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).
(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
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