Exhibit 10.1

THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR PURSUANT TO THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, UNLESS EITHER REGISTERED UNDER
THE SECURITIES ACT AND SUCH APPLICABLE STATE OR OTHER LAWS OR EXEMPTIONS FROM
SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE. IN ADDITION, THIS SECURITY IS
SUBJECT TO RESTRICTIONS ON TRANSFER DESCRIBED HEREIN. IN CONNECTION WITH ANY
TRANSFER, THE HOLDER WILL DELIVER TO THE ISSUERS SUCH CERTIFICATES AND OTHER
INFORMATION AS THE ISSUERS MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE RESTRICTIONS CONTAINED HEREIN.

 

No. 1   $20,455,000

9.875% Senior Subordinated Note due 2016

GRAHAM PACKAGING COMPANY, L.P., a Delaware limited partnership (the “Company”),
and GPC CAPITAL CORP. I, a Delaware corporation (together with their respective
successors and assigns under the Indenture hereinafter referred to, being herein
called the “Issuers”), promise to pay to REYNOLDS GROUP HOLDINGS INC., or
registered assigns, the principal sum of Twenty Million Four Hundred Fifty-Five
Thousand Dollars on December 31, 2016, or, if the transactions contemplated by
the Acquisition Agreement (as defined below) are consummated, on October 15,
2014, together with interest thereon and all other amounts payable with respect
thereto pursuant to the terms and conditions of this senior subordinated note
(this “Note”).

Interest Payment Dates: April 15 and October 15

Record Dates: April 1 and October 1

Dated: August 24, 2011

1. Interest

The Issuers promise to pay interest on the principal amount of this Note at the
rate per annum shown above. The Issuers shall pay interest semiannually on
April 15 and October 15 of each year, commencing October 15, 2011. Interest on
this Note shall accrue from the most recent date to which interest has been paid
or duly provided for or, if no interest has been paid or duly provided for, from
the date hereof until the principal hereof is due. Interest shall be computed on
the basis of a 360-day year of twelve 30-day months. The Issuers shall pay
interest on overdue principal at the rate borne by this Note, and they shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.

 

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2. Method of Payment

The Issuers shall pay interest on this Note (except defaulted interest) to
Reynolds Group Holdings Inc. (together with its successors and registered
assigns, the “Holder”) or such other Person who is a registered assign of the
initial Holder at the close of business on April 1 or October 1 next preceding
the relevant interest payment date even if this Note is cancelled after the
Record Date and on or before such interest payment date (whether or not a
Business Day). To the extent required by the Issuers, the Holder must surrender
this Note to the Company to collect principal payments. The Issuers shall pay
principal, premium, if any, and interest in money of the United States of
America that at the time of payment is legal tender for payment of public and
private debts. The Issuers will make all payments in respect of this Note
(including principal, premium, if any, and interest) by wire transfer to a U.S.
dollar account maintained by the Holder with a bank in the United States
specified in a written notice to the Company designating such account no later
than the Record Date immediately preceding the relevant due date for payment (or
such other date as the Issuers may accept in their discretion); provided that,
at the option of the Issuers, payment of interest may be made by mailing a check
to the registered address of the Holder.

3. Indenture

The Issuers are parties to an Indenture dated as of October 7, 2004 (as amended,
supplemented or otherwise modified from time to time prior to the date hereof,
the “Indenture”), among the Issuers, the guarantors referred to therein and The
Bank of New York, as trustee. Terms defined in the Indenture and not defined
herein have the meanings ascribed thereto in the Indenture, and the Holder is
referred to the Indenture for a statement of such terms.

The proceeds of the issuance of this Note will be used solely to effect the
redemption and refinancing of the senior subordinated notes that were issued
pursuant to the Indenture (the “Existing Notes”) that are actually tendered for
redemption pursuant to the Issuers’ tender offer that expired on August 19,
2011.

4. Redemption and Repurchase

(a) Mandatory Redemption. If the Existing Notes at any time outstanding under
the Indenture are redeemed or repurchased in whole or in part by the Issuers in
accordance with the terms of Section 3.01 or Section 4.06 of the Indenture,
then, to the extent permitted by the terms of the Indenture and other
documentation governing any indebtedness of the Issuers that is then
outstanding, the Issuers shall redeem this Note, in whole or in part, on a pro
rata basis. If the transactions contemplated by the Agreement and Plan of Merger
dated as of June 17, 2011 between Reynolds Group Holdings Limited, Bucephalas
Acquisition Corp. and Graham Packaging Company Inc. (as amended, supplemented or
otherwise modified, the “Acquisition Agreement”) are consummated, then
notwithstanding anything herein to the contrary, the maturity date of this Note
shall automatically be October 15, 2014.

(b) Voluntary Redemption. This Note may be redeemed, in whole or in part, at any
time, at the option of the Issuers upon not less than 10 nor more than 60 days’
prior notice to the Holder, at a redemption price equal to 100% of the principal
amount of this Note to be redeemed

 

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plus accrued and unpaid interest to the applicable redemption date (subject to
the right of the Holder of record on the Record Date to receive interest due on
the relevant interest payment date).

(c) Method and Effect of Redemption. Notice of redemption must be sent by the
Issuers to the Holder at least 10 but not more than 60 days before the
redemption date. The notice of redemption will identify the principal amount of
this Note to be redeemed and will include or state the following:

(i) the redemption date;

(ii) the redemption price including the portion thereof representing any accrued
interest;

(iii) whether this Note must be surrendered to the Company in order to collect
the redemption price and any accrued interest and if so, the addresses of the
Company where this Note is to be surrendered;

(v) on the redemption date the redemption price will become due and payable on
the portion of this Note called for redemption and interest on the portion of
this Note called for redemption will cease to accrue on and after the redemption
date;

(vi) if less than all the outstanding principal amount of this Note is to be
redeemed, the aggregate principal amount of this Note to be redeemed, and the
aggregate principal amount of this Note to be outstanding after such partial
redemption; and

(vii) if this Note is to be redeemed in part, on and after the redemption date,
upon surrender of such Note, a new note equal in principal amount to the
unredeemed portion hereof will be issued.

Once notice of redemption pursuant to this Section 4(c) is given to the Holder,
this Note becomes due and payable on the redemption date and at the redemption
price stated in the notice. Upon surrender to the Company (to the extent
surrender shall be required pursuant to such notice of redemption), the Issuers
shall redeem this Note at the stated redemption price. Commencing on the
redemption date, the portion of this Note to be redeemed will cease to accrue
interest; provided, however, that if the redemption date is after a regular
Record Date and on or prior to an interest payment date, the accrued interest
shall be payable to the Holder of this Note registered on the relevant Record
Date. In connection with a partial redemption of this Note, upon surrender of
this Note in connection with a partial redemption (to the extent surrender shall
be required pursuant to such notice of redemption), the Holder will receive a
new note equal in principal amount to the unredeemed portion of the surrendered
Note.

(d) Payment of Redemption Price. Prior to 10:00 a.m., New York City time, on the
redemption date, the Issuers shall pay to the Holder money sufficient to pay the
redemption price of and accrued interest on this Note or portion thereof to be
redeemed on that date (other than any portion of this Note previously called for
redemption and that has been cancelled). On and after the redemption date,
interest shall cease to accrue on this Note or portion thereof called for
redemption so long as the Issuers have transferred to the Holder funds
sufficient to pay the principal of, plus accrued and unpaid interest on, the
portion of this Note to be redeemed.

 

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5. Sinking Fund

This Note is not subject to any sinking fund.

6. Certain Covenants

(a) Payments. The Issuers agree to pay the principal of and interest on this
Note on the dates and in the manner provided herein. Not later than 10:00 a.m.
(New York City time) on the due date of any principal of or interest on this
Note, or any redemption or purchase price of this Note, the Issuers will pay to
the Holder a sum of money sufficient to pay such amounts. An installment of
principal or interest on this Note will be considered paid on the due date only
if paid to the Holder. The Issuers shall pay interest on overdue principal at
the rate specified therefor in this Note, and they shall pay interest on overdue
installments of interest at the same rate borne by this Note to the extent
lawful.

(b) Reports and Other Information. Notwithstanding that the Issuers may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, or otherwise report on an annual and quarterly basis on forms provided for
such annual and quarterly reporting pursuant to rules and regulations
promulgated by the SEC, the Company shall (x) file with the SEC and (y) provide
the Holder with copies thereof, unless such documents are available on the SEC’s
website, without cost to the Holder, the following information:

(i) within 90 days after the end of each fiscal year (or such shorter period as
may be required by the SEC), annual reports on Form 10-K (or any successor or
comparable form) containing the information required to be contained therein (or
required in such successor or comparable form), and

(ii) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year (or such shorter period as may be required by the SEC)
commencing with the fiscal quarter ending September 30, 2011, reports on Form
10-Q (or any successor or comparable form);

provided, however, that the Company shall not be so obligated to file such
reports with the SEC if the SEC does not permit such filing, in which event the
Company shall make available such information to prospective purchasers of this
Note, in addition to providing such information to the Holder, in each case
within 15 days after the time the Issuers would be required to file such
information with the SEC if it were subject to Section 13 or 15(d) of the
Exchange Act.

So long as:

(i) the Parent Guarantor is a Guarantor (there being no obligation of the Parent
Guarantor to do so) and holds no material assets other than cash, Cash
Equivalents and the Capital Stock of the Company (and performs the related
incidental activities associated with such ownership),

 

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(ii) the Parent Guarantor complies with the requirements of Rule 3-10 of
Regulation S-X promulgated by the Commission (or any successor provision), and

(iii) the rules and regulations of the SEC permit the Company and the Parent
Guarantor to report at the Parent Guarantor’s level on a consolidated basis,

the reports, information and other documents required to be filed and furnished
to the Holder pursuant to this Section 6(b) may, at the option of the Company,
be filed by and be those of the Parent Guarantor rather than the Company.

The Company shall also furnish to the Holder and prospective investors upon
request the information required to be delivered pursuant to Rule 144 and Rule
144A(d)(4) under the Securities Act.

(c) Change of Control. (i)Upon a Change of Control, the Holder will have the
right to require the Issuers to repurchase all or any part (equal to $1,000 or
an integral multiple of $1,000 in excess thereof) of this Note pursuant to a
Change of Control Offer (as defined below) in accordance with the terms
contemplated in this Section 6(c). In the Change of Control Offer, the Issuers
shall offer to Purchase such portion of this Note at a purchase price in cash
equal to 101% of the aggregate principal amount of this Note being repurchased
plus accrued and unpaid interest on the amount of this Note being repurchased,
to the date of purchase (subject to the right of Holder of record on the
relevant Record Date to receive interest due on the relevant interest payment
date) (the “Change of Control Payment”). Prior to complying with any of the
terms of this Section 6(c) but in any event within 90 days following a Change of
Control, to the extent required to permit the Issuers to comply with this
Section 6(c), the Issuers shall either (i) repay all outstanding Senior Debt or
(ii) obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt.

To the extent required by any Senior Debt, the Issuers shall first comply with
the covenant in the first paragraph of Section 6(c)(i) of this Note before they
shall be required to either repurchase this Note or send the notice provision
pursuant to 6(c)(ii). Failure to comply with Section 6(c)(i) of this Note and
any failure to send the notice pursuant to 6(c)(ii) as a result of the
prohibition in Section 6(c)(i) of this Note may (with notice and lapse of time)
constitute an Event of Default described in Section 11(a)(iii) of this Note, but
shall not constitute an Event of Default described in Section 11(a)(i) of this
Note.

(ii) Within 30 days following any Change of Control, except to the extent that
the Issuers have exercised their right to redeem this Note in accordance with
Section 4 of this Note, the Issuers shall mail a notice (a “Change of Control
Offer”) to the Holder stating:

(1) that a Change of Control has occurred and that the Holder has the right to
require the Issuers to purchase all or a portion of the Holder’s Note at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest to the date of purchase;

 

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(2) the circumstances and relevant facts and financial information regarding
such Change of Control;

(3) the purchase date (the “Change of Control Purchase Date”) (which shall be no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
and the instructions determined by the Issuers consistent with this Section,
that the Holder must follow in order to have its Note purchased.

(iii) If the Holder elects to have all or any part of this Note purchased, it
shall be required to surrender this Note, with an appropriate form duly
completed, to the Issuers at the address specified in the notice at least three
Business Days prior to the Change of Control Purchase Date. The Holder shall be
entitled to withdraw its election if the Issuers receive not later than one
Business Day prior to the Change of Control Purchase Date a notice setting forth
the principal amount of this Note which was delivered for purchase by the Holder
and a statement that such Holder is withdrawing his or her election with respect
to some or all of the specified principal amount to have this Note purchased. If
this Note is purchased only in part, a new note shall be issued equal in
principal amount to the unpurchased portion of this Note surrendered.

(iv) On the Change of Control Purchase Date, the Issuers shall accept for
payment this Note or portion of this Note properly tendered pursuant to the
Change of Control Offer. The amount of this Note purchased by the Issuers under
this Section shall be delivered to the Company on the Change of Control Purchase
Date for cancellation, and the Issuers shall pay the Change of Control Payment
to the Holder. The Issuers will promptly execute and deliver to the Holder a new
Note equal in principal amount to any unpurchased portion of this Note
surrendered, if any.

(v) Notwithstanding the foregoing provisions of this Section, the Issuers shall
not be required to make a Change of Control Offer upon a Change of Control if a
third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in Section 6(c)(ii) of
this Note applicable to a Change of Control Offer made by the Issuers and
purchases the full amount of this Note validly tendered and not withdrawn under
such Change of Control Offer.

(vi) The Issuers shall comply with the requirements of Section 14e-1 of the
Exchange Act and any other securities laws or regulations in connection with the
repurchase of this Note pursuant to this Section to the extent those laws and
regulations are applicable in connection with the repurchase of this Note as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section, the
Issuers shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section by
virtue thereof.

(d) Liens. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien
that secures obligations under the Existing Notes or the related guarantees on
any asset or property of the Company or any Restricted Subsidiary that is a
Guarantor, or any income or profits therefrom, or assign or

 

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convey any right to receive income therefrom, unless this Note or the applicable
guarantee of this Note by such Guarantor (each, a “Guarantee” and, collectively,
the “Guarantees”) are equally and ratably secured.

(e) Consolidation, Merger or Sale of Assets

(i) Consolidation, Merger or Sale of Assets of the Company. (a) The Company may
not, directly or indirectly (x) consolidate or merge with or into or wind up
into another Person (whether or not the Company is the surviving corporation) or
(y) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of its properties or assets, in one or more related transactions, to another
Person, unless, in each case:

(1) either:

(A) the Company is the surviving corporation; or

(B) the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is a partnership, limited liability company or
corporation organized or existing under the laws of the jurisdiction of
organization of the Company or the United States, any state of the United
States, the District of Columbia or any territory thereof (the Company or such
Person, as the case may be, hereinafter referred to as the “Successor Company”);

(2) the Successor Company (if other than the Company) expressly assumes all the
obligations of the Company under the this Note pursuant to an agreement
reasonably satisfactory to the Holder;

(3) immediately after such transaction no Default or Event of Default exists;

(4) after giving pro forma effect thereto and any related financing transactions
as if the same had occurred at the beginning of the applicable four-quarter
period, either:

(A) the Successor Company (if other than the Company), would have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.03(a) of the Indenture determined on
a pro forma basis (including pro forma application of the net proceeds
therefrom), as if such transaction had occurred at the beginning of such
four-quarter period; or

(B) the Fixed Charge Coverage Ratio for the Successor Company and its Restricted
Subsidiaries would be greater than such ratio for the Company and its Restricted
Subsidiaries immediately prior to such transaction;

 

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(5) each Guarantor, unless it is the other party to the transactions described
above, in which case clause (ii) shall apply, shall have confirmed in writing
that its Guarantee shall apply to such Person’s obligations under this Note; and

(6) if requested by the Holder, the Company shall have delivered to the Holder
an Officers’ Certificate stating that such consolidation, merger or transfer and
such amendment or supplement (if any) comply with this Note.

The Company shall give the Holder reasonable prior notice of any such
transaction. The Successor Company shall succeed to, and be substituted for, the
Company under this Note. Notwithstanding the foregoing clauses (3) and (4) of
this Section 6(e)(i), (a) any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or to
another Restricted Subsidiary and (b) the Company may merge with an Affiliate
incorporated solely for the purpose of incorporating or reincorporating the
Company in a (or another) state of the United States, so long as the amount of
Indebtedness of the Company and its Restricted Subsidiaries is not increased
thereby.

(ii) Consolidation, Merger or Sale of Assets by a Guarantor. Subject to the
provisions of Section 14(m) (which govern the release of a Guarantor upon the
sale, transfer or disposition of a Restricted Subsidiary of the Company that is
a Guarantor), no Guarantor (other than the Parent Guarantor) shall, and the
Company shall not permit any Guarantor to, consolidate or merge with or into or
wind up into (whether or not such Guarantor is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to any Person:

(1) such Guarantor is the surviving Person or the Person formed by or surviving
any such consolidation or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, lease, conveyance or other disposition will have
been made is a partnership, limited liability company or corporation organized
or existing under the laws of the United States, any state thereof, the District
of Columbia or any territory thereof (such Guarantor or such Person, as the case
may be, being herein called the “Successor Guarantor”);

(2) the Successor Guarantor (if other than such Guarantor) expressly assumes all
the obligations of such Guarantor under this Note pursuant to documents or
instruments in form reasonably satisfactory to the Holder;

(3) immediately after such transaction no Default or Event of Default shall
exist; and

(4) if requested by the Holder, the Company shall have delivered to the Holder
an Officers’ Certificate stating that such consolidation, merger or transfer and
such amendment or supplement (if any) comply with this Note.

The Company shall give the Holder reasonable prior notice of any such
transaction. The Successor Guarantor will succeed to, and be substituted for,
such Guarantor under this Note.

 

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Notwithstanding the foregoing, (x) a Guarantor may merge with an Affiliate
incorporated solely for the purpose of incorporating or reincorporating such
Guarantor in another state of the United States, the District of Columbia or any
territory thereof, so long as the amount of Indebtedness of the Guarantor is not
increased thereby, and (y) any Guarantor may merge into or transfer all or part
of its properties and assets to the Company or another Guarantor.

Notwithstanding anything to the contrary herein, except as expressly permitted
under this Note, no Guarantor shall be permitted to consolidate with, merge into
or transfer all or part of its properties and assets to the Parent Guarantor.

7. Subordination

(a) Agreement to Subordinate. This Note is a senior subordinated unsecured
obligation of the Issuers. This Note is subordinated to Senior Debt, as defined
in the Indenture. To the extent provided herein, Senior Debt must be paid before
this Note and the Guarantees hereunder may be paid. Each of the Issuers agree,
and the Holder by accepting this Note agrees, that the Indebtedness evidenced by
this Note is subordinated in right of payment, to the extent and in the manner
provided in this Section 7, to the prior payment in full of all existing and
future Senior Debt of the Issuers and that the subordination is for the benefit
of and enforceable by the holders of such Senior Debt.

(b) Liquidation, Dissolution, Bankruptcy. The payment of principal and interest,
on this Note will be subordinated to the prior payment in full of all Senior
Debt of the Issuers, including Senior Debt incurred after the date of this Note.
Payments by the Issuers of principal, interest and other amounts on, or with
respect to, this Note (including without limitation payments to purchase, redeem
or retire same) are referred to herein as “Subordinated Note Payments.” Upon any
payment or distribution of the assets of an Issuer to creditors upon a total or
partial liquidation or a total or partial dissolution of an Issuer or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to such Issuer or its property, holders of Senior Debt will be entitled
to receive payment in full in cash of all Obligations due in respect of Senior
Debt (including interest after the commencement of any bankruptcy proceeding at
the rate specified in the applicable Senior Debt, whether or not such interest
is an allowed or allowable claim under applicable law) before the holders of
Notes will be entitled to receive any Subordinated Note Payments (other than
Permitted Junior Securities) with respect to this Note, in the event of any
distribution to creditors of the Issuers:

(i) in a liquidation or dissolution of an Issuer;

(ii) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to an Issuer or its property;

(iii) in an assignment for the benefit of creditors; or

(iv) in any marshaling of an Issuer’s assets and liabilities.

(c) Default on Senior Debt. (i)The Issuers shall not make any Subordinated Note
Payments in respect of this Note if:

(1) a payment default on Senior Debt occurs and is continuing; or

 

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(2) any other default occurs and is continuing on any series of Designated
Senior Debt that permits holders of that series of Designated Senior Debt to
accelerate its maturity and the Trustee under the Indenture receives a notice of
such default (a “Payment Blockage Notice”) from the holders of any Designated
Senior Debt or their Representatives. The Company shall promptly notify the
Holder of the occurrence of a payment default on Senior Debt and of the Trustee
under the Indenture’s receipt of a Payment Blockage Notice; provided that the
failure to give such notice shall have no effect whatsoever on the subordination
provisions described herein.

(ii) Subordinated Note Payments may and will be resumed:

(1) in the case of a payment default, upon the date on which such default is
cured or waived; and

(2) in the case of a nonpayment default, upon the earliest of (i) the date on
which such nonpayment default is cured or waived (so long as no other event of
default exists), (ii) 179 days after the date on which the Payment Blockage
Notice is received or (iii) the date on which Trustee under the Indenture
receives notice from a Representative for the respective issue of Designated
Senior Debt rescinding such Payment Blockage Notice, unless the maturity of any
Designated Senior Debt has been accelerated.

(iii) No new Payment Blockage Notice may be delivered unless and until 360 days
have elapsed since the delivery of the immediately prior Payment Blockage
Notice. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee under the Indenture will
be, or be made, the basis for a subsequent Payment Blockage Notice unless such
default has been cured or waived for a period of not less than 90 days (it being
acknowledged that any subsequent action or any breach of any financial covenants
for a period commencing after the date of delivery of such initial Payment
Blockage Notice that in either case would give rise to a default pursuant to any
provisions under which a default previously existed or was continuing shall
constitute a new default for this purpose).

(iv) If the Holder receives a Subordinated Note Payment when the payment is
prohibited by these subordination provisions, the Holder will hold such
Subordinated Note Payment in trust for the benefit of the holders of Senior
Debt. Upon the proper written request of the holders of Senior Debt, the Holder
will deliver the Subordinated Note Payment in trust to the holders of Senior
Debt or their proper Representative.

(v) The Company shall promptly notify holders of Senior Debt if payment of this
Note is accelerated because of an Event of Default; provided that the failure to
give notice shall have no effect whatsoever on the subordination provisions
described herein.

 

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(d) Acceleration of Payment of Notes. If payment of this Note is accelerated
because of an Event of Default, the Company shall promptly notify the holders of
the Designated Senior Debt of the Issuers (or their Representative) of the
acceleration.

(e) When Distribution Must Be Paid Over. If a distribution is made to the Holder
that because of this Section 7 should not have been made to it, the Holder shall
hold it in trust for holders of Senior Debt of the Issuers and pay it over to
them as their interests may appear.

(f) Subrogation. After all Senior Debt of the Issuers is paid in full and until
this Note is paid in full in cash, the Holder shall be subrogated to the rights
of holders of such Senior Debt to receive distributions applicable to Senior
Debt of the Issuers. A distribution made under this Section 7 to holders of such
Senior Debt which otherwise would have been made to the Holder is not, as
between the Issuers and the Holder, a payment by the Issuers on such Senior
Debt.

(g) Relative Rights. This Section 7 defines the relative rights of the Holder
and holders of Senior Debt of the Issuers. Nothing in this Note shall:

(i) impair, as between the Issuers and the Holder, the obligation of the
Issuers, which is absolute and unconditional, to pay principal of and interest
on this Note in accordance with its terms; or

(ii) prevent the Holder from exercising its available remedies upon a Default,
subject to the rights of holders of Senior Debt of the Issuers to receive
distributions otherwise payable to the Holders.

(h) Subordination May Not Be Impaired by Issuers. No right of any holder of
Senior Debt of the Issuers to enforce the subordination of the Indebtedness
evidenced by this Note shall be impaired by any act or failure to act by the
Issuers or by their failure to comply with this Note.

(i) Distribution or Notice to Representative. Whenever a distribution is to be
made or a notice given to holders of Senior Debt of the Issuers, the
distribution may be made and the notice given to their Representative (if any).

(j) Section 7 Not to Prevent Events of Default or Limit Right to Accelerate. The
failure to make a payment pursuant to this Note by reason of any provision in
this Section 7 shall not be construed as preventing the occurrence of a Default.
Nothing in this Section 7 shall have any effect on the right of the Holder to
accelerate the maturity of this Note.

(k) Reliance by Holders of Senior Debt on Subordination Provisions. The Holder
by accepting this Note acknowledges and agrees that the foregoing subordination
provisions are, and are intended to be, an inducement and a consideration to
each holder of any Senior Debt of the Issuers, whether such Senior Debt was
created or acquired before or after the issuance of this Note, to acquire and
continue to hold, or to continue to hold, such Senior Debt and such holder of
such Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.

Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt of the Issuers may, at any time and from time to time,
without the consent of the

 

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Holder, without incurring responsibility to the Holder and without impairing or
releasing the subordination provided in this Section 7 or the obligations
hereunder of the Holder to the holders of the Senior Debt of the Issuers, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt of the Issuers,
or otherwise amend or supplement in any manner Senior Debt of the Issuers, or
any instrument evidencing the same or any agreement under which Senior Debt of
the Issuers is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Debt of the
Issuers; (iii) release any Person liable in any manner for the payment or
collection of Senior Debt of the Issuers; and (iv) exercise or refrain from
exercising any rights against the Issuers and any other Person.

8. Denominations; Transfer; Exchange

This Note is in registered form, without coupons, in a single denomination of
$20,455,000. The Holder may transfer this Note in whole and not in part. The
Holder may exchange this Note in whole and not in part, except for an exchange
in connection with a partial redemption of this Note made in accordance with the
terms hereof. The Holder shall register the transfer of or exchange of this Note
by providing written notice to the Company of such transfer or exchange. Upon
any registration of transfer or exchange, the Company may require the Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The Company
need not register the transfer of or exchange this Note if selected for
redemption (except if redeemed in part, the portion of this Note not to be
redeemed) or to transfer or exchange this Note for a period of 15 days prior to
a selection of this Note for redemption.

9. Persons Deemed Owners

The registered Holder of this Note shall be treated as the owner of it for all
purposes.

10. Amendment, Waiver

This Note may be amended, supplemented or otherwise modified, or any Default or
Event of Default hereunder may be waived, only with the consent of the Holder.
Notwithstanding the foregoing, without the consent of the Holder, the Issuers
may amend or supplement this Note to cure any ambiguity, defect or
inconsistency.

11. Defaults and Remedies

(a) Events of Default. An “Event of Default” occurs if:

(i) the Issuers default in payment when due and payable, upon redemption,
acceleration or otherwise, of principal on this Note, whether or not prohibited
by Section 7 of this Note;

(ii) the Issuers default in the payment when due of interest, on or with respect
to this Note and such default continues for a period of 30 days, whether or not
such payment shall be prohibited by Section 7 of this Note;

 

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(iii) an Issuer or a Guarantor defaults in the performance of, or breaches any
covenant, warranty or other agreement contained in this Note (other than a
default in the performance or breach of a covenant, warranty or agreement which
is specifically dealt with in clauses (i) or (ii) above) and such default or
breach continues for a period of 60 days after notice from the Holder;

(iv) an “Event of Default” occurs under the Indenture and such “Event of
Default” either (x) results from the failure to pay the Existing Notes in full
at their stated final maturity (after giving effect to any applicable grace
periods) or (y) relates to an obligation other than the obligation to pay
principal of the Existing Notes in full at their stated final maturity and
results in the holder or holders of the Existing Notes (or the trustee under the
Indenture on their behalf) causing the Existing Notes to become, or the Existing
Notes otherwise becoming, due prior to their stated maturity;

(v) the Company or any Significant Subsidiary pursuant to or within the meaning
of any Bankruptcy Law:

(1) commences a voluntary case;

(2) consents to the entry of an order for relief against it in an involuntary
case;

(3) consents to the appointment of a Custodian of it or for any substantial part
of its property; or

(4) makes a general assignment for the benefit of its creditors or takes any
comparable action under any foreign laws relating to insolvency;

(vi) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

(1) is for relief against the Company or any Significant Subsidiary in an
involuntary case;

(2) appoints a Custodian of the Company or any Significant Subsidiary or for any
substantial part of its property;

(3) orders the winding up or liquidation of the Company or any Significant
Subsidiary; or

(4) any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days; or

(vii) any Guarantee of a Significant Subsidiary fails to be in full force and
effect (except as contemplated by the terms thereof) or any Guarantor denies or
disaffirms its obligations under its Guarantee and such Default continues for 10
days.

 

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The foregoing shall constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body. As
used in this Note: the term “Default” means any event which is, or with the
passage of time or the giving of notice or both would be, an Event of Default;
the term “Bankruptcy Law” means Title 11, United States Code, as amended, or any
similar Federal or state law for the relief of debtors; and the term “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

(b) Remedies; Acceleration. If an Event of Default (other than an Event of
Default specified in Section 11(a)(v) and (a)(vi) with respect to the Company)
shall occur and be continuing, the Holder may declare the principal of and
accrued interest on this Note to be due and payable by notice in writing to the
Company specifying the respective Event of Default and that it is a “notice of
acceleration” (the “Acceleration Notice”), and the same shall (i) become
immediately due and payable or (ii) if there are any amounts outstanding under a
Credit Agreement, become immediately due and payable upon the first to occur of
an acceleration under a Credit Agreement or 5 business days after the receipt by
the Company and the Representative under a Credit Agreement of such Acceleration
Notice but only if such Event of Default is then continuing. Notwithstanding the
foregoing, if an Event of Default specified in Section 11(a)(v) and (a)(vi) with
respect to the Company occurs and is continuing, then all unpaid principal of,
and accrued and unpaid interest on the outstanding Note shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Holder of this Note. The Holder may rescind an acceleration and its
consequences in its sole discretion.

No such rescission shall affect any subsequent Default under this Note or impair
any right consequent thereto. The Holder may waive any existing Default or Event
of Default under this Note, and its consequences. In the event of any Event of
Default specified in Section 11(a)(iv), such Event of Default and all
consequences thereof (excluding, however, any resulting payment default) shall
be annulled, waived and rescinded, automatically and without any action by the
Holder, if within 20 days after such Event of Default arose the Company delivers
an Officers’ Certificate to the Holder stating that (x) the Existing Notes have
been discharged or (y) the holder or holders of the Existing Notes have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default or (z) the default that is the basis for
such Event of Default has been cured, it being understood that in no event shall
an acceleration of the principal amount of this Note as described above be
annulled, waived or rescinded upon the happening of any such events. When a
Default is waived, it is deemed cured and the Issuers and the Holder will be
restored to their former positions and rights under this Note, but no such
waiver shall extend to any subsequent or other Default or impair any consequent
right.

If an Event of Default occurs and is continuing, the Holder may pursue any
available remedy at law or in equity to collect the payment of principal of or
interest on this Note or to enforce the performance of any provision of this
Note.

A delay or omission by the Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.

 

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12. No Recourse Against Others

No director, officer, employee, incorporator or holder of any equity interests
in the Issuers or of any Guarantor or any direct or indirect parent, as such,
shall have any liability for any obligations of the Issuers or the Guarantors
under this Note or the Guarantees or for any claim based on, in respect of, or
by any reason of, such obligations or their creation. The Holder by accepting
this Note waives and releases all such liability.

13. Governing Law and Miscellaneous

(a) GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

(b) Notices. Notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy or electronic mail, as follows:

(i) if to any Issuer or Guarantor, to it at 2401 Pleasant Valley Road, York,
Pennsylvania, 17402, Attention of the Chief Financial Officer (Telecopy No.
(717) 849-8541), Email: bill.hennessey@grahampackaging.com; and

(ii) if to the Holder, to it at Reynolds Group Holdings Limited, Level 9 148
Quay Street, Auckland, New Zealand, Attention of Helen Golding (Fax No. +64
9366-6263), Email: helen.golding@rankgroup.co.nz.

All notices and other communications given to any party hereto in accordance
with the provisions of this Note shall be deemed to have been given on the date
of receipt if delivered by hand or overnight courier service or sent by
electronic mail or telecopy or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 13(b) or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 13(b).

(c) Jurisdiction; Venue; Service of Process.

(i) Jurisdiction. Each of the Issuers and the Guarantors hereby irrevocably and
unconditionally submits, for itself and its property, to the general
jurisdiction of the New York State courts, sitting in the Borough of Manhattan,
the City of New York, or the federal courts of the United States of America for
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Note or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Note shall affect any right
that the Holder may otherwise have to bring any action or proceeding relating to
this Note against the Issuers or any Guarantor or their properties in the courts
of any jurisdiction.

 

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(ii) Venue. Each of the Issuers and the Guarantors hereby irrevocably and
unconditionally waives, and agrees not to plea or claim, to the fullest extent
it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Note in any New York State or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

(iii) Service of Process. Each of the Issuers and the Guarantors hereby
irrevocably and unconditionally appoints CT Corporation System with an office on
the date hereof at 111 Eighth Avenue, New York, New York 10011 and its
successors hereunder (the “Process Agent”), as its agent to receive on behalf of
each of the Issuers and any Guarantor and its property of all writs, claims,
process, and summonses in any action or proceeding brought against it in the
State of New York. Such service may be made by mailing or delivering a copy of
such process to the Issuers or any Guarantor, as the case may be, in care of the
Process Agent at the address specified above for the Process Agent, and each of
the Issuers and the Guarantors hereby irrevocably authorizes and directs the
Process Agent to accept such service on its behalf. Failure by the Process Agent
to give notice to the Issuers or any Guarantor, as applicable, or failure of the
Issuers or any Guarantor, as applicable, to receive notice of such service of
process shall not impair or affect the validity of such service on the Process
Agent, the Issuers or any Guarantor, or of any judgment based thereon. Each of
the Issuers and the Guarantors covenants and agrees that it shall take any and
all reasonable action, including the execution and filing of any and all
documents, that may be necessary to continue the designation of the Process
Agent above in full force and effect, and to cause the Process Agent to act as
such. Each of the Issuers and the Guarantors further covenants and agrees to
maintain at all times an agent with offices in New York City to act as its
Process Agent. Nothing herein shall in any way be deemed to limit the ability to
serve any such writs, process or summonses in any other manner permitted by
applicable law.

(d) Successors. All agreements of the Issuers and the Guarantors in this Note
shall bind their successors. All agreements of the Holder in this Note shall
bind its successors and assigns.

(e) Counterparts. This Note may be executed in two or more counterparts, but all
of which when taken together shall constitute but one original.

(f) Note Controls. If and to the extent that any provision of this Note limits,
qualifies or conflicts with a provision of the Indenture, such provision of this
Note shall control.

(g) Severability. In case any provision in this Note shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby and such
provision shall be ineffective only to the extent of such invalidity, illegality
or unenforceability.

 

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14. Guarantees

(a) The obligations of the Issuers pursuant to this Note, including any
repurchase obligation resulting from a Change of Control, are hereby
unconditionally guaranteed, jointly and severally, on an unsecured, subordinated
basis, by the Parent Guarantor and each Subsidiary (other than a Foreign
Subsidiary) of the Company that guarantees the Company’s obligations under the
Indenture (each, a “Subsidiary Guarantor” and, collectively with the Parent
Guarantor, together with their respective successors and permitted assigns, the
“Guarantors”). Notwithstanding the foregoing, if at any time any Subsidiary
(other than a Foreign Subsidiary) that is not a guarantor under the Indenture
shall become a guarantor under the Indenture pursuant to the terms thereof, then
the Company shall within 20 days cause such Subsidiary to become a Subsidiary
Guarantor under this Note.

(b) Upon the occurrence of the guarantee by any Restricted Subsidiary of the
obligations of the Company under the Indenture that is, pursuant to
Section 14(a), required thereby to provide a Guarantee of this Note, the Company
will cause each such Restricted Subsidiary to either execute this Note or a
guarantee supplement substantially in the form of Exhibit A hereto (and with
such documentation relating thereto as the Holder may reasonably require),
pursuant to which such Subsidiary will become a Guarantor; provided, however,
that the guarantee provided by any Guarantor in respect of the Indenture shall
be (i) pari passu with its Guarantee under this Note and (ii) subordinated to
its guarantee with respect to any Credit Agreement pursuant to subordination
provisions substantially as contained in Section 15 hereof.

(c) Each Guarantor hereby jointly and severally, irrevocably and unconditionally
guarantees, as a primary obligor and not merely as a surety, to the Holder
(including its successors and assigns) (i) the full and punctual payment when
due, whether at stated maturity, by acceleration, by redemption or otherwise, of
all obligations of the Issuers under this Note, whether for payment of principal
of, premium, if any, or interest on in respect of this Note and all other
monetary obligations of the Issuers under this Note and (ii) the full and
punctual performance within applicable grace periods of all other obligations of
the Issuers whether for fees, expenses, indemnification or otherwise under this
Note (all the foregoing being hereinafter collectively called the “Guaranteed
Obligations”). Each Guarantor further agrees that the Guaranteed Obligations may
be extended or renewed, in whole or in part, without notice or further assent
from each such Guarantor, and that each such Guarantor shall remain bound under
this Section 14 notwithstanding any extension or renewal of any Guaranteed
Obligation.

(d) To the extent permitted by applicable law, each Guarantor waives
presentation to, demand of payment from and protest to the Issuers of any of the
Guaranteed Obligations and also waives notice of protest for nonpayment. Each
Guarantor waives notice of any default under this Note or the Guaranteed
Obligations. The obligations of each Guarantor hereunder shall not be affected
by (i) the failure of the Holder to assert any claim or demand or to enforce any
right or remedy against the Issuers or any other Person under this Note or any
other agreement or otherwise; (ii) any extension or renewal of this Note or any
other agreement; (iii) any rescission, waiver, amendment or modification of any
of the terms or provisions of this Note or any other agreement; (iv) the release
of any security held by the Holder for the Guaranteed Obligations or any
Guarantor; (v) the failure of the Holder to exercise any right or remedy against
any other guarantor of the Guaranteed Obligations; or (vi) any change in the
ownership of such Guarantor, except as provided in Section 6(e).

 

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(e) To the extent permitted by applicable law, each Guarantor hereby waives any
right to which it may be entitled to have its obligations hereunder divided
among the Guarantors, if applicable, such that such Guarantor’s obligations
would be less than the full amount claimed. Each Guarantor hereby waives any
right to which it may be entitled to have the assets of the Issuers first be
used and depleted as payment of the Issuers’ or such Guarantor’s obligations
hereunder prior to any amounts being claimed from or paid by such Guarantor
hereunder. Each Guarantor hereby waives any right to which it may be entitled to
require that the Issuers be sued prior to an action being initiated against such
Guarantor.

(f) Each Guarantor further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by the
Holder to any security held for payment of the Guaranteed Obligations.

(g) The Guarantee of each Guarantor is, to the extent and in the manner set
forth in Section 15, subordinated and subject in right of payment to the prior
payment in full of the principal of and premium, if any, and interest on all
Senior Debt of the relevant Guarantor and is made subject to such provisions of
this Note.

(h) Except as expressly set forth in Sections 14(m) and 14(r), the obligations
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of the Holder to assert any claim or demand or
to enforce any remedy under this Note or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of any Guarantor as a matter of law or equity.

(i) In furtherance of the foregoing and not in limitation of any other right
which the Holder has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Issuers to pay the principal of or interest on any
Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Guaranteed Obligation, each Guarantor hereby promises to and
shall, upon receipt of written demand by the Holder, forthwith pay, or cause to
be paid, in cash, to the Holder an amount equal to the sum of (i) the unpaid
principal amount of such Guaranteed Obligations, (ii) accrued and unpaid
interest on such Guaranteed Obligations (but only to the extent not prohibited
by applicable law) and (iii) all other monetary obligations of the Issuers to
the Holder and the

 

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(j) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holder in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations and all
obligations to which the Guaranteed Obligations are subordinated as provided in
Section 15. Each Guarantor further agrees that, as between it and the Holder,
(i) the maturity of the Guaranteed Obligations guaranteed hereby may be
accelerated as provided in Section 11 for the purposes of any Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of such Guaranteed
Obligations as provided in Section 11, such Guaranteed Obligations (whether or
not due and payable) shall forthwith become due and payable by such Guarantor
for the purposes of this Section 14.

(k) Each Guarantor also agrees to pay any and all costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by the Holder in enforcing any
rights under this Section 14.

(l) Upon request of the Holder, each Guarantor shall execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Note.

(m) Limitation on Liability. Any term or provision of this Note to the contrary
notwithstanding, the maximum aggregate amount of the Guaranteed Obligations
guaranteed hereunder by any Guarantor shall not exceed the maximum amount (after
giving effect to all guarantees by it of Senior Debt) that can be hereby
guaranteed without rendering this Note or the Guarantees, as they relate to such
Guarantor, subject to avoidance under applicable fraudulent conveyance
provisions of the United States Bankruptcy Code or other comparable provision of
applicable law. A Guarantor shall be automatically and unconditionally released
and discharged from all of its obligations under its Guarantee of the Guaranteed
Obligations under this Section 14 if:

(i) in the case of Guarantor that is a Restricted Subsidiary:

(1) all its assets or Capital Stock is sold or transferred in accordance with
the terms of the Indenture;

(2) the Guarantor merges with or into, or consolidates with or amalgamates with,
or transfers all or substantially all its assets to, another Person in
compliance with Section 6(e) hereof; or

(3) such Guarantor is designated an Unrestricted Subsidiary in accordance with
the terms of the Indenture;

(ii) such Guarantor has delivered to the Holder a certificate of a Responsible
Officer, each stating that all conditions precedent herein provided for relating
to such transaction have been complied with; and

(iii) such Guarantor is released from its guarantee (if any) of the Indenture.

 

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(n) Successors and Assigns. This Section 14 shall be binding upon each Guarantor
and its successors and assigns and shall inure to the benefit of the successors
and assigns of the Holder and, in the event of any transfer or assignment of
rights by the Holder, the rights and privileges conferred upon that party in
this Note shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Note

(o) Execution and Delivery of Guarantee. To evidence its Guarantee set forth in
Section 14(c), each Subsidiary and other Person which is required to become a
Guarantor pursuant to this Section 14 on the date of this Note hereby agrees
that this Note shall be executed on behalf of such Guarantor by an Officer. If
an Officer whose signature is on this Note no longer holds that office at the
time the Issuers execute any new note in accordance with the terms hereof, the
Guarantee shall be valid nevertheless. The delivery of any new note by the
Issuers, after the execution and delivery of this Note, shall constitute due
delivery of the Guarantee set forth in this Note on behalf of the Guarantors.

(p) No Waiver. Neither a failure nor a delay on the part of the Holder in
exercising any right, power or privilege under this Section 14 shall operate as
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise of any right, power or privilege. The rights, remedies
and benefits of the Holder herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have under
this Section 14 at law, in equity, by statute or otherwise.

(q) Modification. No modification, amendment or waiver of any provision of this
Section 14, nor the consent to any departure by any Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Holder, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other or further
notice or demand in the same, similar or other circumstances.

(r) Execution of Guarantee for Future Guarantors. Each Subsidiary and other
Person which is required to become a Guarantor pursuant to this Section 14 after
the date of this Note shall promptly execute and deliver to the Holder a
guarantee supplement substantially in the form attached as Exhibit A hereto
pursuant to which such Subsidiary or other Person shall become a Guarantor under
this Section 14 and shall guarantee the Guaranteed Obligations. Any such
guarantee supplement shall be executed by an Officer of such Guarantor.
Concurrently with the execution and delivery of such guarantee supplement, the
Company shall deliver to the Holder an Officers’ Certificate to the effect that
such guarantee supplement has been duly authorized, executed and delivered by
such Subsidiary or other Person and that, subject to the application of
bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
similar laws relating to creditors’ rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Guarantee of
such Guarantor is a legal, valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms and/or to such
other matters as the Holder may reasonably request.

(s) Non-impairment. The failure to endorse a notation of Guarantee on any Note
shall not affect or impair the validity thereof.

 

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15. Subordination of Guarantees

(a) Agreement to Subordinate. This Note and the Guarantees contained herein are
senior subordinated unsecured obligation of the Issuers and the Guarantors. This
Note is subordinated to Senior Debt, as defined in the Indenture. To the extent
provided herein, Senior Debt must be paid before this Note and the Guarantees
hereunder may be paid. Each of the Guarantors agrees, and the Holder by
accepting this Note agrees, that the obligations of a Guarantor hereunder and
under any Guarantee are subordinated in right of payment, to the extent and in
the manner provided in this Section 15, to the prior payment in full of all
existing and future Senior Debt of such Guarantor and that the subordination is
for the benefit of and enforceable by the holders of such Senior Debt of such
Guarantor. The obligations hereunder with respect to a Guarantor shall in all
respects rank senior in right of payment to all existing and future Subordinated
Indebtedness of such Guarantor; and only Indebtedness of such Guarantor that is
Senior Debt of such Guarantor shall rank senior to the obligations of such
Guarantor in accordance with the provisions set forth herein.

(b) Liquidation, Dissolution, Bankruptcy. The payment of principal and interest,
on this Note (whether directly or pursuant to any Guarantee) will be
subordinated to the prior payment in full of all Senior Debt of the Guarantors,
including Senior Debt incurred after the date of this Note. Payments by any
Guarantor of principal, interest and other amounts on, or with respect to, this
Note (including without limitation payments to purchase, redeem or retire same)
are referred to herein as “Subordinated Guarantee Payments.” Upon any payment or
distribution of the assets of a Guarantor to creditors upon a total or partial
liquidation or a total or partial dissolution of a Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to such
Guarantor or its property, holders of Senior Debt of such Guarantor will be
entitled to receive payment in full in cash of all Obligations due in respect of
such Senior Debt (including interest after the commencement of any bankruptcy
proceeding at the rate specified in the applicable Senior Debt, whether or not
such interest is an allowed or allowable claim under applicable law) before the
holders of Notes will be entitled to receive any Subordinated Guarantee Payments
(other than Permitted Junior Securities) from such Guarantor, in the event of
any distribution to creditors of the Guarantors:

(i) in a liquidation or dissolution of a Guarantor;

(ii) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to a Guarantor or its property;

(iii) in an assignment for the benefit of creditors; or

(iv) in any marshaling of a Guarantor’s assets and liabilities.

(c) Default on Senior Debt. (i) The Guarantors may not make any Subordinated
Guarantee Payments if:

(1) a payment default on Senior Debt occurs and is continuing; or

(2) any other default occurs and is continuing on any series of Designated
Senior Debt that permits holders of that series of Designated Senior Debt to
accelerate its maturity and the Trustee under the Indenture receives a Payment
Blockage Notice as set forth in Section 7(c).

 

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(ii) Subordinated Guarantee Payments may and will be resumed:

(1) in the case of a payment default, upon the date on which such default is
cured or waived; and

(2) in the case of a nonpayment default, upon the earliest of (i) the date on
which such nonpayment default is cured or waived (so long as no other event of
default exists), (ii) 179 days after the date on which the Payment Blockage
Notice is received or (iii) the date on which Trustee under the Indenture
receives notice from a Representative for the respective issue of Designated
Senior Debt rescinding such Payment Blockage Notice, unless the maturity of any
Designated Senior Debt has been accelerated.

(iii) If the Holder receives a Subordinated Guarantee Payment when the payment
is prohibited by these subordination provisions the Holder will hold such
Subordinated Guarantee Payment in trust for the benefit of the holders of Senior
Debt. Upon the proper written request of the holders of Senior Debt, the Holder
will deliver the Subordinated Guarantee Payment in trust to the holders of
Senior Debt or their proper Representative.

(d) When Distribution Must Be Paid Over. If a distribution is made to the Holder
that because of this Section 15 should not have been made to it, the Holder
shall hold it in trust for holders of Senior Debt of the Guarantors and pay it
over to them as their interests may appear.

(e) Subrogation. After all Senior Debt of the Guarantors is paid in full and
until this Note is paid in full in cash, the Holder shall be subrogated to the
rights of holders of such Senior Debt to receive distributions applicable to
Senior Debt of the Guarantors. A distribution made under this Section 15 to
holders of such Senior Debt which otherwise would have been made to the Holder
is not, as between the Guarantors and the Holder, a payment by the Guarantors on
such Senior Debt.

(f) Relative Rights. This Section 15 defines the relative rights of the Holder
and holders of Senior Debt of the Guarantors. Nothing in this Note shall:

(i) impair, as between the Guarantors and the Holder, the obligation of the
Guarantors, which is absolute and unconditional, to pay amounts guaranteed in
accordance with the terms of its Guarantee; or

(ii) prevent the Holder from exercising its available remedies upon a Default,
subject to the rights of holders of Senior Debt of the Guarantors to receive
distributions otherwise payable to the Holder.

(g) Subordination May Not Be Impaired by Guarantors. No right of any holder of
Senior Debt of the Guarantors to enforce the subordination of the Indebtedness
evidenced by this Note or pursuant to the Guarantee shall be impaired by any act
or failure to act by the Guarantors or by their failure to comply with this
Note.

 

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(h) Distribution or Notice to Representative. Whenever a distribution is to be
made or a notice given to holders of Senior Debt of the Guarantors, the
distribution may be made and the notice given to their Representative (if any).

(i) Section 15 Not to Prevent Events of Default or Limit Right to Accelerate.
The failure to make a payment pursuant to this Note or any Guarantee by reason
of any provision in this Section 15 shall not be construed as preventing the
occurrence of a Default. Nothing in this Section 15 shall have any effect on the
right of the Holder to accelerate the maturity of this Note.

(j) Reliance by Holders of Senior Debt of a Guarantor on Subordination
Provisions. The Holder by accepting this Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt of the Guarantors, whether
such Senior Debt was created or acquired before or after the issuance of this
Note, to acquire and continue to hold, or to continue to hold, such Senior Debt
and such holder of such Senior Debt shall be deemed conclusively to have relied
on such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.

Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Debt of the Guarantors may, at any time and from time to time,
without the consent of or notice to the Holder, without incurring responsibility
to the Holder and without impairing or releasing the subordination provided in
this Section 15 or the obligations hereunder of the Holder to the holders of the
Senior Debt of the Guarantors, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Debt of the Guarantors, or otherwise amend or supplement in any
manner Senior Debt of the Guarantors, or any instrument evidencing the same or
any agreement under which Senior Debt of the Guarantors is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt of the Guarantors; (iii) release any
Person liable in any manner for the payment or collection of Senior Debt of the
Guarantors; and (iv) exercise or refrain from exercising any rights against the
Guarantors and any other Person.

 

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IN WITNESS WHEREOF, the parties have caused this Note to be duly executed.

 

GRAHAM PACKAGING COMPANY, L.P., as Issuer   By: GPC OPCO GP LLC   By:  

/s/ David W. Bullock

  Name:     David W. Bullock   Title:   Chief Financial Officer GPC CAPITAL
CORP. I, as Issuer By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Director GRAHAM
PACKAGING HOLDINGS COMPANY, as Guarantor   By: BCP/Graham Holdings L.L.C., its
general partner   By:  

/s/ David W. Bullock

  Name:   David W. Bullock   Title:   Assistant Treasurer GPC SUB GP LLC, as
Guarantor By:  

/s/ David W. Bullock

Name:     David W. Bullock Title:   Chief Financial Officer GPACSUB LLC, as
Guarantor By:  

/s/ David W. Bullock

Name:     David W. Bullock Title:   Chief Financial Officer and Secretary

 

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GRAHAM PACKAGING LATIN AMERICA, LLC, as Guarantor By:  

/s/ David W. Bullock

Name:     David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING
POLAND, L.P., as Guarantor   By: GPACSUB LLC, its general partner   By:  

/s/ David W. Bullock

  Name:     David W. Bullock   Title:   Chief Financial Officer and Secretary
GRAHAM RECYCLING COMPANY, L.P., as Guarantor   By: GPC Sub GP LLC, its general
partner   By:  

/s/ David W. Bullock

  Name:   David W. Bullock   Title:   Chief Financial Officer GRAHAM PACKAGING
FRANCE PARTNERS, as Guarantor   By: Graham Packaging Company, L.P., its partner
    By: GPC Opco GP LLC, its general partner     By:  

/s/ David W. Bullock

    Name:     David W. Bullock     Title:   Chief Financial Officer

 

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GRAHAM PACKAGING WEST JORDAN, LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Secretary GRAHAM
PACKAGING ACQUISITION CORPORATION, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Director GRAHAM
PACKAGING PLASTIC PRODUCTS INC., as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Director GRAHAM
PACKAGING PET TECHNOLOGIES, INC., as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Director GRAHAM
PACKAGING REGIOPLAST STS INC., as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer, Secretary and
Director GRAHAM PACKAGING INTERNATIONAL PLASTIC PRODUCTS INC., as Guarantor By:
 

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Director

 

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GRAHAM PACKAGING LEASING USA LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING
COMERC USA LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING
CONTROLLERS USA LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING
TECHNOLOGICAL SPECIALTIES LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING
MINISTER LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Secretary GRAHAM
PACKAGING GP ACQUISITION LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer

 

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GRAHAM PACKAGING LP ACQUISITION LLC, as Guarantor By:  

/s/ David W. Bullock

Name:    David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING LC,
L.P., as Guarantor   By: Graham Packaging GP Acquisition LLC, its general
partner   By:  

/s/ David W. Bullock

  Name:    David W. Bullock   Title:   Chief Financial Officer GRAHAM PACKAGING
PX HOLDING CORPORATION, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer and Director GRAHAM
PACKAGING PX LLC, as Guarantor By:  

/s/ David W. Bullock

Name:   David W. Bullock Title:   Chief Financial Officer GRAHAM PACKAGING PX
COMPANY, as Guarantor   By: Graham Packaging PX LLC, its general partner   By:  

/s/ David W. Bullock

  Name:   David W. Bullock   Title:   Chief Financial Officer

 

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Acknowledged and agreed,

 

REYNOLDS GROUP HOLDINGS INC., as Holder By:  

/s/ Helen Dorothy Golding

Name:   Helen Dorothy Golding Title:   Secretary

 

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EXHIBIT A

FORM OF GUARANTEE SUPPLEMENT

For value received, the undersigned Guarantor (as defined in the Note referred
to below) hereby, jointly and severally with the other Guarantors,
unconditionally guarantees, to the extent set forth in, and subject to the
provisions of, the 9.875% Senior Subordinated Note due 2016 dated August 24,
2011 (the “Note”) made by Graham Packaging Company, L.P. and GPC Capital Corp.
I, as issuers (the “Issuers”) and the Guarantors listed on the signature pages
thereto to the payee referred to therein (together with its successors and
registered assigns, the “Holder”), (a) the due and punctual payment of the
principal of and interest on the Note, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of the Issuers to the
Holder all in accordance with the terms of the Note and (b) in case of any
extension of time of payment or renewal of the Note or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holder of the Note pursuant to the Guarantees (as defined in the Note) and the
Note are expressly set forth in Section 14 of the Note and reference is hereby
made to the Note for the precise terms of the Guarantee. The Holder of the Note,
by accepting the same, agrees to and shall be bound by such provisions,
including the subordination of the Guarantees as provided in Section 15 of the
Note.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the undersigned has caused this Guarantee Supplement to be
duly executed this      day of                     , 20    .

 

[                    ], as Guarantor By:  

 

Name:   Title:  

 

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