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                                  EXHIBIT 10.2
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                                WAIVER AGREEMENT

                  Waiver Agreement (this "Agreement"), dated as of September 30,
1996, by and among Kerr Group, Inc., a Delaware corporation (the "Company"), PNC
Bank, National Association ("PNC"), John Hancock Mutual Life Insurance Company
("John Hancock"), New York Life Insurance Company ("New York Life"),
Massachusetts Mutual Life Insurance Company ("Massachusetts Mutual"),
Massmutual/Carlson CBO, N.V. ("Massmutual" and, together with John Hancock, New
York Life and Massachusetts Mutual, the "Note Purchasers"), and The First
National Bank of Boston ("Bank of Boston" and, together with PNC and the Note
Purchasers, the "Lenders").

                                R E C I T A L S:

                  WHEREAS, PNC and the Company entered into that certain
Receivables Purchase Agreement, dated as of January 1, 1995 (as amended, the
"Receivables Purchase Agreement"); and

                  WHEREAS, the Note Purchasers (or their predecessors in
interest) and the Company entered into certain Note Agreements, each dated as of
September 15, 1993, providing for the issuance and sale of $41,000,000 aggregate
principal amount of the Company's 9.45% Series A Senior Notes due September 15,
2003 (the "Series A Senior Notes")and $9,000,000 aggregate principal amount of
the Company's 8.99% Series B Senior Notes due September 15, 1999 (collectively
with the Series A Senior Notes, the "Senior Notes")(as amended, the "Note
Agreements"); and

                  WHEREAS, Bank of Boston and the Company entered into that
certain Letter Agreement, dated February 9, 1995 pursuant to which Bank of
Boston extended certain financial accommodations to the Company, including a
loan in the maximum principal amount of $10,000,000 evidenced by a promissory
note dated February 1, 1995 to Bank of Boston in the original principal amount
of $10,000,000 (collectively, the "Letter Agreement"); and

                  WHEREAS, Bank of Boston and the Company further entered into
that certain Amended and Restated Loan and Security Agreement, dated as of
January 5, 1996, pursuant to which Bank of Boston amended and restated the
financial accommodations extended to the Company under the Letter Agreement,
which are presently evidenced by an amended and restated commercial promissory
note dated January 5, 1996 to Bank of Boston in the original principal amount of
$10,000,000 (collectively, the "Restated Loan Agreement"); and

                  WHEREAS, pursuant to a certain Agreement, dated as of January
5, 1996 (the "January Consent"), PNC waived certain provisions of the
Receivables Purchase Agreement, the Note Purchasers waived certain provisions of
the Note Agreements and Bank of Boston waived certain provisions of the Letter
Agreement; and
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                  WHEREAS, pursuant to a certain Amendment Agreement, dated as
of January 5, 1996 (the "Amendment Agreement"), the Note Purchasers and the
Company amended certain provisions of the Note Agreements; and

                  WHEREAS, in consideration of Bank of Boston entering into the
Restated Loan Agreement, the Company granted to Bank of Boston liens on and
security interests in certain of its assets, which liens and security interests
were consented to by PNC and the Note Purchasers in accordance with the terms of
the January Consent; and

                  WHEREAS, in further consideration of Bank of Boston entering
into the Restated Loan Agreement, Santa Fe Plastics Corporation, a California
corporation ("Santa Fe"), executed and delivered to Bank of Boston a Continuing
Guaranty, dated as of January 5, 1996 (the "Santa Fe Guaranty"), pursuant to
which Santa Fe guaranteed the payment of the Additional Obligations (as such
term is defined in the Restated Loan Agreement) to Bank of Boston; and

                  WHEREAS, on March 15, 1996, the Company sold to Alltrista
Corporation, an Indiana corporation ("Alltrista"), substantially all of its
equipment, contract rights (other than those relating to the sale of finished
home canning inventory), trademarks, and licenses used by Kerr in its consumer
products/home canning business, and retained Alltrista as its sales agent for
its finished home canning inventory (the "Alltrista Transaction"); and

                  WHEREAS, in connection with the Alltrista Transaction,
pursuant to a certain Agreement dated as of March 15, 1996 (the "March
Consent"), PNC agreed to waive certain provisions, and to amend certain other
provisions, of the Receivables Purchase Agreement, the Note Purchasers agreed to
waive certain provisions of the Note Agreements, and Bank of Boston agreed to
waive certain provisions, and to amend certain other provisions, of the Restated
Loan Agreement, such waivers having been extended by subsequent agreements,
dated, respectively, as of May 15, 1996 (the "May Consent"), as of June 10, 1996
(the "June Consent"), as of July 1, 1996 (the "July Consent"), as of July 31,
1996 (the "August Consent"), and as of August 30, 1996 (the "September Consent,"
and collectively with the January Consent, the March Consent, the May Consent,
the June Consent, the July Consent, and the August Consent, the "Consents"), to
and including September 30, 1996; and

                  WHEREAS, the Company now further requests that PNC waive
certain provisions of the Receivables Purchase Agreement, the Note Purchasers
waive certain provisions of the Note Agreements, and Bank of Boston waive
certain provisions, and amend certain other provisions, of the Restated Loan
Agreement; and


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                  WHEREAS, the Note Purchasers and the Bank of Boston have
reached an agreement in principal (subject to negotiation of definitive
documentation) to restructure (the "Restructuring") the existing indebtedness of
the Company to such Lenders on the terms set forth on Exhibit A attached hereto.

                  NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:

                  SECTION 1.  Waiver.

                  Subject to the further provisions of this Agreement:

                  (a) the Note Purchasers (i) waive from and including March 30,
1996 through and including December 9, 1996 any Default or Event of Default
(each as defined in the Note Agreements) solely arising out of the Company's
failure to comply with the provisions of Section 10.1 or 10.9 of the Note
Agreements, (ii) waive from and including March 1, 1996 through and including
December 9, 1996 any Default or Event of Default solely arising out of the
Company's failure to comply with the provisions of Section 10.8 or 10.16 of the
Note Agreements, and (iii) waive from and including September 30, 1996 any
Default or Event of Default solely arising out of the Company's failure to pay
the September Interest (as defined in Section 3(a) hereof) to Bank of Boston and
the Note Purchasers on September 30, 1996;

                  (b) PNC (i) waives from and including March 30, 1996 through
and including December 9, 1996 any default or Termination Event (each as defined
in the Receivables Purchase Agreement) solely arising out of the Company's
failure to comply with Section 10.1 or 10.9 of the Note Agreements, including
without limitation any default or Termination Event arising under Section 6.17
of the Receivables Purchase Agreement to the extent such default or Termination
Event solely relates to Section 10.1 or 10.9 of the Note Agreements, (ii) waives
from and including March 1, 1996 through and including December 9, 1996 any
default or Termination Event solely arising out of the Company's failure to
comply with Section 10.8 or 10.16 of the Note Agreements, including without
limitation any default or Termination Event arising under Section 6.17 of the
Receivables Purchase Agreement to the extent such default or Termination Event
solely relates to Section 10.8 or 10.16 of the Note Agreements, and (iii) waives
from and including September 30, any default or Termination Event solely arising
out of the Company's failure to pay the September Interest to Bank of Boston and
the Note Purchasers on September 30, 1996; and

                  (c) Bank of Boston (i) waives from and including March 30,
1996 through and including December 9, 1996 any default or Event of Default
(each as defined in the Restated Loan Agreement) solely arising out of the
Company's failure to comply with


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Section 10.1 or 10.9 of the Note Agreements, (ii) waives from and including
March 1, 1996 through and including December 9, 1996 any default or Event of
Default solely arising out of the Company's failure to comply with Section 10.8
or 10.16 of the Note Agreements, and (iii) waives from and including September
30, 1996 any default or Event of Default solely arising out of the Company's
failure to pay the September Interest to Bank of Boston and the Note Purchasers
on September 30, 1996.

                  SECTION 2.  Amendment to Restated Loan Agreement.

                  (a) Amendment to Restated Loan Agreement. Bank of Boston and
the Company hereby agree that the definition of "Maturity Date" in the Restated
Loan Agreement is amended by deleting "September 30, 1996" and inserting
therefor "December 9, 1996."

                  (b) Amendment to Receivables Purchase Agreement. PNC and the
Company hereby agree that the term "Maximum Purchaser's Net Investment" set
forth in Section 1.1 of the Receivables Purchase Agreement is amended and
restated to read as follows:

                  "Maximum Purchaser's Net Investment" means $8,500,000.00

                  SECTION 3.  Conditions to Waiver.

                  (a) Payments. The Company will pay to Bank of Boston and the
Note Purchasers the interest due to them respectively under the terms of the
Restated Loan Agreement and the Note Agreements on September 30, 1996 (the
"September Interest"), which payment shall be made in immediately available
funds on or before the third business day following the date on which this
Agreement shall have been executed and delivered by all parties hereto.

                  (b) Default under this Section. Notwithstanding the provisions
of Section 1 hereof, if the Company fails to make the payments to Bank of Boston
and the Note Purchasers, respectively, due under the terms of clause (a) of this
Section 3 and Section 5 or if the Company is advised by The CIT Group that it
will not be able to complete a financing prior to December 9, 1996 on
substantially the terms set forth in the CIT Commitment Letter (as defined
below) as modified to permit the Restructuring, the consents, waivers and
amendments granted and agreed to in this Agreement shall immediately be revoked,
and this Agreement shall immediately terminate without further notice to the
Company and shall have no further force or effect.

                  (c) Between the date hereof and December 9, 1996 the Company
shall use best efforts to complete a financing with The CIT Group on
substantially the terms set forth in the commitment letter dated August 28, 1996
(the "CIT Commitment Letter") as modified to permit the Restructuring.


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                 SECTION 4.  Representations, Warranties and Covenants.

                  (a) Corporate Power and Authority. Each party hereto
represents that it has all requisite corporate power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of each such party.

                  (b) Compliance with Other Instruments, etc. The Company
represents that the consummation of the transactions contemplated by this
Agreement will not result in any breach of, or constitute a default under, or
result in the creation of any mortgage, lien, pledge, charge, security interest
or other encumbrance in respect of any property of the Company under, any
indenture, mortgage, deed of trust, bank loan or credit agreement, corporate
charter, by-law, or other agreement or instrument to which the Company is a
party or by which the Company or any of its properties may be bound or affected,
or violate any existing law, governmental rule or regulations, or any order of
any court, arbitrator or governmental body, applicable to the Company or any of
its properties.

                  (c) Governmental Consent. The Company represents that no
consent, approval or authorization of, or registration, filing or declaration
with, any governmental authority is required for the validity of the execution
and delivery by the Company of this Agreement or the consummation of the
transactions contemplated hereby or thereby.

                  (d) Principal Payments. The Company covenants, and each of the
Note Purchasers and Bank of Boston hereby agree, that until December 9, 1996,
the Company shall not (unless each of the Note Purchasers and Bank of Boston
jointly give notice to the Company to the contrary) make any payments in
addition to those required by Section 3 hereof on the outstanding principal
amounts of the obligations under the Note Agreements and the Restated Loan
Agreement (whether by regularly scheduled payment or mandatory or optional
prepayment).

                  (e) Dividends. The Company shall not declare or pay any
dividends on its preferred stock on or before December 9, 1996.

                  SECTION 5. Expenses. Without limiting the generality of any
provision of the Receivables Purchase Agreement (as amended), the Note
Agreements (each as amended), the Letter Agreement, the Restated Loan Agreement
(as amended) or the Letter Agreement, dated April 12, 1996, among Nightingale &
Associates, Inc., the Note Purchasers and Bank of Boston, the Company agrees
that it will pay the reasonable fees, expenses and client charges of counsel for
each of the Lenders and of Nightingale & Associates, Inc., for any services
rendered in connection with the transactions contemplated hereby and with
respect to this


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Agreement and any other document delivered pursuant to this Agreement, and the
Company further agrees that it will hereafter promptly pay any additional
reasonable fees, expenses and client charges of counsel for the Lenders, for any
services rendered in connection with the transactions contemplated hereby and
with respect to this Agreement and any other document delivered pursuant to this
Agreement.

                  SECTION 6. Effectiveness. This Agreement shall become
effective upon the delivery to the Company of a copy of this Agreement executed
by each of the Lenders.

                  SECTION 7. Counterparts; Separate Agreements. This Agreement
may be executed simultaneously in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

                  SECTION 8. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to conflicts of law principles.

                  SECTION 9. Headings. The headings of the several sections of
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of this Agreement.

                  SECTION 10. No Other Changes. (a) Except as expressly stated
herein, the Receivables Purchase Agreement (as amended), the Note Agreements
(each as amended), the Restated Loan Agreement (as amended), and the Consents
are unaffected hereby and shall remain in full force and effect in accordance
with the respective terms thereof.

                  (b) Except as expressly set forth herein, the Lenders do not
waive (i) any breaches or defaults under the Note Agreements (each as amended),
the Receivables Purchase Agreement (as amended), the Restated Loan Agreement (as
amended), or any of the Consents, as the case may be, or any other agreements
executed concurrently therewith or pursuant thereto, whether known or unknown,
previously or hereafter arising, or of any nature or character whatsoever, or
(ii) any of their respective rights or remedies thereunder or under applicable
law, including (but not limited to) any Make-Whole Premium (as such term is
defined in the Note Agreements) to which the Note Purchasers may be entitled
pursuant to the terms of Section 9 of the Note Agreements on account of the
payments due under the terms of (A) Section 4(a) and Schedule 1 to the March
Consent, (B) Section 3 and Schedule 1 to the June Consent, (C) Section 3 and
Schedule 1 to the July Consent, (D) Section 3 and Schedule 1 to the August
Consent, and (E) Section 3 hereof and Schedule 1 to the September Consent.



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                  SECTION 11. Reaffirmation. The Company hereby represents and
warrants to the applicable Lender that each of the representations and
warranties contained in the Restated Loan Agreement, the Note Agreements or the
Receivables Purchase Agreement, as the case may be, were true and correct in all
material respects when made and, except to the extent (a) that a particular
representation or warranty by its terms expressly applies only to an earlier
date, or (b) the Company has previously advised such Lender in writing as
contemplated under the respective agreement, are true and correct in all
material respects as of the date of this Agreement.


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                  SECTION 12. Conflict of Terms. In the event of any
inconsistency between the provisions of this Agreement and any provision of the
Note Agreements (each as amended), the Receivables Purchase Agreement (as
amended), the Letter Agreement or the Restated Loan Agreement (as amended), as
the case may be, the terms and provisions of this Agreement shall govern and
control.





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                  IN WITNESS WHEREOF, the parties hereto have signed, or caused
their duly elected officer to sign on the date first written above.

                                          KERR GROUP, INC.


                                          By: /s/ D. G. Strickland
                                              --------------------------------
                                              D. G. Strickland


                                          PNC BANK, NATIONAL ASSOCIATION


                                          By: /s/ Tom McCool
                                              --------------------------------
                                              Senior Vice President


                                          JOHN HANCOCK MUTUAL LIFE
                                            INSURANCE COMPANY


                                          By: /s/ Stephen J. Blewitt
                                              --------------------------------
                                              Stephen J. Blewitt


                                          NEW YORK LIFE INSURANCE
                                            COMPANY


                                          By:  /s/ Karen A. Hiniker
                                              --------------------------------
                                              Karen A. Hiniker


                                          MASSACHUSETTS MUTUAL LIFE
                                            INSURANCE COMPANY


                                          By: /s/ Michael I. Hanson
                                              --------------------------------
                                              Michael I. Hanson
                                              Managing Director


                                          MASSMUTUAL/CARLSON
                                            CBO, N.V.


                                              /s/ Ruby Cato
                                          By: MEESPIERSON TRUST (CURACAO) N.V.
                                              --------------------------------
                                              Ruby Cato
                                              Managing Director


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                                          THE FIRST NATIONAL BANK OF
                                            BOSTON


                                          By: /s/ W. Douglas Vannah, V.P.
                                              --------------------------------
                                              W. Douglas Vannah, V.P.
<PAGE>   12
                                    EXHIBIT A


                                KERR GROUP, INC.

                         MODIFIED RESTRUCTURING PROPOSAL

ASSUMPTIONS

    -   New CIT Credit Facility provides $10mm immediate borrowing ability, pays
        off PNC Line

    -   New CIT Credit Facility provides $29.3 mm net cash for debt paydown

    -   Existing Sr. Notes and Bank of Boston claims exchanged for cash and new
        Secured Subordinated Notes and Convertible Preferred Stock which shall
        be shared by the Noteholders and Bank of Boston on a pro rata basis
        based upon the respective principal amount of their notes/loans
        outstanding at the closing and shall be evidenced by separate debt and
        equity instruments for each lender

RESTRUCTURING PROPOSAL

    -   $50.9 mm principal of Unsecured Debt Exchanged for:

    1.  Cash in the amount of $29.3 mm

    2.  Secured Subordinated Notes (subordinated only to CIT credit facility and
        permitted refinancings thereof which are not in excess of the then
        outstanding principal amount of the CIT credit facility)

        -   New Secured Subordinated Notes of $12 mm

        -   "Silent" second lien on all CIT collateral (including after acquired
            and replacement collateral)

        -   Interest at 10%, payable quarterly, in arrears (PIK option for first
            three years)

        -   Amortization as follows: $2 mm in year 5, balance due in equal
            installments in years 6, 7 and 8
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        -   Pre-payable without penalty at any time

        -   Cross acceleration with CIT loan documents

        -   No dividends or distributions of any kind (including distributions
            of any equity securities) to be permitted on preferred or common
            stock until Secured Subordinated Notes are paid in full except that
            (i) the existing public preferred stock may continue to accrue
            dividends in accordance with their terms and (ii) the Company may
            redeem the existing public preferred stock in exchange for either
            (but not both of) common stock or new preferred stock having terms
            no more advantageous to the holders thereof than the existing public
            preferred stock

    3.  Class B Preferred Stock

        -   Liquidation preference of $13.0 million

        -   Pari Passu in right of payment and liquidation with all existing and
            outstanding preferred stock

        -   No voting rights, except as required by law

        -   Dividend participation with common stock

        -   Convertible into 19% of the currently outstanding common stock
            (approximately 748,000 shares), at any time, at the option of the
            holder. Convertible into 19% of the then outstanding common stock
            (on a fully diluted basis) at any time prior to the third
            anniversary of the closing date, at the option of the Company, if on
            or prior to the date of such conversion all shares of any other
            class or series of preferred stock have converted into common stock
            or common stock warrants without any other consideration therefor

        -   Demand and piggyback registration rights of common stock issuable
            upon conversion of preferred stock into common stock

        -   Optional redemption of Preferred Stock, at any time prior to
            conversion to common stock at a redemption price equal to the
            liquidation preference

    -   Payment of all accrued interest and expenses as of the Closing Date


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