<PAGE>   1
                                                                   Exhibit 10.17

                           SUPPLEMENT NO. 1, dated as of July 19, 2001, to the
                           Security Agreement dated as of September 30, 1997, as
                           amended and restated as of May 31, 2000, among PLIANT
                           CORPORATION (f/k/a Huntsman Packaging Corporation), a
                           Utah corporation (the "Borrower"), each subsidiary of
                           the Borrower listed on Schedule I thereto (each such
                           subsidiary individually a "Guarantor" and
                           collectively, the "Guarantors"; the Guarantors and
                           the Borrower are referred to collectively herein as
                           the "Grantors") and BANKERS TRUST COMPANY, a New York
                           banking corporation ("Bankers Trust") as collateral
                           agent (in such capacity, the "Collateral Agent") for
                           the Secured Parties (as defined herein).

         A. Reference is made to (a) the Credit Agreement dated as of September
30, 1997, as amended and restated as of May 31, 2000 (as amended, supplemented
or otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, Aspen Industrial, S.A. de C.V., a Mexico corporation, the lenders from
time to time party thereto (the "Lenders") and Bankers Trust, as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders, and (b)
the Guarantee Agreement dated as of September 30, 1997, as amended and restated
as of May 31, 2000 (as amended, supplemented or otherwise modified from time to
time, the "Guarantee Agreement"), among the Borrower, the Guarantors and the
Administrative Agent.

         B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement and the
Credit Agreement.

         C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans and the Issuing Bank to issue Letters of
Credit. Section 7.15 of the Security Agreement provides that additional
Subsidiaries of the Borrower may become Grantors under the Security Agreement by
execution and delivery of an instrument in the form of this Supplement. Each of
the undersigned Subsidiaries (the "New Grantors") is executing this Supplement
in accordance with the requirements of the Credit Agreement to become a Grantor
under the Security Agreement in order to induce the Lenders to make additional
Loans and the Issuing Bank to issue additional Letters of Credit and as
consideration for Loans previously made and Letters of Credit previously issued.

         Accordingly, the Collateral Agent and each of the New Grantors agree as
follows:

         SECTION 1. In accordance with Section 7.15 of the Security Agreement,
each of the New Grantors by its signature below becomes a Grantor under the
Security Agreement with the same force and effect as if originally named therein
as a Grantor and each of the New Grantors hereby (a) agrees to all the terms and
provisions of the Security Agreement applicable to it as a Grantor thereunder
and (b) represents and warrants that the representations and warranties made by
it as a Grantor thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, each of the New Grantors, as security for the
payment and performance in full of the Obligations (as defined in the Security
Agreement), does hereby create
<PAGE>   2
and grant to the Collateral Agent, its successors and assigns, for the benefit
of the Secured Parties, their successors and assigns, a security interest in and
lien on all of its right, title and interest in and to the Collateral (as
defined in the Security Agreement) of such New Grantor. Each reference to a
"Grantor" in the Security Agreement shall be deemed to include each of the New
Grantors. The Security Agreement is hereby incorporated herein by reference.

         SECTION 2. Each of the New Grantors represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.

         SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Collateral
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of each of the New Grantors and the Collateral
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Supplement.

         SECTION 4. Each of the New Grantors hereby represents and warrants that
(a) set forth on Schedule I attached hereto is a true and correct schedule of
the location of any and all Collateral of such New Grantor and (b) set forth
under its signature hereto, is the true and correct location of the chief
executive office of such New Grantor.

         SECTION 5. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect.

         SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         SECTION 7. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties hereto shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

         SECTION 8. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Security Agreement. All
communications and notices hereunder to each of the New Grantors shall be given
to it at the address set forth under its signature below.
<PAGE>   3
         SECTION 9. Each of the New Grantors agrees to reimburse the Collateral
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Collateral Agent.
<PAGE>   4
         IN WITNESS WHEREOF, each of the New Grantors and the Collateral Agent
have duly executed this Supplement to the Security Agreement as of the day and
year first above written.

                                       UNIPLAST HOLDINGS INC.,

                                       By    /s/ Larry Shepler
                                             -----------------------------------
                                       Name:     Larry Shepler
                                       Title:    Secretary
                                       Address:  c/o Pliant Corporation
                                                 1515 Woodfield Road, Suite 600
                                                 Schaumburg, Illinois 60173


                                       UNIPLAST U.S., INC.,

                                       By    /s/ Larry Shepler
                                             -----------------------------------
                                       Name:     Larry Shepler
                                       Title:    Secretary
                                       Address:  c/o Pliant Corporation
                                                 1515 Woodfield Road, Suite 600
                                                 Schaumburg, Illinois 60173


                                       TUREX, INC.,

                                       By    /s/ Larry Shepler
                                             -----------------------------------
                                       Name:     Larry Shepler
                                       Title:    Secretary
                                       Address:  c/o Pliant Corporation
                                                 1515 Woodfield Road, Suite 600
                                                 Schaumburg, Illinois 60173

                                       PIERSON INDUSTRIES, INC.,

                                       By    /s/ Larry Shepler
                                             -----------------------------------
                                       Name:     Larry Shepler
                                       Title:    Secretary
                                       Address:  c/o Pliant Corporation
                                                 1515 Woodfield Road, Suite 600
                                                 Schaumburg, Illinois 60173
<PAGE>   5
                                       UNIPLAST MIDWEST, INC.,

                                       By    /s/ Larry Shepler
                                             -----------------------------------
                                       Name:     Larry Shepler
                                       Title:    Secretary
                                       Address:  c/o Pliant Corporation
                                                 1515 Woodfield Road, Suite 600
                                                 Schaumburg, Illinois 60173


                                       BANKERS TRUST COMPANY,
                                       as Collateral Agent,

                                       By   /s/ Robert R. Telesca
                                           -------------------------------------
                                       Name:     Robert R. Telesca
                                       Title:    Vice President
                                       Address:  One Bankers Trust Plaza
                                                 New York, New York 10006
<PAGE>   6
                                                                      SCHEDULE I
                                                      to Supplement No. 1 to the
                                                              Security Agreement

                             LOCATION OF COLLATERAL
                             ----------------------

<TABLE>
<CAPTION>
Company                                                      Location
-------                                                      --------

<S>                                                          <C>
Uniplast Holdings Inc.                                       c/o Pliant Corporation
                                                             1515 Woodfield Road, Suite 600
                                                             Schaumburg, IL 60173

Uniplast U.S., Inc.                                          c/o Pliant Corporation
                                                             1515 Woodfield Road, Suite 600
                                                             Schaumburg, IL 60173

                                                             1017 Wilson Street
                                                             Palmer, MA 01069

Turex, Inc.                                                  c/o Pliant Corporation
                                                             1515 Woodfield Road, Suite 600
                                                             Schaumburg, IL 60173

                                                             770 Douglas Pike
                                                             Burrillville, RI 02830

                                                             Gaudett Express
                                                             Singleton Street
                                                             Woonsocket, RI  02895

Pierson Industries, Inc.                                     c/o Pliant Corporation
                                                             1515 Woodfield Road, Suite 600
                                                             Schaumburg, IL 60173

                                                             199 South Main Street
                                                             Palmer, MA 01069

                                                             213 South Main Street
                                                             Palmer, MA 01069

                                                             221 South Main Street
                                                             Palmer, MA 01069

                                                             633 North Main Street
                                                             Palmer, MA 01069
</TABLE>
<PAGE>   7
<TABLE>
<CAPTION>
<S>                                                          <C>
                                                             40 Orchard Street
                                                             Palmer, MA 01069

                                                             1017 Wilson Street
                                                             Palmer, MA 01069

Uniplast Midwest, Inc.                                       c/o Pliant Corporation
                                                             1515 Woodfield Road, Suite 600
                                                             Schaumburg, IL 60173

                                                             725 Mapleton Street
                                                             Columbus, IN 47201
</TABLE>