Exhibit 10.2

 

SUBSIDIARIES GUARANTY

 

SUBSIDIARIES GUARANTY, dated as of July 7, 2004 (as amended, modified or
supplemented from time to time, this “Guaranty”), made by each of the
undersigned guarantors (each a “Guarantor” and, together with any other entity
that becomes a guarantor hereunder pursuant to Section 26 hereof, the
“Guarantors”). Except as otherwise defined herein, capitalized terms used herein
and defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.

 

W I T N E S S E T H :

 

WHEREAS, BCO Holding Company, a Delaware Corporation (“Holdings”), BWAY
Corporation, a Delaware Corporation (the ”Borrower”), the lenders party thereto
from time to time (the “Lenders”), Deutsche Bank Securities Inc. and J.P. Morgan
Securities Inc., as Joint Lead Arrangers, and Deutsche Bank Trust Company
Americas, as administrative agent (together with any successor administrative
agent, the “Administrative Agent”), have entered into a Credit Agreement, dated
as of July 7, 2004 (as amended, modified or supplemented from time to time, the
“Credit Agreement”), providing for the making of Loans to, and the issuance of
Letters of Credit for the account of, the Borrower as contemplated therein (the
Lenders, the Collateral Agent, the Issuing Lenders, the Administrative Agent and
each other Agent are herein called the “Lender Creditors”);

 

WHEREAS, the Borrower and/or one or more of its Subsidiaries may at any time and
from time to time enter into one or more Interest Rate Protection Agreements
with one or more Lenders or any Affiliate thereof (each such Lender or
Affiliate, even if the respective Lender subsequently ceases to be a Lender
under the Credit Agreement for any reason, together with such Lender’s or
Affiliate’s permitted successors and assigns party to each such Interest Rate
Protection Agreement, if any, collectively, the “Other Creditors” and, together
with the Lender Creditors, the “Secured Creditors”);

 

WHEREAS, each Guarantor is a direct or indirect Domestic Subsidiary of the
Borrower;

 

WHEREAS, it is a condition to the making of Loans to, and the issuance of
Letters of Credit for the account of, the Borrower under the Credit Agreement
that each Guarantor shall have executed and delivered this Guaranty; and

 

WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans to,
and the issuance of Letters of Credit for the account of, the Borrower under the
Credit Agreement and the entering into by the Borrower and/or one or more of its
Subsidiaries of Interest

 

--------------------------------------------------------------------------------

Rate Protection Agreements with the Other Creditors and, accordingly, desires to
execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph;

 

NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to
each Guarantor, the receipt and sufficiency of which are hereby acknowledged,
each Guarantor hereby makes the following representations and warranties to the
Secured Creditors and hereby covenants and agrees with each Secured Creditor as
follows:

 

1. Each Guarantor, jointly and severally, irrevocably, absolutely and
unconditionally guarantees: (i) to the Lender Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the unpaid principal of, premium, if any, and interest on the Notes
issued by, and the Loans made to, the Borrower under the Credit Agreement, and
all reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit and (y) all other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
liabilities and indebtedness owing by the Borrower to the Lender Creditors under
the Credit Agreement and each other Credit Document to which the Borrower is a
party (including, without limitation, indemnities, Fees and interest thereon
(including, in each case, any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the Credit Agreement, whether or not such interest is an allowed claim in
any such proceeding)), whether now existing or hereafter incurred under, arising
out of, or in connection with, the Credit Agreement and each such other Credit
Document and the due performance and compliance by the Borrower with all of the
terms, conditions and agreements contained in all such Credit Documents (all
such principal, premium, interest, reimbursement obligations, Unpaid Drawings,
liabilities, indebtedness and obligations being herein collectively called the
“Credit Document Obligations”); and (ii) to each Other Creditor the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become due),
liabilities and indebtedness (including, in each case, any interest accruing
after the commencement of any bankruptcy, insolvency, receivership or similar
proceeding at the rate provided for in the respective Interest Rate Protection
Agreements, whether or not such interest is an allowed claim in any such
proceeding) owing by the Borrower and/or one or more of its Subsidiaries under
any Interest Rate Protection Agreement, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower and such
Subsidiaries with all of the terms, conditions and agreements contained in each
Interest Rate Protection Agreement to which it is a party (all such obligations,
liabilities and indebtedness being herein collectively called the “Other
Obligations” and, together with the Credit Document Obligations, the “Guaranteed
Obligations”). As used herein, the term “Guaranteed Party” shall mean the
Borrower and each Subsidiary thereof party to any Interest Rate Protection
Agreement with an Other Creditor. Each Guarantor understands, agrees and
confirms that the Secured Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations against such Guarantor without proceeding
against any other Guarantor, the Borrower, any other Guaranteed Party, against
any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations.

 

Page 2

--------------------------------------------------------------------------------

2. Additionally, each Guarantor, jointly and severally, unconditionally,
absolutely and irrevocably, guarantees the payment of any and all Guaranteed
Obligations whether or not due or payable by the Borrower or any other
Guaranteed Party upon the occurrence in respect of the Borrower or any such
other Guaranteed Party of any of the events specified in Section 10.05 of the
Credit Agreement, and unconditionally and irrevocably, jointly and severally,
promises to pay such Guaranteed Obligations to the Secured Creditors, or order,
on demand. This Guaranty shall constitute a guaranty of payment, and not of
collection.

 

3. The liability of each Guarantor hereunder is primary, absolute, joint and
several, and unconditional and is exclusive and independent of any security for
or other guaranty of the indebtedness of the Borrower or any other Guaranteed
Party, whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and each Guarantor understands and agrees, to
the fullest extent permitted under law, that the liability of each Guarantor
hereunder shall not be affected or impaired by any circumstance or occurrence
whatsoever, including, without limitation: (a) any direction as to application
of payment by the Borrower or any other Guaranteed Party or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a Guarantor or of any other party as to the Guaranteed Obligations, (c) any
payment on or in reduction of any such other guaranty or undertaking (other than
payment of the Guaranteed Obligations in cash in accordance with the terms
hereof to the extent of such payment), (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower or any other
Guaranteed Party, (e) any payment made to any Secured Creditor on the
indebtedness which any Secured Creditor repays the Borrower or any other
Guaranteed Party pursuant to court order in any bankruptcy, reorganization,
arrangement, moratorium or other debtor relief proceeding, and each Guarantor
waives any right to the deferral or modification of its obligations hereunder by
reason of any such proceeding, (f) any action or inaction by the Secured
Creditors as contemplated in Section 6 hereof or (g) any invalidity,
irregularity or unenforceability of all or any part of the Guaranteed
Obligations or of any security therefor.

 

4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor, the Borrower or any
other Guaranteed Party, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against any
other Guarantor, any other guarantor, the Borrower or any other Guaranteed Party
and whether or not any other Guarantor, any other guarantor, the Borrower or any
other Guaranteed Party be joined in any such action or actions. Each Guarantor
waives, to the fullest extent permitted by law, the benefits of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or any other Guaranteed Party or other circumstance
which operates to toll any statute of limitations as to the Borrower or any
other Guaranteed Party shall operate to toll the statute of limitations as to
each Guarantor.

 

5. To the fullest extent permitted under applicable law, each Guarantor hereby
waives notice of acceptance of this Guaranty and notice of any liability to
which it may apply, and waives promptness, diligence, presentment, demand of
payment, protest, notice of dishonor or nonpayment of any such liabilities, suit
or taking of other action by the Administrative Agent or any other Secured
Creditor against, and any other notice to, any party

 

Page 3

--------------------------------------------------------------------------------

liable thereon (including such Guarantor, any other Guarantor, any other
guarantor, the Borrower or any other Guaranteed Party).

 

6. To the fullest extent permitted under law, any Secured Creditor may at any
time and from time to time without the consent of, or notice to, any Guarantor,
without incurring responsibility to such Guarantor, without impairing or
releasing the obligations of such Guarantor hereunder, upon or without any terms
or conditions and in whole or in part:

 

(a) change the manner, place or terms of payment of, and/or change, increase or
extend the time of payment of, renew or alter, any of the Guaranteed Obligations
(including any increase or decrease in the rate of interest thereon or the
principal amount thereof), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made shall
apply to the Guaranteed Obligations as so changed, extended, renewed or altered;

 

(b) take and hold security for the payment of the Guaranteed Obligations and
sell, exchange, release, surrender, impair, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and/or any offset there against;

 

(c) exercise or refrain from exercising any rights against the Borrower, any
other Guaranteed Party, any other Credit Party, any Subsidiary thereof or
otherwise act or refrain from acting;

 

(d) release or substitute any one or more endorsers, Guarantors, other
guarantors, the Borrower, any other Guaranteed Party, or other obligors;

 

(e) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower or any other Guaranteed Party to creditors of the Borrower or such
other Guaranteed Party other than the Secured Creditors;

 

(f) except as otherwise expressly required by the Security Documents, apply any
sums by whomsoever paid or howsoever realized to any liability or liabilities of
the Borrower or any other Guaranteed Party to the Secured Creditors regardless
of what liabilities of the Borrower or such other Guaranteed Party remain
unpaid;

 

(g) consent to or waive any breach of, or any act, omission or default under,
any of the Interest Rate Protection Agreements, the Credit Documents or any of
the instruments or agreements referred to therein, or otherwise amend, modify or
supplement any of the Interest

 

Page 4

--------------------------------------------------------------------------------

Rate Protection Agreements, the Credit Documents or any of such other
instruments or agreements;

 

(h) act or fail to act in any manner which may deprive such Guarantor of its
right to subrogation against the Borrower or any other Guaranteed Party to
recover full indemnity for any payments made pursuant to this Guaranty; and/or

 

(i) take any other action which would, under otherwise applicable principles of
common law, give rise to a legal or equitable discharge of such Guarantor from
its liabilities under this Guaranty.

 

7. This Guaranty is a continuing one and all liabilities to which it applies or
may apply under the terms hereof shall be conclusively presumed to have been
created in reliance hereon. No failure or delay on the part of any Secured
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Secured Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Secured Creditor to any other or further action in any circumstances
without notice or demand. It is not necessary for any Secured Creditor to
inquire into the capacity or powers of the Borrower or any other Guaranteed
Party or the officers, directors, partners or agents acting or purporting to act
on its or their behalf, and any indebtedness made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.

 

8. Any indebtedness of the Borrower or any other Guaranteed Party now or
hereafter owing to any Guarantor is hereby subordinated to the Guaranteed
Obligations of the Borrower or such other Guaranteed Party to the Secured
Creditors, and such Guaranteed Obligations of the Borrower or such other
Guaranteed Party to any Guarantor, if the Administrative Agent or the Collateral
Agent, after the occurrence and during the continuance of an Event of Default,
so requests, shall be collected, enforced and received by such Guarantor as
trustee for the Secured Creditors and be paid over to the Secured Creditors on
account of the Guaranteed Obligations of the Borrower or the other Guaranteed
Parties to the Secured Creditors, but without affecting or impairing in any
manner the liability of such Guarantor under the other provisions of this
Guaranty. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.

 

9. (a) Each Guarantor waives any right (except as shall be required by
applicable law and cannot be waived) to require the Secured Creditors to: (i)
proceed against the Borrower, any other Guaranteed Party, any other Guarantor,
any other guarantor of the

 

Page 5

--------------------------------------------------------------------------------

Guaranteed Obligations or any other party; (ii) proceed against or exhaust any
security held from the Borrower, any other Guaranteed Party, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party;
or (iii) pursue any other remedy in the Secured Creditors’ power whatsoever.
Each Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party other than payment in full in
cash of the Guaranteed Obligations, including, without limitation, any defense
based on or arising out of the disability of the Borrower, any other Guaranteed
Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or
any other party, or the unenforceability of the Guaranteed Obligations or any
part thereof from any cause, or the cessation from any cause of the liability of
the Borrower or any other Guaranteed Party other than payment in full in cash of
the Guaranteed Obligations. The Secured Creditors may, at their election,
foreclose on any security held by the Administrative Agent, the Collateral Agent
or the other Secured Creditors by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable, or
exercise any other right or remedy the Secured Creditors may have against the
Borrower, any other Guaranteed Party or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in full
in cash. Each Guarantor waives, to the fullest extent permitted under law, any
defense arising out of any such election by the Secured Creditors, even though
such election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower, any
other Guaranteed Party or any other party or any security.

 

(b) Each Guarantor waives, to the fullest extent permitted under law, all
presentments, demands for performance, protests and notices, including, without
limitation, notices of nonperformance, notices of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence, creation
or incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower’s and each
other Guaranteed Party’s financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks which such Guarantor assumes and
incurs hereunder, and agrees that the Secured Creditors shall have no duty to
advise any Guarantor of information known to them regarding such circumstances
or risks.

 

10. The Secured Creditors agree that this Guaranty may be enforced only by the
action of the Administrative Agent or the Collateral Agent, in each case acting
upon the instructions of the Required Lenders (or, after the date on which all
Credit Document Obligations have been paid in full, the holders of at least a
majority of the outstanding Other Obligations) and that no other Secured
Creditors shall have any right individually to seek to enforce or to enforce
this Guaranty, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Collateral Agent or, after all
the Credit Document Obligations have been paid in full, by the holders of at
least a majority of the outstanding Other Obligations, as the case may be, for
the benefit of the Secured Creditors upon the terms of this Guaranty. The
Secured Creditors further agree that this Guaranty may not be enforced against
any director, officer, employee, partner, member or stockholder of any Guarantor
(except to the extent such partner, member or stockholder is also a Guarantor
hereunder).

 

Page 6

--------------------------------------------------------------------------------

11. In order to induce the Lenders to make Loans to, and issue Letters of Credit
for the account of, the Borrower pursuant to the Credit Agreement, and in order
to induce the Other Creditors to execute, deliver and perform the Interest Rate
Protection Agreements, each Guarantor represents, warrants and covenants that:

 

(a) Such Guarantor (i) is a duly organized and validly existing corporation,
partnership or limited liability company, as the case may be, in good standing
under the laws of the jurisdiction of its organization, (ii) has the corporate,
partnership or limited liability company power and authority, as the case may
be, to own its property and assets and to transact the business in which it is
engaged and presently proposes to engage and (iii) is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the
conduct of its business requires such qualification except for failures to be so
qualified which, either individually or in the aggregate, has not had, and would
not reasonably be expected to have, a Material Adverse Effect.

 

(b) Such Guarantor has the corporate, partnership or limited liability company
power and authority, as the case may be, to execute, deliver and perform the
terms and provisions of this Guaranty and each other Credit Document to which it
is a party and has taken all necessary corporate, partnership or limited
liability company action, as the case may be, to authorize the execution,
delivery and performance by it of this Guaranty and each such other Credit
Document. Such Guarantor has duly executed and delivered this Guaranty and each
other Credit Document to which it is a party, and this Guaranty and each such
other Credit Document constitutes the legal, valid and binding obligation of
such Guarantor enforceable in accordance with its terms, except to the extent
that the enforceability hereof or thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors’ rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).

 

(c) Neither the execution, delivery or performance by such Guarantor of this
Guaranty or any other Credit Document to which it is a party, nor compliance by
it with the terms and provisions hereof and thereof, will (i) contravene any
provision of any applicable law, statute, rule or regulation or any applicable
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the property or assets
of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement, or any
other material agreement, contract or instrument to which such Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject (except other than in the case of any
conflict with, breach of or default under any Credit Document, if such conflict
with, breach of or default under, has not had or would not be reasonably
expected to have a Material Adverse Effect) or (iii) violate any provision of
the certificate or articles of incorporation or by-laws (or equivalent
organizational documents) of such Guarantor or any of its Subsidiaries.

 

Page 7

--------------------------------------------------------------------------------

(d) No material order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, the execution, delivery and performance of this Guaranty by such Guarantor
or any other Credit Document to which such Guarantor is a party.

 

(e) There are no actions, suits or proceedings pending or, to such Guarantor’s
knowledge, threatened (i) with respect to this Guaranty or any other Credit
Document to which such Guarantor is a party or (ii) with respect to such
Guarantor or any of its Subsidiaries that, either individually or in the
aggregate, has had, or would reasonably be expected to have, a Material Adverse
Effect.

 

12. Each Guarantor covenants and agrees that on and after the Effective Date and
until the termination of the Total Commitment and all Interest Rate Protection
Agreements entered into with the Other Creditors and until such time as no Note
or Letter of Credit remains outstanding and all Guaranteed Obligations have been
paid in full, such Guarantor will comply, and will cause each of its
Subsidiaries to comply, with all of the applicable provisions, covenants and
agreements contained in Sections 8 and 9 of the Credit Agreement, and will take,
or will refrain from taking, as the case may be, all actions that are necessary
to be taken or not taken so that it is not in violation of any provision,
covenant or agreement contained in Section 8 or 9 of the Credit Agreement, and
so that no Default or Event of Default is caused by the actions of such
Guarantor or any of its Subsidiaries.

 

13. The Guarantors hereby jointly and severally agree to pay all reasonable
out-of-pocket costs and expenses of each Secured Creditor in connection with the
enforcement of this Guaranty (including, without limitation, the reasonable fees
and disbursements of counsel employed by each of the Secured Creditors) and of
the Administrative Agent and Syndication Agent in connection with any amendment,
waiver or consent relating hereto (including, without limitation, the reasonable
fees and disbursements of counsel employed by each of the Agents).

 

14. This Guaranty shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the Secured Creditors and their
successors and assigns.

 

15. Neither this Guaranty nor any provision hereof may be changed, waived,
discharged or terminated except with the written consent of each Guarantor
directly affected thereby and with the written consent of either (x) the
Required Lenders (or, to the extent required by Section 13.12 of the Credit
Agreement, with the written consent of each Lender) at all times prior to the
time on which all Credit Document Obligations have been paid in full or (y) the
holders of at least a majority of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations have been paid in full;
provided, that any change, waiver, modification or variance affecting the rights
and benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall also require the
written consent of the Requisite Creditors (as defined below) of such Class of

 

Page 8

--------------------------------------------------------------------------------

Secured Creditors (it being understood that the addition or release of any
Guarantor hereunder in accordance with the terms hereof or the Credit Agreement
shall not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released and shall not require
the consent of any Secured Creditor other than the Administrative Agent). For
the purpose of this Guaranty, the term “Class” shall mean each class of Secured
Creditors, i.e., whether (x) the Lender Creditors as holders of the Credit
Document Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Guaranty, the term “Requisite Creditors” of
any Class shall mean (x) with respect to the Credit Document Obligations, the
Required Lenders (or, to the extent required by Section 13.12 of the Credit
Agreement, each Lender) and (y) with respect to the Other Obligations, the
holders of at least a majority of all obligations outstanding from time to time
under the Interest Rate Protection Agreements.

 

16. Each Guarantor acknowledges that an executed (or conformed) copy of each of
the Credit Documents and Interest Rate Protection Agreements has been made
available to a senior officer of such Guarantor and such officer is familiar
with the contents thereof.

 

17. In addition to any rights now or hereafter granted under applicable law
(including, without limitation, Section 151 of the New York Debtor and Secured
Creditor Law) and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default (such term to mean
and include any “Event of Default” as defined in the Credit Agreement and any
payment default under any Interest Rate Protection Agreement continuing after
any applicable grace period), each Secured Creditor is hereby authorized, at any
time or from time to time, without notice to any Guarantor or to any other
Person, any such notice being expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other indebtedness
at any time held or owing by such Secured Creditor to or for the credit or the
account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Secured Creditor under this Guaranty,
irrespective of whether or not such Secured Creditor shall have made any demand
hereunder and although said obligations, liabilities, deposits or claims, or any
of them, shall be contingent or unmatured.

 

18. All notices, requests, demands or other communications pursuant hereto shall
be sent or delivered by mail, telegraph, telex, telecopy, cable or courier
service and all such notices and communications shall, when mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, be effective when
deposited in the mails, delivered to the telegraph company, cable company or
overnight courier, as the case may be, or sent by telex or telecopier, except
that notices and communications to the Administrative Agent or any Guarantor
shall not be effective until received by the Administrative Agent or such
Guarantor, as the case may be. All notices and other communications shall be in
writing and addressed to such party at (i) in the case of any Lender Creditor,
as provided in the Credit Agreement, (ii) in the case of any Guarantor, at: BWAY
Corporation, 8607 Roberts Drive, Suite 250, Atlanta, Georgia 30350, Attention:
Jeff O’Connell, Telephone No.: 770-645-4800, Telecopier No.: 770-645-4810, and
(iii) in the case of any Other Creditor, at such address as such Other Creditor
shall have specified in writing to the Borrower and the Administrative Agent; or
in any case at such other address as any of the Persons listed above may
hereafter notify the others in writing.

 

Page 9

--------------------------------------------------------------------------------

19. If claim is ever made upon any Secured Creditor for repayment or recovery of
any amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower or any other Guaranteed Party) then and in such
event each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or other instrument evidencing any liability of the Borrower or any other
Guaranteed Party, and such Guarantor shall be and remain liable to the aforesaid
payees hereunder for the amount so repaid or recovered to the same extent as if
such amount had never originally been received by any such payee.

 

20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which any
Guarantor is a party may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York in each case
which are located in the County of New York, and, by execution and delivery of
this Guaranty, each Guarantor and each Secured Creditor (by its acceptance of
the benefits of this Guaranty) hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each Guarantor and each Secured Creditor (by its acceptance of
the benefits of this Guaranty) hereby further irrevocably waives any claim that
any such court lacks personal jurisdiction over it, and agrees not to plead or
claim in any legal action or proceeding with respect to this Guaranty or any
other Credit Document to which it is a party brought in any of the aforesaid
courts that any such court lacks personal jurisdiction over such Guarantor. Each
Guarantor and each Secured Creditor (by its acceptance of the benefits of this
Guaranty) further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party
at its address set forth in Section 18 hereof, such service to become effective
30 days after such mailing. Each Guarantor and each Secured Creditor (by its
acceptance of the benefits of this Guaranty) hereby irrevocably waives any
objection to such service of process and further irrevocably waives and agrees
not to plead or claim in any action or proceeding commenced hereunder or under
any other Credit Document to which it is a party that such service of process
was in any way invalid or ineffective. Nothing herein shall affect the right of
any such party to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any other party in any
other jurisdiction.

 

(b) Each Guarantor and each Secured Party (by its acceptance of the benefits of
this Guaranty) hereby irrevocably waives (to the fullest extent permitted by
applicable law) any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty or any other Credit Document to which such
Guarantor is a party brought in the courts referred to in clause (a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that such action or proceeding brought in any such court has been brought
in an inconvenient forum.

 

Page 10

--------------------------------------------------------------------------------

(c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS
OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY,
THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

21. In the event that all of the capital stock of a Guarantor is sold or
otherwise disposed of or liquidated in compliance with the requirements of
Section 9.02 of the Credit Agreement (or such sale or other disposition has been
approved in writing by the Required Lenders (or all the Lenders if required by
Section 13.12 of the Credit Agreement)) and the proceeds of such sale,
disposition or liquidation are applied in accordance with the provisions of the
Credit Agreement, to the extent applicable, such Guarantor shall upon
consummation of such sale or other disposition (except to the extent that such
sale or disposition is to Holdings or another Subsidiary thereof) be released
from this Guaranty automatically and without further action and this Guaranty
shall, as to each such Guarantor, terminate, and have no further force or effect
(it being understood and agreed that the sale of one or more Persons that own,
directly or indirectly, all of the capital stock of any Guarantor shall be
deemed to be a sale of such Guarantor for the purposes of this Section 21).

 

22. At any time a payment in respect of the Guaranteed Obligations is made under
this Guaranty, the right of contribution of each Guarantor against each other
Guarantor shall be determined as provided in the immediately following sentence,
with the right of contribution of each Guarantor to be revised and restated as
of each date on which a payment (a “Relevant Payment”) is made on the Guaranteed
Obligations under this Guaranty. At any time that a Relevant Payment is made by
a Guarantor that results in the aggregate payments made by such Guarantor in
respect of the Guaranteed Obligations to and including the date of the Relevant
Payment exceeding such Guarantor’s Contribution Percentage (as defined below) of
the aggregate payments made by all Guarantors in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment (such excess, the
“Aggregate Excess Amount”), each such Guarantor shall have a right of
contribution against each other Guarantor who has made payments in respect of
the Guaranteed Obligations to and including the date of the Relevant Payment in
an aggregate amount less than such other Guarantor’s Contribution Percentage of
the aggregate payments made to and including the date of the Relevant Payment by
all Guarantors in respect of the Guaranteed Obligations (the aggregate amount of
such deficit, the “Aggregate Deficit Amount”) in an amount equal to (x) a
fraction the numerator of which is the Aggregate Excess Amount of such Guarantor
and the denominator of which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A
Guarantor’s right of contribution pursuant to the preceding sentences shall
arise at the time of each computation, subject to adjustment to the time of each
computation; provided that no Guarantor may take any action to enforce such
right until the Guaranteed Obligations have been irrevocably paid in full in
cash, it being expressly recognized and agreed by all parties hereto that any
Guarantor’s right of contribution arising pursuant to this Section 22 against
any other Guarantor shall be expressly junior and subordinate to such other
Guarantor’s obligations and liabilities in respect of the Guaranteed Obligations
and any other obligations owing under this Guaranty. As used in this Section 22:
(i) each Guarantor’s “Contribution Percentage” shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth (as defined below) of such

 

Page 11

--------------------------------------------------------------------------------

Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the
“Adjusted Net Worth” of each Guarantor shall mean the greater of (x) the Net
Worth (as defined below) of such Guarantor and (y) zero; and (iii) the “Net
Worth” of each Guarantor shall mean the amount by which the fair saleable value
of such Guarantor’s assets on the date of any Relevant Payment exceeds its
existing debts and other liabilities (including contingent liabilities, but
without giving effect to any Guaranteed Obligations arising under this Guaranty
or any guaranteed obligations arising under any guaranty of the Subordinated
Notes) on such date. Notwithstanding anything to the contrary contained above,
any Guarantor that is released from this Guaranty shall thereafter have no
contribution obligations, or rights, pursuant to this Section 22, and at the
time of any such release, if the released Guarantor had an Aggregate Excess
Amount or an Aggregate Deficit Amount, same shall be deemed reduced to $0, and
the contribution rights and obligations of the remaining Guarantors shall be
recalculated on the respective date of release (as otherwise provided above)
based on the payments made hereunder by the remaining Guarantors. All parties
hereto recognize and agree that, except for any right of contribution arising
pursuant to this Section 22, each Guarantor who makes any payment in respect of
the Guaranteed Obligations shall have no right of contribution or subrogation
against any other Guarantor in respect of such payment until all of the
Guaranteed Obligations have been irrevocably paid in full in cash. Each of the
Guarantors recognizes and acknowledges that the rights to contribution arising
hereunder shall constitute an asset in favor of the party entitled to such
contribution. In this connection, each Guarantor has the right to waive its
contribution right against any Guarantor to the extent that after giving effect
to such waiver such Guarantor would remain solvent, in the reasonable
determination of the Required Lenders.

 

23. Each Guarantor and each Secured Creditor (by its acceptance of the benefits
of this Guaranty) hereby confirms that it is its intention that this Guaranty
not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or
state law. To effectuate the foregoing intention, each Guarantor and each
Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby
irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor
shall be limited to such amount as will, after giving effect to such maximum
amount and all other (contingent or otherwise) liabilities of such Guarantor
that are relevant under such laws (it being understood that, to the extent
relevant under such laws, the subordination provisions contained in the
Subordinated Notes will be given effect to and therefore any outstanding
Subordinated Notes would be excluded for purposes of making any determination of
such maximum amount) and after giving effect to any rights to contribution
pursuant to any agreement providing for an equitable contribution among such
Guarantor and the other Guarantors, result in the Guaranteed Obligations of such
Guarantor in respect of such maximum amount not constituting a fraudulent
transfer or conveyance.

 

24. This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.

 

Page 12

--------------------------------------------------------------------------------

25. All payments made by any Guarantor hereunder will be made without setoff,
counterclaim or other defense (other than payment in cash of such Guaranteed
Obligations made in accordance with the terms of this Guaranty) and on the same
basis as payments are made by the Borrower under Sections 4.03 and 4.04 of the
Credit Agreement.

 

26. It is understood and agreed that any Subsidiary of Holdings that is required
to become a party to this Guaranty after the date hereof pursuant to the
requirements of the Credit Agreement or any other Credit Document, shall become
a Guarantor hereunder by (x) executing and delivering a counterpart hereof, or a
joinder agreement in form satisfactory to the Administrative Agent, and
delivering same to the Administrative Agent and (y) taking all actions as
specified in this Guaranty as would have been taken by such Guarantor had it
been an original party to this Guaranty, in each case with all documents
required by the Credit Documents to be delivered to the Administrative Agent and
with all documents and actions required by the Credit Documents to be taken to
the reasonable satisfaction of the Administrative Agent.

 

*             *             *

 

Page 13

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and
delivered as of the date first above written.

 

ARMSTRONG CONTAINERS, INC.,
as a Guarantor By:  

/s/ J. M. O’Connell

   

Name: Jeff O’Connell

   

Title: Vice President/Secretary

SC PLASTICS, LLC,
as a Guarantor By:  

/s/ J. M. O’Connell

   

Name: Jeff O’Connell

   

Title: Vice President/Secretary

NORTH AMERICA PACKAGING CORPORATION,
as a Guarantor By:  

/s/ J. M. O’Connell

   

Name: Jeff O’Connell

   

Title: Vice President/Secretary

NORTH AMERICA PACKAGING OF PUERTO RICO, INC.,
as a Guarantor By:  

/s/ J. M. O’Connell

   

Name: Jeff O’Connell

   

Title: Vice President/Secretary

 

--------------------------------------------------------------------------------

Accepted and Agreed to:

 

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent

By:  

/s/ Albert Fischetti

   

Name: Albert Fischetti

   

Title: Director