 111% 111% 111% 111%Average 7.5x 111% 111% 111% 111% 111% 111% 111% 111% 102%EBITDA 7.0x 111% 111% 111% 111% 111% 111% 111% 102% 102%Multiple 6.5x 111% 111% 111% 111% 111% 111% 102% 102% 102%

6.0x 111% 111% 111% 111% 102% 102% 102% 102% 95%5.5x 111% 111% 111% 102% 102% 102% 101% 91% 82%5.0x 111% 102% 102% 102% 102% 95% 86% 77% 68%

Source: MTR analysis. As expected, the Senior Subordinated Notes are most sensitive to variations in enterprise value (see Figure 25).

30

Figure 25

Sensitivity Analysis FV Recovery of 12.75% Senior Subordinated Notes

Stabilized EBITDA ($ millions)48% 115.00 110.00 105.00 100.00 95.00 90.00 85.00 80.00 75.00 8.0x 103% 103% 103% 94% 82% 70% 57% 45% 33%

Average 7.5x 103% 102% 90% 79% 67% 56% 45% 33% 29%EBITDA 7.0x 96% 85% 74% 64% 53% 42% 32% 28% 17%Multiple 6.5x 78% 68% 58% 48% 38% 29% 26% 16% 6%

6.0x 61% 51% 42% 33% 32% 22% 13% 3% 0%5.5x 43% 35% 26% 25% 17% 8% 0% 0% 0%5.0x 26% 25% 17% 10% 2% 0% 0% 0% 0%

Source: MTR analysis. RECOMMENDATION There are a number of opposing factors that have yet to unfold that will affect the success with which Tekni-Plex navigates this challenging period. Our view to potentially improving fundamentals, as well as strategic options which include borrowing additional debt, asset sales and a rescue by Weston Presidio, is offset by uncertainty surrounding working capital management, raw material pricing and pricing pass-throughs. In constructing our valuation scenarios, we used a Chapter 11 reorganization as a proxy for some future restructuring event that would lead to the allocation of Company intrinsic value; an out-of-court restructuring would likely entail a shorter timeframe and significantly lower expenses. As shown in Figure 26, we have projected the cumulative probability of a restructuring in fiscal 2006 peaking at 38%, increasing rapidly to 83% during Tekni’s fiscal 2007 inventory build. Our calculated internal rates of return assume that the value received by noteholders is liquid at the time of the Company’s emergence from bankruptcy. 10.875% 1st Lien Senior Secured Notes In the event of a bankruptcy, the 1st Lien Notes are well collateralized and fully covered in each of our sensitivity scenarios. At a purchase price of 110, we calculate an expected internal rate of return of 5.5% given a recovery in bankruptcy of 113.60 (includes pre and post-petition interest). Assuming a required market rate of return of 9.0%, which has been based upon the security’s credit rating, we find the calculated return insufficient. As shown in Figure 27, at an estimated 83% cumulative probability of a Chapter 11 filing, a hurdle rate of 9.0% is attained as the Note purchase price approaches par.

Figure 26

Source: MTR analysis.

CUMULATIVE PROBABILITY OF RESTRUCTURING

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

11/29/05 12/31/05 3/31/06 6/30/06 9/30/06 12/30/06

31

Figure 27Sensitivity Analysis

Internal Rate of Return - 10.875% Senior Secured Notes

Purchase Price114% 120.00 115.00 110.00 105.00 100.00 95.00 90.00 85.00 80.00

Probability 0% 6.9% 7.8% 8.7% 9.7% 10.8% 11.9% 13.1% 14.4% 15.9%of 2007 20% 6.3% 7.2% 8.3% 9.4% 10.6% 11.9% 13.4% 14.9% 16.6%

Chapter 11 40% 5.4% 6.5% 7.8% 9.1% 10.5% 12.0% 13.7% 15.5% 17.6%Filing 60% 4.2% 5.5% 7.0% 8.5% 10.2% 12.1% 14.2% 16.4% 19.0%

80% 2.3% 3.9% 5.8% 7.7% 9.9% 12.3% 14.9% 17.8% 21.0%100% -1.6% 0.8% 3.4% 6.2% 9.2% 12.5% 16.1% 20.0% 24.3%

Source: MTR analysis. 8.75% 2nd Lien Senior Secured Notes The Company’s 2nd Lien Notes are well covered by an enterprise value of $647 million in our base case scenario. The Notes’ right to post-petition interest is compromised at an enterprise value of $572 million (assuming an enterprise value of $143 million for the non-guarantor subsidiaries). Given our hurdle rate of 13.0%, which has been based upon the security’s credit rating, we find the 2nd Lien Notes fully valued at 92 (see Figure 28). If one were to assign no value to the garden hose business, Tekni’s calculated enterprise value would be $548 million. At this level, the 2nd Lien noteholders lose their right to post-petition interest and have an unsecured claim that is ultimately made-whole via a value transfer from the Subordinated Notes. Under this scenario, we calculate an expected internal rate of return of 9.9%. Figure 28

Sensitivity AnalysisInternal Rate of Return - 8.75% Senior Secured Notes

Purchase Price114% 105.00 100.00 95.00 90.00 85.00 80.00 75.00 70.00 65.00

Probability 0% 8.0% 8.9% 9.9% 10.9% 12.0% 13.2% 14.6% 16.0% 17.6%of 2007 20% 7.9% 9.0% 10.1% 11.3% 12.6% 14.1% 15.7% 17.5% 19.5%

Chapter 11 40% 7.7% 9.0% 10.3% 11.8% 13.4% 15.3% 17.3% 19.6% 22.2%Filing 60% 7.5% 9.0% 10.7% 12.6% 14.7% 17.0% 19.7% 22.8% 26.3%

80% 7.0% 9.0% 11.3% 13.8% 16.7% 19.9% 23.5% 27.7% 32.5%100% 6.1% 9.1% 12.5% 16.1% 20.1% 24.5% 29.4% 34.9% 41.1%

Source: MTR analysis.

Sensitivity AnalysisInternal Rate of Return - 8.75% Senior Secured Notes

Assumes Chapter 11 Filing

Purchase Price114% 105.00 100.00 95.00 90.00 85.00 80.00 75.00 70.00 65.00

650$ 6.0% 9.1% 12.5% 16.2% 20.2% 24.6% 29.5% 35.0% 41.2%Enterprise 600 6.0% 9.1% 12.5% 16.2% 20.2% 24.6% 29.5% 35.0% 41.2%

Value 550 1.3% 4.2% 7.4% 10.9% 14.7% 19.0% 23.6% 28.9% 34.8%500 1.3% 4.2% 7.4% 10.9% 14.7% 19.0% 23.6% 28.9% 34.8%450 -2.7% 0.1% 3.2% 6.5% 10.2% 14.2% 18.7% 23.7% 29.4%400 -13.4% -10.9% -8.2% -5.2% -2.0% 1.6% 5.5% 10.0% 15.0%

Source: MTR analysis.

32

12.75% Senior Subordinated Notes The Subordinated Notes are the fulcrum security in our analysis and as such, have a required rate of return of 25.0%. The hurdle rate reflects the risk associated with the Notes and the difficulty in accurately valuing the various pieces of Tekni-Plex. Given a purchase price of 61, a recovery in bankruptcy of 47.5% and an estimated likelihood of a bankruptcy filing of 83%, we calculate an expected internal rate of return of 8.4%, which we find insufficient. Assuming our current level of perceived risk, the sensitivity analysis in Figure 29 implies investment interest at a Note price around 45. Figure 29

Sensitivity AnalysisInternal Rate of Return - 12.75% Senior Subordinated Notes

Purchase Price114% 75.00 70.00 65.00 60.00 55.00 50.00 45.00 40.00 35.00

Probability 0% 22.8% 25.4% 28.2% 31.3% 34.9% 39.0% 43.8% 49.6% 56.7%of 2007 20% 19.2% 21.8% 24.7% 27.9% 31.6% 35.8% 40.8% 46.8% 54.3%

Chapter 11 40% 14.8% 17.4% 20.4% 23.7% 27.5% 31.9% 37.2% 43.5% 51.4%Filing 60% 9.1% 11.8% 14.8% 18.3% 22.3% 26.9% 32.5% 39.2% 47.7%

80% 0.8% 3.7% 6.9% 10.6% 14.9% 19.9% 26.0% 33.4% 42.8%100% -16.3% -12.7% -8.7% -4.0% 1.3% 7.5% 15.0% 24.0% 35.2%

Source: MTR analysis. RISKS Risks to our sell recommendations include declining resin prices, successful price increase pass-throughs, as well as additional liquidity obtained through additional debt, asset sales and an investment by Weston Presidio and its affiliates. With January 1st approaching, it will soon be clear whether Tekni has been successful in passing through an initial price increase of 10.0%, its stated goal of 17.5%, or neither. Additional data points to monitor in the Company’s garden hose business include the change in unit volumes and the potential increase in unabsorbed overhead. Tekni still has room to incur $16.5 million in additional debt (and more with an additional equity investment) and should be readily able to expand its credit facility if so desired. Asset sales are also feasible given the discrete nature of Tekni’s businesses (other than garden hose and specialty compounds). Whether this course of action will be pursued will be determined by the agendas of those parties in control. If Weston Presidio can envision a way to preserve sufficient value through a debt restructuring, it may prefer to keep Tekni intact. We believe that the 2nd Lien Notes are currently trading on a yield-to-maturity basis; if so, we would consider them slightly overpriced. Given our liquidity concerns, our analysis values the Notes on an expected yield-to-restructuring/yield-to-maturity basis. Value that would accrue to the Notes in a restructuring would be most compromised through a substantial loss in Company going-concern value, which could occur in Tekni’s garden hose business. While we do not view the importation of garden hose as an immediate threat, we do believe that there exists a distinct possibility of a fundamental shift in the business and a commensurate loss of market share by domestic producers.

33

Figure 30 TEKNI-PLEX, INC.

Historical Quarterly Balance Sheet (In Millions of Dollars)

2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q0612/26/03 3/26/04 7/2/04 10/1/04 12/31/04 4/1/05 7/1/05 9/30/05

Cash 23.1$ 18.4$ 29.7$ 39.0$ 12.5$ 12.7$ 18.6$ 40.4$ Accounts Receivable 86.2 126.0 138.1 90.2 86.8 128.1 138.4 85.9 Inventories 195.9 202.8 149.8 175.9 201.7 188.2 129.6 136.8 Deferred Income Taxes 7.2 7.2 - - - - - - Prepaid Expenses and Other Current Assets 7.2 6.3 6.4 8.0 7.8 9.2 5.8 9.4 Total Current Assets 319.6 360.7 324.0 313.1 308.7 338.2 292.4 272.6

PP&E, net 180.7 182.1 182.7 183.4 184.5 179.0 176.2 173.0 Intangible Assets, net 213.5 212.9 207.3 205.7 206.0 205.5 204.6 204.0 Deferred Financing Costs, net 9.6 10.1 9.7 9.6 9.1 9.1 16.7 16.3 Deferred Income Taxes 23.0 20.9 18.8 19.0 18.8 19.1 - - Other Assets 1.5 1.5 1.2 1.2 1.2 1.3 1.8 1.9

TOTAL ASSETS 747.9$ 788.2$ 743.7$ 731.9$ 728.4$ 752.3$ 691.7$ 667.8$

Current Portion of Long-Term Debt 2.1 2.0 2.1 2.0 1.7 1.9 1.1 1.1 Accounts Payable 26.8 33.2 54.3 34.0 35.2 52.0 48.1 29.7 Accrued Expenses 36.7 53.0 39.8 54.3 40.5 60.8 36.1 65.0 Income Taxes Payable 0.0 0.0 1.9 3.0 0.8 3.1 6.4 2.0 Total Current Liabilities 65.6 88.1 98.1 93.2 78.3 117.8 91.6 97.8

Long-Term Debt, net of current maturities 729.0 734.1 731.9 731.8 750.1 751.2 744.6 732.7 Series A Redeemable Preferred Stock - - - - - - 54.8 64.0 Other Non-Current Liabilities 22.5 21.7 18.7 15.2 14.4 11.2 14.0 10.9

Stockholders' Equity (69.2) (55.8) (105.1) (108.3) (114.4) (128.0) (213.3) (237.7)

TOTAL LIABS. AND STOCKHOLDERS' EQUITY 747.9$ 788.2$ 743.7$ 731.9$ 728.4$ 752.3$ 691.7$ 667.8$

Source: Company reports.

Miller Tabak Roberts Fixed Income/Convertible Important Disclosures

General Disclosure

SRO DisclosuresCompensation Disclosure

Ownership Disclosure

Officer/Director Disclosure

Valuation Methods

Risk Factors

Dissemination of Research

Market Making

Suitability and Reliability

Research Ratings and Distribution

Percentage of Securities Covered by the Firm Receiving this Recommendation since 1/1/04:(MTR undertakes no investment banking operations.)

BUY 47.4%HOLD (6.5%)/No Recommendation (29.6%) 36.1%SELL 16.5%

Other Disclosure

Visits

Analyst Certification

Please see page 27 of this report for an explanation of the methods of valuation utilized by the analyst.

Please see page 32 of this report for an explanation of the risks utilized by the analyst.

The firm distributes research by electronic mail and U.S. mail, and at meetings with customers. Our research distribution lists include only employees and our customers, and aresegregated by market segment (convertible, high yield and distressed, and emerging market). From time to time we provide research to prospective customers and employees. Wedo not provide, or authorize the redistribution, of our research to the general public. We do not seek retail investors as customers.

As of the date of this report, firm makes a market in some or all the fixed income and convertible securities (if any) of the subject(s) of this report. The firm reserves the right to stop,or start, making markets in any securities (including, without limitation, securities subject of this report), at any time, without notice.

BUY describes a security that we expect to provide a total return (price appreciation plus yield and any distributions) in excess of securities with a similar risk profile.

HOLD describes a security that we expect to provide a total return (price appreciation plus yield and any distributions) comparable to securities with a similar risk profile.

NO RECOMMENDATION describes a security in which we believe there is insufficient information to support a specific opinion or we have expedited publication to address near-term customer needs for factual information. Absence of an opinion should not be inferred to mean a HOLD.

Although the information contained herein has been obtained from sources Miller Tabak Roberts Securities, LLC believes to be reliable, its accuracy and completeness cannot beguaranteed. This report is for information purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Anyrecommendation contained in this report may not be appropriate for all investors. Additional information is available upon request.

Miller Tabak Roberts Securities, LLC observes the fixed-income securities research rules of the NASD, SEC, Ontario Securities Commission, and Investment Dealers Association ofCanada.

The firm and its affiliates have not received compensation from the subject of this report, or persons known by this firm to be affiliates of the subject, in the prior twelve months for theperformance of services. Neither the authoring analyst, nor any supervisory or executive person with the ability to influence the content of this report, nor any member or principalofficer of the firm, nor any of their respective households or immediate families, has received compensation from the subject of this report in the prior twelve months.

Neither the author of this report, nor any member of the author's household or immediate family, has any financial interest in any of the securities of the subject(s) of this report.Neither the firm nor its affiliates beneficially owns in excess of 1% of any class of the common equity securities of the subject(s) of this report.

Neither the author of this report nor any member of the author's household or immediate family, has served or serves as an officer, director or advisory board member of thesubject(s) of this report.

The firm does no investment banking or investment management business with any person; however, the firm may from time to time act as broker or dealer on the account ofcompanies covered in its research reports. Neither the firm nor the author of this report is aware of any factors or relationships with respect to any personnel of the firm or its affiliateswhich would reasonably be expected to indicate a potential conflict of interest, including, without limitation to matters of compensation, ownership and service as an officer, director oradviser, except as set forth in detail below. Miller Tabak Roberts Securities, LLC research reports and other research materials are made available to institutional customers of ouraffiliated firm Miller Tabak Roberts Securities (UK) LLP only upon such a customer's request. Miller Tabak Roberts Securities, LLC's research activities are regulated by the UnitedStates Securities and Exchange Commission and National Association of Securities Delears and do not necessarily comply with all research rules of the United Kingdom FinancialServices Authority.

or indirect compensation for expressing the specific recommendation(s) in this report.

I, Ronald A. Rich, hereby certify that the views expressed in this report accurately reflect my personal views about the subject company(ies) and its securities. I also certify that I have not been, am not, and will not be receiving direct

SELL describes a security that we expect to provide a total return (price appreciation plus yield and an distributions) below that of securities with a similar risk profile.

The author of this report has not visited material operations of the subject of this report.