AMENDMENT NO. 1 TO THE SECOND LIEN SECURITY AGREEMENT
EXECUTION COPY
AMENDMENT NO. 1 TO THE SECOND LIEN SECURITY AGREEMENT
This AMENDMENT NO. 1 (this “Amendment”) is entered into as of October 5, 2009, among PREGIS
CORPORATION, a Delaware corporation (the “Company”), each of the other Grantors (as hereinafter
defined) signatory hereto and THE BANK OF NEW YORK MELLON TRUST COMPANY N.A., as Trustee (the
“Trustee”) and as collateral agent (in such capacity, the “Collateral Agent”) for the Holders (as
hereinafter defined).
PRELIMINARY STATEMENTS:
(1) The Company, the other Grantors and the Collateral Agent have entered into the Second
Lien Security Agreement, dated as of October 12, 2005 (such Second Lien Security Agreement, the
“Security Agreement”). Capitalized terms not otherwise defined in this Amendment shall have the
respective meaning ascribed to such terms in the Security Agreement (as amended by this Amendment).
(2) The Company has issued certain senior secured floating rate notes (the “Original Notes) to
the Holders and pursuant to the Security Agreement has granted to the Collateral Agent for the
benefit of the Trustee and the ratable benefit of the Holders a second priority security interest
in the Collateral.
(3) The Company intends to issue additional senior secured floating rate notes under the
Indenture in an aggregate principal amount of Euros which as of the date hereof is approximately
equivalent to €125,000,000 (the “Additional Floating Rate Notes”), which Additional Floating Rate
Notes shall be secured by the Collateral on a second priority basis on the same terms and
conditions set forth in the Security Agreement and the other Note Documents as the Original Notes.
(4) The Company, the other Grantors and the Collateral Agent are, on the terms and conditions
stated below, willing to amend the Security Agreement as hereinafter set forth.
SECTION 1. Amendments to Security Agreement. The Security Agreement is, effective as
of the date hereof and subject to the satisfaction of the conditions precedent set forth in
Section 2, hereby amended by:
(a) Deleting the word “Second” before the words “Secured Floating Rate Notes” in
Preliminary Statement (1) therein; and
(b) Substituting the first parenthetical in Preliminary Statement (1) therein with the
following parenthetical:
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“(together with any additional notes from time to time issued under the Indenture,
including, without limitation, the Senior Secured Floating Rate Notes due 2013 issued on
October 5, 2009, the “Notes”)”
(c) Adding a new clause (d) in Section 9 to read as follows:
“(d) Pursuant to Section 12.06(b) of the Indenture, the Collateral Agent has requested and
each Grantor hereby agrees to take the following actions promptly after the issue date of
the Senior Secured Floating Rate Notes due 2013 issued on October 5, 2009, to provide a
perfected security interest securing such notes: (w) amend the Subordinated Pledge
Agreement, dated as of October 12, 2005, between the Company, and the Collateral Agent, (x)
amend the existing mortgages and deeds of trust and provide local counsel opinions in
connection with the same, such amendments and opinions to be in form and substance
reasonably satisfactory to the Collateral Agent, (y) (i) with respect to the property
located in Queensbury, New York, amend the mortgage to increase the capped secured amount
thereunder to $3,500,000 and (ii) with respect to the properties located outside of the
State of New York, obtain (through an endorsement to the applicable existing title insurance
policy) increased title insurance coverage in an amount equal to 10% of the applicable
existing insured amount and a date-down endorsement for the applicable existing title
insurance policy which modifies the effective date of the title insurance policy to a
current date and (z) amend the intellectual property security agreements, the parties hereto
hereby agreeing that for purposes of Section 12.06(b) and 12.06(d) of the Indenture, given
the number, extent and complexity of the filings in connection with the foregoing clauses
(w) through (z), completion of such filings and delivery of perfected security interests and
the items identified in such clauses within 120 days from the issue date of the Senior
Secured Floating Rate Notes due 2013 issued on October 5, 2009 shall constitute prompt
delivery for the purposes thereof; provided that, in the event any of the properties subject
to a mortgage or deed of trust is sold or transferred within such 120 day period, clauses
(x) and (y) shall no longer apply to such property as and from the date of the sale or
transfer.”
SECTION 2. Conditions to Effectiveness. This Amendment shall become effective on
and as of the first date on which the Collateral Agent shall have received counterparts of this
Amendment, executed by the Company and each of the other Grantors and the consent of the
Intercreditor Agent (as defined in the Intercreditor Agreement) of the execution and delivery by
the Grantors of this Amendment.
SECTION 3. Representations and Warranties of the Grantors. Each of the Grantors
hereby represents and warrants as follows:
(a) The execution, delivery and performance by each Grantor of this Amendment, and the
performance by each such Grantor of the Security Agreement, as amended hereby, have been
duly authorized by all necessary corporate action.
(b) This Amendment has been duly executed and delivered by each Grantor. This
Amendment and the Security Agreement, as amended hereby, constitute the legal, valid and
binding obligations of each Grantor, enforceable against each such Grantor in
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accordance with their respective terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’
rights generally, and subject to the effects of general principles of equity (regardless
whether considered in a proceeding in equity or at law).
SECTION 4. Affirmation of Grantors. (a) Each Grantor in its capacity as a
Guarantor hereby specifically consents to this Amendment and hereby confirms and agrees that,
notwithstanding the effectiveness of this Amendment, the obligations of such Guarantor contained in
the Note Guarantee (as defined in the Indenture), or in any other Note Document to which it is a
party are, and shall remain, in full force and effect and are hereby ratified and confirmed in all
respects, in each case as amended by this Amendment.
(b) Each Grantor hereby confirms and agrees that the Additional Notes constitute
“Secured Obligations” under, and as defined in, the Security Agreement.
(c) By its execution of this Amendment, each Grantor hereby (i) authorizes and agrees
that the financing statements on form UCC-1 (stamped copies of which are attached as
Schedule 1 to this Amendment) naming such Grantor as debtor and the Collateral Agent as
secured party, which were filed in connection with its initial execution and delivery of the
Security Agreement cover the Additional Notes and (ii) acknowledges and agrees that this
Amendment constitutes a request from the Collateral Agent for purposes of Section 12.06(b)
of the Indenture.
SECTION 5. Reference to and Effect on the Note Documents.
(a) On and after the effectiveness of this Amendment, each reference in the Security
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to
the Security Agreement, and each reference in each of the other Note Documents to “the
Security Agreement”, “thereunder”, “thereof” or words of like import referring to the
Security Agreement, shall mean and be a reference to the Security Agreement, as amended by
this Amendment.
(b) The Security Agreement and each of the other Note Documents, as specifically
amended by this Amendment, are and shall continue to be in full force and effect and are
hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of any Holder
or the Collateral Agent under the Security Agreement, nor constitute a waiver of any
provision of the Security Agreement or any other Note Document.
SECTION 6. Costs, Expenses. The Company hereby agrees to pay on demand all costs and expenses incurred by the
Collateral Agent pursuant to the Security Agreement or in connection with this Amendment or the
Security Agreement, or any of the transactions contemplated hereby or thereby (including, without
limitation, the reasonable fees and expenses of counsel for the Collateral Agent) in accordance
with the terms of Section 23 of the Security Agreement.
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SECTION 7. Execution in Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by
facsimile or other electronic communication shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 8. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
SECTION 9. Waiver of Jury Trial. EACH PARTY SIGNATORY HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF THE COLLATERAL AGENT,
TRUSTEE OR ANY HOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first above written.
| PREGIS CORPORATION |
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| By: | /s/ D. Xxxxx XxXxxxxx | |||
| Name: | D. Xxxxx XxXxxxxx | |||
| Title: | Vice President, Chief Financial Officer, Treasurer and Secretary | |||
| PREGIS HOLDING II CORPORATION |
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| By: | /s/ D. Xxxxx XxXxxxxx | |||
| Name: | D. Xxxxx XxXxxxxx | |||
| Title: | Vice President, Chief Financial Officer, Treasurer and Secretary | |||
| PREGIS INNOVATIVE PACKAGING INC. |
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| By: | /s/ D. Xxxxx XxXxxxxx | |||
| Name: | D. Xxxxx XxXxxxxx | |||
| Title: | Vice President, Chief Financial Officer, Treasurer and Secretary | |||
| HEXACOMB CORPORATION |
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| By: | /s/ D. Xxxxx XxXxxxxx | |||
| Name: | D. Xxxxx XxXxxxxx | |||
| Title: | Vice President, Chief Financial Officer, Treasurer and Secretary | |||
| PREGIS MANAGEMENT CORPORATION |
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| By: | /s/ D. Xxxxx XxXxxxxx | |||
| Name: | D. Xxxxx XxXxxxxx | |||
| Title: | Vice President, Chief Financial Officer, Treasurer and Secretary | |||
| Pregis – 2nd Lien Security Agreement Amendment |
[Signature Page]
| THE BANK OF NEW YORK MELLON TRUST COMPANY N.A., as Collateral Agent |
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| By: | /s/ X. Xxxxxx | |||
| Name: | X. Xxxxxx | |||
| Title: | Vice President | |||
| Pregis – 2nd Lien Security Agreement Amendment |
[Signature Page]
CONSENT OF INTERCREDITOR AGENT
Dated as of October 5, 2009
Reference is made to (a) the Credit Agreement dated as of October 12, 2005 (as amended,
restated, supplemented and otherwise modified to the date hereof, the “Credit Agreement”;
capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement) among Pregis Corporation, a Delaware corporation (the “Borrower”),
Pregis Holding II Corporation, a Delaware corporation (“Parent”), various subsidiaries of the
Borrower as Subsidiary Guarantors, various agents party thereto, the banks, financial institutions
and other institutional lenders party thereto from time to time (each a “Lender” and collectively
the “Lenders”) and Credit Suisse, Cayman Islands Branch, as collateral agent and administrative
agent (“Agent”), (b) the Intercreditor Agreement dated as of October 12, 2005, among the Agent and
the Trustee for the holders of the Floating Rate Notes, acknowledged and agreed to by the Borrower,
Parent and each Subsidiary Guarantor and (c) Amendment no. 1 to the Second Lien Security Agreement,
dated as of 5, 2009, (the “Second Lien Security Agreement Amendment”) among the Borrower, Parent
and the Subsidiary Guarantors. The Agent, in its capacity as Intercreditor Agent (as defined in
the Intercreditor Agreement) under the Intercreditor Agreement, hereby consents to the execution
and delivery by the Borrower, Parent and the Subsidiary Guarantors party thereto of the Second Lien
Security Agreement Amendment and any amendment to any of the other Second-Priority Collateral
Documents necessary or desirable to grant a perfected security interest in the property, rights and
assets of the Loan Parties that are required to secure the Additional Notes.
| CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Intercreditor Agent |
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| By: | /s/ Xxxxxxx Xxxxx /s/ Xxxx Ivashkov | |||
| Name: | Shaheen Xxxxx Xxxx Ivashkov | |||
| Title: | Vice President Associate | |||
| Pregis – 2nd Lien Security Agreement Amendment |
[Signature Page]
