10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Fiscal Year Ended:

October 1, 2006

001-12415

(Commission File Number)

BWAY CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	36-3624491
(State of incorporation)	(IRS Employer Identification No.)
8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350-2237	(770) 645-4800
(Address of principal executive offices)	(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

As of April 2, 2006 (the registrant’s most recently completed second fiscal quarter), all of the voting and non-voting common equity was held by affiliates. The registrant’s common equity is not publicly traded.

As of December 22, 2006, there were 1,000 shares of BWAY Corporation’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

BWAY CORPORATION

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	7
Item 2.	Properties	8
Item 3.	Legal Proceedings	8
Item 4.	Submission of Matters to a Vote of Security Holders	9
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6.	Selected Financial Data	10
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	12
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 8.	Financial Statements and Supplementary Data	21
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	21
Item 9A.	Controls and Procedures	21
Item 9B.	Other Information	21
PART III
Item 10.	Directors and Executive Officers of the Registrant	22
Item 11.	Executive Compensation	24
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13.	Certain Relationships and Related Transactions	32
Item 14.	Principal Accounting Fees and Services	34
PART IV
Item 15.	Exhibits, Financial Statement Schedules	34

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BWAY CORPORATION

Annual Report on Form 10-K

For the Fiscal Year Ended October 1, 2006

PART I

Item 1. Business

GENERAL

BWAY Corporation (“BWAY”), including its principal subsidiary, North America Packaging Corporation (“NAMPAC”), and each of their lesser subsidiaries (collectively the “Company”, “we”, “our” or “us”) is a leading North American manufacturer of metal and rigid plastic containers for paint and certain other consumer and industrial products. Our product offerings include a wide variety of steel containers such as paint, aerosol and specialty cans, which are used by our customers to package a diverse range of end-use products including paint, household and personal care products, automotive after-market products, paint thinners and driveway and deck sealants. Our plastic containers include injection molded plastic pails and blow-molded tight head containers, drums and bottles. Our end-use markets have historically exhibited stable demand characteristics and our customer base includes leading participants in these markets. The references in this report to market positions or market share are based on information derived from annual reports, trade publications and management estimates, which we believe are reliable.

We are the successor to a business founded in 1875. On February 7, 2003, we were acquired pursuant to a merger agreement dated September 30, 2002 whereby we became a wholly owned subsidiary of BCO Holding Company, which is a holding company controlled by affiliates of Kelso & Company, L.P., a private investment firm founded in 1971 (“Kelso”). Upon completion of the acquisition, BWAY became a private company and our common stock was delisted from the New York Stock Exchange. The acquisition by Kelso will be referred to herein as the “Transaction.”

On November 4, 2003, the Registration Statement for our $200 million 10% Senior Subordinated Notes Due 2010 became effective under the Securities Act of 1933 (the “Senior Notes”). In December 2003, we exchanged these notes for previously issued, unregistered notes in an equal principal amount.

Our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K are filed electronically with the Securities and Exchange Commission (the “SEC”). The SEC maintains an internet site that contains these reports at www.sec.gov. You may also access these reports through links found on our website at www.bwaycorp.com.

Acquisitions and Dispositions

On July 17, 2006, we acquired substantially all of the assets and assumed certain of the liabilities of Industrial Containers, Ltd. (“ICL Ltd.”), a Toronto based manufacturer of rigid plastic containers and steel pails for industrial packaging markets (the “ICL Acquisition”). The net assets were acquired by ICL Industrial Containers ULC (“ICL”), a wholly owned subsidiary of BWAY created to effectuate the acquisition. For a further discussion of the ICL Acquisition, see Note 2 of the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K.

On July 7, 2004, we acquired all of the stock of NAMPAC, a manufacturer of rigid plastic containers for industrial packaging markets, from MVOC, LLC, a Delaware limited liability company and sole owner of the common shares of NAMPAC (the “NAMPAC Acquisition”). As a result of the acquisition, NAMPAC became a wholly owned subsidiary of BWAY. For a further discussion of the NAMPAC Acquisition, see Note 2 of the Notes to the Consolidated Financial Statements under Item 8 of this Form 10-K.

On August 25, 2003, we acquired substantially all of the assets of SST Industries (“SST”), a manufacturer of rigid plastic containers for industrial packaging markets (the “SST Acquisition”). We paid approximately $23.0 million in cash, net of cash acquired, for the SST assets.

INDUSTRY SEGMENTS

Our business is organized on the basis of product type with two reportable segments: metal packaging and plastics packaging. We operate these reportable segments as separate divisions and differentiate the segments based on the nature of the products and services they offer. The markets in which we participate can generally be placed into three broad categories: North American general line rigid metal containers (excluding aerosol), North American general line aerosol containers and North American general line rigid plastic containers. Our metal packaging segment includes the North American general line rigid metal containers (including aerosol) market and our plastics packaging segment includes the North American general line rigid plastic containers market.

Certain financial information about our industry segments is set forth in Part II herein under Item 7 and in the Notes to the Consolidated Financial Statements under Item 8.

Metal Packaging Segment

Metal containers are produced for three primary markets: beverage, food and general line. We compete primarily in the general line market. General line products include paint cans and components, aerosol cans, oblong cans, steel pails, ammunition boxes and a variety of other specialty cans. We estimate, based on industry data published by the Can Manufacturers Institute (the trade association of the metal and composite can manufacturing industry in the United States), that calendar 2006 industry shipments in the United States will approximate 135 billion units as follows: 75% to the beverage market, 21% to the food market and 4% to the general line market. General line cans generally have higher

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selling prices than food or beverage cans. Few companies compete in each of the three product markets.

Products and Markets

Our metal packaging segment operates primarily in North America in the general line segment of the metal container market. In the United States, we are the leading producer of steel paint cans, the third largest producer of steel aerosol cans, and we have established significant market positions in most of our other product lines.

The primary uses for our general line cans are for paint and related products, lubricants, roof and driveway sealants, charcoal lighter fluid, and household and personal care products. Specific products include round cans with rings and plugs (generally paint cans), specialty cans (generally PVC or rubber cement cans, brake fluid and other automotive after-market products cans, oblong or “F” style cans, ammunition boxes and an assortment of other specialty cans), aerosol cans and steel pails. We produce a full line of these products to serve the specific requirements of a diversified base of nationally recognized customers. Most of our products are manufactured in facilities that are strategically located to allow us to deliver product to our customers within a one-day transit time.

Paint Cans. We are the leading supplier in North America and the only national supplier of metal paint cans. We are the sole supplier of metal paint cans to the leading domestic paint companies, and we are the sole supplier of metal paint can components to the primary manufacturer of hybrid (plastic and metal) paint cans in North America.

Specialty Cans. We are the leading supplier of metal specialty cans in North America. Specialty cans include screw top cans, pour top cans, oblong or “F” style cans and ammunition boxes. Screw top cans typically have an applicator or brush attached to a screw cap and are typically used for PVC pipe cleaner, PVC cement and rubber cement. Pour top cans are typically used for packaging specialty oils and automotive after-market products. Oblong or “F” style cans are typically used for packaging paint-related products, charcoal lighter fluid and waterproofing products. Ammunition boxes provide a hermetic seal, are coated with a corrosion-resistant finish and are used to package small arms ammunitions and other ordnance products. We sell ammunition boxes to the U.S. Department of Defense as well as to major domestic and foreign producers of ordnance.

Aerosol Cans. We are the third largest supplier of aerosol cans in North America. We focus on serving as a primary supplier to small and medium sized customers and as a secondary supplier to large customers. Aerosol cans are typically used for packaging various household and industrial products, including paint and related products, personal care products, lubricants and insecticides.

Steel Pails. We are one of the leading suppliers of steel pails in North America. Steel pails are typically used for packaging paint and related products, roof and driveway sealants, marine coatings, vegetable oil, and water repellent.

Customers

Our metal packaging segment customers include many of the world’s leading paint, consumer and personal care companies. In 2006, sales to our 10 largest metal packaging segment customers accounted for approximately 43% of the segment’s net sales. Of the 2006 segment net sales, approximately 13% were to The Sherwin-Williams Company.

Consistent with industry practice, we enter into multi-year supply agreements with many of our major customers. However, many of our contracts are requirements contracts under which we supply a percentage of a customer’s requirements for our products over a period of time, without any specific commitment to unit volume. In addition, many of our customer contracts, including those with our major customers, provide that the customer may receive competitive proposals for all or a portion of the products we furnish to the customer under the contract, including proposals to reformulate the packaging to another material. We generally have the right to retain the customer’s business subject to the terms of the competitive proposal.

We believe we have strong relationships with our major customers due to: (i) the close proximity of our manufacturing facilities to key customer locations; (ii) our low-cost, flexible manufacturing capabilities; and (iii) our reputation for quality and customer service.

Raw Materials

Our principal raw materials consist of tinplate, blackplate and cold rolled steel, energy, various coatings, inks and compounds. Steel products represent the largest component of raw material costs. With the exception of pails and ammunition boxes, which are manufactured from either blackplate or cold rolled steel, all of our products are manufactured from tinplate steel. We purchase all required raw materials from outside sources.

Various domestic and foreign steel producers supply us with tinplate steel, although we currently purchase most of our tinplate steel from domestic suppliers. Procurement from suppliers generally depends on the suppliers’ product offering, product quality, service and price. Historically, we have generally been able to increase the price of our products to reflect increases in the price of steel, but we cannot be sure that we will be able to do so in the future.

A steel supply shortage could affect, among other things, our ability to obtain steel, the timing of steel deliveries and the price we pay for steel. In the event of supply interruptions, we could

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experience higher costs due to underutilization of our manufacturing facilities and lower sales due to a reduction in our ability to produce goods for sale.

In addition to steel products, we purchase energy from various suppliers as well as various coatings, inks and compounds. We do not anticipate any future shortages or supply problems for these items based on their historical availability and the current number of suppliers.

Competition

The steel container industry is highly competitive and some of our competitors have greater financial resources than we do. Competition is based primarily on price, manufacturing capacity, manufacturing flexibility and quality. We believe that (i) the close proximity of our manufacturing facilities to key customer locations, (ii) our low-cost, flexible manufacturing capabilities and (iii) our reputation for quality and customer service enable us to compete effectively.

In addition, we face competitive risks from substitute products, such as plastics, and, to a lesser extent, composites and flexible packaging containers. Steel containers continue to be the preferred package in the majority of our customers’ markets. We believe this is primarily due to: (i) their price stability and competitiveness, compared to alternative packaging; (ii) the attractive strength and non-permeable characteristics of steel versus other materials, such as plastics; (iii) their lower storage and handling costs; (iv) their ability to hold highly volatile and solvent-based liquids; and (v) their fire safety characteristics. In addition, we believe steel containers are easier and less costly to recycle and have a higher rate of recycling than alternative materials.

One of the objectives of our recent acquisitions of general line rigid plastic container manufacturers was to mitigate competitive risk from plastic substitution. In addition, the broader product offering enables us to provide other products utilized by our existing customer base.

Plastics Packaging Segment

Products and Markets

We are the largest manufacturer of general line rigid plastic containers in the North American market and we produce products in five broad categories: (1) open-head containers; (2) tight-head containers; (3) F-Style plastic bottles; (4) plastic drums; and (5) plastic paint bottles.

Open-head Containers. Open-head containers are injection-molded products made of high-density polyethylene (“HDPE”) that are used primarily by the paint and coating, petroleum, food, building materials, agricultural and janitorial supply industries.

Tight-head Containers. Tight-head containers are blow-molded made of HDPE that are used primarily by the food, petroleum, agricultural, chemical, janitorial supply, beverage and coating industries.

F-Style Plastic Bottles. F-Style plastic bottles are one-piece, blow-molded HDPE containers that are most commonly used for storing and shipping herbicides and pesticides for the crop protection industries.

Plastic Drums. Plastic drums are large transportable containers made from HDPE available in either an open-head or tight-head format. Plastic drums are most frequently used for shipping concentrated beverage syrup and chemicals.

Plastic Paint Bottles. We are the primary supplier to a leading paint manufacturer of an innovative plastic paint container made from HDPE. The paint bottle is proprietary to the customer, and we cannot provide it to other paint manufacturers.

Customers

Our plastics packaging segment customers include some of the world’s leading paint, food and industrial companies, several of which are also customers of our metal packaging segment. We have long-term relationships with our customers and in many cases we are the exclusive supplier of our customers’ plastic packaging requirements. In 2006, sales to our 10 largest plastics packaging segment customers accounted for approximately 40% of the segment’s net sales. Of the 2006 segment net sales, approximately 18% were to The Sherwin-Williams Company.

We maintain a diversified customer base, which is broadly distributed among industries as diverse as paint, food, construction, petroleum and chemicals. Consistent with industry practice, we enter into multi-year supply agreements with many of our major customers. However, many of our contracts are requirements contracts under which we supply a percentage of a customer’s requirements for our products over a period of time, without any specific commitment to unit volume. In addition, many of our customer contracts, including those with our major customers, provide that the customer may receive competitive proposals for all or a portion of the products we furnish to the customer under the contract, including proposals to reformulate the packaging to another material. We generally have the right to retain the customer’s business subject to the terms of the competitive proposal.

Raw Materials

The main raw material utilized in the plastics packaging segment is HDPE, a plastic resin used to produce rigid plastic packaging containers and materials. HDPE is particularly suitable for our plastic packaging products because of its strength, stiffness and resistance to chemicals and moisture. Furthermore, the product is relatively easy to process and form. HDPE resin constitutes approximately half of our plastics packaging segment total cost of products sold. As a commodity product, resin is susceptible to price fluctuations. Resin prices have increased approximately 27% during the last year.

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In order to mitigate the impact of resin price fluctuations, we have agreements with our customers, which represent a substantial majority of our plastic packaging net sales, allowing changes in resin cost to be passed through to them. Most of these agreements are tied to specific chemical indices, such as the DeWitt Index, which provide a benchmark for the price of resin. As a result, some or all of the change in resin price is passed through to the customer, consistent with industry practice.

HDPE is the primary plastic resin we use in the manufacture of our products, which we purchase from major HDPE suppliers. In addition, we employ a strategy to purchase resin opportunistically in spot markets when resin can be bought below contract prices.

Competition

The general line rigid plastic containers market is very competitive. Competition is based primarily on service, manufacturing flexibility and price. We believe that (i) our low-cost, flexible manufacturing capacities, (ii) the close proximity of our manufacturing facilities to key customer locations and (iii) our reputation for quality and customer service enable us to compete effectively.

Employees

As of October 1, 2006, we employed approximately 2,400 hourly employees and approximately 500 salaried employees. Approximately 23% of our hourly workforce is covered by nine separate collective bargaining agreements.

Two of our collective bargaining agreements, representing approximately 47% of our unionized employees, will become amendable in fiscal 2007.

While we consider relations with our employees to be good, we may not be able to negotiate new or renegotiate existing collective bargaining agreements (as they become amendable) with the same terms. A labor dispute could result in production interruptions, and a prolonged labor dispute, which could include a work stoppage, could adversely affect our ability to satisfy our customers’ requirements and could have a material adverse effect on our business, including our financial condition, results of operations or cash flows.

Environmental, Health and Safety Matters

We are subject to a broad range of federal, state, provincial and local environmental, health and safety laws, including those governing discharges to air, soil and water, the handling and disposal of hazardous substances and the investigation and remediation of contamination resulting from the release of hazardous substances. We believe that we are currently in compliance with all applicable environmental, health and safety laws, though future expenditures may be necessary in order to maintain such compliance, including compliance with air emission control requirements for volatile organic compounds. In addition, in the course of our operations we use, store and dispose of hazardous substances. Some of our current and former facilities are currently involved in environmental investigations and remediation resulting from the release of hazardous substances or the presence of other contaminants. While we do not believe that any investigation or identified remediation obligations will have a material adverse effect on our financial condition, results of operations or cash flows, there are no assurances that such obligations will not arise in the future. Many of our facilities have a history of industrial usage for which investigation and remediation obligations could arise in the future and which could have a material adverse effect on our financial condition, results of operations or cash flows. However, except to the extent otherwise disclosed herein, we believe it is remote that any such material losses could result from environmental remediation matters or environmental investigations relating to our current or former facilities.

We incurred approximately $1.1 million in capital expenditures in 2006 and approximately $0.6 million in the first quarter of 2007 to comply with federal Maximum Achievable Control Technology (“MACT”) regulations related to air emission control requirements for Hazardous Air Pollutants (“HAP”) and volatile organic compounds. In addition, we expect to incur approximately $1.1 million in capital expenditures in 2007 to comply with certain environmental laws at a facility related to the ICL Acquisition.

In the third quarter of 2005, we joined a potentially responsible party (“PRP”) group related to a waste disposal site in Georgia. Our status as a PRP was based on documents indicating that waste materials were transported to the site from our Homerville, Georgia facility prior to our acquisition of the facility in 1989. We joined the PRP group in order to reduce our exposure, which we estimate will approximate $0.1 million.

From time to time, we receive requests for information or are identified as a PRP pursuant to the Federal Comprehensive Environmental Response, Compensation and Liability Act or analogous state laws with respect to off-site waste disposal sites utilized by its current or former facilities or its predecessors in interest. We do not believe that any of these identified matters will have a material adverse effect on our financial condition, results of operations or cash flows.

We record reserves for environmental liabilities when environmental investigation and remediation obligations are probable and related costs are reasonably estimable. We had accrued liabilities of approximately $0.3 million at the end of each of 2006 and 2005; however, future expenditures may exceed the amounts accrued.

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Item 1A. Risk Factors

The most significant risk factors affecting our business include the following:

An increase in the use of alternative packaging as a substitute for the steel and plastic containers we sell could adversely affect our profitability.

Our steel and plastic containers are used by our customers to package a diverse range of end-use products. A variety of substitute products are available to package these end-use products, including steel and plastics, and to a lesser extent, composites and flexible packaging containers. From time to time our customers, including some of our larger customers, have used such alternative methods to package their products.

A widespread introduction of alternative packages by these or other companies as a substitute for steel or plastic containers could significantly reduce our sales to our customers. More generally, a decrease in the costs of substitute products, improvements in the performance characteristics of substitute products or the successful development or introduction of new substitute products could significantly reduce our customers’ orders and our profitability.

Competition from other steel or plastic container manufacturers could significantly impact our profitability, as could an election by our customers to self-manufacture their steel or plastic container requirements.

The container industries in which we do business are highly competitive and some of our competitors have greater financial, technical, sales and marketing and other resources than we do. The principal methods of competition in our industry include price, manufacturing capacity, manufacturing flexibility and quality. We may not be able to compete successfully with respect to any of these factors. Competition could force us to reduce our prices or could otherwise result in a loss of market share for our products. In addition, some manufacturers of products that are packaged in steel or plastic containers produce their own steel or plastic containers for their products. The election by some of our existing customers, or potential future customers, to manufacture their steel or plastic containers in-house could significantly impact our profitability.

Our customer contracts generally allow our customers to change, and, in some cases, terminate their contracts on short notice.

Some of our 2006 sales were made to customers with whom we have contractual relationships. Many of these contracts, which are often with our largest customers, are requirements contracts under which we supply a percentage of a customer’s requirements for our products over a period of time, without any specific commitment to unit volume. As such, we are not guaranteed any minimum level of net sales under many of our contracts and many of our customers are under no obligation to continue to purchase products from us.

Moreover, if a customer’s requirements for our products exceeds our ability to supply that customer, as has occurred from time to time in the past, we may have a short-term or long-term inability to supply all of its requirements from our own manufacturing facilities and may be required to purchase containers from third parties or take other proactive steps in order to fill that customer’s order. Our inability to supply a customer’s specific requirements from our manufacturing facilities could materially adversely affect our relationship with that customer or otherwise increase our operating costs.

In addition, many of our requirements contracts with our customers provide that the customer may receive competitive proposals for all or a portion of the products we furnish to the customer under the contract. We generally have the right to retain the customer’s business subject to the terms of the competitive proposal. If we match a competitive proposal, it may result in reduced sales prices for the products that are the subject of the competitive proposal. If we choose not to match a competitive proposal, we may lose the sales that were the subject of the competitive proposal.

The loss of a key customer could have a significant negative impact on our sales and profitability.

In 2006, approximately 34% of our net sales were to our top 10 customers. Sales to our largest customer accounted for approximately 15% of our 2006 net sales.

The loss of, or major reduction in business from, one or more of our major customers could create excess capacity within our manufacturing facilities and could result in the erosion of our gross margins and our market share position.

The loss of one or more members of our senior management team could adversely affect our ability to execute our business strategy.

We are dependent on the continued services of our senior management team. Although we believe we could replace key employees in an orderly fashion should the need arise, the loss of any such key personnel could have a material adverse effect on our ability to execute our business strategy. We do not maintain key-person insurance for any of our officers, employees or directors.

Increases in the price of our raw materials or interruptions or shortages in the supply of raw materials could cause our production costs to increase, which could reduce our ability to compete effectively.

We require substantial amounts of raw materials in our operations, including steel, resin, energy, various inks and coatings. We purchase all raw materials we require from outside sources, and

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consolidate our steel and resin purchases among a select group of suppliers in an effort to leverage purchasing power. The availability and prices of our raw materials may be subject to curtailment or change due to new laws or regulations. For example, the United States previously imposed tariffs or quotas on imports of certain steel products and steel slabs. The availability and prices of raw materials may also be subject to shortages in supply, suppliers’ allocations to other purchasers, interruptions in production by suppliers (including by reason of labor strikes or work stoppages at our suppliers’ plants), our inability to leverage our purchasing power as successfully as we have in the past, changes in exchange rates and worldwide price levels. Historically, we have generally been able to increase the price of our products to reflect increases in the price of steel and plastic resin, but we may not be able to do so in the future. We have generally not been able in the past to pass on any price increases to our customers in the prices of the raw materials, other than steel and plastic resin, that we utilize in our business. To the extent we are not able to leverage our purchasing power in the future as successfully as we have in the past, we are not able to increase the price of our products to reflect increases in the prices of raw materials or we experience any interruptions or shortages in the supply of raw materials, our operating costs could materially increase.

Labor disruptions with a portion of our workforce which is unionized could decrease our profitability.

At the end of 2006, approximately 23% of our hourly employees worked under various collective bargaining agreements. Two of our nine collective bargaining agreements, representing approximately 47% of our unionized workforce, will become amendable in 2007. While we believe that our relations with our employees are good, we may not be able to negotiate these or other collective bargaining agreements on the same or more favorable terms as the current agreements, or at all, and without production interruptions, including labor stoppages. A prolonged labor dispute, which could include a work stoppage, could impact our ability to satisfy our customers’ requirements. In particular, a labor dispute with either of the major unions representing employees in Cincinnati could have a material adverse effect on our ability to produce aerosol containers and could result in a deterioration of that business. The agreement with our largest union at the Cincinnati facility becomes amendable in August 2007.

In the event of a catastrophic loss of one of our manufacturing facilities, we may not be able to meet the volume requirements of our existing customers or fulfill the requirements of potential customers.

We face the risk of a catastrophic loss of the use of all or a portion of any of our facilities due to accident, terrorist attack, labor issues, weather conditions, other natural disasters or otherwise. Such a catastrophic loss could have a significant effect on our relationships with our customers, financial condition, results of operations and cash flows. Although we maintain insurance covering our manufacturing facilities, including business interruption insurance, our insurance coverage may not be adequate to cover all of our losses in the event of a catastrophic loss of any of our manufacturing facilities. In addition, such insurance, including business interruption insurance, could in the future become more expensive and difficult to maintain and may not be available on commercially reasonable terms or at all. Under certain circumstances, we are required under our credit facility to utilize the proceeds of any casualty insurance, but not business interruption insurance, to repay outstanding indebtedness under the senior credit facility rather than to reinvest such proceeds in rebuilding any such facility.

Our business may be subject to significant environmental investigation, remediation and compliance costs.

We are subject to a broad range of federal, state and local environmental, health and safety laws, including those governing discharges to air, soil and water, the handling and disposal of hazardous substances and the investigation and remediation of contamination resulting from the release of hazardous substances. We believe that we are in material compliance with all applicable environmental, health and safety laws, though future expenditures may be necessary in order to maintain such compliance. In addition, in the course of our operations, we use, store and dispose of hazardous substances. Some of our current and former facilities are currently involved in environmental investigations and remediation resulting from releases of hazardous substances or the presence of other constituents. While we do not believe that any investigation or remediation obligations that we have identified will have a material adverse effect on our results of operations, financial condition or cash flows, many of our facilities have a history of industrial usage for which investigation and remediation obligations could arise in the future and which could require us to make material expenditures or otherwise materially affect the way we operate our business. For further discussion of existing environmental issues relating to us, see “Environmental, Health and Safety Matters” in Item 1.

Our revenues or operating costs could be adversely affected by product liability or product recall costs involving our products or products of our customers.

We are subject to the risk of exposure to product liability and product recall claims, however, if any of our products, such as the coatings we apply to certain containers through our material center services business, are alleged to have resulted in personal injury or death, or property damage, based, for example, on alleged product defect. Although we do maintain product liability insurance, this insurance may not be adequate to cover any losses related to a product liability claim brought against us. Furthermore, products liability insurance could in the future become more expensive and difficult to maintain and may not be available on commercially reasonable terms, if at all. In addition, we do not maintain any product recall insurance and should we be required to initiate a product recall, such a recall could have a significant impact on our results of operations or cash flows.

In addition, several leading paint manufacturers are defendants in various lawsuits, including class-action tort litigation brought by public entities, concerning exposure of children to lead-based paint applied thirty or more years ago, as well as alleging that lead pigment in paint constitutes a public nuisance requiring abatement. While we do not believe that any of these lawsuits has resulted in an adverse verdict against any of these defendants, this or similar product liability related

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litigation could have a material adverse effect on the financial condition of certain of our customers in the future, including our paint container customers. To the extent our orders decrease or we are unable to collect receivables from customers due to the effects of product liability litigation on our customers, including the lead-based paint litigation referred to above, our results of operations could be unfavorably affected. One of our subsidiaries, Armstrong Containers, Inc. (“Armstrong”), has been joined as a defendant in some of the lead-based paint litigation based upon allegations of its corporate predecessor’s conduct that predated our ownership of Armstrong. See Item 3, “Legal Proceedings,” below.

We may not succeed in our strategy of pursuing selective acquisitions.

We intend to continue to evaluate and selectively pursue acquisitions that we believe are strategically important based on their potential to: (i) meet our customers’ needs; (ii) increase cash flow; (iii) diversify our product and customer base in related markets; and (iv) broaden our geographic sales, distribution and manufacturing platform throughout the United States and Canada. However, we may not be able to locate or acquire suitable acquisition candidates at attractive cash flow multiples consistent with our strategy, and we may not be able to fund future acquisitions because of limitations relating to our indebtedness or otherwise. In addition, to the extent that we make any acquisition in the future, our failure to integrate the acquired business successfully could significantly impair our results of operations.

A disruption or failure in our computer systems could significantly disrupt our operations and impose significant costs on us.

A significant part of our information technology systems used in connection with our internal operations is centralized in our Atlanta, Georgia headquarters. In addition, other parts of our information technology systems are outsourced to third-party hosting vendors. We rely in the regular course of business on the proper operation of our information technology systems. Any disruption or failure of our Atlanta-based or outsourced information technology systems could significantly disrupt our operations and impose significant costs on us.

We are controlled by affiliates of Kelso, and their interests as equity holders may conflict with the interests of our noteholders.

Certain private equity funds affiliated with Kelso own a substantial majority of our common stock. The Kelso affiliates are able to elect a majority of our directors, appoint new management and approve any action requiring the vote of our outstanding common stock, including the amendment of our certificate of incorporation, mergers or sales of substantially all of our assets. The directors elected by the Kelso affiliates will be able to make decisions affecting our capital structure, including decisions to issue additional capital stock and incur additional debt. The interests of Kelso and its affiliates may not in all cases be aligned with the interests of our noteholders. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of our equity holders might conflict with your interests as a noteholder. In addition, our equity holders may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investments, even though such transaction might involve risks to holders of the Senior Notes.

Item 1B. Unresolved Staff Comments

None.

7

Item 2. Properties

The following table sets forth certain information with respect to our headquarters and manufacturing facilities as of December 1, 2006. We believe our properties are generally in good condition, well maintained and suitable for their intended use. We have excluded from the table our warehouses and any manufacturing facility that is permanently idled or otherwise not utilized by us in the production of our products.

Location	General Character	Approximate Square Footage	Type of Interest(1)	Segment
Atlanta, Georgia (Headquarters)	Office	16,000	Leased	Corporate
Brampton, Ontario	Manufacturing	41,000	Leased	Metal
Bryan, Texas	Manufacturing	83,000	Leased	Plastics
Cedar City, Utah	Manufacturing	89,000	Owned	Plastics
Chicago, Illinois (Kilbourn)	Manufacturing	141,000	Owned	Metal
Cidra, Puerto Rico	Manufacturing	83,000	Leased	Plastics
Cincinnati, Ohio	Manufacturing	467,000	Leased	Metal
Cleveland, Ohio	Manufacturing	248,000	Leased	Plastics
Dayton, New Jersey	Manufacturing	119,000	Leased	Plastics
Fontana, California	Manufacturing	72,000	Leased	Metal
Franklin Park, Illinois	Manufacturing	115,000	Leased	Metal
Garland, Texas	Manufacturing	108,000	Leased	Metal
Homerville, Georgia	Manufacturing	395,000	Owned	Metal
Indianapolis, Indiana	Manufacturing	169,000	Leased	Plastics
Lithonia, Georgia	Manufacturing	75,000	Leased	Plastics
Memphis, Tennessee	Manufacturing	120,000	Leased	Metal
St. Albert, Alberta	Manufacturing	62,000	Leased	Plastics
Sturtevant, Wisconsin	Manufacturing	85,000	Leased	Metal
Toccoa, Georgia	Manufacturing	121,000	Leased	Plastics
Toronto, Ontario	Manufacturing	73,000	Leased	Plastics
Trenton, New Jersey	Manufacturing	105,000	Leased	Metal
Valparaiso, Indiana	Manufacturing	106,000	Leased	Plastics
York, Pennsylvania	Manufacturing	97,000	Owned	Metal

(1) Our owned manufacturing facilities are subject to a mortgage lien in favor of Deutsche Bank Trust Company Americas as collateral agent for the lenders under our credit facility.

We regularly evaluate our various manufacturing facilities in light of current and expected market conditions and demand, and may further consolidate our manufacturing facilities in the future.

Item 3. Legal Proceedings

We are involved in legal proceedings from time to time in the ordinary course of business. Other than as described below, we are not currently involved in any litigation or other proceedings that we expect, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows. We are also involved in certain proceedings relating to environmental matters as described under Item 1. “Business - Environmental, Health and Safety Matters.”

Lead Pigment Litigation

Angel Evans, a Minor, by her guardian ad litem, Susan M. Gramling vs. American Cyanamid Co., Atlantic Richfield Company, BWAY Corp, Conagra Foods, Inc., E.I. Dupont De Nemours and Company, Millenium Holding, NL Industries, Inc., The Sherwin-Williams Company, Bobby Armon, Department of Health and Family Services, State of Wisconsin; Circuit Court, Milwaukee County; State of Wisconsin; Case No. 05-CV-9281 (“Evans”).

Jomara Hardison, Minor by her guardian ad litem, Susan M. Gramling vs. American Cyanamid Co., BWAY Corp, E.I. Dupont De Nemours and Company, Conagra Foods, Inc., Millenium Holding, Sylvia Kirkendoll, Joel Kirkendoll, Department of Health and Family Services, State of Wisconsin; Circuit Court, Milwaukee County; State of Wisconsin; Case No. 06-CV-00606 (“Hardison”).

Ruben Baez Godoy, Minor, by her guardian ad litem, Susan M. Gramling vs. American Cyanamid Co, BWAY Corporation, Cytec Industries, Inc., E.I. Dupont De Nemours and Company, Conagra Foods, Inc., The Sherwin Williams Company, Walter Stankowski, Wayne Stankowski, and Wisconsin Electric Power Company; Circuit Court, Milwaukee County, State of Wisconsin; Case No. 06-CV-277 (“Godoy”).

In 2006, we were named as one of several defendants in the above-referenced personal injury cases in the state of Wisconsin. Plaintiffs initially filed the Evans lawsuit in October 2005, and the Hardison and Godoy lawsuits in January 2006. More recently, the plaintiffs in these actions agreed to the dismissal of BWAY Corporation as a defendant and the substitution of our subsidiary, Armstrong Containers, Inc. (“Armstrong”) as a defendant.

These cases arise out of the sale of lead pigment for use in lead-based paint. The claims have been asserted against Armstrong based on allegations that Armstrong assumed certain liabilities of MacGregor Lead Company (“MacGregor”), an entity that was involved in the manufacture and sale of lead

8

pigment until 1971, when MacGregor sold its lead paint business to a third party. These cases seek to recover unspecified monetary damages in excess of the statutory minimum for personal injuries due to alleged exposure to lead based paint. Armstrong has answered the complaints, denying the allegations contained therein. The cases currently are in the discovery phase. We have been advised by plaintiffs’ counsel that other cases are likely to be filed which will name Armstrong as a defendant.

Separately, on December 18, 2006, Armstrong received a copy of a complaint in the case of City of Columbus, Ohio vs. Sherwin-Williams Company, Millennium Holdings, LLC, NL Industries, Inc., Conagra Grocery Products Company, E.I. DuPont De Nemours and Company, Atlantic Ritchfield Company, Cytec Industries, Inc., American Cyanamid Company, Armstrong Containers, and John Doe Corporations; In the Court of Common Pleas Franklin County, Ohio, Civil Division; Case No. 06CVH12 16480. In that case, which also arises from the alleged historic activities of MacGregor, the City of Columbus, Ohio, has alleged that lead pigment in paint constitutes a public nuisance under Ohio law and seeks abatement of that nuisance. Other defendants in the case include Sherwin-Williams Company, Millennium Holdings, LLC, NL Industries, Inc., Conagra Grocery Products Company, E.I. DuPont De Nemours and Company, Atlantic Ritchfield Company, Cytec Industries, Inc., and American Cyanamid Company.

While we believe that we have valid defenses to these cases and plan to vigorously defend them, we can neither predict the outcome at this time due to the uncertainties involved nor can we reasonably determine the scope or amount of the potential costs and liabilities related to these matters. At the end of 2006, we had accrued approximately $0.5 million in legal fees and expenses related to these matters. We have notified our general liability insurers, who are participating in the defense of the claims, subject to reservation of rights.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted during the fourth quarter of 2006 to a vote of our security holders through the solicitation of proxies or otherwise.

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

There is no established public market for our common equity, which is held entirely by BCO Holding.

During the year we declared a $10.0 million cash dividend payable to BCO Holding. The dividend was used by BCO Holding to repurchase 45,482 shares of its common stock and to cash settle the exercise of 386,221 shares under option related to options held by BWAY’s chief executive officer.

With certain exceptions, we are prohibited by our long-term debt arrangements from paying dividends. The dividend paid to BCO Holding discussed above was such an exception.

9

Item 6. Selected Financial Data

The following table sets forth our selected historical consolidated financial and operating data, which should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this report and with our consolidated financial statements and related notes included in Item 8 of this Form 10-K. The selected consolidated financial and other data as of and for each of the fiscal years in the three-year period ended October 1, 2006 have been derived from our audited financial statements and related notes included in Item 8 of this report. The selected consolidated financial and other data as of and for each of the periods in the two-year period ended September 28, 2003 have been derived from our audited financial statements and related notes which are not included in this report. In the discussion that follows, the “Transaction”, “NAMPAC Acquisition” and “ICL Acquisition” are defined in Item 1 of this Form 10-K. Unless otherwise indicated, references to years in this report relate to fiscal years rather than to calendar years.

	Predecessor						Successor
Fiscal periods ended (1) (Dollars in thousands)	2002			Predecessor 2003			Successor 2003			2004			2005			2006
STATEMENT OF OPERATIONS DATA
Net sales	$	527,601		$	186,726		$	364,384		$	611,588		$	829,109		$	918,513
Cost of products sold (excluding depreciation and amortization) (2)		456,788			166,383			311,447			529,064			714,039			796,401
Gross profit (excluding depreciation and amortization)		70,813			20,343			52,937			82,524			115,070			122,112
Depreciation and amortization (3)(4)		19,582			6,091			16,835			31,724			43,215			41,615
Selling and administrative expense (5)		14,179			14,875			8,675			14,040			22,120			29,777
Merger related transaction costs (6)		1,478			2,488			—			—			—			—
Restructuring and impairment charges (adjustment) (7)(8)(9)(10)(11)(12)		1,250			(460	)		260			352			5,265			1,511
Other (income) expense, net (13)(14)		(597	)		17			905			178			(175	)		1,813
Income (loss) from operations		34,921			(2,668	)		26,262			36,230			44,645			47,396
Interest expense, net (15)(16)(17)		13,109			11,190			16,935			26,889			32,165			34,660
Income (loss) before income taxes and cumulative effect of change in accounting principle		21,812			(13,858	)		9,327			9,341			12,480			12,736
Provision for (benefit from) income taxes		9,556			(4,791	)		3,462			3,634			4,351			6,941
Income (loss) before cumulative effect of change in accounting principle		12,256			(9,067	)		5,865			5,707			8,129			5,795
Cumulative effect of change in accounting principle, net of tax		—			—			—			—			—			(398	)
Net income (loss)		12,256			(9,067	)		5,865			5,707			8,129			5,397
OTHER FINANCIAL DATA
EBITDA (18)		54,503			3,423			43,097			67,594			87,860			89,011
EBITDA margin % (19)		10.3	%		1.8	%		11.8	%		11.1	%		10.6	%		9.7	%
Capital expenditures		10,586			4,607			8,879			19,066			20,282			25,041
Cash interest paid, net		11,720			5,374			18,611			22,595			29,866			33,200
STATEMENT OF CASH FLOWS DATA
Net cash provided by (used in) operating activities		46,063			(2,135	)		30,415			45,098			64,324			60,933
Net cash used in investing activities (20)(21)(22)		(9,528	)		(4,582	)		(52,006	)		(220,857	)		(19,247	)		(92,131	)
Net cash (used in) provided by financing activities (23)(24) (25)		(17,330	)		(12,663	)		21,729			202,836			(20,513	)		30,288
Ratio of earnings to fixed charges (26)		2.46x			—			1.51x			1.32x			1.35x			1.33x

	Predecessor	Successor
	2002	2003	2004	2005	2006
BALANCE SHEET DATA
Working capital	20,467	17,451	52,382	53,709	70,988
Total assets (27)	306,686	443,325	741,404	771,994	833,745
Total debt (28)(29)	100,291	217,465	415,810	395,975	440,444
Stockholder’s equity	72,648	79,487	115,005	123,436	127,483

Notes to Selected Financial Data Table:

(1) Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2002, 2003, 2004, 2005 and 2006 ended September 29, 2002, September 28, 2003, October 3, 2004, October 2, 2005 and October 1, 2006, respectively. Fiscal 2003 consists of Predecessor 2003 (for the period from September 30, 2002 to February 6, 2003) and Successor 2003 (for the period from February 7, 2003 to September 28, 2003). The fiscal years 2002, 2003, 2005 and 2006 consisted of 52 weeks. Fiscal year 2004 consisted of 53 weeks. Our financial statements for the periods presented include the results of operations from and including August 25, 2003 related to the assets we acquired and liabilities assumed from SST Industries, from and including July 7, 2004 related to the NAMPAC Acquisition and from and including July 17, 2006 related to the ICL Acquisition. Some of our subsidiaries report their financial position and results of operations on a calendar month basis with fiscal years ending on September 30 and have been consolidated as of September 30, 2004, September 30, 2005 and September 30, 2006. There were no significant or unusual transactions between the calendar month and fiscal month ending dates that should have been considered in the consolidated financial statements.

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Notes to Selected Financial Data Table:

(2) The following table summarizes stock-based compensation expense recorded by line item for the periods indicated. There was no stock-based compensation expense in 2002.

	Predecessor		Successor
Fiscal periods ended (a) (Dollars in thousands)	Predecessor 2003		Successor 2003		2004		2005		2006
STOCK-BASED COMPENSATION
Cost of products sold (excluding depreciation and amortization)	$	2,900	$	214	$	206	$	344	$	274
Selling and administrative expense (b)		9,692		940		904		1,508		9,881
TOTAL STOCK-BASED COMPENSATION (c)(d)(e)	$	12,592	$	1,154	$	1,110	$	1,852	$	10,155

(a) See Note 1 above.

(b) Stock-based compensation expense in 2006 includes approximately $8.8 million related to the cash settlement of certain Exchange Options exercised by one of our officers.

(c) Stock-based compensation expense in Predecessor 2003 relates to Predecessor stock option payouts associated with the Transaction.

(d) Stock-based compensation expense in Successor 2003, 2004 and 2005 relates to stock options issued subsequent to the Transaction.

(e) Stock-based compensation expense for 2006 relates partially to stock options issued subsequent to the Transaction and to the cash settlement of certain Exchange Options as discussed in (b) above.

(3) Depreciation for 2002 includes an additional depreciation expense of $0.7 million related to shortened useful lives of certain computer systems.

(4) Depreciation for Successor 2003, 2004 and 2005 includes $1.8 million, $5.8 million and $3.9 million, respectively, of additional depreciation related to shortened useful lives of certain long-lived assets, primarily equipment.

(5) See Note 2 above.

(6) Amounts relate to certain professional fees and other transaction costs relating to the Transaction.

(7) Fiscal 2002 includes an additional $1.2 million restructuring charge related to the closing of one of our manufacturing facilities 2001.

(8) Predecessor 2003 includes a $0.5 million adjustment related to revised expectations of future lease payments for closed facilities.

(9) Successor 2003 includes a charge of $0.3 million primarily related to severance and benefits resulting from the closing of our Picayune, Mississippi manufacturing facility.

(10) Fiscal 2004 includes a charge of $0.3 million related to severance and benefits, equipment disposition and other related costs associated with the closing of our Picayune, Mississippi manufacturing facility.

(11) Fiscal 2005 includes a $5.3 million charge for restructuring ($4.3 million) and asset impairment ($1.0 million). The restructuring charge consisted of $0.3 million related to costs associated with the shutdown of our manufacturing facility in Picayune, Mississippi, $3.1 million related to costs associated with the shutdown of certain of our plastics manufacturing facilities, $1.0 million related to severance costs associated with the closure of certain of the plastics manufacturing facilities and the elimination of redundant positions as a result of the NAMPAC Acquisition and a $(0.1) million adjustment to a previously recognized facility closure exit liability. The $1.0 million impairment charge was taken to write down certain assets associated with the closed plastics manufacturing facilities to their estimated fair value.

(12) Fiscal 2006 primarily relates to on-going severance and facility holding costs associated with the plastics manufacturing facility shutdowns discussed in Note 11 above. The facility holding costs include an additional expense of approximately $0.8 million related to changes in our sublease assumptions on the remaining facility.

(13) Includes financial advisory fees paid to Kelso of $0.3 million in Successor 2003 and $0.5 million in each of 2004, 2005 and 2006.

(14) Fiscal 2006 includes approximately $0.8 million in third party expenses incurred in connection with the refinancing of the term loan component of our credit facility that could not be capitalized as deferred financing costs in accordance with applicable accounting guidance.

(15) The period from September 30, 2002 to February 6, 2003 includes $6.8 million of interest expense related to the Transaction. The $6.8 million consists of $5.1 million related to the tender, consent and redemption premiums and $1.7 million related to the write-off of deferred financing costs, each associated with the redemption of our $100.0 million 10 ¹/4% Senior Subordinated Notes due 2007.

(16) The period from February 7, 2003 to September 28, 2003 includes $1.9 million related to the write-off of a bridge loan commitment fee, which was expensed when the bridge loan commitment expired undrawn at the closing of the Transaction.

(17) Fiscal 2004 includes approximately $1.3 million of unamortized deferred financing costs written-off as a result of refinancing the credit facility in connection with the NAMPAC Acquisition.

(18) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is reconciled to income (loss) before cumulative effect of change in accounting principle and to net cash provided by (used in) operating activities in the tables below. EBITDA is not a GAAP measurement. However, we present EBITDA because it is one of the measures upon which management assesses our financial performance and is a primary metric used in certain management incentive programs. Management also believes that EBITDA is a commonly used measurement of performance used by companies in our industry and is frequently used by securities analysts, investors and other interested parties to measure our ability to service debt and as a measurement of financial performance. While providing useful information, EBITDA should not be considered in isolation or as a substitute for consolidated statement of operations and cash flows data prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be construed as an indication of a company’s operating performance or as a measure of liquidity. Our definition of EBITDA is not calculated in the same way EBITDA is calculated under either the indenture governing the Senior Notes or the Credit Facility. Also, such non-GAAP information presented by other companies may not be comparable to our presentation, since each company may define non-GAAP measures differently.

Stock-based compensation expense (see Note 2 above), restructuring and impairment charges (adjustments), other (income) expense, net and merger-related transaction costs, collectively representing $2.1 million, $14.6 million, $2.3 million, $1.6 million, $6.9 million and $14.0 million, in 2002, Predecessor 2003, Successor 2003, 2004, 2005 and 2006, respectively, have not been added back to income (loss) before cumulative effect of change in accounting principle for purposes of calculating EBITDA. In addition, included in cost of products sold (excluding depreciation and amortization), for Predecessor 2003, Successor 2003, 2004 and 2006 are costs of $0.5 million of other expense associated with the Transaction, $2.3 million of amortization of manufacturer’s profit recorded in inventory primarily as a result of the Transaction, $0.4 million in amortization of manufacturer’s profit recorded in inventory as a result of the NAMPAC Acquisition and $0.5 million in amortization of manufacturer’s profit recorded in inventory as a result of the ICL Acquisition respectively, that have not been added back to income (loss) before cumulative effect of change in accounting principle for purposes of calculating EBITDA.

	Predecessor					Successor
For the periods indicated (a) (Dollars in thousands)	2002		Predecessor 2003			Successor 2003		2004		2005		2006
RECONCILIATION OF EBITDA TO INCOME (LOSS) BEFORE CUMULATIVE CHANGE IN ACCOUNTING PRINCIPLE
Income (loss) before cumulative effect of change in accounting principle	$	12,256	$	(9,067	)	$	5,865	$	5,707	$	8,129	$	5,795
Depreciation and amortization (b)		19,582		6,091			16,835		31,724		43,215		41,615
Interest expense, net (c)		13,109		11,190			16,935		26,889		32,165		34,660
Provision for (benefit from) income taxes		9,556		(4,791	)		3,462		3,634		4,351		6,941
EBITDA	$	54,503	$	3,423		$	43,097	$	67,954	$	87,860	$	89,011

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Notes to Selected Financial Data Table:

	Predecessor						Successor
For the periods indicated (a) (Dollars in thousands)	2002			Predecessor 2003			Successor 2003			2004			2005			2006
RECONCILIATION OF EBITDA TO CASH FLOW FROM OPERATIONS
Net cash provided by (used in) operating activities	$	46,063		$	(2,135	)	$	30,415		$	45,098		$	64,324		$	60,933
Interest expense, net		13,109			11,190			16,935			26,889			32,165			34,660
Provision for (benefit from) income taxes		9,556			(4,791	)		3,462			3,634			4,351			6,941
Stock-based compensation expense		—			—			(1,154	)		(1,110	)		(1,852	)		(10,155	)
Amortization of deferred financing costs		(977	)		(359	)		(1,168	)		(1,970	)		(2,120	)		(2,156	)
Change in operating assets, liabilities and other		(13,248	)		(482	)		(5,393	)		(4,587	)		(9,008	)		(1,212	)
EBITDA	$	54,503		$	3,423		$	43,097		$	67,954		$	87,860		$	89,011

(a) See Note (1) above.

(b) See Notes (3) and (4) above.

(c) See Notes (15) and (16) above.

(19) EBITDA margin is defined as the ratio of EBITDA to net sales.

(20) Investing activities in Successor 2003 include the use of $19.9 million in transaction costs related to the Transaction and $23.2 million related to the SST Acquisition.

(21) Investing activities in 2004 include the use of $202.5 million, which is net of $11.3 million in cash acquired, related to the NAMPAC Acquisition.

(22) Investing activities in 2006 include the use of $68.4 million related to the ICL Acquisition.

(23) Financing activities in Predecessor 2003 include $0.4 million used in financing costs incurred related to the Transaction. Financing activities Successor 2003 include $5.6 million in net cash provided from the Transaction and $10.5 million used in financing costs incurred related to the financing of the Transaction.

(24) Financing activities in 2004 include the proceeds of a $225.0 million term loan used, in part, to finance the NAMPAC Acquisition, $30.0 million of additional capital contributed by BCO Holding and $6.8 million in financing costs incurred related to the term loan and the refinancing of our credit facility.

(25) Financing activities in 2006 include the net proceeds of $74.7 million from refinancing the credit facility that were used, in part, to finance the ICL Acquisition. Also included in financing activities in 2006 is the payment of a $10.0 million dividend to BCO Holding for the purposes of repurchasing certain stock and settling the exercise of certain Exchange Options by one of our officers.

(26) For purposes of determining the ratio of fixed charges, “earnings” are defined as earnings (loss) before income taxes and cumulative effect of change in accounting principle plus fixed charges. Fixed charges include interest on all indebtedness, amortization of capitalized expenses related to indebtedness and a portion of rental expense on operating leases, which is representative of an interest factor. In Predecessor 2003, fixed charges exceeded our earnings by $13.9 million.

(27) The increase in total assets at the end of 2004 from 2003 reflects the assets associated with the NAMPAC Acquisition and the increase in total assets at the end of 2006 from 2005 reflects the assets associated with the ICL Acquisition.

(28) The increase in total debt at the end of 2004 from 2003 reflects the debt incurred in financing the NAMPAC Acquisition and the increase in total debt at the end of 2006 from 2005 reflects the debt incurred in financing the ICL Acquisition.

(29) Total debt includes capital lease obligations of $0.3 million at the end of both 2002 and 2003, $0.8 million at the end of 2004, $0.7 million at the end of 2005 and $0.5 million at the end of 2006.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion should be read in conjunction with our consolidated financial statements and related notes included in Item 8 of this report as well as with a general understanding of our business as discussed in Item 1 of this report. Unless otherwise indicated, references to years in our discussion and analysis relates to fiscal years rather than to calendar years.

Major Developments

ICL Acquisition. On July 17, 2006, we acquired substantially all of the assets and certain of the liabilities of Industrial Containers, Ltd., (“ICL Ltd.”) a Toronto based manufacturer of rigid plastic containers and steel pails for industrial packaging markets (the “ICL Acquisition”). The assets were acquired by ICL Industrial Containers ULC (“ICL”), a wholly owned subsidiary of BWAY created to effectuate the acquisition. We paid approximately $68.4 million in cash for the acquisition, which was funded by $50.0 million in term loan borrowings by ICL and from a portion of the proceeds of additional term loan borrowings by BWAY. The term loans are further discussed in Note 6 to the consolidated financial statements in Item 8 of this report. The results of operations related to this acquisition are included in the consolidated financial statements from the date of acquisition. Included in the purchase price is approximately $1.7 million in transaction costs associated with the acquisition. The purchase price also includes purchase price adjustments of approximately $0.4 million settled in fiscal 2007, which were accrued as of October 1, 2006.

The ICL Acquisition enables us to expand in the Canadian market. We believe geographic expansion is important to our growth.

NAMPAC Acquisition. On July 7, 2004, we acquired all of the issued and outstanding shares of stock of NAMPAC, a manufacturer of rigid plastic containers for industrial packaging markets. We paid approximately $202.8 million in cash, net of cash acquired, for the acquisition, which was funded by a $30.0 million equity contribution from Kelso and certain members of our senior management and from a portion of the proceeds from a $225.0 million term loan facility. The results of operations related to this acquisition are included in the consolidated financial statements from the date of acquisition.

The NAMPAC acquisition enabled us to enter the general line rigid plastic containers market, which we believe is important to our growth, and to provide our customers with a more diverse product offering.

Plastics Manufacturing Facility Restructuring. In October 2004, the Board of Directors approved a plan to close three plastics manufacturing facilities and to eliminate certain positions that became redundant as a result of the NAMPAC Acquisition. We ceased operations and closed all three facilities—

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one at the end of fiscal 2004 and the remaining two in the third quarter of 2005. We consolidated the business from these closed facilities into our other plastics manufacturing facilities, which has resulted in lower overall manufacturing costs and improved manufacturing capacity. In closing the facilities, we relocated or terminated the workforce and disposed of, stored or transferred certain equipment to other manufacturing facilities.

Results of Operations

2006 and 2005

The following table sets forth changes in our statements of operations and line items as a percentage of net sales for 2006 (year ended October 1, 2006) and 2005 (year ended October 2, 2005).

Fiscal years ended October 1, 2006 and October 2, 2005							Change					As a % of Net Sales
(Dollars in thousands)	2006			2005			$			%		2006		2005
NET SALES	$	918,513		$	829,109		$	89,404		10.8	%	100.0	%	100.0	%
Cost of products sold (excluding depreciation and amortization)		796,401			714,039			82,362		11.5		86.7		86.1
Gross profit (excluding depreciation and amortization)		122,112			115,070			7,042		6.1		13.3		13.9
Depreciation and amortization		41,615			43,215			(1,600	)	(3.7	)	4.5		5.2
Selling and administrative expense		29,777			22,120			7,651		34.6		3.2		2.7
Restructuring and impairment charge		1,511			5,265			(3,754	)	(71.3	)	0.2		0.6
Interest expense, net		34,660			32,165			2,495		7.8		3.8		3.9
Other expense (income), net		1,813			(175	)		1,988		—		0.2		—
Income before income taxes and cumulative effect of change in accounting principle		12,736			12,480			256		2.1		1.4		1.5
Provision for income taxes		6,941			4,351			2,590		59.5		0.8		0.5
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE		5,795			8,129			(2,334	)	(28.7	)	0.6		1.0
Cumulative effect of change in accounting principle, net of tax benefit		(398	)		—			(398	)	—		—		—
NET INCOME	$	5,397		$	8,129		$	(2,732	)	(33.6	)%	0.6	%	1.0	%

As noted above under “Major Developments,” we acquired ICL in July 2006. The following discussion refers to this acquisition as the “ICL Acquisition.”

Net Sales.

Fiscal years ended October 1, 2006 and October 2, 2005					Change				As a % of the Total
(Dollars in thousands)	2006		2005		$		%		2006		2005
NET SALES BY SEGMENT
Metal packaging	$	552,968	$	528,512	$	24,456	4.6	%	60.2	%	63.7	%
Plastics packaging		365,545		300,597		64,948	21.6		39.8		36.3
CONSOLIDATED NET SALES	$	918,513	$	829,109	$	89,404	10.8	%	100.0	%	100.0	%

The increase in metal packaging segment net sales for 2006 over 2005 is primarily related to net volume gains and to the ICL Acquisition. The increase in plastics packaging segment net sales for 2006 over 2005 is primarily due to higher selling prices related to higher resin costs and, to a lesser extent, revenue from the ICL Acquisition.

Cost of Products Sold.

Fiscal years ended October 1, 2006 and October 2, 2005					Change				As a % of the Total
(Dollars in thousands)	2006		2005		$		%		2006		2005
COST OF PRODUCTS SOLD BY SEGMENT (excluding depreciation and amortization)
Metal packaging	$	459,217	$	439,844	$	19,373	4.4	%	57.7	%	61.6	%
Plastics packaging		335,217		273,851		61,366	22.4		42.1		38.4
SEGMENT CPS		794,434		713,695		80,739	11.3		99.8		100.0
Corporate undistributed expenses		1,967		344		1,623	471.8		0.2		—
CONSOLIDATED CPS	$	796,401	$	714,039	$	82,362	11.5	%	100.0	%	100.0	%

The increase in cost of products sold, excluding depreciation and amortization, (“CPS”) for the metal packaging segment for 2006 over 2005 is primarily due to the net increase in metal packaging sales volume and to the ICL Acquisition. Metal packaging CPS improved in 2006 over 2005 by approximately $3.5 million related to changes in the LIFO reserve resulting from movements in raw material costs. Metal packaging segment CPS as a percentage of segment net sales decreased to 83.0% in 2006 from 83.2% in 2005.

The increase in CPS for the plastics packaging segment in 2006 from 2005 is primarily due to higher raw material costs and to the ICL Acquisition, partially offset by reduced spending and manufacturing productivity. Plastics packaging segment CPS increased by approximately $3.0 million related to changes in the LIFO reserve due to movements in raw material costs. Plastics packaging segment CPS as a percentage of segment net sales increased to 91.7% in 2006 from 91.1% in 2005 primarily

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as a result of higher raw material costs for plastic resin that could not be passed on through increases in selling prices.

The increase in corporate undistributed expenses in 2006 over 2005 is primarily related to higher stock-based compensation expense associated with options issued after the Transaction.

Depreciation and Amortization.

Fiscal years ended October 1, 2006 and October 2, 2005	2006		2005		Change					As a % of the Total
(Dollars in thousands)					$			%		2006		2005
DEPRECIATION AND AMORTIZATION BY SEGMENT
Metal packaging	$	21,381	$	21,468	$	(87	)	(0.4	)%	51.4	%	49.7	%
Plastics packaging		18,331		19,646		(1,315	)	(6.7	)	44.0		45.5
SEGMENT D&A		39,712		41,114		(1,402	)	(3.4	)	95.4		95.1
Corporate		1,903		2,101		(198	)	(9.4	)	4.6		4.9
CONSOLIDATED D&A	$	41,615	$	43,215	$	(1,600	)	(3.7	)%	100.0	%	100.0	%

The decrease in metal packaging segment depreciation and amortization expense (“D&A”) in 2006 from 2005 primarily relates to lower scheduled amortization of intangibles, which was partially offset by increased amortization associated with the ICL Acquisition.

The decrease in plastics packaging segment D&A in 2006 from 2005 primarily relates to approximately $3.9 million of additional depreciation in 2005 associated with the shortened useful lives on certain assets offset by higher scheduled amortization of intangibles and to the amortization of intangibles associated with the ICL Acquisition

Selling and Administrative Expense.

Fiscal years ended October 1, 2006 and October 2, 2005					Change					As a % of the Total
(Dollars in thousands)	2006		2005		$			%		2006		2005
SELLING AND ADMINISTRATIVE EXPENSE BY SEGMENT
Metal packaging	$	6,558	$	6,837	$	(279	)	(4.1	)%	22.0	%	30.9	%
Plastics packaging		3,974		4,561		(587	)	(12.9	)	13.3		20.6
SEGMENT S&A		10,532		11,398		(866	)	(7.6	)	35.4		51.5
Corporate undistributed expenses		19,245		10,722		8,523		79.5		64.6		48.5
CONSOLIDATED S&A	$	29,777	$	22,120	$	7,657		34.6	%	100.0	%	100.0	%

The increase in consolidated selling and administrative expense (“S&A”) in 2006 from 2005 is primarily due to stock-based compensation expense of $8.8 million in 2006 associated with the exercise of certain stock options partially offset by general cost savings and lower spending in each of the segments.

Other Changes

Restructuring and Impairment Charges. In 2005, we recorded a $5.3 million charge consisting of a $1.0 million impairment charge and a $4.3 million restructuring charge. The impairment charge related to the write-down of certain manufacturing equipment. The majority of the restructuring charge related to costs associated with the shutdown of certain of our plastics manufacturing facilities and related severance costs. A portion of the restructuring charge related to shutdown costs included the net present value of future lease payments, net of expected sublease proceeds, and other obligations associated with facilities that were closed in the third quarter of 2005.

The restructuring charge in 2006 primarily related to on-going holding costs and severance related to the closures in 2005, including a charge of approximately $0.8 million related to a revision in our sublease assumption for one of the closed facilities.

Interest Expense, Net. Interest expense, net, increased $2.4 million in 2006 from 2005 primarily due to higher interest rates and to additional borrowings associated with the ICL Acquisition. Interest expense, net, in 2006 includes $0.2 million in deferred financing costs written off associated with the refinancing of the revolver component of the credit facility.

Other, Net. Other expense, net, in 2006 includes $0.8 million in third party expenses incurred in connection with the refinancing of the term loan component of the credit facility that could not be capitalized as deferred financing costs in accordance with applicable accounting guidance. Other expense, net, in each of 2006 and 2005 includes $0.5 million in financial advisory fees paid to Kelso. Other income, net, in 2005 included gains on the sale of idled equipment and a vacant manufacturing facility in Dallas, Texas.

Provision for Income Taxes. The provision for income taxes increased approximately $2.5 million to $6.9 million in 2006 from $4.4 million in 2005. The increase in the provision for income taxes was due primarily to a $0.9 million tax assessment by the Puerto Rican tax authority and to a $1.0 million adjustment to our estimated effective state tax rate.

Cumulative Effect of Change in Accounting Principle, Net of Tax Benefit. Upon adoption of FIN 47 in the fourth quarter of 2006, we recorded an increase in property, plant and equipment of $0.6 million and recognized an asset retirement obligation of $1.2 million. This resulted in the recognition of a non-cash cumulative effect of a change in accounting principle of $0.4 million, net of a $0.2 deferred tax benefit, in 2006.

14

2005 and 2004

The following table sets forth changes in our statements of operations and line items as a percentage of net sales for 2005 (year ended October 2, 2005) and 2004 (year ended October 3, 2004).

Fiscal years ended October 2, 2005 and October 3, 2004	2005			2004		Change					As a % of Net Sales
(Dollars in thousands)						$			%		2005		2004
NET SALES	$	829,109		$	611,588	$	217,521		35.6	%	100.0	%	100.0	%
Cost of products sold (excluding depreciation and amortization)		714,039			529,064		184,975		35.0		86.1		86.5
Gross profit (excluding depreciation and amortization)		115,070			82,524		32,546		39.4		13.9		13.5
Depreciation and amortization		43,215			31,724		11,491		36.2		5.2		5.2
Selling and administrative expense		22,120			14,040		8,080		57.5		2.7		2.3
Restructuring and impairment charge		5,265			352		4,913		—		0.6		0.1
Interest expense, net		32,165			26,889		5,276		19.6		3.9		4.4
Other (income) expense, net		(175	)		178		(353	)	111.4		—		—
Income before income taxes		12,480			9,341		3,139		33.6		1.5		1.5
Provision for (income taxes		4,351			3,634		717		19.7		0.5		0.6
NET INCOME	$	8,129		$	5,707	$	2,422		42.4	%	1.0	%	0.9	%

As noted above under “Major Developments,” we acquired NAMPAC in July 2004. The following discussion refers to this acquisition as the “NAMPAC Acquisition.”

Net Sales.

Fiscal years ended October 2, 2005 and October 3, 2004	2005		2004		Change				As a % of the Total
(Dollars in thousands)					$		%		2005		2004
NET SALES BY SEGMENT
Metal packaging	$	528,512	$	518,658	$	9,854	1.9	%	63.7	%	84.8	%
Plastics packaging		300,597		92,930		207,667	223.5		36.3		15.2
CONSOLIDATED NET SALES	$	829,109	$	611,588	$	217,521	35.6	%	100.0	%	100.0	%

The increase in metal packaging segment net sales for 2005 over 2004 is primarily related to volume gains in certain product lines and by higher selling prices related to the pass through of higher metal costs, partially offset by the loss of the Folgers coffee can business in the first half of 2004, to voluntary reductions in certain unprofitable material center sales as capacity was redirected to meet internal needs and to volume decreases in other product lines.

The increase in plastics packaging segment net sales for 2005 over 2004 is attributable to the NAMPAC Acquisition, which occurred in July 2004.

Cost of Products Sold.

Fiscal years ended October 2, 2005 and October 3, 2004	2005		2004		Change					As a % of the Total
(Dollars in thousands)					$			%		2005		2004
COST OF PRODUCTS SOLD BY SEGMENT (excluding depreciation and amortization)
Metal packaging	$	439,844	$	455,459	$	(5,615	)	(1.3	)%	61.6	%	84.2	%
Plastics packaging		273,851		83,052		190,799		229.7		38.4		15.7
SEGMENT CPS		713,695		528,511		185,184		35.0		100.0		99.9
Corporate undistributed expenses		344		206		138		67.0		—		—
Acquisition related expenses		—		347		(347	)	(100.0	)	—		0.1
CONSOLIDATED CPS	$	714,039	$	529,064	$	184,975		35.0	%	100.0	%	100.0	%

The decrease in cost of products sold, excluding depreciation and amortization, (“CPS”) for the metal packaging segment for 2005 from 2004 is primarily due to the net decrease in metal packaging sales volume partially offset by an increase in raw material costs associated with steel surcharges. Additionally, metal packaging segment CPS was negatively impacted by approximately $5.1 million related to changes in the LIFO reserve resulting from movements in raw material costs.

Metal packaging segment CPS as a percentage of segment net sales decreased to 83.2% in 2005 from 85.9% in 2004. The decrease in CPS as a percentage of segment net sales is primarily a result of the pass through of steel surcharges as well as manufacturing efficiencies. In the fourth quarter of 2004, we began the implementation of a lean manufacturing program in the metal packaging segment to increase its operating efficiency and productivity. We began realizing the benefits of this initiative during the second quarter of 2005 and realized additional benefits in 2006. Some of the improvements in metal packaging segment CPS as a percentage of segment net sales were temporary.

The increase in CPS for the plastics packaging segment in 2005 from 2004 is primarily due to the NAMPAC Acquisition, which occurred in July 2004, partially offset by the efficiencies from the closure of three plastics manufacturing facilities. Plastics packaging segment CPS was negatively impacted by approximately $2.5 million related to changes in the LIFO reserve resulting from movements in raw material costs.

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Plastics packaging segment CPS as a percentage of segment net sales increased to 91.1% in 2005 from 89.4% in 2004 primarily as a result of higher operating costs associated with the NAMPAC Acquisition and to higher raw material costs for plastic resin.

Corporate undistributed expenses of $0.3 million and $0.2 million in 2005 and 2004, respectively, represent stock-based compensation associated with options issued after the Transaction. Acquisition related expenses in 2004 represent the recognition of manufacturer’s profit in beginning inventory resulting from the NAMPAC Acquisition.

Depreciation and Amortization.

Fiscal years ended October 2, 2005 and October 3, 2004	2005		2004		Change					As a % of the Total
(Dollars in thousands)					$			%		2005		2004
DEPRECIATION AND AMORTIZATION BY SEGMENT
Metal packaging	$	21,468	$	25,178	$	(3,710	)	(14.7	)%	49.7	%	79.4	%
Plastics packaging		19,646		4,674		14,972		320.3		45.5		14.7
SEGMENT D&A		41,114		29,852		11,262		37.7		95.1		94.1
Corporate		2,101		1,872		229		12.2		4.9		5.9
CONSOLIDATED D&A	$	43,215	$	31,724	$	11,491		36.2	%	100.0	%	100.0	%

The decrease in metal packaging segment depreciation and amortization expense (“D&A”) in 2005 from 2004 primarily relates to additional depreciation expense of $5.8 million related to the shortened useful lives of assets disposed of following the closure of our Picayune, Mississippi manufacturing facility in the second half of 2004.

The increase in plastics packaging segment D&A in 2005 from 2004 is a result of the NAMPAC Acquisition. In addition, 2005 includes approximately $3.9 million of additional depreciation associated with the shortened useful lives on certain assets, primarily equipment, which have been disposed of or reclassified to assets held for sale in connection with the closure of certain of our plastics manufacturing facilities.

Selling and Administrative Expense.

Fiscal years ended October 2, 2005 and October 3, 2004	2005		2004		Change					As a % of the Total
(Dollars in thousands)					$			%		2005		2004
SELLING AND ADMINISTRATIVE EXPENSE BY SEGMENT
Metal packaging	$	6,837	$	7,080	$	(243	)	(3.4	)%	30.9	%	50.5	%
Plastics packaging		4,561		1,579		2,982		188.9		20.6		11.2
SEGMENT S&A		11,398		8,659		2,739		31.6		51.5		61.7
Corporate undistributed expenses		10,722		5,381		5,341		99.3		48.5		38.3
CONSOLIDATED S&A	$	22,120	$	14,040	$	8,080		57.5	%	100.0	%	100.0	%

The decrease in metal packaging segment selling and administrative expenses (“S&A”) in 2005 from 2004 relates primarily to general cost savings and lower spending in 2005.

The increase in plastics packaging segment S&A in 2005 over 2004 is primarily related to higher costs associated with the NAMPAC Acquisition, which occurred in the fourth quarter of 2004.

Corporate undistributed expenses include $1.5 million and $0.9 million in 2005 and 2004, respectively, of stock-based compensation expense. Excluding the increase in stock-based compensation, the net increase in corporate undistributed S&A primarily relates to wages and expenses associated with the Sarbanes-Oxley compliance initiative, an increase in bonus expense and higher professional fees. Bonus expense increased approximately $2.4 million in 2005 over 2004 as a result of the company meeting certain performance measures in 2005 that were not met in 2004.

Restructuring and Impairment, Interest, Taxes and Other

Restructuring and Impairment Charges. In 2005, we recorded a $5.3 million charge consisting of a $1.0 million impairment charge and a $4.3 million restructuring charge. The impairment charge relates to the write-down of certain manufacturing equipment subsequently sold in 2006. The restructuring charge consists of $0.3 million related to costs associated with the shutdown of our manufacturing facility in Picayune, Mississippi, $3.1 million related to costs associated with the shutdown of certain of our plastics manufacturing facilities, $1.0 million related to severance costs associated with the closure of certain of the plastics manufacturing facilities and the elimination of redundant positions as a result of the NAMPAC Acquisition and $(0.1) million to adjust a previously recorded facility closure exit liability.

A portion of the $3.1 million restructuring charge related to shutdown costs, as discussed above, includes the net present value of future lease payments, net of expected sublease proceeds, and other obligations associated with facilities that were closed in the third quarter of 2005.

Interest Expense, Net. Interest expense, net, increased $5.3 million in 2005 from 2004. The increase is primarily due to higher outstanding borrowings in 2005 associated with the financing of the NAMPAC Acquisition in the fourth quarter of 2004. In addition, the increased borrowings are at variable

16

interest rates, which increased in 2005. Included in 2004 interest expense, net, is $1.3 million related to the write-off of deferred financing fees associated with the refinancing of our revolving credit facility and approximately $0.4 million in additional interest related to the Senior Notes due to the additional week in 2004.

Other, Net. Other, net, in 2005 relates primarily to gains on the sale of idled equipment and a vacant manufacturing facility in Dallas, Texas.

Provision for Income Taxes. The provision for income taxes increased $0.8 million to $4.4 million in 2005 from $3.6 million in 2004. The effective tax rate decreased in 2005 to 34.9% from 38.9% in 2004 primarily due to the impact on the effective tax rate of foreign income from operations in Puerto Rico acquired in the NAMPAC Acquisition that are taxed at rates other than the federal statutory rate.

Seasonality

Sales of certain of our products are to some extent seasonal, with sales levels generally higher in the second half of our fiscal year due primarily to higher demand for paint and related products during warmer periods.

Liquidity and Capital Resources

The ICL Acquisition in 2006 required total cash of approximately $68.4 million, which was funded by $50.0 million in term loan borrowings by ICL and from a portion of the proceeds of additional term loan borrowings by BWAY. The term loans are further discussed below. The $68.4 million includes approximately $1.7 million in transaction costs associated with the acquisition and approximately $0.4 million in purchase price adjustments settled in fiscal 2007, which were accrued as of October 1, 2006.

In connection with the ICL Acquisition, we refinanced our existing credit facility, which now provides a U.S. dollar term loan of $190.0 million and a Canadian dollar term loan of $50.0 million, which is denominated in Canadian dollars (Cdn$56.4 million at the time of borrowing). The Canadian dollar term loan was borrowed by ICL. The $240.0 million in term loan proceeds were used to repay the existing term loan outstanding of $165.3 million, to pay the consideration and transaction costs related to the ICL Acquisition of approximately $68.4 million and to pay financing fees and costs of approximately $3.5 million related to the new credit facility. In addition, the new credit facility increases our revolver from $30.0 million to $50.0 million and provides for a $5.0 million revolver, which can be borrowed by ICL. There were no revolver borrowings drawn on the initial borrowing date or outstanding at year-end.

The interest rates on our term loan borrowings are variable. The weighted-average borrowing rate on these variable rate loans at the end of 2006 was approximately 7.0%.

During 2006, we used available cash on hand to pay a $10.0 million dividend to BCO Holding. The dividend was used by BCO Holding to purchase shares of BCO Holding common stock controlled by our chairman and chief executive officer, and to cash settle the exercise of a portion of his Exchange Options.

Our cash requirements for operations and capital expenditures during 2006 and 2005 were primarily financed through internally generated cash flows and borrowings under our revolving credit facility. During 2006, cash and cash equivalents decreased $0.9 million to $51.0 million. In the first quarter of 2007, we made a voluntary repayment of $20.0 million on the U.S. term loan. Repayments permanently reduce the term loan.

Debt increased in 2006 by $44.7 million primarily as a result of borrowings to finance the ICL Acquisition offset by a $30.0 million term loan payment in the first quarter of 2006.

At the end of 2006, we had $8.0 million in standby letter of credit commitments that reduced our available borrowings under the U.S. Revolver to $42.0 million. There were no borrowings under the $5.0 million Canadian revolver at the end of 2006.

We expect that cash provided from operations and available borrowings under the revolvers will provide sufficient working capital to operate our business, to make expected capital expenditures and to meet foreseeable liquidity requirements, including debt service on our long-term debt, including the Senior Notes, in the next 12 months. However, we cannot provide assurance that our business will generate sufficient cash flows or that future borrowings will be available in an amount sufficient to enable us to service our debt or to fund our other liquidity needs in the long term.

The Senior Notes and the Credit Facility are subject to certain covenants, which we were in compliance with at October 1, 2006. For a discussion of these covenants and for further information on our long-term debt, see Note 6 to the consolidated financial statements under Item 8 of this report.

The following table presents financial information on our cash flows and changes in cash and cash equivalents for 2006, 2005 and 2004:

17

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006			2005			2004			Change 2005 to 2006			Change 2004 to 2005
Net cash provided by operating activities	$	60,933		$	64,324		$	45,098		$	(3,391	)	$	19,226
Net cash used in investing activities		(92,131	)		(19,247	)		(220,857	)		(72,884	)		201,610
Net cash provided by (used in) financing activities		30,288			(20,513	)		202,836			50,801			(223,349	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(910	)		24,564			27,077			(25,474	)		(2,513	)
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	50,979		$	51,889		$	27,325		$	(910	)	$	24,564

The increase in cash provided by operating activities from 2004 to 2005 is primarily a result of additional business associated with the NAMPAC Acquisition in the fourth quarter of 2004. We paid cash interest of $33.2 million, $29.9 million and $22.6 million in 2006, 2005 and 2004, respectively. The increase in interest is primarily due to borrowings in 2004 related to the NAMPAC Acquisition and, to a lesser extent, higher interest rates. We paid income taxes of $20.0 million and $0.4 million in 2006 and 2005, respectively, and received an income tax refund of $2.5 million in 2004.

We used cash in investing activities for capital expenditures of $25.0 million, $20.3 million and $19.1 million in 2006, 2005 and 2004, respectively. Increases in capital expenditures are primarily related to certain manufacturing improvement initiatives. Included in 2006 are capital expenditures for improvements required to meet certain environmental standards. Investing cash flows related to business acquisitions were $68.4 million in 2006 (ICL) and $202.3 million in 2004 (primarily NAMPAC). We expect lower capital expenditures in FY 2007.

Changes in cash related to financing activities are due to the following: net long-term debt borrowings of $44.1 million in 2006 and $197.8 million in 2004 were primarily related to the funding of the acquisitions discussed above. We had net repayments of $19.7 million in 2005. We received a capital contribution of $30.0 million in 2004 to partially fund the NAMPAC Acquisition and paid a dividend of $10.0 million in 2006 to fund the purchase of stock and settlement of options by BCO Holding, as discussed above.

Market Risk

Our cash flows and earnings are exposed to the risk of interest rate changes resulting from variable rate borrowings under our Credit Facility. Borrowings under the Credit Facility bear interest on the outstanding Term Loan and the Revolver borrowings at an applicable margin (based on certain ratios contained in the credit agreement) plus a market rate of interest. At the end of 2006, we had Term Loan borrowings of $240.0 million that were subject to interest rate risk. Each 100 basis point increase in interest rates relative to these borrowings would reduce annual pretax earnings by approximately $2.4 million based on the debt level at the end of the year. There were no outstanding borrowings at the end of 2006 under the Revolvers.

Our business is also exposed to variations in the prices of steel and of plastic resin. See “Commodity Risk” below and Item 1, “Business.”

The fair value of the Senior Notes is exposed to the market risk of interest rate changes. A 100 basis point increase in interest rates would reduce the market value of the Senior Notes by approximately $6.4 million.

Off-Balance Sheet Arrangements

None.

Contractual Obligations and Commercial Commitments

The following table summarizes our significant contractual obligations at the end of 2006:

18

	Payments Due by Period
(Dollars in millions)	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
CONTRACTUAL OBLIGATIONS
Long-term debt obligations (1)(2)(3)	$	440.0	$	20.5	$	4.5	$	204.4	$	210.6
Interest on the Senior Notes (4)		90.0		20.0		40.0		30.0		—
Operating and capital lease obligations		57.9		10.0		17.5		13.2		17.2
Other long-term liabilities (5)		21.3		1.3		3.3		3.5		13.2
TOTAL CONTRACTUAL OBLIGATIONS	$	609.2	$	51.8	$	65.3	$	251.1	$	241.0

(1) Includes $200.0 million in principal amount of our 10% Senior Subordinated Notes due 2010 and $240.0 million of outstanding borrowings under the Term Loans. There were no outstanding borrowings under the Revolvers. In the event of a continuing event of default (as defined in the credit facility agreement), the agent could declare outstanding borrowings immediately due and payable and/or may terminate any future borrowings under the facility. As of October 1, 2006, we had borrowing capacity under the Revolvers of approximately $47.0 million. The Revolvers expire July 17, 2012; the Term Loans have scheduled quarterly repayments due with final maturity on July 17, 2013.

(2) Included in the payments due in less than one year is a $ 20.0 million voluntary repayment on the US Term Loan made in November 2006. Prepayments reduce future scheduled payments.

(3) In the event of a continuing event of default (as defined in the indenture governing the Senior Notes due 2010), the trustee or holders of 25% of the outstanding principal could declare the principal and accrued interest on all the notes to be immediately due and payable. In the event of a change in control (as defined in the indenture governing the Senior Notes), each holder of notes shall have the right to require us to purchase all or a portion of the holder’s notes at 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. As of October 1, 2006, $200.0 million in principal amount was outstanding.

(4) The table does not include variable interest payable on Term Loan borrowings. Based on outstanding Term Loan borrowings of $240.0 million and a weighted-average interest rate of 7.0% at October 1, 2006, our annual interest obligation would be approximately $16.8 million.

(5) Other long-term obligations include certain future payments related to supplemental executive retirement benefit obligations for certain of our current and retired executives, pension liabilities and other postretirement benefits. The amounts shown in the table are the maximum future benefit payments subject to certain actuarial assumptions regarding life expectancy, which differ from the actuarially determined liability related to these obligations recorded in the financial statements. The current and long-term actuarially determined amounts are included in our consolidated balance sheet in “Other Current Liabilities” and “Other Long-Term Liabilities,” respectively, as of October 1, 2006.

At the end of 2006, we had standby letters of credit, which expire in less than one year, in the aggregate amount of approximately $8.0 million in favor of our workers’ compensation insurers and purchasing card vendor. The standby letters of credit reduce the borrowing capacity under the U.S. Revolver, and at the end of 2006, $42.0 million of the $50.0 million facility was available. All of the $5.0 million Canadian Revolver was available at the end of 2006.

Effect of Inflation

Historically, in certain circumstances, we have been able to pass through price increases in our primary raw materials (steel and resin) to our customers. Although we generally have been able to increase the price of our products to reflect increases in the price of these raw materials, we cannot rely on our ability to do so in the future. However, we believe that inflation in the near term will not have a material adverse impact on us.

New Accounting Standards

In December 2004, the Financial Accounting Standards Board (the “FASB”) issued Statement of Financial Accounting Standards (“SFAS”) 123 (revised 2004), Share-Based Payment (“SFAS 123R”), which eliminates the ability to account for share based compensation transactions using APB 25 and generally requires that such transactions be accounted for using a fair value-based method with the resulting compensation cost recognized over the period that the employee is required to provide service in order to receive their compensation. SFAS 123R also amends SFAS 95, Statement of Cash Flows, requiring the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as currently required. For purposes of SFAS 123R, a nonpublic entity as defined in the Statement includes entities that have only debt securities trading in a public market.

        We adopted SFAS 123R as of the required effective date for nonpublic entities, which, for us, was October 2, 2006, using the “prospective transition” method. Under the “prospective transition” method, compensation cost is recognized in the financial statements beginning with the effective date for all new awards and to awards modified, repurchased or cancelled after the required effective date. As such, the adoption of the Statement did not result in a cumulative effect of a change in accounting principle. However, SFAS 123R will have an impact on our consolidated financial statements for new awards and for awards modified, repurchased or cancelled after the required effective date.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections—A Replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS 154”). SFAS 154 requires retrospective application to prior periods’ financial statements for changes in accounting principle, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. SFAS 154 also requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. Indirect effects of a change in accounting principle, such as a change in nondiscretionary profit-sharing payments resulting from an accounting change, should be recognized in the period of the accounting change. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. The Statement does not change the transition provisions of any existing accounting pronouncements. SFAS 154 is effective for accounting changes and errors in previously issued financial statements made in fiscal years beginning after December 15, 2005, which for us is the beginning of 2007. We will follow the provisions of this Statement in the event of any future accounting changes.

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (“FIN 48”). This interpretation clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a tax return and requires that we recognize in our financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. This interpretation also

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provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements for uncertain tax positions. The provisions of FIN 48 are effective for us at the beginning of 2008 (October 2007). We are currently evaluating the impact of FIN 48 on our consolidated financial statements.

In September 2006, the SEC issued SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). SAB 108 states that registrants should use both a balance sheet approach and an income statement approach when quantifying and evaluating the materiality of a misstatement. The interpretations in SAB 108 contain guidance on correcting errors under the dual approach as well as provide transition guidance for correcting errors. This interpretation does not change the requirements within SFAS 154 for the correction of an error on financial statements. SAB 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006, which, for us, is fiscal 2007 ending September 30, 2007. We are currently evaluating the impact of SAB 108 on our consolidated financial statements.

In September 2006, the FASB issued SFAS 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 is effective for us at the beginning of 2009 (October 2008). We are currently evaluating the impact of SFAS 157 on our consolidated financial statements.

In September 2006, the FASB issued SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158”). This Statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability on its statement of financial position. SFAS 158 also requires an employer to recognize changes in that funded status in the year in which the changes occur through comprehensive income. In addition, this statement requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. Since we do not have publicly traded equity securities, SFAS 158 is effective for us at the end of the fiscal year ending after June 15, 2007, which is fiscal 2007 ending September 30, 2007. We are currently evaluating the impact of SFAS 158 on our consolidated financial statements.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, which often require the judgment of management in the selection and application of certain accounting principles and methods. We believe that the quality and reasonableness of our most critical policies enable the fair presentation of our financial position and results of operations. However, investors are cautioned that the sensitivity of financial statements to these methods, assumptions and estimates could create materially different results under different conditions or using different assumptions.

In response to the SEC’s Release No. 33-8040, Cautionary Advice Regarding Disclosure About Critical Accounting Policies, we have identified the following as the most critical accounting policies upon which our financial status depends. These critical policies were determined by considering accounting policies that involve the most complex or subjective decisions or assessments. Our most critical accounting policies are as follows:

Revenue Recognition. We recognize revenue when persuasive evidence of an arrangement exists, our products have been shipped and title and risk of loss have passed, the sales amount is fixed or determinable and collectibility of the amount billed is probable. We record provisions for discounts, returns, allowances, customer rebates and other adjustments in the same period as the related revenues are recorded. We do not engage in revenue arrangements with multiple deliverables.

Accounts Receivable. Accounts receivable are recorded net of an allowance for uncollectibility. The allowance for doubtful accounts is based on management’s assessment of the collectibility of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. The determination of the amount of the allowance accounts is subject to significant levels of judgment and estimation by management. If circumstances change or economic conditions deteriorate, we may need to increase the allowance for doubtful accounts.

Inventories. Inventories are carried at the lower of cost or market. Generally, inventory is determined under the last-in, first-out (LIFO) method of inventory valuation. However, inventory at our ICL subsidiary is determined under the first-in, first-out (FIFO) method of inventory valuation. We estimate reserves for inventory obsolescence and shrinkage based on management’s judgment of future realization. Projected inventory losses are recognized at the time the loss is probable rather than when the goods are ultimately sold.

Accrued Rebates. We provide volume rebates to our customers on certain products. We accrue a provision for these rebates, which is recognized as a reduction of net sales, in the period that the goods are shipped. Accrued rebates may be settled in cash or as a credit against customer accounts receivable.

Long-lived Assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

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In addition, depreciation and amortization expense is affected by our determination of the estimated useful lives of the related assets. We determine estimated useful lives of our fixed assets and finite lived intangible assets based on the type and expected usage of the asset.

Goodwill and Other Intangible Assets. Our intangible assets consist of identifiable intangibles (tradenames, customer relationships and covenants not-to-compete) and goodwill. We amortize finite-lived, identifiable intangible assets over their remaining useful lives in proportion to the underlying cash flows that were used in determining the acquired value. Finite-lived, identifiable intangible assets are also tested for impairment as noted above for long-lived assets. Indefinite-lived identifiable intangibles and goodwill are not amortized, but tested for impairment at least annually at the end of our fiscal year.

We have two reporting units that have goodwill: metal packaging and plastic packaging. We use an independent valuation specialist to assist us in estimating the fair value of each reporting unit for purposes of impairment testing. Fair value estimates are based, in part, on discounted future cash flows and market multiples. If the fair value of a reporting unit exceeds its carrying value, then no further testing is required. If the carrying value of a reporting unit exceeds its fair value, however, a second step is required to determine the amount of the impairment charge, if any. An impairment charge is recognized if the carrying value of a reporting unit’s goodwill exceeds its implied fair value.

We perform our impairment test for our indefinite-lived intangible assets by comparing the fair value of each indefinite-lived intangible asset to its carrying value. The fair value of the asset is estimated based on its discounted future cash flows. We recognize an impairment charge if the carrying value of the asset unit exceeds its estimated fair value.

Commodity Risk

We are subject to various risks and uncertainties related to changing commodity prices for and the availability of the materials (primarily steel and resin) and processed energy (primarily electric power and natural gas) used in the manufacture of our products.

Environmental Matters

For information regarding environmental matters, see Item 1. “Business - Environmental, Health and Safety Matters.”

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We do not purchase, sell or hold derivatives or other market risk-sensitive instruments to hedge commodity price risk, interest rate risk or exchange rate risk or for trading purposes.

For a discussion of interest rate risk and its relation to our indebtedness, see “Liquidity and Capital Resources” in Item 7, which is incorporated herein by reference.

For a discussion of commodity risk and its relation to our cost of products sold, see Item 1, “Business,” and “Commodity Risk” in Item 7, which is incorporated herein by reference.

Our purchases in transactions denominated in foreign currencies are not significant and we do not believe we are exposed to a significant market risk of exchange rate changes related to fluctuations in the value of these foreign currencies in relation to the local currency.

Item 8. Financial Statements and Supplementary Data

See the attached Consolidated Financial Statements on pages F-1 through F-34.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures: Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has concluded, based upon its evaluation as of the end of the period covered by this report, that our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Control Over Financial Reporting: There have been no changes in our internal controls over financial reporting during the three months ended October 1, 2006 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10. Directors and Executive Officers of the Registrant

Our by-laws provide that the size of the Board of Directors (the “Board”) shall be fixed from time to time by resolution of the Board and that the remaining directors may fill vacancies on the Board. The Board currently consists of six directors. Each director elected shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as provided in the by-laws.

The Board has determined that each director serving on its audit committee is an independent financial expert in accordance with Item 401(h) of Regulation S-K. The Board determined “independence” as the term is defined in the listing requirements of the New York Stock Exchange.

We have adopted a code of ethics that applies to our executive officers, including, but not limited to, our chief executive and chief financial officers and to other members of management.

The following sets forth certain information as of December 1, 2006 with respect to BWAY’s Board and to certain of its officers (including all executive officers), who serve at the discretion of the Board.

Name	Age	Business Experience
Jean-Pierre M. Ergas Chairman of the Board and Chief Executive Officer	67	Mr. Ergas became our chairman and chief executive officer in January 2000. Mr. Ergas has served as one of our directors since August 1995 and served as our board’s vice chairman from July 1999 to December 1999. Mr. Ergas has also previously served as executive vice president, Europe of Alcan Aluminum Limited, president of Alcan Europe Limited, executive chairman of British Alcan Aluminum plc. and chief executive officer of Alcan Deutschland GmbH from June 1996 to December 1999. Mr. Ergas served as senior advisor to the chief executive officer of Alcan Aluminum Limited from January 1995 to June 1996 and served as a trustee of DePaul University from February 1994 to December 1994. Prior thereto, Mr. Ergas served as senior executive vice president of Pechiney S.A. and as a member of the Pechiney Group executive committee from 1987 to January 1994 and also held several management positions with various subsidiaries of Pechiney S.A., serving as: chief executive officer of American National Can Company from 1989 to January 1994 and chairman of the board from 1991 to January 1994; chief executive officer of Cegedur Pechiney from 1982 to 1988 and chairman of the board from 1987 to 1988; chief executive officer of Cebal S.A. from 1974 to 1982 and chairman of the board during 1982; and marketing manager for Pechiney Aluminum from 1967 to 1974. Mr. Ergas is a trustee of DePaul and AUP Universities and a director of Dover Corporation and Compagnie Plastic Omnium.
Warren J. Hayford Non-Executive Vice-Chairman of the Board	77	Mr. Hayford became the non-executive vice-chairman of our board in December 1999. From 1989 until December 1999, Mr. Hayford served as our chief executive officer and our board’s chairman. Mr. Hayford has held a number of senior positions within the packaging industry over the past 35 years including president and chief operating officer of Gaylord Container Corporation, a manufacturer of paper packaging products, 1986 to 1988, and vice chairman of Gaylord Container, 1988 through 1992. Prior to Gaylord Container, Mr. Hayford served as president and a director of Gencorp, Inc., president and a director of Navistar International Corporation and executive vice president and a director of the Continental Group, Inc.
David I. Wahrhaftig Director	49	Mr. Wahrhaftig became one of our directors in February 2003. Mr. Wahrhaftig joined Kelso in 1987 and has served as a managing director since 1998. Prior to becoming a managing director of Kelso, he was a vice president. Mr. Wahrhaftig is also a director of DS Waters Enterprises, Inc., Insurance Auto Auctions, Inc., Renfro Corporation and U.S. Electrical Services, LLC. Mr. Wahrhaftig is also on the Board of Visitors at Wake Forest University.
Thomas R. Wall, IV Director	48	Mr. Wall became one of our directors in February 2003. Mr. Wall joined Kelso in 1983 and is currently a managing director. Mr. Wall spent the previous three years as a lending officer in the corporate division of Chemical Bank, where his responsibilities included the analysis and evaluation of lending proposals for numerous leveraged buyouts. Mr. Wall is a director of Ellis Communications Group, LLC, Endurance Business Media, Inc., Mitchell Supreme Fuel Company, Renfro Corporation and U.S. Electrical Services, LLC. Mr. Wall is also a Trustee of Choate Rosemary Hall.

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Name	Age	Business Experience
David M. Roderick Director	82	Mr. Roderick became one of our directors in May 2003. Mr. Roderick has served as chairman of the board of Earle M. Jorgensen Company since January 1998. He was chairman and chief executive officer of USX Corporation from 1979 to 1989 and president from 1975 to 1979. Mr. Roderick is a member of the boards of the University of Pittsburgh Medical Center and Citation Corporation. He is past chairman of both the American Iron and Steel Institute and the International Iron Institute. Mr. Roderick is past chairman of the International Environmental Bureau. He is a co-founder and currently is chairman emeritus of the U.S.-Korea Business Council and is a past chairman of the National Alliance of Business. Mr. Roderick is a trustee and past chairman of the board of trustees of Carnegie Mellon University. He is a past member of the Business Roundtable and a member of the Business Council.
Lawrence A. McVicker Director	66	Mr. McVicker became one of our directors in October 2004. Mr. McVicker is currently the chief effective officer of MVOC, LLC. Mr. McVicker was chairman and chief executive officer of North America Packaging Corporation (“NAMPAC”) from 2001 to July 2004 and was president and chief operating officer of Southcorp Packaging USA from 1999 to 2001. Mr. McVicker served as president and chief operating officer for Waldorf Corporation from 1995 to 1997 and from 1964 to 1995 was employed by Packaging Corporation of America (Tenneco), most recently as the senior vice president of international operations from 1991 to 1995. Mr. McVicker is a trustee of the Miami University Foundation. He has served as vice-chairman, executive committee—recycled paperboard and solid waste task force for the American Forest & Paper Association; served on the executive committee and board of directors of the Paperboard Packaging Council; served on the board of trustees of the Recycled Paperboard Technical Association and of the Miami University Pulp & Paper Foundation.
Kenneth M. Roessler President and Chief Operating Officer of the Company and President and Chief Operating Officer—BWAY Packaging Division	44	Mr. Roessler was appointed president and chief operating officer of the Company in March 2006. From October 2004 to February 2006, Mr. Roessler served as senior vice president of the Company. Mr. Roessler continues to serve as the president and chief operating officer of our BWAY Packaging Division, which he has done since September 2004. From January 2003 through September 2004, Mr. Roessler served as our chief operating officer and from March 2000 until January 2003, he served as our executive vice president of sales and marketing. From June 1993 to February 2000, Mr. Roessler served in various senior management positions with Southcorp Packaging USA, including vice president of sales and marketing from 1998 to February 2000, vice president and general manager from 1995 to 1998 and vice president and chief financial officer from June 1993 through 1995. Prior to June 1993, Mr. Roessler held senior management positions with Berwind Corporation.
Kevin C. Kern Chief Financial Officer and Vice-President of Administration	47	Mr. Kern has been our vice president of administration and chief financial officer since February 2001. From May 1995 until February 2001, Mr. Kern served as our vice president corporate controller. From 1991 to May 1995, Mr. Kern was controller of McKechnie Plastics Components, Inc. From 1981 to 1991, Mr. Kern was employed by Ernst & Young, most recently as a senior audit manager from 1988 to 1991.
Jeffrey M. O’Connell Vice-President, Treasurer and Secretary	53	Mr. O’Connell has been our vice president and treasurer since May 1997 and has served as our secretary since May 2001. From June 1996 to May 1997, Mr. O’Connell served as our assistant treasurer. From June 1995 to June 1996, Mr. O’Connell served as vice president of finance of Macmillan Bloedel Packaging Inc. From October 1994 to June 1995, Mr. O’Connell served as our director of financial planning. Prior thereto, Mr. O’Connell served as vice president of administration of Mead Coated Board Division of The Mead Corporation.

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Name	Age	Business Experience
Thomas K. Linton Senior Vice-President of the Company and President and Chief Operating Officer—NAMPAC Division	53	Mr. Linton was named senior vice president of the Company in October 2004 and has served as president and chief operating officer of our NAMPAC Division since July 2004. Prior to our acquisition of NAMPAC in July 2004, Mr. Linton was vice president and general manager of NAMPAC’s Western Division. From 1997 to 2001, Mr. Linton was the executive vice president and general manager of Field Container Company, where he had responsibility for the consumer packaging business. Between 1991 and 1997, Mr. Linton served as vice president and general manager of the folding carton business at Tenneco Packaging, where he began his career as a sales representative in 1979.

Item 11. Executive Compensation

Our Board’s Management Resources, Nominating and Compensation Committee determines compensation for the Company’s executive officers.

The following tables and notes present information regarding compensation provided by the Company to our Chief Executive Officer and to each of the Company’s four other most highly compensated executive officers (the “Named Executive Officers”) for services rendered to the Company in all capacities during 2004, 2005 and 2006.

Summary Compensation Table

		Annual Compensation			Long-Term Compensation
	Fiscal Year	Salary ($)	Bonus ($) (1)	Other Annual Compensation ($)	Awards		Payouts		All Other Compensation ($)
Name and Principal Position					Securities Underlying Options/SARs (#)		LTIP Payouts ($)
Jean-Pierre M. Ergas	2006	681,667	1,227,000	—	—		8,800,646	(2)	463,257	(3)
Chairman and Chief Executive	2005	637,500	1,490,000	—	—		—		699,517	(4)
Officer	2004	581,250	300,000	—	—		—		446,099	(5)
Kenneth M. Roessler (6)	2006	374,792	505,969	—	—		—		8,800	(7)
President and Chief Operating	2005	339,375	564,219	—	—		—		5,600	(7)
Officer; President and Chief Operating Officer—BWAY Packaging Division	2004	318,750	100,000	—	—		—		1,432	(7)
Thomas K. Linton (8)	2006	318,760	298,838	—	—		—		6,300	(7)
Senior Vice President; President	2005	307,500	217,188	—	—		—		7,060	(7)
and Chief Operating Officer— NAMPAC Division	2004	70,161	150,000	—	120,000	(9)	—		1,811	(7)
Kevin C. Kern	2006	288,542	324,609	—	—		—		3,333	(7)
Chief Financial Officer;	2005	265,625	402,031	—	—		—		3,083	(7)
Vice-President of Administration	2004	246,250	175,000	—	—		—		3,283	(7)
Jeffrey M. O’Connell	2006	194,042	174,638	—	—		—		6,681	(7)
Vice President; Treasurer and	2005	180,625	230,625	—	—		—		6,375	(7)
Secretary	2004	168,125	100,000	—	—		—		5,075	(7)

(1) Bonus amounts were earned during the fiscal year indicated and paid in the subsequent fiscal year.

(2) Compensation related to the cash settlement upon the exercise of 386,221 Exchange Options.

(3) The amount includes an accrual of $459,957 for supplemental executive retirement benefits pursuant to his employment agreement and $3,300 of Company paid 401(k) contributions under the Savings Plan.

(4) The amount includes an accrual of $696,517 for supplemental executive retirement benefits pursuant to his employment agreement and $3,000 of Company paid 401(k) contributions under the Savings Plan.

(5) The amount includes an accrual of $438,349 for supplemental executive retirement benefits pursuant to his employment agreement and $7,750 of Company matching 401(k) contributions under the Savings Plan.

(6) Mr. Roessler served as our executive vice president of sales and marketing from March 2000 through December 2002 and as our chief operating officer from January 2003 through June 2004. Mr. Roessler became the president and chief operating officer of our BWAY Packaging Division in September 2004 and was appointed president and chief operating officer of the Company in March 2006.

(7) The amount represents Company paid 401(k) contributions under the Savings Plan.

(8) Mr. Linton became the president and chief operating officer of our NAMPAC Division following the NAMPAC Acquisition in July 2004. Prior to the acquisition, Mr. Linton was an officer of NAMPAC.

(9) Options were granted under the Holding Incentive Plan (as defined under “BCO Holding Stock Incentive Plan” below) and are exercisable for shares of BCO Holding common stock. Forty percent of the BCO Holding options will generally become exercisable in three equal annual installments with the first installment exercisable on July 8, 2005. Ten percent of the BCO Holding options will generally become exercisable in five equal annual installments if the Company achieves certain EBITDA objectives. The remaining 50% of the BCO Holding options are exit options that will generally become exercisable if certain targets have been achieved upon a change in control.

There were no stock options granted to the Named Executive Officers during fiscal 2006. The following table summarizes options held by the Named Executive Officers at the end of 2006.

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Aggregated Option/SAR Exercises in Last Fiscal Year

and Fiscal Year-End Option/SAR Values

Under the Holding Incentive Plan

	Shares Acquired on Exercise (#)	Value Realized ($)		Number of Securities Underlying Unexercised Options/SARs at Fiscal Year End (#) Exercisable / Unexercisable	Value of Unexercised In-the- Money Options/SARs at Fiscal Year End ($) (1) Exercisable / Unexercisable
Jean-Pierre M. Ergas	386,221	$	8,800,646	727,731 / 417,454	$16,952,811 / 8,845,850
Kenneth M. Roessler	—		—	242,954 / 208,727	5,481,541 / 4,422,925
Thomas K. Linton	—		—	39,200 / 80,800	576,240 / 1,187,760
Kevin C. Kern	—		—	96,533 / 50,095	2,291,362 / 1,061,513
Jeffrey M. O’Connell	—		—	56,587 / 20,873	1,369,252 / 442,299

(1) As of the end of the fiscal year, all of the exercisable, unexercised options held by the Named Executive Officers were in the money. The fair market value of the underlying securities is based on the valuation of the underlying securities as of September 30, 2006 at $31.19 per share.

Long-Term Incentive Plans—Awards in Last Fiscal Year

We did not grant any long-term incentive plan awards to the Named Executive Officers in 2006.

Compensation of Directors

Directors who serve on our Board and who are also employed by us or one of our subsidiaries, or who are employed by Kelso, are not entitled to receive a fee for serving as a director. Each non-employee director is entitled to receive a fee to be determined by the Board. Mr. Hayford receives an annual retainer fee of $100,000 in accordance with his written agreement. Two non-employee directors receive annual retainer fees of $25,000.

Management Employment Agreements

Jean-Pierre M. Ergas. We entered into an amended and restated employment agreement with Jean-Pierre M. Ergas dated as of February 7, 2003, whereby Mr. Ergas will continue to serve as our Chief Executive Officer or, with our consent, our Executive Chairman during the employment period (as described below). Under this agreement, Mr. Ergas will receive an annual base salary, currently at $660,000, as determined by our board (but not less than $550,000), and is eligible to participate in all of our employee benefit plans for which our senior executive employees are generally eligible. Mr. Ergas is eligible to receive an annual bonus of 80% of his base salary (the “Target Bonus”) if certain EBITDA targets are achieved for the applicable fiscal year. If these EBITDA targets are exceeded, Mr. Ergas’ Target Bonus for such fiscal year will be increased to a maximum of 2.5 times his Target Bonus. The Management Resources, Nominating and Compensation Committee of our Board determines the applicable fiscal year EBITDA targets related to the bonus. Under the employment agreement, Mr. Ergas received 802,796 options to purchase BCO Holding common stock pursuant to the BCO Holding Company Stock Incentive Plan. The employment period shall end on December 31, 2007, unless terminated earlier by the resignation, death, or permanent disability or incapacity of Mr. Ergas or we terminate Mr. Ergas’ employment period with or without cause, as defined in the employment agreement, or Mr. Ergas terminates the employment period with or without good reason, as defined in the employment agreement. Upon expiration of the employment period, Mr. Ergas will become non-executive chairman of the Company on such terms and conditions as we shall agree at such time, provided that Mr. Ergas shall be entitled to participate and vest in, and be deemed to be an employee for purposes of, all of our employee benefit programs.

In the event we terminate Mr. Ergas’ employment without cause, or Mr. Ergas terminates his employment for good reason, in each case, prior to December 31, 2007, we shall (i) pay his base salary until the second anniversary of the date of his termination, (ii) pay his target bonus in respect of the fiscal year in which his employment is terminated (or if his target bonuses have not yet been set for either such fiscal year, an amount equal to 70% of his base salary at the date of termination in lieu of the target bonus for either such fiscal year), (iii) reimburse his COBRA premium under our group health plan and dental plan (if any) on a monthly basis for the lesser of the period in which he is eligible to receive such continuation coverage or 18 months, which we define as the COBRA period, and, (iv) upon expiration of the COBRA period, procure individual medical and dental insurance policies for him on substantially similar terms as the coverage we provided to him as of the date of termination. In addition, in the event the employment period is terminated as a result of Mr. Ergas’ death or retirement upon or after reaching age 65, or the employment period expires, Mr. Ergas shall be entitled to receive a pro rata bonus for the year which includes the date of Mr. Ergas’ termination, based on the Company’s performance through such date, as determined by the Management Resources, Nominating and Compensation Committee of our Board.

If Mr. Ergas’ employment terminates for any reason other than for cause, Mr. Ergas will be entitled to a monthly supplemental retirement benefit until his death (and, following his death, until the death of his surviving spouse). The monthly benefit will be equal to one-twelfth of his then-current base salary, multiplied by a percentage multiplier based on the age of Mr. Ergas on the retirement date

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(10% if Mr. Ergas is 62 years of age on the retirement date and increasing by 5% each year for five years to a maximum of 35%). Payments commence on the first day of the calendar month that begins coincident with or immediately after the later of (i) the date on which Mr. Ergas attains age 67, and (ii) Mr. Ergas’ termination date. If we terminate the employment period without cause, because of Mr. Ergas’ permanent disability or incapacity or Mr. Ergas resigns for good reason or after a change of control following the merger, Mr. Ergas shall be entitled to the maximum monthly retirement benefit (as if he were 67 years of age or older on such retirement date). Mr. Ergas has agreed not to compete with us during the term of his employment and so long as he is receiving salary and bonus under the agreement as a result of his termination by us without cause or by him for good reason (but in no event for less than eighteen months after the termination of his employment).

Thomas K. Linton. We entered into a letter agreement with Thomas K. Linton in May 2004 that became effective upon the closing of the NAMPAC Acquisition on July 7, 2004. Pursuant to the agreement, Mr. Linton became President and Chief Operating Officer—NAMPAC Division. Mr. Linton’s base salary was initially set at $300,000 annually and is subject to annual merit increases based on a performance review. Mr. Linton is eligible to participate in our cash incentive plan whereby Mr. Linton’s target bonus would be initially set at 45% of his base salary pending the company achieving certain performance goals as determined by our Board. Mr. Linton was guaranteed a minimum target bonus of $135,000 in fiscal 2004. Mr. Linton is eligible to participate in the Company Stock Incentive Plan and was awarded 120,000 options following the closing of the acquisition.

In the event we terminate Mr. Linton’s employment for reasons other than performance or cause, he will be entitled to his base salary, health and dental benefits and executive outplacement services, each for twelve months following the date of his termination. Mr. Linton will also be entitled to any accrued and unpaid bonus through the date of termination.

In the event of a change in control, as detailed in the agreement, if Mr. Linton is terminated for reasons other than performance or cause within six months following the change in control, he is entitled to a lump sum payment of two times his annual base salary and one times his target incentive bonus, each as in effect at the time of the change in control. Mr. Linton would also be entitled to twenty-four months of health and dental benefits and executive outplacement services. Any benefits under the change in control would be in lieu of any other severance benefits provided for in the agreement.

Change in Control Agreements

Each of Messrs. Ergas, Roessler, Kern and O’Connell is a party to a separate change in control agreement with the Company. Under the terms of each change in control agreement, if Company terminates the executive without cause at any time within 24 months following a change in control event, or if the executive leaves employment during that period for good reason (as defined in each change in control agreement), the executive will be entitled to:

(a) A lump severance payment equal to (1) in the case of Mr. Ergas, the sum of three times his annual base salary at the time of the Transaction and one times his target incentive bonus at the time of the Transaction, (2) in the case of Mr. Roessler, the sum of two times his annual base salary at the time of the Transaction and one times his target incentive bonus at the time of the Transaction, (3) in the case of Mr. Kern, the sum of one and one half times his annual base salary at the time of the Transaction and one times his target incentive bonus at the time of the Transaction, and (4) in the case of Mr. O’Connell, the sum of one times his annual base salary at the time of the Transaction and one times his target incentive bonus at the time of the Transaction.

(b) Payment of any executive perquisites that the executive is receiving as of his separation date until the later of six months (in the case of Mr. Roessler, nine months) from the separation date or the end of the calendar year in which the separation occurs.

(c) Reimbursement of COBRA premiums under the Company’s group health and dental plan on a monthly basis for the period entitled to such continuation coverage.

(d) Individual medical and dental insurance policies on substantially similar terms as provided by the Company as of the separation date for a period of six to 18 months following expiration of the COBRA period (other than for Messrs. Kern and O’Connell).

(e) Payment of premiums for individual life insurance coverage on substantially similar terms as provided by the Company as of the separation date for a period of one to three years following the separation date.

(f) Full vesting of any retirement plans maintained by the Company in which the executive participates as of the separation date.

(g) In the case of the executives other than Mr. Ergas, outplacement services for a period of 12 months.

The change in control agreements provide that if any payments to the executive are considered “excess parachute payments” as defined in Section 280G of the Internal Revenue Code, the amount of the separation payment to an executive described under the first bullet point above will be reduced by the minimum amount necessary to reduce the parachute payments to 299% of the executive’s “base amount” as defined in Section 280G of the Internal Revenue Code. Following termination, each executive is subject to a customary one-year non-compete agreement, which, if breached, would require an executive to repay (or, if unpaid, to forfeit) all the above specified payments and benefits.

The Transaction constituted a change in control pursuant to the above agreements. However, the 24 month period in which the agreements would be applicable to the Transaction expired on February 6, 2005.

The change in control agreements survived the Transaction and are applicable to any future change in control per each respective agreement.

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As discussed above under “Management Employment Agreements,” Mr. Linton’s letter agreement provides certain change in control benefits.

BCO Holding Stock Incentive Plan

In February 2000, the Predecessor adopted the Fourth Amendment and Restatement of the 1995 Long-Term Incentive Plan (the “Predecessor Incentive Plan”). As a result of the Transaction, (which, as defined in the Predecessor Incentive Plan, was an event of a change in control), all outstanding options became immediately vested and exercisable. Certain members of management that held stock options under the Predecessor Incentive Plan entered into Exchange Agreements with BCO Holding whereby their Predecessor Incentive Plan options to acquire shares in BWAY Corporation were exchanged 2-for-1 for new options under the Holding Incentive Plan with an exercise price of $10.00 per share of BCO Holding common stock (“Exchange Options”). The Exchange Options were fully vested as of the closing of the Transaction and were issued with substantially the same terms and conditions in effect immediately before the exchange.

Effective with the closing of the Transaction in February 2003, BCO Holding, our parent company, assumed the Predecessor Incentive Plan, which was replaced in July 2004 with the Amended and Restated BCO Holding Stock Incentive Plan (the “Holding Incentive Plan”). The July 2004 amendment increased the number of available shares of the common stock of BCO Holding subject to options from 2,006,989 to 2,395,103.

Three types of options may be granted under the BCO Plan:

Service options. These options generally become exercisable in up to three equal annual installments commencing on the first anniversary of the grant date.

Performance options. These options generally become exercisable in five equal annual installments if the Company achieves certain specified EBITDA objectives.

Exit options. These options generally become exercisable only if the Kelso affiliates are able to sell all or substantially all of their equity investment in BCO Holding at a price greater than or equal to four times their initial investment (taking into account all options) and achieve at least a 15% internal rate of return, compounded annually, subject to certain exceptions. Exit options become exercisable ratably between two times the exit value and four times the exit value.

Under the BCO Plan, 40% of the options (approximately 958,000) will be service options, 10% (approximately 239,000) will be performance options and 50% (approximately 1,198,000) will be exit options.

In the event that a participant’s employment with us terminates by reason of death, disability or retirement, the participant (or the participant’s beneficiary) may exercise any vested options within one year following the termination or the normal date of the options, whichever period is shorter, and all unvested options are canceled immediately upon such termination. If we terminate the participant for cause, all options, whether vested or unvested, are immediately canceled. In the event a participant’s employment terminates due to voluntary resignation or any reason other than those described above, any options held by the participant that are exercisable at the date of such termination, shall remain exercisable for a period of sixty days following the termination.

Upon a change in control, each outstanding service option (regardless of whether such service options are at such time otherwise exercisable), each performance option that is exercisable on or prior to the change in control and each exit option that is exercisable on or prior to the change in control shall be canceled in exchange for a payment in cash of an amount equal to the excess, if any, of the change in control price over the option price. Alternatively, the Compensation Committee of the BCO Holding board of directors may determine that in the event of a change in control, such options shall be honored or assumed, or new rights substituted therefore by the new employer on a substantially similar basis and in accordance with the terms and conditions of the BCO Plan. The BCO Plan also provides that if any payments to the participant are considered “excess parachute payments” as defined in Section 280G of the Internal Revenue Code, the amount of the payment to a participant under the BCO Plan will be reduced by the minimum amount necessary to reduce the parachute payments to 299% of the participant’s “base amount” as defined in Section 280G of the Internal Revenue Code.

The Compensation Committee of the Board of Directors of BCO Holding administers the BCO Plan or, if there shall not be any committee serving, the board administers the plan. The committee has discretionary authority to determine the employees eligible to participate under the plan and determines the number of shares of common stock subject to each option granted thereunder, the time and condition of exercise of such option and all other terms and conditions of such option, including the form of the option agreement setting forth the terms and conditions of such option. The compensation committee determines the exercise price of each option under the incentive plan, provided that the exercise price cannot be less than the fair market value (as determined under the incentive plan) of the BCO Holding common stock on the date of grant. It is anticipated that all options will be non-qualified stock options for federal income tax purposes. Options are not transferable other than by will or by the laws of descent and distribution or, if permitted by the compensation committee, in connection with certain pledges and estate planning transfers. All of the shares acquired upon exercise of any option will be subject to the securityholder arrangements described above.

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Pension and Savings Plans

We maintain various savings plans (the “Savings Plans”) qualified under Sections 401(a) and 401(k) of the Internal Revenue Code. Generally, all full-time employees, including executives and officers, are eligible to participate in the Savings Plans upon their employment with us. With the exception of Mr. Linton, the named executive officers are eligible to participate under the BWAY Corporation Retirement Savings Plan, which provides for company matching contributions of 100% of the first 4% of annual compensation contributed after completing one year of service. Mr. Linton is eligible to participate in the North America Packaging Corporation 401(k) Retirement Savings Plan, which provides for contributions from the company of 3% of compensation.

Mr. Linton is a participant in the North America Packaging Corporation Pension Plan, which was frozen in October 2004. Effective with the freeze, each active participant’s pension benefit will be determined based on the participant’s compensation and period of employment as of the freeze.

Compensation Committee Interlocks and Insider Participation

We do not have any items to report related to Management Resources, Nominating and Compensation Committee interlocks or insider participation relationships with the Company by its members.

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Management Resources, Nominating and Compensation Committee Report on Executive Compensation

The Management Resources, Nominating and Compensation Committee of the Board of Directors (“the Compensation Committee”) offers this report regarding the compensation policies for the Company’s executive officers, including the Chief Executive Officer.

The Compensation Committee reviews and makes recommendations to the Board regarding salaries, compensation and benefits of executive officers of the Company and develops and administers programs providing stock-based incentives. After consideration of the Compensation Committee’s recommendations, the entire Board reviews and approves the salaries and bonuses and the stock and benefit programs for the Company’s executive officers. This report documents the components of the Company’s executive officer compensation programs and describes the bases upon which compensation will be determined by the Compensation Committee with respect to the executive officers of the Company.

Compensation Philosophy

The compensation philosophy of the Company is to link executive compensation to continuous improvements in corporate performance and increases in stockholder value. The goals of the Company’s executive compensation programs are as follows:

• To establish pay levels that are necessary to attract and retain highly qualified executives in light of the overall competitiveness of the market for high quality executive talent.

• To recognize superior individual performance, new responsibilities and new positions within the Company.

• To balance short-term and long-term compensation to complement the Company’s annual and long-term business objectives and strategy and to encourage executive performance in furtherance of the fulfillment of those objectives.

• To provide variable compensation opportunities based on the Company’s performance.

• To align executive remuneration with the interests of the stockholder.

Compensation Program Components

The Compensation Committee regularly reviews the Company’s compensation program to ensure that pay levels and incentive opportunities are competitive with the market and reflect the performance of the Company. The particular elements of the compensation program for executive officers are further explained below.

Base Salary. The base pay level for Mr. Ergas is set forth in his employment agreement, as amended. (See “Management Employment Agreements” above.) Mr. Ergas, as Chief Executive Officer, may change or modify the compensation of the other executive officers as he deems necessary for the proper operation of the Company.

Annual Incentives. All executive officers are eligible for annual incentives under the Company’s Officer Incentive Plan with awards determined annually by the Compensation Committee. The Company uses annual incentives to enhance management’s contribution to stockholder returns by offering competitive levels of compensation for the attainment of the Company’s financial objectives. In particular, the Company utilizes annual incentives to focus corporate behavior on the achievement of goals for growth, financial performance and other items.

Stock Ownership. The Compensation Committee believes that it can align the interests of stockholders and executives by providing those persons who have substantial responsibility over the management and growth of the Company with an opportunity to establish a meaningful ownership position in the Company. There were no stock options granted to the executive officers in fiscal 2006.

Following the buyout of the Company in February 2003, management rolled a substantial number of stock options into options to receive BCO Holding common stock. As stockholders, we believe management will continue to act in the best interests of the Company and of the other stockholders.

Compensation for the Chief Executive Officer

The base pay level and annual incentive bonus compensation for Mr. Ergas, who has served as the Company’s Chief Executive Officer since January 2000, was initially determined pursuant to his amended employment agreement dated February 7, 2003. Pursuant to this employment agreement, Mr. Ergas’ base salary was initially set at $550,000 per annum and bonus compensation pursuant to the Officer Incentive Program was set based on certain EBITDA targets as defined in the employment agreement. The Compensation Committee in its sole discretion based on the achievement of goals and objectives determined by it and in accordance with Mr. Ergas’ employment agreement may change base pay and shall determine the Company’s EBITDA objectives that, if achieved, will trigger Mr. Ergas’ annual incentive bonus. In March 2006, Mr. Ergas’ base salary was set at $700,000 per annum and Mr. Ergas was awarded an annual bonus of $1,227,000 for fiscal 2006 based on the Company exceeding certain performance objectives.

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Summary

After reviewing the Company’s existing programs, the Compensation Committee believes that the total compensation program for executives of the Company is focused on increasing value for stockholders and enhancing corporate performance, that the compensation of executive officers is properly tied to stock appreciation through stock options or stock ownership, and that executive compensation levels at the Company are competitive with the compensation programs provided by other corporations with which the Company competes.

THIS COMPENSATION COMMITTEE REPORT SHALL NOT BE DEEMED INCORPORATED BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS FORM 10-K INTO ANY FILING UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.

The following directors and members of the Company’s Management Resources, Nominating and Compensation Committee have provided the foregoing report:

Thomas R. Wall, IV, Chairman

Warren J. Hayford

David I. Wahrhaftig

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table provides certain information with respect to the beneficial ownership of the common stock of BCO Holding as of December 1, 2006, by (i) each stockholder known by us who owns beneficially 5 percent or more of the outstanding shares of such common stock, (ii) each of our directors, (iii) each of our executive officers and (iv) all of our directors and executive officers as a group. BCO Holding owns 100% of the capital stock of BWAY, which in turn owns 100% of the capital stock of NAMPAC. To our knowledge, each stockholder has sole voting and investment power with respect to the shares indicated as beneficially owned, unless otherwise indicated in a footnote to the following table. Unless otherwise indicated in a footnote, the business address of each person is our corporate address.

On February 7, 2003, BCO Holding entered into a securityholders agreement with the Kelso affiliates and certain stockholders who own shares and options of BCO Holding. This securityholders agreement covers, among other things, transferability of the stockholders’ shares and the composition of the board of directors. See “Certain Relationships and Related Transactions—Securityholders Agreement.” In addition, the securityholders agreement requires, and other future agreements may require, BCO Holding to repurchase BCO Holding’s common stock or options to purchase BCO Holding’s common stock. We may fund all or a portion of such repurchases, subject to the provisions of the indenture governing the notes, provisions of our new credit facility and other conditions.

Beneficial Owner	Number of Shares of Common Stock (1)		Percent of Class (2)
Kelso Investment Associates VI, L.P. (3)	9,430,983	(4)	86.0	%
KEP VI, LLC (3)	9,430,983	(4)	86.0	%
Frank T. Nickell (3)		(5)		(5)
Thomas R. Wall, IV (3)		(5)		(5)
George E. Matelich (3)		(5)		(5)
Michael B. Goldberg (3)		(5)		(5)
David I. Wahrhaftig (3)		(5)		(5)
Frank K. Bynum, Jr. (3)		(5)		(5)
Philip E. Berney (3)		(5)		(5)
Frank J. Loverro (3)		(5)		(5)
James J. Connors, II (3)		(5)		(5)
Jean-Pierre M. Ergas	727,731	(6)	6.2	%
Kenneth Roessler	242,954	(7)	2.2	%
Kevin C. Kern	101,081	(8)	*
Jeffrey O’Connell	59,619	(9)	*
Warren J. Hayford	1,954,990	(10)	16.8	%
Marylou Hayford	1,284,156	(11)	11.7	%
Thomas K. Linton	39,200	(12)	—
David M. Roderick	—		—
Lawrence A. McVicker	—		—
All Directors and Executive Officers as a Group (10 persons)	3,125,575	(13)	24.4	%

* Less than one percent.

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(1) The number of shares includes shares of BCO Holding common stock subject to options exercisable within 60 days of December 1, 2006.

(2) As of December 1, 2006, 10,970,992 shares of BCO Holding common stock were issued and outstanding. Shares subject to options exercisable within 60 days of December 1, 2006 are considered outstanding for the purpose of determining the percent of the class held by the holder of such option, but not for the purpose of computing the percentage held by others.

(3) The business address for these persons is c/o Kelso & Company, 320 Park Avenue, 24^th Floor, New York, New York 10022.

(4) The shares of common stock beneficially owned by Kelso Investment Associates VI, L.P. and KEP VI, LLC represents the combined share ownership of Kelso Investment Associates VI, L.P. and KEP VI, LLC. Kelso Investment Associates VI, L.P. and KEP VI, LLC, due to their common control, could be deemed to beneficially own each of the other’s shares, but disclaim such beneficial ownership.

(5) Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney, Loverro and Connors may be deemed to share beneficial ownership of shares of common stock owned of record by Kelso Investment Associates VI, L.P. and KEP VI, LLC, by virtue of their status as managing members of KEP VI, LLC and the general partner of Kelso Investment Associates VI, L.P. Messrs. Nickell, Wall, Matelich, Goldberg, Wahrhaftig, Bynum, Berney, Loverro and Connors share investment and voting power with respect to the shares of common stock owned by Kelso Investment Associates VI, L.P. and KEP VI, LLC but disclaim beneficial ownership of such shares.

(6) The shares of common stock beneficially owned by Mr. Ergas include 727,731 shares subject to options exercisable within 60 days.

(7) The shares of common stock beneficially owned by Mr. Roessler consist of 242,954 shares subject to options exercisable within 60 days. The shares of common stock beneficially owned by Mr. Roessler exclude 34,237 shares and shares subject to option transferred to his wife in fiscal 2005 pursuant to a settlement agreement entered into in conjunction with a division of marital assets incident to their divorce.

(8) The shares of common stock beneficially owned by Mr. Kern consist of 96,533 shares subject to options exercisable within 60 days.

(9) The shares of common stock beneficially owned by Mr. O’Connell consist of 56,587 shares subject to options exercisable within 60 days.

(10) The shares of common stock beneficially owned by Mr. Hayford consist of 1,238,674 shares directly owned by his wife, Marylou Hayford, and 45,482 shares and 670,834 shares subject to options directly owned by Mr. Hayford. Mr. Hayford disclaims beneficial ownership of the shares directly owned by his wife.

(11) The shares of common stock beneficially owned by Mrs. Hayford include 45,482 shares directly owned by her husband, Warren J. Hayford, but do not include 670,834 shares subject to options owned directly by Mr. Hayford. Mrs. Hayford disclaims beneficial ownership of the shares directly owned by her husband.

(12) The shares of common stock beneficially owned by Mr. Linton consist of 39,200 shares subject to options exercisable within 60 days.

(13) The shares of common stock held by directors and executive officers as a group excludes shares held by Kelso Investment Associates VI, L.P. and KEP VI, LLC that may be deemed to be beneficially owned by Mr. Wall and Mr. Wahrhaftig.

Equity Compensation Plan Information

The following table summarizes compensation plans (including individual compensation arrangements) under which the equity securities of BCO Holding are authorized for issuance as of October 1, 2006. We are a wholly-owned subsidiary of BCO Holding.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders under the BCO Holding Incentive Plan	3,468,653	$	9.90	144,049
Equity compensation plans not approved by security holders	—		—	—
Total	3,486,653	$	9.90	144,049

Item 13. Certain Relationships and Related Transactions

Securityholders Agreement

BWAY is a wholly-owned subsidiary of BCO Holding. On February 7, 2003, BCO Holding entered into a securityholders agreement with the Kelso affiliates, which in the aggregate own a majority of BCO Holding’s common stock, and certain other securityholders who own common stock and options to purchase common stock of BCO Holding and whom we refer to in this prospectus as the non-Kelso securityholders. The securityholders agreement provides that Jean-Pierre M. Ergas or a family representative or, with Kelso’s consent, other representative following his death or disability, will be a member of BCO Holding’s board of directors until the later of (a) Mr. Ergas no longer serving as either our chief executive officer or chairman or (b) he or his family or estate selling any of their equity in BCO Holding. The securityholders agreement also provides that Warren J. Hayford or another person he and Mary Lou Hayford designate will be a member of BCO Holding’s board of directors (or if BCO Holding’s board of directors is composed of 11 or more persons, Mr. and Mrs. Hayford may designate two of BCO Holding’s directors). Consent of the Kelso affiliates is required for any Hayford designees who are not members of the Hayford family. The Kelso affiliates have the right to designate all of the other members of BCO Holding’s board of directors. Mr. Hayford or any Hayford family member board designee or the disinterested members of BCO Holding’s board have the right to approve all affiliate transactions and certain other matters, subject to certain specified exceptions. Mr. Ergas’ employment agreement has been

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amended to provide that Mr. Ergas will remain as either chief executive officer or executive chairman through December 31, 2007.

The securityholders agreement generally restricts the transfer of shares of common stock owned by the non-Kelso securityholders and any of our employees who will, at a later point, become parties to the agreement. Exceptions to this restriction include transfers for estate planning purposes or transfers in connection with certain pledges, so long as any transferee agrees to be bound by the terms of the securityholders agreement. Warren J. Hayford and Mary Lou Hayford have the right to transfer their shares to third parties with the consent of the Kelso affiliates.

In addition, the non-Kelso securityholders have “tag-along” rights to sell their shares on a pro rata basis with the Kelso affiliates in significant sales to third parties. Similarly, the Kelso affiliates have “drag-along” rights to cause the non-Kelso securityholders to sell their shares on a pro rata basis with the Kelso affiliates in significant sales to third parties. Our employees who are parties to the securityholders agreement are subject to “put” and “call” rights which, subject to certain exceptions, entitle an employee stockholder to require BCO Holding to purchase their shares and which entitle BCO Holding, subject to certain exceptions, to require the employee stockholder to sell their shares to BCO Holding, upon any termination of the stockholder’s employment with BCO Holding at differing prices, depending upon the circumstances of the termination and further subject to a six-month and one day holding period following the date of acquisition of any shares through the exercise of stock options. The securityholders agreement also contains a provision that requires BCO Holding to offer certain existing stockholders the right to purchase shares of BCO Holding upon a new issuance on a pro rata basis, subject to certain exceptions.

Registration Rights Agreement

On February 7, 2003, BCO Holding entered into a registration rights agreement with the non-Kelso securityholders. Pursuant to this agreement, the Kelso affiliates have the right to make an unlimited number of requests that BCO Holding register their shares under the Securities Act, and, following the first anniversary of an initial public offering, Mr. and Mrs. Hayford have the right to make up to two requests for such registration. In any demand registration, all of the parties to the registration rights agreement have the right to participate on a pro rata basis, subject to certain conditions. In addition, if BCO Holding proposes to register any of its shares (other than registrations related to exchange offers, benefit plans and certain other exceptions), all of the holders of registration rights under the registration rights agreement have the right to include their shares in the registration statement, subject to certain conditions.

Kelso Arrangements

In connection with the closing of the merger, we paid to Kelso a one-time fee of $4,950,000. In addition, we entered into an agreement, which requires us to pay to Kelso annual financial advisory fees not to exceed $495,000, reimburse Kelso and certain of its affiliates for their expenses incurred in connection with the transactions and in connection with any services to be provided by Kelso or any such affiliates to us on a going forward basis, and indemnify Kelso and certain of its affiliates with respect to the Transaction and any services to be provided by Kelso or any such affiliates to us on a going-forward basis.

Exchange Agreements

BCO Holding entered into separate exchange agreements, dated as of September 30, 2002, with each of Jean-Pierre M. Ergas, Warren J. Hayford, Mary Lou Hayford, Thomas N. Eagleson, Kevin C. Kern, Jeffrey M. O’Connell and Kenneth M. Roessler. Pursuant to these exchange agreements, immediately prior to the consummation of the merger of BCO Acquisition and BWAY, Mary Lou Hayford exchanged 596,596 shares of common stock of BWAY for 1,193,192 shares of common stock of BCO Holding, and Jean-Pierre M. Ergas, Warren J. Hayford, Thomas N. Eagleson, Kevin C. Kern, Jeffrey M. O’Connell and Kenneth M. Roessler exchanged, in the aggregate, options to acquire 812,910 shares of common stock of BWAY for new options to acquire, in the aggregate, 1,625,820 shares of common stock of BCO Holding. As a result of the exchange agreements, these continuing investors hold, in the aggregate, shares of BCO Holding’s common stock, which, together with options to purchase BCO Holding’s common stock, but without giving effect to the grant of new stock options under BCO Holding’s new stock incentive plan, represent approximately 26.1% of the fully diluted equity of BCO Holding.

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Item 14. Principal Accounting Fees and Services

Fees paid to Deloitte & Touche LLP – Audit and non-audit fees

The following table presents fees for professional audit services rendered by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, “Deloitte & Touche”) for the audit of the Company’s annual financial statements for the years ended October 1, 2006 and October 2, 2005 and fees billed for tax and other services rendered by Deloitte & Touche during those periods. All of the following fees were approved by the Audit Committee.

	Fiscal Year
(Dollars in millions)	2006		2005
Audit Fees	$	0.7	$	0.6
Audit Related Fees(1)	$	0.1	$	0.4
Tax Fees(2)	$	0.3	$	0.2
All Other Fees		—		—
Total	$	1.1	$	1.2

(1) Audit Related Fees consist of the assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. We have included in this category fees related to the performance of audits and attest services not required by statute or regulations, audits of the Company’s benefit plans, due diligence related to mergers and acquisitions, review of filings related to the registration of the Company’s senior subordinated notes, review of filings related to mergers and acquisitions and accounting consultations regarding the application of GAAP to proposed transactions.

(2) Tax Fees consist of the aggregate fees billed for professional services rendered by Deloitte & Touche for tax compliance, tax advice and tax planning.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor

The Audit Committee is responsible for appointing, setting compensation and overseeing the work of the independent auditor. The Audit Committee assists the Board of Directors in its oversight of the quality and integrity of the accounting, auditing, and reporting practices of the Company. The Audit Committee’s role includes discussing with management the Company’s processes to manage business and financial risk, and for compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee is responsible for the appointment, replacement, compensation, and oversight of the independent auditor engaged to prepare or issue audit reports on the financial statements of the Company. The Audit Committee relies on the expertise and knowledge of management, the internal auditors and the independent auditor in carrying out its oversight responsibilities.

The audit committee approves all fees incurred by us from Deloitte & Touche LLP.

PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as a part of this report:

(1) The Consolidated Financial Statements included in Item 8 hereof and set forth on pages F-1 through F-34.

(2) The Financial Statement Schedule listed in the Index to the Financial Statement Schedules on page S-1. Financial Statement Schedules not included in the Index are not applicable.

(3) The Exhibits listed in the Index to Exhibits at page 33.

(b) Exhibits. The exhibits required by Item 601 of Regulation S-K are either filed as part of this Annual Report on Form 10-K or are incorporated by reference. See the Index to Exhibits at page 33.

(c) Financial Statements and Schedules Excluded from Annual Report to Shareholders: None

FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements as encouraged by the Private Securities Litigation Reform Act of 1995. All statements contained in this document, other than historical information, are forward-looking statements. These statements represent management’s current judgment on what the future holds. A variety of factors could cause business conditions and the Company’s actual results to differ materially from those expected by the Company or expressed in the Company’s forward-looking statements. These factors include, without limitation, competitive risks from substitute products and other container manufacturers, termination of the Company’s customer contracts, loss or reduction of business from key customers, dependence on key personnel, changes in steel, resin and other raw material costs or availability, labor unrest, catastrophic loss of one of the Company’s manufacturing facilities, environmental exposures, management’s inability to identify or execute selective acquisitions, failures in the Company’s computer systems, unanticipated expenses, delays in implementing cost reduction initiatives, potential equipment malfunctions and the other factors discussed in the Company’s filings with the Securities and Exchange Commission. The Company takes no obligation to update or revise

34

forward-looking statements to reflect changed assumptions, the occurrences of unanticipated events or changes to future results of operations.

35

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BWAY CORPORATION
(Registrant)
By	/s/ Jean-Pierre M. Ergas
	Jean-Pierre M. Ergas
	Chairman and Chief Executive Officer
Date	December 28, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on December 28, 2006.

Signatures	Title
/s/ Jean-Pierre M. Ergas	Chairman, Chief Executive Officer and Director (Principal Executive Officer)
Jean-Pierre M. Ergas
/s/ Kevin C. Kern	Vice-President of Administration and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Kevin C. Kern
/s/ Warren J. Hayford	Director
Warren J. Hayford
/s/ David I. Wahrhaftig	Director
David I. Wahrhaftig
/s/ Thomas R. Wall, IV	Director
Thomas R. Wall, IV
/s/ David M. Roderick	Director
David M. Roderick
/s/ Lawrence A. McVicker	Director
Lawrence A. McVicker

36

INDEX TO EXHIBITS

Exhibit Number	Description
2.1	Purchase Agreement, dated November 21, 2002, between BWAY Finance Corp. and Deutsche Bank Securities Inc.(17)
2.2	Agreement and Plan of Merger by and among BCO Holding Company, BCO Acquisition, Inc. and BWAY Corporation, dated as of September 30, 2002.(15)
2.3	Stock Purchase Agreement by and among BWAY Corporation, North America Packaging Corporation and MVOC LLC dated as of May 28, 2004.(20)
2.4	Agreement and Plan of Merger by and between BWAY Corporation and BWAY Manufacturing, Inc., dated as of April 13, 2004. (22)
3.1	Amended and Restated Certificate of Incorporation of BWAY Corporation, as amended.(17)
3.2	Form of Certificate of Designation, Preferences and Rights of Junior Participating Preferred Stock, Series A of BWAY Corporation (formerly known as Brockway Standard Holdings Corporation).(17)
3.3	Amended and Restated By-laws of BWAY Corporation.(17)
4.1	Indenture, dated as of as of November 27, 2002, between BWAY Finance Corp. and The Bank of New York, as trustee, relating to the 10% Senior Subordinated Notes due 2010.(17)
4.2	First Supplemental Indenture, dated as of as of February 7, 2003, among BWAY Corporation, BWAY Finance Corp., BWAY Manufacturing, Inc. and The Bank of New York, as trustee, relating to the 10% Senior Subordinated Notes due 2010.(17)
4.3	Assumption Agreement, dated as of as of February 7, 2003, among BWAY Corporation, BWAY Manufacturing, Inc. and BWAY Finance Corp.(17)
4.4	Form of 10% Senior Subordinated Note due 2010.(17)
4.5	Registration Rights Agreement, dated as of November 27, 2002, between BWAY Finance Corp. and Deutsche Bank Securities Inc.(17)
4.6	Securityholders Agreement, dated as of February 7, 2003, among BCO Holding Company, Kelso Investment Associates VI, L.P., KEP VI, LLC, Magnetite Asset Investors III, L.L.C. and the individuals named therein.(17)
4.7	Form of certificate representing shares of Common Stock of BWAY Corporation.(2)
4.8	Second Supplemental Indenture, dated as of as of July 7, 2004, among North America Packaging Corporation, North America Packaging of Puerto Rico, Inc., SC Plastics LLC, Armstrong Containers, Inc., BWAY Corporation and The Bank of New York, as trustee, relating to the 10% Senior Subordinated Notes due 2010. (22)
4.9	Credit Agreement, dated as of July 17, 2006, among BCO Holding Company, BWAY Corporation, ICL Industrial Containers ULC, various lenders and Deutsche Bank Trust Company Americas, as administrative agent, LaSalle Bank, N.A., as documentation agent, Deutsche Bank Securities Inc. and J.P. Morgan Securities, Inc., as joint lead arrangers. (23)
4.10	Subsidiaries Guaranty made by each of Armstrong Containers, Inc., SC Plastics LLC, North America Packaging Corporation and North America Packaging of Puerto Rico, Inc., dated as of July 17, 2006.
4.11	U.S. Security Agreement among BCO Holding Company, BWAY Corporation, Armstrong Containers, Inc., SC Plastics, LLC, North America Packaging Corporation and North America Packaging of Puerto Rico, Inc., and Deutsche Bank Trust Company Americas as Collateral Agent, dated as of July 17, 2006.
4.12	Security Agreement dated as of July 17, 2006 made by ICL Industrial Containers ULC, to and in favor of Deutsche Bank Trust Company Americas as Collateral Agent.
4.13	Pledge Agreement among BCO Holding Company, BWAY Corporation, Armstrong Containers, Inc., SC Plastics, LLC, North America Packaging Corporation and North America Packaging of Puerto Rico, Inc., and Deutsche Bank Trust Company Americas as Collateral Agent and Pledgee, dated as of July 17, 2006.
	The Registrant will furnish to the Commission, upon request, each instrument defining the rights of holders of long-term debt of the Registrant and its subsidiaries where the amount of such debt does not exceed 10 percent of the total assets of the Registrant and its subsidiaries on a consolidated basis.
10.1	Employment Agreement between BWAY Corporation and Warren J. Hayford, dated as of June 1, 1995.#(1)

37

10.2	Employment Agreement between BWAY Corporation and John T. Stirrup, dated as of June 1, 1995.#(1)
10.3	Lease dated February 24, 1995 between Tab Warehouse Fontana II and Brockway Standard, Inc.(1)
10.4	Garland, Texas Industrial Net Lease dated January 14, 1985 between MRM Associates and Armstrong Containers, Inc.(1)
10.5	Lease dated February 11, 1991 between Curto Reynolds Oelerich Inc. and Armstrong Containers, Inc.(1)
10.6	Lease Agreement dated November 16, 1996 between Shelby Distribution Park and Brockway Standard, Inc., as amended December 26, 1996.(8)
10.7	Lease dated August 9, 1991 between DK Containers, Inc. and Smith Barney Birtcher Institutional Fund-I Limited Partnership and the First Amendment thereto.(1)
10.8	Employment Agreement between BWAY Corporation and James W. Milton, dated as of May 28, 1996.#(4)
10.9	Brockway Standard (Ohio), Inc. Bargaining Unit Savings Plan.#(5)
10.10	Employment Agreement between BWAY Corporation and John T. Stirrup Amendment No. 1.#(7)
10.11	Employment Agreement between BWAY Corporation and John T. Stirrup—Amendment No. 2.#(9)
10.12	Employment Agreement and Options Agreement between BWAY Corporation and Warren J. Hayford—Omnibus Amendment.#(10)
10.13	Lease Agreement dated August 20, 1999 between CRICBW Anderson Trust and Milton Can Company.(10)
10.14	BWAY Corporation Fourth Amended and Restated 1995 Long-Term Incentive Plan.#(11)
10.15	Change in Control Agreement, between BWAY Corporation and Kevin C. Kern, dated August 9, 2001.#(12)
10.16	Change in Control Agreement, between BWAY Corporation and Kenneth Roessler, dated August 9, 2001.#(12)
10.17	Separation and Release Agreement between BWAY Corporation and James W. Milton, dated November 2, 2001.#(15)
10.18	Change in Control Agreement, between BWAY Corporation and Jean-Pierre Ergas, dated August 30, 2001.#(13)
10.19	Amendment No. 1 to Change in Control Agreement, between BWAY Corporation and Jean-Pierre Ergas effective January 1, 2002.#(13)
10.20	Lease Amendment dated June 20, 2002 by and between Centerpoint Properties Trust (successor to Curto Reynolds Oelerick Inc) and BWAY Corporation (as successor to Armstrong Containers, Inc.).(14)
10.21	Change in Control Agreement, between BWAY Corporation and Jeffrey M. O’Connell, dated August 9, 2001.#(16)
10.22	Amended and Restated Employment Agreement between BWAY Corporation and Jean-Pierre M. Ergas, dated February 7, 2003.#(17)
10.23	Form of BCO Holding Company Nonqualified Stock Option Agreement.#(17)
10.24	Sublease dated December 5, 2003 between Buske Lines, Inc. and BWAY Manufacturing, Inc. (as sublessee). (19)
10.25	Amended and Restated BCO Holding Company Stock Incentive Plan.# (22)
10.26	Lease between Southcorp Packaging USA, Inc. and North America Packaging Corporation dated as of June 28, 2001 for the property located in Cleveland, Ohio. (22)
10.27	Lease between Firleigh Estates, Inc. and North America Packaging Corporation dated as of August 10, 2002 for the property located in Lithonia, Georgia. (22)
10.28	Lease between Duke Realty Limited Partnership and Southcorp Packaging USA Inc. d/b/a North America Packaging Corporation, as amended, dated November 30, 1998 for the property located in Indianapolis, Indiana. (22)
10.29	Lease between Carlyle/FR Investors L.L.C. and Southcorp Packaging dated November 1, 1999 for the property located in Indianapolis, Indiana. (22)

38

10.30	Lease between Southcorp Packaging USA, Inc. and North America Packaging Corporation dated as of June 28, 2001 for the property located in Valparaiso, Indiana. (22)
10.31	Lease between Southcorp Packaging North America and North America Packaging Corporation dated as of June 28, 2001 for the property located in Toccoa, Georgia. (22)
10.32	Lease between Southcorp Packaging USA, Inc. and North America Packaging Corporation dated as of June 28, 2001 for the property located in South Brunswick, New Jersey. (22)
10.33	Lease between Southcorp Puerto Rico, Inc. and North America Packaging Corporation dated as of June 28, 2001 for the property located in Cidra, Puerto Rico. (22)
10.34	Lease between Southcorp Packaging USA, Inc. and North America Packaging Corporation dated as of June 28, 2001 for the property located in Bryan, Texas. (22)
10.35	Letter agreement between BWAY Corporation and Thomas K. Linton dated May 28, 2004.# (22)
10.36	Asset Purchase Agreement, dated as of June 16, 2006, by and among 3146598 Nova Scotia Company, BWAY Corporation, 6045995 Canada, Inc., 4095138 Canada, Inc., Industrial Containers Ltd. and Arshinoff & Co. Ltd. (23)
10.37	Lease between 80241 Canada Ltd. and ICL Industrial Containers ULC dated as of July 17, 2006 for the property located on North Queen Street in Toronto, Ontario.
10.38	Lease between 80241 Canada Ltd. and ICL Industrial Containers ULC dated as of July 17, 2006 for the property located on Hansen Road South in Brampton, Ontario.
10.39	Lease between 80241 Canada Ltd. and ICL Industrial Containers ULC dated as of July 17, 2006 for the property located on Walker Drive in Brampton, Ontario.
10.40	Lease between 80241 Canada Ltd. and ICL Industrial Containers ULC dated as of July 17, 2006 for the property located on Calder Place in St. Albert, Alberta.
14.1	BWAY Corporation Code of Ethics. (18)
21.1	Subsidiaries of BWAY Corporation.
31.1	Certification of Chief Executive Officer required by Rule 13a-14(a) (17 C.F.R. 240.13a-14(a)).
31.2	Certification of Chief Financial Officer required by Rule 13a-14(a) (17 C.F.R. 240.13a-14(a)).
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 # Management contract or compensatory plan or arrangement.

(1) Incorporated by reference to BWAY Corporation’s Registration Statement on Form S-1 (File No. 33-91114).

(2) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended October 1, 1995 (File No. 0-26178).

(3) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended March 31, 1996 (File No. 0-26178).

(4) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended June 30, 1996 (File No. 0-26178).

(5) Incorporated by reference to BWAY Corporation’s Registration Statement on Form S-8 filed on October 31, 1997 (File No. 333-39225).

(6) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended September 29, 1996 (File No. 1-12415).

(7) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended March 29, 1998 (File No. 1-12415).

(8) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended September 28, 1997 (File No. 1-12415).

(9) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended July 4, 1999 (File No. 1-12415).

(10) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended October 3, 1999 (File No. 1-12415).

39

(11) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended April 2, 2000 (File No. 1-12415).

(12) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended July 1, 2001 (File No. 1-12415).

(13) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended September 30, 2001 (File No. 1-12415).

(14) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended June 30, 2002 (File No. 1-12415).

(15) Incorporated by reference to Exhibit 2.1 in BWAY Corporation’s Current Report on Form 8-K filed on October 3, 2002 (File No. 1-12415).

(16) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended September 29, 2002 (File No. 1-12415).

(17) Incorporated by reference to BWAY Corporation’s Registration Statement on Form S-4 (File No. 333-104388).

(18) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended September 28, 2003 (File No. 1-12415).

(19) Incorporated by reference to BWAY Corporation’s Form 10-Q for the period ended January 4, 2004 (File No. 1-12415).

(20) Incorporated by reference to BWAY Corporation’s Form 8-K filed as of May 28, 2004 (File No. 1-12415).

(21) Incorporated by reference to BWAY Corporation’s Form 8-K filed as of July 7, 2004 (File No. 1-12415).

(22) Incorporated by reference to BWAY Corporation’s Form 10-K for the fiscal year ended October 3, 2004 (File No. 1-12415).

(23) Incorporated by reference to BWAY Corporation’s Form 8-K filed as of July 17, 2006 (File No. 1-12415).

40

INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of October 1, 2006 and October 2, 2005	F-3
Consolidated Statements of Operations for the years ended October 1, 2006, October 2, 2005 and October 3, 2004	F-4
Consolidated Statements of Stockholder’s Equity for the years ended October 1, 2006, October 2, 2005 and October 3, 2004	F-5
Consolidated Statements of Cash Flows for the years ended October 1, 2006, October 2, 2005 and October 3, 2004	F-6
Notes to the Consolidated Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of BWAY Corporation (a wholly owned

subsidiary of BCO Holding Company):

We have audited the accompanying consolidated balance sheets of BWAY Corporation and subsidiaries (the “Company”) as of October 1, 2006 and October 2, 2005, and the related consolidated statements of operations, stockholder’s equity, and cash flows for each of the three years in the period ended October 1, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of BWAY Corporation and subsidiaries at October 1, 2006 and October 2, 2005, and the results of their operations and their cash flows for each of the three years in the period ended October 1, 2006, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, the Company adopted Financial Accounting Standards Board Interpretation No. 47, “Accounting for Conditional Assets Retirement Obligations, an interpretation of FASB Statement No. 143,” in the fourth quarter of fiscal year 2006.

/s/ Deloitte & Touche LLP

Atlanta, Georgia

December 28, 2006

F-2

CONSOLIDATED BALANCE SHEETS

BWAY Corporation and Subsidiaries

October 1, 2006 and October 2, 2005 (Dollars in thousands, except share data)	2006			2005
Assets
CURRENT ASSETS
Cash and cash equivalents	$	50,979		$	51,889
Accounts receivable, net of allowance for doubtful accounts of $1,702 and $1,613		115,986			104,122
Inventories		80,441			71,965
Income taxes receivable		7,291			—
Deferred tax assets		4,038			9,174
Other		4,842			3,750
TOTAL CURRENT ASSETS		263,577			240,900
PROPERTY, PLANT AND EQUIPMENT, NET		142,944			142,476
OTHER ASSETS
Goodwill		248,687			219,218
Other intangible assets, net		166,201			156,751
Deferred financing costs, net of accumulated amortization of $4,029 and $4,085		10,952			10,589
Other		1,384			2,060
TOTAL OTHER ASSETS		427,224			388,618
TOTAL ASSETS	$	833,745		$	771,994
Liabilities and Stockholder’s Equity
CURRENT LIABILITIES
Accounts payable	$	118,939		$	97,968
Accrued salaries and wages		13,856			13,786
Accrued interest		9,837			10,803
Accrued rebates		11,091			10,104
Income taxes payable		—			7,993
Current portion of long-term debt		20,506			30,000
Other		18,360			16,537
TOTAL CURRENT LIABILITIES		192,589			187,191
LONG-TERM DEBT		419,495			365,300
OTHER LIABILITIES
Deferred tax liabilities		71,292			76,119
Other		22,886			19,948
TOTAL OTHER LIABILITIES		94,178			96,067
TOTAL LIABILITIES		706,262			648,558
COMMITMENTS AND CONTINGENCIES (NOTE 14)
STOCKHOLDER’S EQUITY
Preferred stock, $.01 par value, 5,000,000 shares authorized; no shares issued		—			—
Common stock, $.01 par value, 24,000,000 shares authorized; 1,000 shares issued and outstanding		—			—
Additional paid-in capital		112,882			104,082
Retained earnings		15,098			19,701
Accumulated other comprehensive loss		(497	)		(347	)
TOTAL STOCKHOLDER’S EQUITY		127,483			123,436
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	833,745		$	771,994

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-3

CONSOLIDATED STATEMENTS OF OPERATIONS

BWAY Corporation and Subsidiaries

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006			2005			2004
NET SALES	$	918,513		$	829,109		$	611,588
COSTS AND EXPENSES
Cost of products sold (excluding depreciation and amortization)		796,401			714,039			529,064
Depreciation and amortization		41,615			43,215			31,724
Selling and administrative expense		29,777			22,120			14,040
Restructuring and impairment charge		1,511			5,265			352
Interest expense, net		34,660			32,165			26,889
Other expense (income), net		1,813			(175	)		178
TOTAL COSTS AND EXPENSES		905,777			816,629			602,247
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE		12,736			12,480			9,341
Provision for income taxes		6,941			4,351			3,634
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE		5,795			8,129			5,707
Cumulative effect of change in accounting principle, net of income taxes of $246		(398	)		—			—
NET INCOME	$	5,397		$	8,129		$	5,707

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-4

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

BWAY Corporation and Subsidiaries

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006			2005			2004
COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period	$	104,082		$	104,022		$	73,622
Deferred shares of BCO Holding granted		—			—			400
Exercise of stock options		8,800			60			—
Capital contribution of BCO Holding		—			—			30,000
Balance, end of period		112,882			104,082			104,022
RETAINED EARNINGS
Balance, beginning of period		19,701			11,572			5,865
Net income		5,397			8,129			5,707
Dividend to BCO Holding		(10,000	)		—			—
Balance, end of period		15,098			19,701			11,572
ACCUMULATED OTHER COMPREHENSIVE LOSS
Balance, beginning of period		(347	)		(589	)		—
Minimum pension liability adjustment, net of tax		(401	)		242			(589	)
Cumulative foreign currency translation adjustment		251			—			—
Balance, end of period		(497	)		(347	)		(589	)
TOTAL STOCKHOLDER’S EQUITY	$	127,483		$	123,436		$	115,005
COMPREHENSIVE INCOME
Net income	$	5,397		$	8,129		$	5,707
Additional minimum pension liability, net of tax of $(280), $152 and $(369)		(401	)		242			(589	)
Cumulative foreign currency translation adjustment		251			—			—
TOTAL COMPREHENSIVE INCOME	$	5,247		$	8,371		$	5,118
COMMON STOCK SHARES ISSUED AND OUTSTANDING		1,000			1,000			1,000

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS

BWAY Corporation and Subsidiaries

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006			2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	5,397		$	8,129		$	5,707
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		28,101			31,353			24,136
Amortization of other intangible assets		13,514			11,862			7,588
Amortization of deferred financing costs		2,156			2,120			1,970
Deferred financing costs expensed		1,040			—			1,252
Cumulative effect of change in accounting principle, net of tax benefit		398			—			—
(Provision for) recovery of doubtful accounts		(13	)		(41	)		178
Impairment charge		—			1,000			—
Loss (gain) on disposition of property, plant and equipment and assets held for sale		98			(754	)		(57	)
Utilization of acquired deferred tax asset		1,659			—			—
Deferred income taxes		835			(6,900	)		3,334
Stock-based compensation expense		10,155			1,852			1,110
Changes in assets and liabilities, net of effects of business acquisitions
Accounts receivable		(411	)		(23,042	)		(889	)
Inventories		(1,082	)		(12,690	)		7,526
Other assets		(831	)		639			239
Accounts payable		15,420			31,832			(9,773	)
Accrued and other liabilities		(219	)		8,091			383
Income taxes, net		(15,284	)		10,873			2,394
NET CASH PROVIDED BY OPERATING ACTIVITIES		60,933			64,324			45,098
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(25,041	)		(20,282	)		(19,066	)
Business acquisitions, net of cash acquired		(68,427	)		(262	)		(202,307	)
Proceeds from disposition of property, plant and equipment and assets held for sale		1,337			1,297			516
NET CASH USED IN INVESTING ACTIVITIES		(92,131	)		(19,247	)		(220,857	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments under revolving credit facility		—			—			(17,170	)
Proceeds from term loan		240,000			—			225,000
Repayments of term loan		(195,927	)		(19,700	)		(10,000	)
Capital contribution from BCO Holding		—			—			30,000
Dividend paid to BCO Holding		(10,000	)		—			—
Proceeds from stock option exercise		—			40			—
Decrease in unpresented bank drafts in excess of cash available for offset		—			(621	)		(18,072	)
Principal repayments under capital leases		(241	)		(232	)		(117	)
Financing costs incurred		(3,544	)		—			(6,805	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		30,288			(20,513	)		202,836
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(910	)		24,564			27,077
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		51,889			27,325			248
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	50,979		$	51,889		$	27,325
SUPPLEMENTAL DISCLOSURES
Cash paid (refunded) during the period for:
Interest	$	33,200		$	29,866		$	22,595
Income taxes		19,833			378			(2,493	)
Detail of business acquisitions
Fair value of assets acquired		74,597			221			290,461
Liabilities (assumed ) adjusted		(6,170	)		41			(88,154	)
Cash paid for business acquisitions, net		68,427			262			202,307
Non-cash investing and financing activities
Amounts owed for capital expenditures		642			897			1,062
Assets acquired through capital leases		—			81			560
Grant of deferred shares in conjunction with the NAMPAC Acquisition		—			—			400

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Operations

BWAY Corporation (“BWAY”, “we”, “our” or the “Company”) manufactures and distributes metal and rigid plastic containers that are used primarily by manufacturers of industrial and consumer products for packaging. We have operations in the United States and Canada and primarily sell to customers located in these geographic markets.

We are a wholly owned subsidiary of BCO Holding Company (“BCO Holding”), an affiliate of Kelso & Company, L.P., as a result of a leveraged buyout completed on February 7, 2003 (the “Transaction”). The Transaction was accounted for as a purchase in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations, and Emerging Issues Task Force (“EITF”) Issue 88-16, Basis in Leveraged Buyout Transactions. As such, the acquired assets and assumed liabilities were recorded at fair market value for the interests acquired and liabilities assumed by new investors and at carryover basis for continuing investors. The acquired assets and assumed liabilities were assigned new book values in the same proportion as the residual interests of the continuing investors and the new interests acquired by the new investors. References herein to “Predecessor” refer to the Company prior to the Transaction.

In the fourth quarter of 2006, we acquired substantially all of the assets of Industrial Containers Ltd, a Canadian manufacturer of rigid plastic containers and steel pails. In the fourth quarter of 2004, we acquired all of the issued and outstanding common stock of North America Packaging Corporation (“NAMPAC”), a manufacturer of rigid plastic containers. See Note 2 regarding these acquisitions.

Principles of Consolidation and Basis of Presentation

The Consolidated Financial Statements include the accounts of BWAY and its subsidiaries, each wholly owned. We have eliminated all significant intercompany accounts and transactions. Results of operations related to acquisitions are included from the date of acquisition. Certain prior period amounts have been reclassified to conform to the current period for presentation purposes.

Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2006, 2005 and 2004 ended October 1, 2006, October 2, 2005 and October 3, 2004, respectively. Fiscal years 2006 and 2005 consisted of 52 weeks and fiscal year 2004 consisted of 53 weeks. Our NAMPAC and ICL subsidiaries report their financial position and results of operations on a calendar month basis with fiscal years ending on September 30 and have been consolidated as of September 30, 2006 and September 30, 2005 and for the years then ended and for the year ended September 30, 2004. There were no significant or unusual transactions between the calendar month and fiscal month ending dates that should have been considered in the Consolidated Financial Statements.

Unless otherwise stated, references to years in these consolidated financial statements relate to fiscal years rather than to calendar years.

We have prepared the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Our Consolidated Financial Statements include amounts that are based on management’s best estimates and judgments. Actual results could differ from those estimates and assumptions.

All references in these consolidated financial statements to U.S. based subsidiaries or operations include the Commonwealth of Puerto Rico, unless otherwise indicated.

Stock-Based Compensation

We account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board (“APB”) Opinion 25, Accounting for Stock Issued to Employees, and related interpretations (“APB 25”). Accordingly, we are not required to record compensation expense when the exercise price of stock options granted to employees or directors is equal to or greater than the fair market value of the stock when the option is granted.

In December 2004, the Financial Accounting Standards Board (the “FASB”) issued SFAS 123 (revised 2004), Share-Based Payment (“SFAS 123R”), which eliminates the ability to account for share based compensation transactions using APB 25 and generally requires that such transactions be accounted for using a fair value-based method with the resulting compensation cost recognized over the period that the employee is required to provide service in order to receive their compensation. SFAS 123R also amends SFAS 95, Statement of Cash Flows, requiring the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow rather than as an operating cash flow as currently required. For purposes of SFAS 123R, a “nonpublic entity” as defined in the Statement includes entities that have only debt securities trading in a public market.

We adopted SFAS 123R as of the required effective date for nonpublic entities, which, for us, was October 2, 2006, using the “prospective transition” method. Under the “prospective transition” method, compensation cost is recognized in the financial statements beginning with the effective date for all new awards and to awards modified, repurchased or cancelled after the required

F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

effective date. As such, the adoption of the Statement did not result in a cumulative effect of a change in accounting principle. However, SFAS 123R will have an impact on our consolidated financial statements for new awards and for awards modified, repurchased or cancelled after the required effective date. Under SFAS 123R, we are no longer required to provide, after adoption of the Statement, pro forma disclosures for outstanding awards that we continue to account for under the intrinsic value method previously allowed under APB 25.

In March 2005, the Securities and Exchange Commission (the “SEC”) released SEC Staff Accounting Bulletin (“SAB”) 107, Share-Based Payment (“SAB 107”). SAB 107 provides the SEC staff’s position regarding the implementation of SFAS 123R. SAB No. 107 contains interpretive guidance related to the interaction between SFAS 123R and certain SEC rules and regulations, as well as provides the staff’s views regarding the valuation of share-based payment transactions. The guidance of SAB 107 will be followed in association with our adoption of SFAS 123R.

The following table illustrates the pro forma effect on net income if we had determined stock-based compensation based on the fair value-based method of SFAS 123, Accounting for Stock-Based Compensation, using a “minimum value” methodology, which excludes the effects of volatility of our stock price on the fair value of the option since our equity securities are not publicly traded.

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004
(Dollars in thousands)	2006			2005			2004
Net income	$	5,397		$	8,129		$	5,707
Add: Stock-based compensation included in reported net income, net of related tax effects (1)		4,620			1,206			683
Less: Pro forma stock-based compensation under SFAS 123, net of related tax effects		(950	)		(2,707	)		(2,463	)
PRO FORMA NET INCOME	$	9,067		$	6,628		$	3,927

(1) Stock-based compensation included in net income, net of related tax effects, recorded in 2005 and 2004 relates to stock options issued pursuant to the Holding Incentive Plan (see Note 8). Of the stock-based compensation included in net income, net of related tax effects, recorded in 2006, approximately 0.6 million relates to stock options issued pursuant to the Holding Incentive Plan and approximately $4.0 million relates to the cash settlement of Exchange Options exercised (see Note 7). Under SFAS 123, no additional compensation expense is recognized for cash settlements of outstanding awards, which is why pro forma stock-based compensation expense for 2006 is less than stock-based compensation under APB 25.

The weighted-average grant date fair value of each option granted during 2006, 2005 and 2004 was $9.68, $2.39 and $3.80, respectively.

In determining the pro forma disclosures above, the fair value of options granted was estimated on the date of grant using the Black-Scholes option-pricing model and assumptions appropriate to the plan. The Black-Scholes model was developed to estimate the fair value of traded options, which have different characteristics than the employee stock options we grant, and changes to the subjective assumptions used in the model can result in different fair value estimates. The weighted average grant date fair values for the options granted in 2006, 2005 and 2004 were based on the following assumptions:

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004	2006		2005		2004
Expected dividend yield	0.0	%	0.0	%	0.0	%
Expected volatility	0.0	%	0.0	%	0.0	%
Risk-free interest rate	4.7	%	3.8	%	4.0	%
Expected life (in years)	10.0		3.5		4.0

Cash and Cash Equivalents

We consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded net of an allowance for uncollectibility. The allowance for doubtful accounts is based on management’s assessment of the collectibility of customer accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances and current economic conditions that may affect a customer’s ability to pay.

Inventories

Inventories are carried at the lower of cost or market. Generally, inventory is determined under the last-in, first-out (LIFO) method of inventory valuation. However, inventory totaling approximately $7.1 million at our ICL subsidiary is determined under the first-in, first-out (FIFO) method of inventory valuation. We estimate reserves for inventory obsolescence and shrinkage based on management’s judgment of future realization. Projected inventory losses are recognized at the time the loss is probable rather than when the goods are ultimately sold.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. Generally, estimated useful lives are 30 years for buildings and improvements, 5 to 15 years for machinery and equipment, 5 to 7 years for furniture and fixtures and 3 years for computer information systems.

F-8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

We amortize leasehold improvements over the lesser of the estimated useful lives or the remaining underlying lease term. We depreciate equipment under capital leases using the straight-line method over the lesser of the estimated useful life or the term of the lease. We periodically assess the appropriateness of and make revisions to the remaining estimated useful lives of property, plant and equipment. For leasehold improvements acquired in a business combination or purchased subsequent to the inception of a lease after June 2005, we amortize these improvements over the lesser of the useful life of the assets or the term of the lease including renewals that are reasonably assured at the date of the business combination or purchase.

We capitalize expenditures for major renewals and replacements and charge against income expenditures for maintenance and repairs. When we retire or otherwise dispose of property, plant and equipment, we remove the asset balances from the related asset and accumulated depreciation accounts, and we credit or charge to operations any resulting gain or loss, respectively.

We capitalize interest in connection with the installation of major machinery and equipment. Capitalized interest is recorded as part of the cost of the related asset and is depreciated over the asset’s estimated useful life. Interest capitalized in 2006, 2005 and 2004 was immaterial.

We include assets under capital leases and the related amortization in property, plant and equipment and depreciation expense, respectively.

Goodwill and Other Intangible Assets

Indefinite-lived identifiable intangibles and goodwill are not amortized, but tested for impairment at least annually. We perform an impairment test for our indefinite-lived intangible assets by comparing the fair value of indefinite-lived intangible assets to their carrying value. The fair value of the assets is estimated based on discounted future cash flows. We recognize an impairment charge if the carrying value of the assets exceed their estimated fair value. There were no impairments of indefinite-lived intangibles during 2006, 2005 or 2004.

Goodwill represents the excess of the purchase price over the fair value of net assets acquired. We test goodwill for impairment annually or more frequently if an event occurs or circumstances change that more likely than not reduce the value of the reporting unit below its carrying value. For purposes of goodwill impairment testing, we compare the fair value of each reporting unit with its carrying amount, including goodwill. Each of our two operating divisions is considered a reporting unit for goodwill impairment testing. The fair value of each reporting unit is determined based on expected discounted future cash flows. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired. If goodwill is considered impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of goodwill exceeds implied fair value of that goodwill. We performed our annual impairment test at the end of 2006. For purposes of our annual goodwill impairment test, we obtained an independent valuation of our reporting units. Based on a comparison of the independent valuation to the carrying value of each reporting unit, we determined that goodwill was not impaired at the end of 2006. Our annual impairment tests for 2005 and 2004 did not indicate an impairment of goodwill.

Our other intangible assets consist of finite-lived and indefinite-lived identifiable intangibles. We amortize our acquired finite-lived, identifiable intangible assets over their remaining useful lives in proportion to the underlying cash flows that were used in determining the acquired value. A portion of these intangibles represent basis carried over in the Transaction; these continue to be amortized on a straight-line basis. Our finite-lived intangibles are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of any asset may not be recoverable based on estimates of future undiscounted cash flows. In the event of impairment, the asset would be written down to its fair market value as estimated by future discounted cash flows. Indefinite-lived identifiable intangibles are tested in the same manner as goodwill, as discussed above. There were no impairments of other intangible assets recognized in 2006, 2005 or 2004.

Deferred Financing Costs

We amortize deferred financing costs to interest expense over the term of the related financing agreement using the straight-line method for costs associated with financing having a single payoff date and using a declining balance method for costs associated with financing having scheduled payoffs, each of which approximates the effective yield method.

Foreign Currency Translation

The financial statements of our non-U.S. subsidiary are translated into U.S. dollars for financial reporting purposes. The cumulative translation adjustments are reflected in stockholder’s equity. Assets and liabilities are translated at the rate of exchange on the balance sheet date, while revenues and expenses are translated at average exchange rates during the year.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, our products have been shipped and title and risk of loss have passed, the sales amount is fixed or determinable and collectibility of the amount billed is probable. We record provisions for discounts, returns, allowances, customer rebates and other adjustments in the same period as the related revenues are recorded. We do not engage in revenue arrangements with multiple deliverables.

F-9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

Accrued Rebates

We provide volume rebates to our customers on certain products. We accrue a provision for these rebates, which is recognized as a reduction of net sales, in the period that the goods are shipped. Accrued rebates may be settled in cash or as a credit against customer accounts receivable.

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If these assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are recorded at the lower of net book value or fair market value less cost to sell at the date management commits to a plan of disposal. Assets to be disposed of are reclassified to other current assets on the consolidated balance sheets. At the end of 2005, assets held for sale in other current assets was approximately $0.6 million.

Fair Value of Financial Instruments

Due to variable interest rates that change on a relative short-term basis, we consider the historical carrying value of our Term Loan borrowings to be a reasonable estimate of their fair value. The fair value of our publicly held Senior Notes is estimated based on the quoted bid price for these debt instruments and was approximately $210.0 and $211.0 million at the end of 2006 and 2005, respectively. The Term Loans and Senior Notes are further described in Note 6. In addition, we consider the carrying value of cash and cash equivalents, trade accounts receivable and trade accounts payable to approximate fair value. Our estimates of fair value involve judgment and are not necessarily indicative of the amounts that could be realized or paid in a current market exchange.

Derivative Financial Instruments and Hedging Activities

We do not enter into or hold derivatives for trading or hedging purposes. We review our contracts for embedded derivatives that would require separate reporting and disclosure.

Income Taxes

We account for income taxes in accordance with SFAS 109, Accounting for Income Taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. In accordance with SFAS 109, deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Earnings per Share

We are not required to present earnings per share information because our common stock is not publicly traded.

Comprehensive Income

Comprehensive income includes net income, adjustments to the minimum pension liability, net of tax, and foreign currency translation adjustments.

The components of accumulated other comprehensive loss are as follows:

October 1, 2006 and October 2, 2005
(Dollars in thousands)	2006			2005
Minimum pension liability adjustment, net of tax	$	(748	)	$	(347	)
Cumulative foreign currency translation adjustment		251			—
TOTAL ACCUMULATED OTHER COMPREHENSIVE LOSS	$	(497	)	$	(347	)

Conditional Asset Retirement Obligations

In March 2005, the FASB issued Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations—an interpretation of FASB Statement No. 143 (“FIN 47”). FIN 47 is an interpretation of SFAS 143, Accounting for Asset Retirement Obligations, which applies to all entities and addresses the legal obligations with the retirement of tangible long-lived assets that result from the acquisition, construction, development or normal operation of a long-lived asset. The Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the

F-10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

period in which it is incurred if a reasonable estimate of fair value can be made even though uncertainty exists about the timing and/or method of settlement. FIN 47 further clarifies the meaning of “conditional asset retirement obligation” with respect to recording the asset retirement obligation discussed in SFAS 143. Upon adoption of FIN 47 in the fourth quarter of 2006, we recorded an increase in property, plant and equipment of $0.6 million and recognized an asset retirement obligation of $1.2 million. This resulted in the recognition of a non-cash charge of $0.4 million, net of a $0.2 deferred tax benefit, for 2006 that was reported as a cumulative effect of an accounting change. Pursuant to FIN 47, the financial statements for periods prior to October 1, 2006 have not been restated. If FIN 47 had been in effect in prior periods, we would have recorded asset retirement obligations of approximately $1.0 million and $0.9 million at October 2, 2005 and October 3, 2004, respectively.

Recently Issued Accounting Standards

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections—A Replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS No. 154”). SFAS No. 154 requires retrospective application to prior periods’ financial statements for changes in accounting principle, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. SFAS 154 also requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. Indirect effects of a change in accounting principle, such as a change in nondiscretionary profit-sharing payments resulting from an accounting change, should be recognized in the period of the accounting change. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. SFAS 154 is effective for us beginning in 2007. However, the Statement does not change the transition provisions of any of the existing accounting pronouncements. SFAS 154 is effective for accounting changes and errors in previously issued financial statements made in fiscal years beginning after December 15, 2005, which for us is the beginning of 2007. We will follow the provisions of this Statement in the event of any future accounting changes.

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (“FIN 48”). This interpretation clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a tax return and requires that we recognize in our financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure requirements for uncertain tax positions. The provisions of FIN 48 are effective for us at the beginning of 2008 (October 2007). We are currently evaluating the impact of FIN 48 on our consolidated financial statements.

In September 2006, the SEC issued SAB 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”). SAB 108 states that registrants should use both a balance sheet approach and an income statement approach when quantifying and evaluating the materiality of a misstatement. The interpretations in SAB 108 contain guidance on correcting errors under the dual approach as well as provide transition guidance for correcting errors. This interpretation does not change the requirements within SFAS 154 for the correction of an error on financial statements. SAB 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006, which, for us, is fiscal 2007 ending September 30, 2007. We are currently evaluating the impact of SAB 108 on our consolidated financial statements.

In September 2006, the FASB issued SFAS 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 is effective for us at the beginning of 2009 (October 2008). We are currently evaluating the impact of SFAS 157 on our consolidated financial statements.

In September 2006, the FASB issued SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans-an amendment of FASB Statements No. 87, 88, 106, and 132(R) (SFAS 158”). This Statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability on its statement of financial position. SFAS 158 also requires an employer to recognize changes in that funded status in the year in which the changes occur through comprehensive income. In addition, this statement requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. Since we do not have publicly traded equity securities, SFAS 158 is effective for us at the end of the fiscal year ending after June 15, 2007, which is fiscal 2007 ending September 30, 2007. We are currently evaluating the impact of SFAS 158 on our consolidated financial statements.

2. ACQUISITIONS

NAMPAC Acquisition

On July 7, 2004, we acquired all of the issued and outstanding shares of stock of NAMPAC, a manufacturer of rigid plastic containers for industrial packaging markets, from MVOC, LLC, a Delaware limited liability company and sole owner of the common shares of NAMPAC (the “NAMPAC Acquisition”). As a result of the acquisition, NAMPAC became a wholly owned subsidiary of BWAY. We paid approximately $202.8 million in cash, net of cash acquired, for the acquisition, which was funded by a $30.0 million equity contribution from Kelso and certain members of our senior management and from a portion of the proceeds from a $225.0 million term loan facility. The term loan facility is further discussed in Note 6. The results of operations related to this acquisition are included in the consolidated financial statements from the date of acquisition. Included in the purchase price

F-11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

is approximately $2.3 million in transaction costs associated with the acquisition. The purchase price was subject to a working capital adjustment, which was finalized and received in September 2004 and is reflected in the purchase price.

The NAMPAC transaction enabled us to expand the scale of our plastic container offerings, which were first established with the SST Industries asset acquisition in August 2003. We believe the rigid plastic container segment is important to our growth, and the acquisition enables us to serve our customers with a more diverse product offering.

The acquisition was accounted for as a purchase in accordance with SFAS 141, Business Combinations. As such, the assets and liabilities have been recorded at fair market value. We allocated the purchase price based on our estimates and with the assistance of an independent appraiser. The purchase price allocation was adjusted in 2006 for a correction to a vacation liability and for the utilization of an acquired deferred tax asset, net of contingency, that was not previously recorded (see Note 5).

The following is a summary of the final allocation of fair values of the assets and liabilities, as adjusted, related to the acquisition:

July 7, 2004
(Dollars in thousands)
Current assets	$	46,121
Property, plant and equipment		42,289
Intangible assets subject to amortization		104,828
Goodwill		98,894
Other assets		284
Total assets		292,416
Current liabilities		37,670
Other liabilities		51,989
Total liabilities		89,659
CASH PURCHASE PRICE, NET OF $11,351 CASH ACQUIRED	$	202,757

We allocated goodwill and intangible assets resulting from the acquisition to our plastics packaging segment. The weighted-average life of the acquired intangible assets subject to amortization is approximately 17.5 years. Goodwill resulting from this acquisition is not deductible for income tax purposes.

ICL Acquisition

On July 17, 2006, we acquired substantially all of the assets and assumed certain of the liabilities of Industrial Containers, Ltd., (“ICL Ltd.”) a Toronto based manufacturer of rigid plastic containers and steel pails for industrial packaging markets (the “ICL Acquisition”). The net assets were acquired by ICL Industrial Containers ULC (“ICL”), a wholly owned subsidiary of BWAY created to effectuate the acquisition. We paid approximately $68.4 million in cash for the acquisition, which was funded by $50.0 million in term loan borrowings by ICL and from a portion of the proceeds of additional term loan borrowings by BWAY. The term loans are further discussed in Note 6. The results of operations related to this acquisition are included in the consolidated financial statements from the date of acquisition. Included in the purchase price is approximately $1.7 million in transaction costs associated with the acquisition. The purchase price also includes purchase price adjustments of approximately $0.4 million, which will be paid in 2007.

The ICL Acquisition enables us to expand in the Canadian market. We believe geographic expansion is important to our growth.

We recorded the assets acquired and liabilities assumed at fair market value in accordance with SFAS No. 141. We allocated the purchase price based on our estimates and with the assistance of an independent appraiser. Although we believe the purchase price allocation is substantially complete, the finalization of certain tax allocations or transaction costs, among other things, could result in an adjustment to the allocation.

The following is a summary of the initial allocation of fair value of the assets acquired and liabilities assumed in the transaction:

July 17, 2006
(Dollars in thousands)
Current assets	$	18,735
Property, plant and equipment		4,063
Intangible assets subject to amortization		22,679
Goodwill		29,166
Total assets		74,643
Less: Current liabilities		(6,216	)
NET ASSETS ACQUIRED		68,427

Goodwill and intangible assets resulting from the acquisition have been allocated to each of our metal and plastics packaging segment based on estimated fair value. See Note 5. The weighted-average life of the acquired intangible assets subject to amortization is approximately 13 years. Goodwill resulting from this acquisition is not deductible for U.S. income tax purposes.

F-12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

3. INVENTORIES

October 1, 2006 and October 2, 2005
(Dollars in thousands)	2006			2005
Raw materials	$	26,212		$	28,999
Work-in-progress		39,181			29,737
Finished goods		32,894			25,316
Inventories at FIFO cost		98,287			84,052
LIFO reserve		(17,846	)		(12,087	)
INVENTORIES	$	80,441		$	71,965

During 2006 and 2004, as a result of reduced inventory quantities, LIFO inventory quantities carried at lower costs were liquidated which resulted in an increase in income before taxes and cumulative effect of change in accounting principle of approximately $3.0 million and $0.6 million, respectively. There was no LIFO liquidation in 2005. The liquidation results in additional earnings due to LIFO inventories valued at costs prevailing in prior years that were lower than the costs of current purchases.

4. PROPERTY, PLANT AND EQUIPMENT

October 1, 2006 and October 2, 2005
(Dollars in thousands)	2006			2005
Land	$	3,272		$	3,063
Buildings and improvements		13,740			12,609
Machinery and equipment		203,168			181,031
Furniture, fixtures and computer information systems		15,019			13,518
Construction-in-progress		7,454			9,669
		242,653			219,890
Accumulated depreciation		(99,709	)		(77,414	)
PROPERTY, PLANT AND EQUIPMENT, NET	$	142,944		$	142,476

5. GOODWILL AND OTHER INTANGIBLE ASSETS

The change in the net carrying amount of goodwill for 2006 and 2005 by reportable segment:

(Dollars in thousands)	Metal Packaging		Plastics Packaging			Total
BALANCE, OCTOBER 3, 2004	$	112,556	$	107,741		$	220,297
Adjustments related to the NAMPAC Acquisition (1)		—		(1,079	)		(1,079	)
BALANCE, OCTOBER 2, 2005		112,556		106,662			219,218
Correction related to the NAMPAC Acquisition(2)		—		667			667
Utilization of acquired deferred tax asset, net of contingency(3)		—		(731	)		(731	)
Additions related to the ICL Acquisition		7,677		21,489			29,166
Currency translation adjustment		95		272			367
BALANCE, OCTOBER 1, 2006	$	120,328	$	128,359		$	248,687

⁽¹⁾ Purchase accounting adjustments primarily related to net operating loss carryforwards, which resulted in an increase in deferred tax assets, net of a valuation allowance, and a reduction in goodwill of approximately $0.9 million.

⁽²⁾ During the implementation of an automated time keeping system in the first quarter of fiscal 2006 at facilities acquired in the NAMPAC Acquisition, we determined that the accrued vacation liability recorded as part of the purchase price allocation for the NAMPAC Acquisition was understated by approximately $0.7 million due to differences between actual pay practices and documentation provided and used to determine the purchase price allocation. We recorded an adjustment of $0.7 million to the accrued salaries and wages liability related to accrued vacation in the consolidated balance sheet as of January 1, 2006 with an offsetting increase to goodwill. Based on the amount of this adjustment and the impact on previously reported financial statements, management determined that such previously issued financial statements were not materially misstated.

⁽³⁾ In the third quarter of fiscal 2006, we reduced goodwill for approximately $1.7 million related to the utilization of a deferred tax asset associated with a net operating loss carryforward acquired in the NAMPAC Acquisition. However, a portion of the net operating loss carryforward is currently under review by the Internal Revenue Service. As such, we have established a contingent liability for approximately $1.0 million (and increased goodwill) based on our estimate of net operating loss carry forwards that are probable of disallowance by the Internal Revenue Service.

F-13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

Identifiable intangible assets by major asset class:

	2006							2005
October 1, 2006 and October 2, 2005 (Dollars in thousands)	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
AMORTIZABLE INTANGIBLES ASSETS
Customer relationships	$	177,873	$	(33,601	)	$	144,272	$	158,060	$	(21,924	)	$	136,136
Tradenames		25,984		(4,809	)		21,175		22,833		(3,150	)		19,683
Noncompetition agreements		401		(260	)		141		401		(82	)		319
		204,258		(38,670	)		165,588		181,294		(25,156	)		156,138
UNAMORTIZABLE INTANGIBLES ASSETS
Technology		613		—			613		613		—			613
	$	204,871	$	(38,670	)	$	166,201	$	181,907	$	(25,156	)	$	156,751

The useful lives of customer relationships, tradenames and noncompetition agreements range from 14 to 18 years, 10 to 15 years and 3 to 4 years, respectively.

Expected future amortization expense:

(Dollars in thousands)
FISCAL YEAR ENDING
2007	$	15,519
2008		15,011
2009		14,468
2010		14,396
2011		13,766
Thereafter		92,428
	$	165,588

6. LONG-TERM DEBT

October 1, 2006 and October 2, 2005 (Dollars in thousands)	2006			2005
LONG TERM DEBT
10% USD senior subordinated notes due October 2010	$	200,000		$	200,000
Variable rate USD term loan maturing July 2013		189,500			—
Variable rate CAD term loan maturing July 2013		50,501			—
Variable rate USD term loan (1)		—			195,300
		440,001			395,300
Less: Current portion		(20,506	)		(30,000	)
LONG TERM DEBT, NET OF CURRENT PORTION	$	419,495		$	365,300

(1) Loan was refinanced with the variable rate USD term loan maturing July 2013 in conjunction with the ICL Acquisition (see Note 2).

The current portion of long-term debt for 2006 and 2005 reflects voluntary prepayments of the applicable USD term loan of $20.0 million and $30.0 million, respectively. The prepayments were made in the first quarter following the applicable year-end.

The weighted-average interest rate on variable rate credit facility borrowings at the end of 2006 and 2005 was 7.0% and 6.0%, respectively.

F-14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

Scheduled maturities on long-term debt reflecting any prepayments discussed above are as follows:

(Dollars in thousands)
FISCAL YEAR ENDING
2007	$	20,506
2008		1,794
2009		2,652
2010		2,223
2011		202,223
Thereafter		210,603
	$	440,001

Senior Subordinated Notes

The $200.0 million principal amount of 10% Senior Subordinated Notes due 2010 (the “Senior Notes”) are unsecured senior subordinated obligations of the Company and are effectively subordinated to all senior debt obligations of the Company. Interest on the Senior Notes is payable semi-annually in arrears on April 15 and October 15. The interest rate is fixed at 10% per annum. All of our U.S. based subsidiaries have fully and unconditionally guaranteed the Senior Notes.

The Senior Notes are governed by an Indenture dated as of November 27, 2002 between BWAY Finance Corp. and The Bank of New York, as trustee, as assumed by BWAY Corporation on February 7, 2003 and as amended from time to time (the “Indenture”).

The Senior Notes are subject to covenants that, among other things, limit our ability (and the ability of some or all of our subsidiaries) to: incur additional debt, pay dividends or distributions on our capital stock or to repurchase our capital stock, make certain investments, create liens on our assets to secure debt, engage in transactions with affiliates, merge or consolidate with another company and transfer and sell assets. These covenants are subject to a number of important limitations and exceptions. At October 1, 2006, we were in compliance with all applicable covenants related to the Senior Notes.

We may redeem some or all of these notes at redemption prices specified in the Indenture (105% on October 15, 2006 declining annually to 100% on October 15, 2009). Upon the occurrence of a Change in Control, as defined in the Indenture, the holders of the Senior Notes could require us to repurchase the notes at 101% of the principal amount.

We incurred and have deferred approximately $8.0 million in financing costs related to the underwriting and registration of these notes. We are amortizing these deferred costs to interest expense over the term of the notes. At the end of 2006 and 2005, approximately $4.2 million and $5.2 million, respectively, of the deferred costs remained to be amortized.

Credit Facility

New Credit Facility

On July 17, 2006, in conjunction with the ICL Acquisition, we entered into a new credit facility with various lenders, Deutsche Bank Trust Company Americas, as administrative agent, LaSalle Bank, N.A., as documentation agent and Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as joint arrangers. The credit facility consists of a $190.0 million B Term Loan (the “US Term Loan”) and a $50.0 million revolving credit facility (the “US Revolver”) with BWAY Corporation as borrower and a Cdn$56.41 million (US$50.0 million equivalent at the borrowing date) C Term Loan (the “Canadian Term Loan”) and a $5.0 million equivalent revolving credit facility (the “Canadian Revolver”) with ICL as borrower.

The term loans mature July 17, 2013 and the revolving loans mature July 17, 2012. In the event the Senior Notes are not refinanced prior to April 15, 2010, the B Term Loan and the US and Canadian Revolvers mature April 15, 2010 and the C Term Loan matures July 18, 2011.

The US Term Loan is denominated in U.S. dollars and, at the option of the borrower, may consist of a Base Rate Loan or a Eurodollar Loan, each as defined in the Credit Agreement. Once repaid, the US Term Loan may not be reborrowed. Scheduled quarterly repayments of approximately $0.5 million begin September 30, 2006 and continue to March 31, 2013. The remaining balance is due on the maturity date. Interest accrues on Base Rate Loans at a fixed margin of 0.75% plus the greater of the federal funds rate plus .005% or the Prime Lending Rate and on Eurodollar Loans at a Eurodollar Rate (as defined in the Credit Agreement) plus a fixed margin of 1.75%. At the end of 2006, the effective interest rate on outstanding US Term Loan borrowings was approximately 7.13%.

The US Revolver is denominated in U.S. dollars and, at the option of the borrower, may consist of a Base Rate Loan or a Eurodollar Loan, each as defined in the Credit Agreement. Any outstanding borrowings are due at maturity. Interest accrues on Base Rate Loans at a variable margin ranging from 0.25% to 1.00% plus the greater of the federal funds rate plus .005% or the administrative agent’s “prime lending rate”. Interest accrues on Eurodollar Loans at a Eurodollar Rate plus a variable margin ranging from 1.25% to 2.00%. The applicable margin for either the Base Rate or Eurodollar loans is based on a Consolidated Total Leverage Ratio, as defined in the Credit Agreement.

F-15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

The Canadian Term Loan is denominated in Canadian dollars and, at the option of the borrower, may consist of a Canadian Prime Rate Loan or a B/A Discount Rate Loan, each as defined in the Credit Agreement. Once repaid, the Canadian Term Loan may not be reborrowed. Scheduled quarterly repayments of approximately Cdn$141 thousand (approximately $127 thousand US dollar equivalent at the end of 2006) begin September 30, 2006 and continue to March 31, 2013. The remaining balance is due on the maturity date. Interest accrues on Canadian Prime Rate Loans at the greater of DB Canada’s “prime rate” or CDOR plus 75 basis points plus a fixed margin of 1.0% and on B/A Discount Rate Loans at CDOR plus a fixed margin of 2.0%. At the end of 2006, the effective interest rate on outstanding Canadian Term Loan borrowings was approximately 6.43%.

The Canadian Revolver is denominated in either U.S. or Canadian dollars, at the option of the borrower, and, at the option of the borrower, may consist of a Base Rate Loan or a Eurodollar Loan for U.S. dollar denominated loans or Canadian Prime Rate Loan or a B/A Discount Rate Loan for Canadian dollar denominated loans, each as defined in the Credit Agreement. Any outstanding borrowings are due at maturity. Interest accrues on Base Rate Loans or Canadian Prime Rate Loans at the applicable base (as discussed above) plus a variable margin ranging from 0.25% to 1.00%. Interest accrues on Eurodollar Loans or B/A Discount Rate Loans at the applicable base (as discussed above) plus a variable margin ranging from 1.25% to 2.00%. The applicable margin for either the Base Rate or Eurodollar loans is based on a Consolidated Total Leverage Ratio, as defined in the Credit Agreement.

BCO Holding and each of our U.S. subsidiaries have guaranteed the B Term Loan and US Revolver, each of which is secured by substantially all of our U.S. assets and the assets of BCO Holding and, subject to certain limitations, the outstanding stock of ICL. In addition, we have pledged as collateral all of the issued and outstanding stock of our U.S. subsidiaries, which are wholly-owned by BWAY. ICL has guaranteed the Canadian Term Loan and Canadian Revolver, each of which is secured by all of the assets of ICL.

A portion of the initial net proceeds from the Term Loans were used to finance the ICL Acquisition.

At the end of 2006, we had $8.0 million in standby letter of credit commitments that reduced our available borrowings under the US Revolver to $42.0 million. There were no outstanding US or Canadian Revolver borrowings at the end of 2006.

The credit agreement contains covenants that, among other things, limit our ability (and the ability of some or all of our subsidiaries) to: incur additional debt, pay dividends or distributions on our capital stock or to repurchase our capital stock, make certain investments, create liens on our assets to secure debt, engage in transactions with affiliates, merge or consolidate with another company and transfer and sell assets. We are also required to maintain a minimum Consolidated Interest Coverage Ratio and to not exceed a Maximum Consolidated Total Leverage Ratio (each as defined in the credit agreement). These covenants are subject to a number of important limitations and exceptions. At the end of 2006, we were in compliance will all applicable covenants contained in the credit agreement.

Deferred Financing Costs

In connection with the refinancing of our credit facility, we followed the guidance of EITF 98-14, Debtor’s Accounting for Changes in Line-of-Credit or Revolving-Debt Arrangements (“EITF 98-14”) related to the revolver and EITF 96-19 Debtor’s Accounting for Modification or Exchange of Debt Instruments (“EITF 96-19”) related to the term loans. Pursuant to EITF 98-14, we carried forward approximately $0.4 million and expensed approximately $0.2 million of the unamortized financing costs related to the revolver at the date refinanced, July 17, 2006. Pursuant to EITF 96-19, the refinancing was not considered a “debt extinguishment” and, as such, we expensed approximately $0.8 million in third-party expenses incurred in connection with refinancing the term loan and carried forward $3.9 million in unamortized financing costs related to the term loan at July 17, 2006. We incurred and deferred approximately $1.5 million in new fees and costs associated with the US Revolver and US Term Loan and approximately $1.2 million in fees and costs associated with the Canadian Revolver and Term Loan.

We are amortizing the resulting $5.9 million of these deferred costs related to the Term Loans to interest expense over the term of the loans in proportion to the outstanding principal, which approximates the effective yield method. We are amortizing the remaining $1.1 million related to the Revolvers on a straight-line basis over the term of the Revolvers, which approximates the effective yield method. At the end of 2006, approximately $6.8 million of deferred costs associated with the New Credit Facility were unamortized. At the end of 2005, approximately $5.4 million of deferred costs associated with the Old Credit Facility were unamortized.

In 2004, we charged to interest expense approximately $1.3 million of unamortized deferred financing costs that were not carried forward under EITF 98-14 when we refinanced the credit facility in connection with the NAMPAC Acquisition.

Old Credit Facility

On July 7, 2004, in connection with the NAMPAC Acquisition, we entered into a $255.0 million credit facility with various lenders and Deutsche Bank Trust Company Americas, as administrative agent. The credit facility consisted of (a) a $225.0 million term loan facility which was scheduled to mature June 30, 2011 and (b) a $30.0 million revolving credit facility, which was scheduled to mature June 30, 2009. This credit facility was refinanced in conjunction with the ICL Acquisition, as discussed above.

F-16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

7. STOCKHOLDER’S EQUITY

Dividend

In the fourth quarter of 2006, we declared a dividend of $10.0 million payable to BCO Holding. The dividend was used to purchase 45,482 shares of BCO Holding common stock controlled by our chairman and chief executive officer and to cash settle the exercise of approximately 386,000 Exchange Options (as defined in Note 8). All of the Exchange Options were fully vested as of February 7, 2003 and the settlement price per option was based on the difference between the fair value per share of BCO Holding common stock at the exercise date and the weighted average option price. We recorded approximately $8.8 million in stock-based compensation expense related to the exercise of these options and increased additional paid-in capital in the same amount.

NAMPAC Acquisition

In the fourth quarter of 2004, Kelso and the other BCO Holding stockholders, including certain members of our senior management, made an additional capital contribution of $30.0 million through BCO Holding in association with the NAMPAC Acquisition. No additional shares were issued to BCO Holding in exchange for the capital contribution, which is recorded in additional paid-in capital. Also in the fourth quarter of 2004, approximately $0.4 million was recorded to additional paid-in capital related to a deferred share agreement between BCO Holding and an officer of NAMPAC whereby approximately $0.4 million of the officer’s compensation under a NAMPAC long-term incentive plan, which was terminated and paid out in conjunction with the NAMPAC Acquisition, was deferred in the form of deferred shares of BCO Holding common stock. The number of deferred shares granted was fixed based on a value per share agreed upon by the parties to the deferred share agreement. The obligation under the deferred share agreement can only be settled through the issuance of BCO Holding common stock.

BCO Holding Securityholders Agreement

On February 7, 2003, BCO Holding entered into a securityholders agreement with the Kelso affiliates, which in the aggregate own a majority of BCO Holding’s common stock (the “Kelso Affiliates”), and certain other securityholders who own common stock and options to purchase common stock of BCO Holding (the “Non-Kelso Securityholders”) (the “Securityholders Agreement”).

The Securityholders Agreement generally restricts the transfer of shares of common stock owned by the Non-Kelso Securityholders and any of the Company’s employees who will, at a later point, become parties to the agreement. Exceptions to this restriction include transfers for estate planning purposes or transfers in connection with certain pledges, so long as any transferee agrees to be bound by the terms of the Securityholders Agreement.

In addition, the Non-Kelso Securityholders have “tag-along” rights to sell their shares on a pro rata basis with the Kelso Affiliates in significant sales to third parties. The Kelso Affiliates have “drag-along” rights to cause the Non-Kelso Securityholders to sell their shares on a pro rata basis with the Kelso Affiliates in significant sales to third parties.

Our employees who are a party to the Securityholders Agreement are subject to “put” and “call” rights, which, subject to certain exceptions, entitle an employee stockholder to require BCO Holding to purchase their shares, and which entitle BCO Holding, subject to certain exceptions, to require the employee stockholder to sell their shares to BCO Holding, upon any termination of the stockholder’s employment with BCO Holding, at differing prices, depending upon the circumstances of the termination and further subject to a six-month and one day holding period following the date of acquisition of any shares through the exercise of stock options. The Securityholders Agreement also contains a provision that requires BCO Holding to offer certain existing stockholders the right to purchase shares of BCO Holding upon a new issuance on a pro rata basis, subject to certain exceptions.

BCO Holding Registration Rights Agreement

On February 7, 2003, BCO Holding entered into a registration rights agreement with the Non-Kelso Securityholders (the “Holding Registration Rights Agreement”). Pursuant to this agreement, the Kelso Affiliates have the right to make an unlimited number of requests that BCO Holding register their shares under the Securities Act following the first anniversary of an initial public offering. In any demand registration, all of the parties to the Holding Registration Rights Agreement have the right to participate on a pro rata basis, subject to certain conditions. In addition, if BCO Holding proposes to register any of its shares (other than registrations related to exchange offers, benefit plans and certain other exceptions), all of the holders of registration rights under the Holding Registration Rights Agreement have the right to include their shares in the registration statement, subject to certain conditions.

8. STOCK-BASED COMPENSATION

In February 2000, Predecessor adopted the Fourth Amendment and Restatement of the 1995 Long-Term Incentive Plan (the “Predecessor Incentive Plan”). The Predecessor Incentive Plan authorized grants of stock options to participants from time to time as determined by the Board. As a result of the Transaction, (which, as defined in the Predecessor Incentive Plan, was a change in control event), all outstanding options became immediately vested and exercisable. Certain members of management that held stock options under the Predecessor Incentive Plan entered into Exchange Agreements with BCO Holding whereby their Predecessor Incentive Plan options to acquire shares in BWAY Corporation were exchanged 2-for-1 for new options to acquire BCO Holding common stock with an exercise price of

F-17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

$10.00 per share (“Exchange Options”). The Exchange Options were fully vested as of the closing of the Transaction and were issued with substantially the same terms and conditions in effect immediately before the exchange.

Effective with the closing of the Transaction in February 2003, BCO Holding assumed the Predecessor Incentive Plan, and we granted approximately 1.8 million options on February 8, 2003. The Predecessor Incentive Plan was replaced in July 2004 with the Amended and Restated BCO Holding Stock Incentive Plan (the “Holding Incentive Plan”), which increased the number of available shares of common stock of BCO Holding subject to options from 2,006,989 to 2,395,103.

Three types of options may be granted under the Holding Incentive Plan: (1) Service Options, which vest in three equal annual installments commencing on the first anniversary of the grant date based upon service; (2) Performance Options, which vest in five equal annual installments if we achieve certain specified performance objectives; and (3) Exit Options, which vest upon a change in equity control (as defined and subject to certain limitations). Under the Holding Incentive Plan, 40% of available options will be Service Options, 10% will be Performance Options and 50% will be Exit Options.

We account for Service Options as fixed awards and determine compensation expense as the amount by which the fair value of BCO Holding common stock at the effective grant date exceeds the exercise price of the option granted. Compensation expense, if any, related to Service Options is recognized ratably as the options vest. Because the number of options is contingent upon future events, we account for Performance Options as variable awards and record compensation expense for the number of options with known vesting during each reporting period. The compensation expense recorded for the Performance Options is the change during the period in the amount by which the fair value of BCO Holding common stock at the end of the reporting period exceeds the exercise price on unvested options. We also account for Exit Options as variable awards. However, since the contingent event upon which they are based is unknown, we have not recorded compensation expense related to these options.

The Holding Incentive Plan will terminate on February 7, 2013 unless terminated earlier by BCO Holding. Termination of the Holding Incentive Plan will not affect grants made prior to the termination. Although the Holding Incentive Plan grants the right to acquire shares in BCO Holding, the Holding Incentive Plan is used to incentivize certain of our employees, including management, and certain options available under the plan are tied to our performance. As such, the Holding Incentive Plan is accounted for as if it were a direct plan of the Company. BCO Holding is a holding company that owns 100% of our outstanding common stock and does not have any other operations.

We recorded approximately $1.4 million, $1.9 million and $1.1 million in stock-based compensation expense in 2006, 2005 and 2004, respectively, related to outstanding Service and Performance options. Because the underlying exit event cannot be reasonably estimated, we did not record compensation expense in any of those periods related to Exit Options. In addition, we recorded stock-based compensation expense of approximately $8.8 million related to the exercise of certain exchange options as further described in Note 7.

The following table presents the status of the Holding Incentive Plan at the end of 2004, 2005 and 2006 and changes during the periods then ended:

	Shares Under Option		Weighted- Average Exercise Price		Options Exercisable	Weighted- Average Exercise Price
EMPLOYEE STOCK OPTIONS
Options outstanding at September 28, 2003	3,464,226		$	7.57	1,625,820	$	4.82
Options granted	468,000			16.49
Options forfeited	(72,252	)		10.00
Options outstanding at October 3, 2004	3,859,974			8.61	1,898,236		5.57
Options granted	121,692			19.20
Options exercised	(4,000	)		10.00
Options forfeited	(102,166	)		11.14
Options outstanding at October 2, 2005	3,875,500			8.87	2,251,684		6.50
Options granted	139,618			27.23
Options exercised	(386,221	)		3.58
Options forfeited	(142,244	)		16.06
OPTIONS OUTSTANDING AT OCTOBER 1, 2006	3,486,653		$	9.90	2,173,109	$	7.74

F-18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

The following table summarizes information about stock options outstanding and exercisable at October 1, 2006:

October 1, 2006	Number Outstanding	Weighted-Average Remaining Term	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
RANGE OF EXERCISE PRICES
$2.22 to 5.53	1,239,599	5.2 years	$	5.21	1,239,599	$	5.21
$10.00	1,665,818	6.4 years		10.00	797,512		10.00
$16.49 to 22.00	401,898	7.9 years		16.73	120,564		16.63
$26.37 to 31.19	179,338	9.3 years		26.07	15,434		24.42
	3,486,653	6.3 years	$	9.90	2,173,109	$	7.74

At October 1, 2006, there were 144,049 options available for grant.

9. INCOME TAXES

Our provision for income taxes consists of the following:

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006		2005			2004
CURRENT INCOME TAXES
Federal	$	3,703	$	9,907		$	(546	)
Foreign		1,161		—			—
State		1,242		1,344			478
DEFERRED INCOME TAXES		835		(6,900	)		3,702
PROVISION FOR INCOME TAXES	$	6,941	$	4,351		$	3,634

The provision for income taxes is reconciled with the federal statutory rate as follows:

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006			2005			2004
Income tax expense at the federal statutory rate	$	4,458		$	4,368		$	3,269
State income tax expense, net of federal income tax benefits		399			437			327
Foreign income taxed at rates other than the federal statutory rate		(947	)		(791	)		(296	)
Puerto Rican tax assessment		899			—			—
Adjustment to estimated effective state tax rates		1,034			—			—
Other items, net		1,098			337			334
PROVISION FOR INCOME TAXES		6,941		$	4,351		$	3,634
EFFECTIVE TAX RATE AS A PERCENTAGE OF PRETAX INCOME		54.5	%		34.9	%		38.9	%

The components of deferred tax assets and liabilities are as follows:

October 1, 2006 and October 2, 2005 (Dollars in thousands)	2006			2005
DEFERRED TAX LIABILITIES
Property, plant and equipment	$	27,221		$	30,567
Intangible assets		54,087			56,407
Other		1,664			842
TOTAL DEFERRED TAX LIABILITIES		82,972			87,816
DEFERRED TAX ASSETS
Restructuring reserves		956			779
Employee benefits		11,260			11,815
Accounts receivable		1,460			1,409
Inventory		102			3,990
Transaction costs		775			1,384
Net operating loss carryforwards		—			727
Other		1,165			1,494
Total deferred tax assets, gross		15,718			21,598
Valuation allowance		—			(727	)
TOTAL DEFERRED TAX ASSETS		15,718			20,871
DEFERRED TAX LIABILITY, NET	$	67,254		$	66,945
Current deferred tax assets, net	$	(4,038	)	$	(9,174	)
Noncurrent deferred tax liability, net		71,292			76,119
DEFERRED TAX LIABILITY, NET	$	67,254		$	66,945

In accordance with SFAS 109, Accounting for Income Taxes, and SFAS 5, Accounting for Contingencies, we establish reserves for tax contingencies that reflect our best estimate of the deductions and credits that we may be unable to sustain, or that we could be willing to concede as part of a broader tax settlement. At the end of 2006 and 2005, we had recorded tax contingency reserves of approximately $1.3 million and $0.4 million, respectively. The increase in the tax contingency reserve relates to estimated amounts of utilized acquired net operating losses that are probable of disallowance. Any future benefits of these net operating losses will result in an adjustment to goodwill. See Note 5.

F-19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

10. LEASE COMMITMENTS

We lease manufacturing facilities, warehouses and office space under operating leases, and we lease vehicles and equipment under operating and capitalized leases. We recorded lease expense of approximately $10.8 million, $11.1 million and $8.2 million in 2006, 2005 and 2004, respectively.

Future minimum lease payments under non-cancelable capitalized and operating leases, net of sublease income, at October 1, 2006:

(Dollars in thousands)	Capitalized Leases			Operating Leases
Fiscal year ending
2007	$	228		$	9,812
2008		148			9,495
2009		92			7,776
2010		—			6,748
2011		—			6,475
2012 and thereafter		—			17,227
Total minimum lease payments		468		$	57,533
Less: imputed interest		(25	)
Present value of minimum capitalized lease payments		443
Current portion of capitalized lease obligations		219
Long-term capitalized lease obligations	$	224

11. EMPLOYEE BENEFIT PLANS

Pension and Postretirement Plans

Our defined benefit pension and other postretirement benefit costs and obligations are dependent on assumptions used by actuaries in calculating such amounts. These assumptions, which we review annually, include the discount rate, long-term expected rate of return on plan assets, healthcare cost trend rate and other economic and demographic factors. We determine the discount rate assumption for our defined benefit pension plan based on the estimated rate at which annuity contracts could be purchased to discharge the pension benefit obligation. In estimating discount rates for the defined benefit pension plan and the other postretirement benefit plans, we evaluate the AA-rated corporate long-term bond yield rate in the United States at the end of our fiscal year as an estimate of the rate that would generate matching cash flows to pay benefits under the plans if invested in a portfolio of high quality debt instruments. The long-term expected rate of return on plan assets is based on a combination of historical results of the portfolio and our expectation of future returns that we expect to realize over the estimated remaining life of the plan liabilities that will be funded with the plan assets. The healthcare cost trend rate assumptions are based on historical cost and payment data, the near-term outlook and an assessment of the likely long-term trends. Since the defined benefit pension plan was frozen, as discussed below, we did not make salary growth assumptions.

We have a defined benefit pension plan sponsored by NAMPAC that covers certain of its hourly and salaried employees. The plan was frozen effective October 31, 2004 for salaried participants; the plan was frozen to hourly participants in 1998. Benefits are based on the participant’s compensation and period of employment as of the date the applicable portion of the plan was frozen.

We offer postretirement medical coverage to certain union employees at our Cincinnati, Ohio manufacturing facility in accordance with certain of our collective bargaining agreements. We closed the plan to new participants in 1998.

The measurement dates used to determine pension benefit obligations are September 30, 2006 and September 30, 2005 and the measurement dates used to determine other postretirement benefit obligations are October 1, 2006 and October 2, 2005.

F-20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

The following table reflects the change in benefit obligation and plan assets and the components of net periodic benefits cost associated with these benefits:

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	Defined Benefit Pension Plan (1)									Other Postretirement Benefits
	2006			2005			2004			2006			2005			2004
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost	$	—		$	72		$	204		$	6		$	5		$	5
Interest cost		599			609			158			356			382			399
Expected return on plan assets		(603	)		(530	)		(159	)		—			—			—
Recognized net actuarial loss		—			—			—			53			52			59
NET PERIODIC BENEFIT COST		(4	)		151			203			415			439			463
WEIGHTED AVERAGE ASSUMPTIONS
Discount rate		5.54	%		5.75	%		6.10	%		5.50	%		6.00	%		6.00	%
Expected return on plan assets		8.00	%		8.00	%		8.75	%		n/a			n/a			n/a

(1) Net periodic benefit cost for 2004 is for the period from July 7, 2004 when the plan was acquired in the NAMPAC Acquisition. We did not have defined benefit pension plans prior to the NAMPAC Acquisition.

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	Defined Benefit Pension Plan (1)									Other Postretirement Benefits
	2006			2005			2004			2006			2005			2004
CHANGE IN FAIR VALUE OF PLAN ASSETS
Beginning of period	$	7,433		$	6,402		$	7,353		$	—		$	—		$	—
Actual return on plan assets		489			706			(73	)		—			—			—
Company contributions		421			547			—			433			326			532
Benefits paid		(237	)		(222	)		(878	)		(433	)		(326	)		(532	)
END OF PERIOD FAIR VALUE		8,106			7,433			6,402			—			—			—
CHANGE IN PROJECTED BENEFIT OBLIGATION
Beginning of period	$	10,908		$	10,666		$	10,457		$	6,700		$	6,604		$	6,882
Service cost		—			72			204			6			5			5
Interest cost		599			609			158			356			382			399
Actuarial loss (gain)		567			(217	)		725			512			35			(150	)
Benefits paid		(237	)		(222	)		(878	)		(433	)		(326	)		(532	)
END OF PERIOD PROJECTED BENEFIT OBLIGATION		11,837			10,908			10,666			7,141			6,700			6,604
Unfunded status of the plan		(3,731	)		(3,475	)		(4,264	)		(7,141	)		(6,700	)		(6,604	)
Unrecognized net actuarial loss		1,245			564			958			2,135			1,676			1,692
Accrued benefit cost		(2,486	)		(2,911	)		(3,306	)		(5,006	)		(5,024	)		(4,912	)
Additional minimum liability		(1,245	)		(564	)		(958	)		—			—			—
NET AMOUNT RECOGNIZED		(3,731	)		(3,475	)		(4,264	)		(5,006	)		(5,024	)		(4,912	)
WEIGHTED AVERAGE ASSUMPTIONS
Discount rate		5.75	%		5.54	%		5.75	%		5.75	%		5.50	%		6.00	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%		n/a			n/a			n/a

(1) Net periodic benefit cost for 2004 is for the period from July 7, 2004 when the plan was acquired in the NAMPAC Acquisition. We did not have defined benefit pension plans prior to the NAMPAC Acquisition.

The accumulated benefit obligation for the defined benefit pension plan was $11.8 million and $10.9 million at the end of 2006 and 2005 respectively. The accumulated benefit obligation for the other post-retirement benefit plans was $7.1 million and $6.7 million at the end of 2006 and 2005, respectively.

F-21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

The following table presents plan assets as a percentage of total plan assets for our defined benefit pension plan at the date indicated:

September 30
(Dollars in thousands)	2006		2005		2004
ASSET CATEGORY
Equity mutual funds	60	%	61	%	61	%
Fixed income mutual funds	40	%	39	%	39	%
	100	%	100	%	100	%

NAMPAC employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a determined level of risk. Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across domestic and non-domestic stock, as well as growth, value and small and large capitalizations. Other assets such as real estate, private equity and hedge funds may be used to enhance long-term returns while improving portfolio diversification. Derivatives may be used to gain market exposure; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements and periodic asset/liability studies.

Estimated future benefit payments under the defined benefit pension plan and other postretirement benefits by fiscal year are as follows:

(Dollars in thousands)	Pension Benefits		Other Benefits
FISCAL YEAR ENDING
2007	$	292	$	513
2008		320		514
2009		376		541
2010		404		571
2011		418		582
2012 through 2016		2,727		2,467

In 2007, we expect to contribute approximately $1.0 million and $0.5 million to the pension plan and the postretirement benefit plan, respectively.

For measurement purposes, annual rates of increase of 10.00% and 10.75% in the post-65 per capita costs of covered health care benefits were assumed for each of 2006 and 2005, respectively, and a 9.00% and 9.75% annual rate of increase in the pre-65 per capita costs of covered health care benefits were assumed for 2006 and 2005, respectively. As of October 1, 2006, post-65 rates were assumed to decrease by 0.75% per year to 7.0% and then by 0.5% per year to 5.5% and remain at that level thereafter. Pre-65 rates were assumed to decrease by 0.75% per year to 7.5% and then by 0.5% per year to 5.5% and remain at that level thereafter.

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Medicare Act”) was signed into law. The Medicare Act introduced a Medicare prescription drug benefit that began in calendar 2006 as well as a federal subsidy to sponsors of retirement health care plans that provide a benefit at least “actuarially equivalent” to the Medicare benefit. We evaluated the benefits of the subsidy and determined that the cost of applying for the subsidy was outweighed by the estimated benefit to the Company. As such, plan obligations do not reflect the impact of this legislation.

Assumed healthcare cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects:

(Dollars in thousands)	2006
1% INCREASE IN ASSUMED HEALTH CARE COST TRENDS
Effect on total service and interest cost components	$	42
Effect on postretirement benefit obligation		708
1% DECREASE IN ASSUMED HEALTH CARE COST TRENDS
Effect on total service and interest cost components	$	(36	)
Effect on postretirement benefit obligation		(609	)

Defined Contribution Plans

We offer qualified defined contribution plans that cover substantially all full-time employees. Under the plans, we match employee contributions up to a certain limit. One of our plans provides for a deferred profit sharing component, which is funded at the discretion of our Board of Directors. Our net contributions to these plans were approximately $2.8 million, $2.5 million and $1.9 million in 2006, 2005 and 2004, respectively.

We contribute to certain union sponsored defined contribution plans that provide benefits to certain of our union employees under collective bargaining agreements. Our contributions to these

F-22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

plans were approximately $1.4 million, $1.3 million and $1.4 million in 2006, 2005 and 2004, respectively.

Supplemental Executive Retirement Plans

We provide for retirement benefits to certain current and former executives of the Company or its predecessors through supplemental executive retirement plans (“SERPs”). We recorded expenses of approximately $0.8 million, $0.9 million and $0.4 million in 2006, 2005 and 2004, respectively related to these plans. We paid SERP benefits of approximately $0.4 million, $0.4 million and $0.2 million in 2006, 2005 and 2004, respectively. At October 1, 2006 and October 2, 2005, we had accrued SERP liabilities of $6.6 million and $5.8 million, respectively. The current and the non-current portions of the SERP liability are recorded in other current liabilities and other noncurrent liabilities, respectively, in the consolidated balance sheets. The liabilities at the end of 2006 and 2005 were determined using a discount rate of 5.74% and 5.43%, respectively. The SERPs are unfunded.

Estimated future benefit payments under the SERP agreements are as follows:

(Dollars in thousands)
FISCAL YEAR ENDING
2007	$	477
2008		722
2009		722
2010		722
2011		722
2012 through 2016		3,288

12. RELATED PARTY TRANSACTIONS

We pay an annual financial advisory fee to Kelso of approximately $0.5 million and reimburse them for related expenses. These expenses are included in other expense (income), net.

13. RESTRUCTURING AND IMPAIRMENT

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004
(Dollars in thousands)	2006		2005		2004
Restructuring charge	$	1,511	$	4,265	$	352
Impairment charge		—		1,000		—
RESTRUCTURING AND IMPAIRMENT CHARGE	$	1,511		5,265		352

The following table set forth changes in the restructuring and exit liabilities, which are included in other current liabilities in the consolidated balance sheets. The nature of the liabilities has not changed from that previously reported and restructuring charges are shown net of any adjustments.

	Metal Packaging Segment									Plastic Packaging Segment
(Dollars in millions)	Severance Costs			Facility Closure Costs			Segment Total			Severance Costs			Facility Closure Costs			Segment Total			Total
Restructuring liability
Balance at September 29, 2003		0.3			1.2			1.5			—			—			—			1.5
Restructuring charge		0.2			0.1			0.3			—			—			—			0.3
Expenditures		(0.5	)		(1.2	)		(1.7	)		—			—			—			(1.7	)
Balance at October 3, 2004		—			0.1			0.1			—			—			—			0.1
Restructuring charge		—			0.3			0.3			1.0			3.1			4.1			4.4
Expenditures		—			(0.4	)		(0.4	)		(0.6	)		(1.6	)		(2.2	)		(2.6	)
Balance at October 2, 2005		—			—			—			0.4			1.5			1.9			1.9
Restructuring charge		—			—			—			0.4			0.3			0.7			0.7
Adjustment related to change in sublease assumptions		—			—			—			—			0.8			—			0.8
Expenditures		—			—			—			(0.6	)		(1.2	)		(1.8	)		(1.8	)
Balance at October 1, 2006	$	—		$	—		$	—		$	0.2		$	1.4		$	1.6		$	1.6

F-23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

	Metal Packaging Segment									Plastic Packaging Segment						Total
(Dollars in millions)	Severance Costs			Facility Closure Costs			Segment Total			Severance Costs		Facility Closure Costs		Segment Total
Exit Liability
Balance at September 29, 2003		0.2			0.5			0.7			—		—		—		0.7
Adjustments		(0.2	)		0.2			—			—		—		—		—
Expenditures		—			(0.5	)		(0.5	)		—		—		—		(0.5	)
Balance at October 3, 2004		—			0.2			0.2			—		—		—		0.2
Adjustments		—			(0.1	)		(0.1	)		—		—		—		(0.1	)
Expenditures		—			(0.1	)		(0.1	)		—		—		—		(0.1	)
Balance at October 2, 2005	$	—		$	—		$	—		$	—	$	—	$	—	$	—

Restructuring Charge and Liability

2001 Rightsizing Plan. In 2001, we implemented a manufacturing and cost structure rightsizing plan whereby we recorded a restructuring charge of approximately $5.3 million. The restructuring liability of $1.5 million remaining at the beginning of 2004 primarily related to future lease obligations at two of our closed manufacturing facilities. We recorded a reduction in the restructuring liability of approximately $0.1 million (as an adjustment to restructuring expense) in 2005 as no further severance or facility closure costs were expected. At the end of 2005, there were no amounts remaining in the restructuring liability related to this plan, and we do not anticipate any related future charges or adjustments.

2004 Picayune Facility Closure. In the fourth quarter of 2003, we were notified by one of our large customers that it was converting its steel packaging requirements to an alternative packaging that we did not manufacture. The customer completed its conversion in the second quarter of 2004. As a result of this conversion, we closed our Picayune, Mississippi manufacturing facility, whereby we relocated or terminated the workforce and disposed of, stored or transferred certain equipment to other of our manufacturing facilities. Upon notice from the customer and in anticipation of the closure, we recorded a restructuring charge of approximately $0.3 million in 2003 (primarily related to severance and benefits) and recorded an aggregated restructuring charge of approximately $0.3 million in each of 2004 and 2005. The total restructuring charge consisted of severance and benefits, equipment disposition and other related costs associated with closure of the Picayune facility. We terminated approximately 80 employees related to this facility closure.

In addition to the restructuring charge, we shortened the estimated remaining useful lives of certain long-lived assets, primarily equipment, associated with the manufacture of the steel packaging supplied to the customer discussed above. The shortened useful lives resulted in approximately $1.8 million in additional depreciation expense in the fourth quarter of 2003 and approximately $5.8 million in additional depreciation in 2004.

We returned the facility to the landlord in 2005, and, at the end of 2005, there were no amounts remaining in the restructuring liability related to the closure of this facility. We do not anticipate any related future charges or adjustments.

2005 Plastics Manufacturing Restructuring Plan. In October 2004, the Board of Directors approved a broad plan to close certain plastics manufacturing facilities and to eliminate certain positions that became redundant as a result of the NAMPAC Acquisition. We ceased operations at one of the facilities at the end of 2004, and the remaining facilities were closed in the third quarter of 2005. Approximately 88 hourly and approximately 41 salaried employees were affected by the plan. The purpose of the plan was to lower overall manufacturing costs and improve manufacturing capacity through the consolidation of existing business from these closed facilities into our NAMPAC facilities.

In 2005, we recorded a $4.1 million restructuring charge consisting of $3.1 million in costs associated with the shutdown of certain of our plastics manufacturing facilities and $1.0 million in severance and benefits costs associated with the facility closures and the elimination of redundant positions as a result of the NAMPAC Acquisition. A portion of the $3.1 million restructuring charge related to shutdown costs includes the net present value of future lease payments, net of expected sublease proceeds, and other obligations associated with facilities that were closed in the third quarter of 2005.

In addition to the restructuring charge, we recorded approximately $3.9 million of additional depreciation in 2005 associated with the shortened useful lives of equipment subsequently taken out of service in association with the closure of the plastic manufacturing facilities.

During 2006, we incurred and expensed approximately $1.0 million in facility closure costs and approximately $0.3 million in severance costs related to these facilities. Included in the $1.0 million in facility closure costs is an adjustment of approximately $0.8 million related to a change in our sublease assumptions on the remaining facility. We expect to incur future restructuring charges of approximately $0.4 million related to facility shutdown and holding costs, which include the accretion of net lease liabilities recorded at present value, and to severance related costs.

In the fourth quarter of 2006, we closed a warehouse facility in Canada, which resulted in the termination of 3 employees. We recorded approximately $0.1 million in facility closure costs and approximately $0.1 million in severance and benefits costs. We do not anticipate any future charges related to this closure.

F-24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

Impairment Charge

As a result of the plastics manufacturing restructuring plan, as discussed above, we took an initial $0.8 million impairment charge in the third quarter of 2005 to write certain assets down to their estimated fair value and reclassified them as assets held for sale in other current assets. We took an additional charge of $0.2 million in the fourth quarter of 2005 to further write the assets down to their estimated fair value.

At the end of 2005, the estimated fair value less cost to sell of equipment held for sale associated with the closed facilities was approximately $0.6 million, and is included in other current assets. The assets were sold in 2006 for $0.6 million.

Exit Liability

At February 7, 2003, our senior management committed to a plan to exit a manufacturing facility. In conjunction with this decision, we established an exit liability of $1.1 million for closing our Southwest manufacturing facility in Dallas, Texas. This liability included severance and benefit costs of approximately $0.5 million and estimated facility closure costs of approximately $0.6 million. The facility was sold in fiscal 2005, and we do not anticipate any future charges or adjustments.

The facility was classified as an asset held for sale in other current assets at the end of 2004. We sold the facility for approximately $0.7 million in December 2004 and recorded a gain on the sale of approximately $0.2 million.

14. CONTINGENCIES

Environmental

We are subject to a broad range of federal, state, provincial and local environmental, health and safety laws, including those governing discharges to air, soil and water, the handling and disposal of hazardous substances and the investigation and remediation of contamination resulting from the release of hazardous substances. We believe that we are currently in compliance with all applicable environmental, health and safety laws, though future expenditures may be necessary in order to maintain such compliance, including compliance with air emission control requirements for volatile organic compounds. In addition, in the course of our operations we use, store and dispose of hazardous substances. Some of our current and former facilities are currently involved in environmental investigations and remediation resulting from the release of hazardous substances or the presence of other contaminants. While we do not believe that any investigation or identified remediation obligations will have a material adverse effect on our financial condition, results of operations or cash flows, there are no assurances that such obligations will not arise in the future. Many of our facilities have a history of industrial usage for which investigation and remediation obligations could arise in the future and which could have a material adverse effect on our financial condition, results of operations or cash flows. However, except to the extent otherwise disclosed herein, we believe it is remote that any such material losses could result from environmental remediation matters or environmental investigations relating to our current or former facilities.

We incurred approximately $1.1 million in capital expenditures in 2006 and approximately $0.6 million in 2007 to comply with federal Maximum Achievable Control Technology (“MACT”) regulations related to air emission control requirements for Hazardous Air Pollutants (“HAP”) and volatile organic compounds. We expect to incur approximately $1.1 million in capital expenditures in 2007 to comply with certain environmental laws at a facility related to the ICL Acquisition.

In the third quarter of 2005, we joined a potentially responsible party (“PRP”) group related to a waste disposal site in Georgia. Our status as a PRP was based on documents indicating that waste materials were transported to the site from our Homerville, Georgia facility prior to our acquisition of the facility in 1989. We joined the PRP group in order to reduce our exposure, which we estimate will approximate $0.1 million.

From time to time, we receive requests for information or are identified as a PRP pursuant to the Federal Comprehensive Environmental Response, Compensation and Liability Act or analogous state laws with respect to off-site waste disposal sites utilized by its current or former facilities or its predecessors in interest. We do not believe that any of these identified matters will have a material adverse effect on our financial condition, results of operations or cash flows.

We record reserves for environmental liabilities when environmental investigation and remediation obligations are probable and related costs are reasonably estimable. We had accrued liabilities of approximately $0.3 million at the end of each of 2006 and 2005; however, future expenditures may exceed the amounts accrued.

Self Insurance

We are self-insured with stop loss arrangements for the majority of our medical and workers’ compensation benefits. The self insurance liability related to workers’ compensation is determined actuarially based on filed claims. The self-insurance liability related to medical claims is determined based on internal and external analysis of actual claims. The amounts related to these claims are included in other current liabilities and were $7.0 million and $7.5 million at the end of 2006 and 2005, respectively.

Other

We are involved in legal proceedings from time to time in the ordinary course of business. We believe that the outcome of these proceedings will not have a material effect on our financial condition, results of operations or cash flows. At the end of 2006 and 2005, we had accrued approximately $0.3 million and $0.5 million, respectively, related to pending litigation matters.

We have been named as a defendant in various complaints related to the sale of lead pigment for use in lead-based paint. The claims have been asserted against our Armstrong Containers, Inc. subsidiary (“Armstrong”) based on allegations that Armstrong assumed certain liabilities of MacGregor Lead Company (“MacGregor”), an entity that was involved in the manufacture and sale of lead pigment until 1973, when MacGregor sold its lead paint business to a third party. These cases

F-25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

seek to recover unspecified monetary damages in excess of the statutory minimum for personal injuries due to alleged exposure to lead based paint. We have been advised by plaintiff’s counsel that other cases are likely to be filed that will name Armstrong as a defendant. We believe that we have valid defenses to these cases and plan to vigorously defend them. We have notified our general liability insurers, who are participating in the defense of the claims. However, we can neither predict the outcome at this time due to uncertainties involved nor can we reasonably determine the scope or amount of potential costs and liabilities related to such litigation. At the end of 2006, we had accrued approximately $0.5 million in legal fees and expenses related to this matter.

In the third quarter of 2006, one of our customers notified us that it had initiated a voluntary product recall of certain of its products due to potential leaks in certain of the containers that we likely manufactured. At the end of 2006, we had approximately $1.2 million accrued related to this matter.

Letters of Credit

At October 1, 2006, a bank had issued standby letters of credit on our behalf in the aggregate amount of $8.0 million primarily in favor of our workers’ compensation insurers and purchasing card vendor.

Collective Bargaining Agreements

At the end of 2006, approximately 23% of our hourly employees were subject to union collective bargaining agreements. Two of our collective bargaining agreements, representing approximately 47% of our union employees, will become amendable in 2007.

Commodity Risk

We are subject to various risks and uncertainties related to changing commodity prices for and the availability of the raw materials used in the manufacture of our products, primarily steel and resin, as well as unfavorable changes in energy costs, primarily electricity and natural gas.

15. BUSINESS SEGMENTS

Our operations are organized and reviewed by management along our products lines in two reportable segments —Metal Packaging and Plastics Packaging. We operate these reportable segments as separate divisions and differentiate the segments based on the nature of the products and services they offer. The primary raw material and manufacturing process are unique for each segment. A further description of each business segment and of our Corporate services area follows:

Metal Packaging. Metal Packaging includes the metal packaging products and material center services that we have historically offered. Primarily products in this segment include paint cans, aerosol containers, ammunition boxes and other general line containers made from steel. Metal Packaging is a separate division of the Company with management and production facilities and processes distinct from our Plastics Packaging Division. Metal Packaging includes steel pails manufactured by ICL.

Plastics Packaging. Plastics Packaging includes the plastics packaging products manufactured and distributed by NAMPAC and ICL. Principle products in this segment include open- and tight-head pails and drums and other multi-purpose rigid industrial plastic packaging. Plastics Packaging is a separate division of the Company with management and production facilities and processes distinct from our Metal Packaging Division.

Corporate. Corporate includes accounting and finance, information technology, payroll and human resources and various other overhead charges, each to the extent not allocated to the divisions.

Segment asset disclosures include, among other things, inventories, property, plant and equipment, goodwill and other intangible assets. The accounting policies of our segments are the same as those described in Note 1. There were no intersegment sales in the periods presented. Management’s evaluation of segment performance is principally based on EBITDA.

F-26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

The following sets forth certain financial information attributable to our business segments for 2006 and 2005.

Fiscal years ended October 1, 2006 and October 2, 2005 (Dollars in thousands)	2006			2005
NET SALES
Metal packaging	$	552,968		$	528,512
Plastics packaging		365,545			300,597
CONSOLIDATED NET SALES		918,513			829,109
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
Metal packaging		87,193			81,831
Plastics packaging		26,354			22,185
Segment earnings excluding depreciation and amortization		113,547			104,016
Corporate undistributed expense		(21,212	)		(11,561	)
Depreciation and amortization (see below)		(41,615	)		(43,215	)
Restructuring and impairment charge		(1,511	)		(5,265	)
Interest expense, net		(34,660	)		(32,165	)
Other (expense) income, net		(1,813	)		670
CONSOLIDATED INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE	$	12,736		$	12,480
TOTAL ASSETS
Metal packaging	$	318,699		$	303,364
Plastics packaging		322,540			285,434
Segment assets		641,239			588,798
Corporate assets		192,506			183,196
CONSOLIDATED TOTAL ASSETS		833,745			771,994
CAPITAL EXPENDITURES
Metal packaging		8,543			8,143
Plastics packaging		15,632			11,337
Segment capital expenditures		24,175			19,480
Corporate capital expenditures		866			802
CONSOLIDATED CAPITAL EXPENDITURES		25,041			20,282
DEPRECIATION AND AMORTIZATION
Metal packaging		21,381			21,468
Plastics packaging		18,331			19,646
Segment depreciation and amortization		39,712			41,114
Corporate depreciation and amortization		1,903			2,101
CONSOLIDATED DEPRECIATION AND AMORTIZATION	$	41,615		$	43,215

The following sets forth business segment net sales by products and services for 2006, 2005 and 2004:

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004 (Dollars in thousands)	2006		2005		2004
METAL PACKAGING
General line containers	$	535,942	$	502,318	$	472,707
Other		17,026		26,194		45,951
TOTAL METAL PACKAGING SEGMENT NET SALES		552,968		528,512		518,658
PLASTICS PACKAGING SEGMENT NET SALES		365,545		300,597		92,930
CONSOLIDATED NET SALES	$	918,513	$	829,109	$	611,588

Customers

We sell our containers to a large number of customers in various industry sectors. To reduce credit risk, we set credit limits and perform ongoing credit evaluations. Although our exposure to credit risk associated with nonpayment is affected by the industry conditions of our customers, our outstanding accounts receivable are substantially current and are materially within our established terms and limits.

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004	2006		2005		2004
PERCENTAGE OF SALES TO TOP TEN CUSTOMERS
Metal packaging segment	43	%	48	%	47	%
Plastics packaging segment	40		42		29
Total	35		40		42

F-27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

Fiscal years ended October 1, 2006, October 2, 2005 and October 3, 2004	2006		2005		2004
PERCENTAGE OF SALES TO LARGEST CUSTOMER
Metal packaging segment	13	%	16	%	16	%
Plastics packaging segment	18		22		16
Total	15		18		16

We sell our products and services primarily in North America. In 2006, 2005 and 2004, sales to customers located outside the United States were less than five percent of our total net sales.

16. SUPPLEMENTAL GUARANTOR SUBSIDIARIES INFORMATION

The Senior Notes are guaranteed on a full, unconditional joint and several basis by our U.S. based subsidiaries, each of which is wholly owned. The following condensed, consolidating financial information presents the Consolidating Financial Statements of BWAY and its subsidiaries. We have not presented separate guarantor subsidiary financial statements because we do not believe they would provide materially useful information to investors.

F-28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Balance Sheet Information

October 1, 2006

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated
Assets
CURRENT ASSETS
Cash and cash equivalents	$	43,617		$	1,458		$	5,904		$	—		$	50,979
Accounts receivable, net		61,279			44,520			10,187			—			115,986
Inventories		53,426			19,944			7,071			—			80,441
Income taxes receivable		18,757			(11,201	)		(265	)		—			7,291
Deferred tax assets		451			3,587			—			—			4,038
Other		3,420			1,291			131			—			4,842
TOTAL CURRENT ASSETS		180,950			59,599			23,028			—			263,577
PROPERTY, PLANT AND EQUIPMENT, NET		83,955			54,952			4,037			—			142,944
OTHER ASSETS
Goodwill		120,259			98,895			29,533			—			248,687
Other intangible assets, net		51,483			92,265			22,453			—			166,201
Deferred financing costs, net		9,774			—			1,178			—			10,952
Other		1,026			358			—			—			1,384
Investment in subsidiaries		244,960			19,557			—			(264,517	)		—
TOTAL OTHER ASSETS		427,502			211,075			53,164			(264,517	)		427,224
TOTAL ASSETS	$	692,407		$	325,626		$	80,229		$	(264,517	)	$	833,745
Liabilities and Stockholder’s Equity
CURRENT LIABILITIES
Accounts payable	$	56,027		$	54,805		$	8,107		$	—		$	118,939
Accrued salaries and wages		10,233			3,096			527			—			13,856
Accrued interest		9,748			—			89			—			9,837
Accrued rebates		9,453			1,537			101			—			11,091
Current portion of long-term debt		20,000			—			506			—			20,506
Other		16,616			1,264			480			—			18,360
TOTAL CURRENT LIABILITIES		122,077			60,702			9,810			—			192,589
LONG-TERM DEBT		369,500			—			49,995			—			419,495
OTHER LIABILITIES
Deferred tax liabilities		24,984			46,308			—			—			71,292
Intercompany		29,593			(29,658	)		65			—			—
Other		18,770			4,116			—			—			22,886
TOTAL OTHER LIABILITIES		73,347			20,766			65			—			94,178
TOTAL LIABILITIES		564,924			81,468			59,870			—			706,262
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER’S EQUITY
Preferred stock		—			—			—			—			—
Common stock		—			1			—			(1	)		—
Additional paid-in capital		112,882			233,190			19,634			(252,824	)		112,882
Retained earnings		15,098			11,715			474			(12,189	)		15,098
Accumulated other comprehensive loss		(497	)		(748	)		251			497			(497	)
TOTAL STOCKHOLDER’S EQUITY		127,483			244,158			20,359			(264,517	)		127,483
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	692,407		$	325,626		$	80,229		$	(264,517	)	$	833,745

F-29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Balance Sheet Information

October 2, 2005

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Eliminations			Consolidated
Assets
CURRENT ASSETS
Cash and cash equivalents	$	50,161		$	1,728		$	—		$	51,889
Accounts receivable, net		61,900			42,222			—			104,122
Inventories		41,776			30,189			—			71,965
Deferred tax assets		8,226			948			—			9,174
Other		2,925			825			—			3,750
TOTAL CURRENT ASSETS		164,988			75,912			—			240,900
PROPERTY, PLANT AND EQUIPMENT, NET		90,594			51,882			—			142,476
OTHER ASSETS
Goodwill		120,259			98,959			—			219,218
Other intangible assets, net		58,042			98,709			—			156,751
Deferred financing costs, net		10,589			—			—			10,589
Other		1,138			922			—			2,060
Investment in subsidiaries		219,231			—			(219,231	)		—
TOTAL OTHER ASSETS		409,259			198,590			(219,231	)		388,618
TOTAL ASSETS	$	664,841		$	326,384		$	(219,231	)	$	771,994
Liabilities and Stockholder’s Equity
CURRENT LIABILITIES
Accounts payable	$	48,311		$	49,657		$	—		$	97,968
Accrued salaries and wages		12,233			1,553			—			13,786
Accrued interest		10,803			—			—			10,803
Accrued rebates		9,458			646			—			10,104
Income taxes payable		4,117			3,876			—			7,993
Current portion of long-term debt		30,000			—			—			30,000
Other		15,292			1,245			—			16,537
TOTAL CURRENT LIABILITIES		130,214			56,977			—			187,191
LONG-TERM DEBT		365,300			—			—			365,300
OTHER LIABILITIES
Deferred tax liabilities		28,388			47,731			—			76,119
Intercompany		1,324			(1,324	)		—			—
Other		16,179			3,769			—			19,948
TOTAL OTHER LIABILITIES		45,891			50,176			—			96,067
TOTAL LIABILITIES		541,405			107,153			—			648,558
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER’S EQUITY
Preferred stock		—			—			—			—
Common stock		—			1			(1	)		—
Additional paid-in capital		104,082			214,107			(214,107	)		104,082
Retained earnings		19,701			5,470			(5,470	)		19,701
Accumulated other comprehensive loss		(347	)		(347	)		347			(347	)
TOTAL STOCKHOLDER’S EQUITY		123,436			219,231			(219,231	)		123,436
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY	$	664,841		$	326,384		$	(219,231	)	$	771,994

F-30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Statement of Operations Information

For the year ended October 1, 2006

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Other Subsidiaries		Eliminations			Consolidated
NET SALES	$	548,823		$	354,928		$	14,762	$	—		$	918,513
COSTS AND EXPENSES
Cost of products sold (excluding depreciation and amortization)		461,095			323,676			12,341		(711	)		796,401
Depreciation and amortization		22,522			18,493			600		—			41,615
Selling and administrative expense		25,708			3,698			371		—			29,777
Restructuring charge		1,511			—			—		—			1,511
Interest expense, net		34,082			(122	)		700		—			34,660
Other expense (income), net		1,534			(446	)		14		711			1,813
TOTAL COSTS AND EXPENSES		546,452			345,299			14,026		—			905,777
INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE		2,371			9,629			736		—			12,736
Provision for income taxes		2,821			3,858			262		—			6,941
Equity in income of subsidiaries		6,245			474			—		(6,719	)		—
NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE		5,795			6,245			474		(6,719	)		5,795
Cumulative effect of change in accounting principle, net of tax benefit		(398	)		—			—		—			(398	)
NET INCOME	$	5,397		$	6,245		$	474	$	(6,719	)	$	5,397

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Statement of Operations Information

For the year ended October 2, 2005

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Eliminations			Consolidated
NET SALES	$	538,474		$	290,635		$	—		$	829,109
COSTS AND EXPENSES
Cost of products sold (excluding depreciation and amortization)		451,289			263,461			(711	)		714,039
Depreciation and amortization		28,134			15,081			—			43,215
Selling and administrative expense		17,995			4,125			—			22,120
Restructuring and impairment charge		5,265			—			—			5,265
Interest expense, net		32,172			(7	)		—			32,165
Other income, net		(127	)		(759	)		711			(175	)
TOTAL COSTS AND EXPENSES		534,728			281,901			—			816,629
INCOME BEFORE INCOME TAXES AND EQUITY EARNINGS		3,746			8,734			—			12,480
Provision for income taxes		1,307			3,044			—			4,351
Equity in income of subsidiaries		5,690			—			(5,690	)		—
NET INCOME	$	8,129		$	5,690		$	(5,690	)	$	8,129

F-31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Statement of Operations Information

For the year ended October 3, 2004

(Dollars in thousands)	BWAY Corporation		Guarantor Subsidiaries			Eliminations			Consolidated
NET SALES	$	548,873	$	62,715		$	—		$	611,588
COSTS AND EXPENSES
Cost of products sold (excluding depreciation and amortization)		474,401		55,377			(714	)		529,064
Depreciation and amortization		28,070		3,654			—			31,724
Selling and administrative expense		13,231		809			—			14,040
Restructuring charge		352		—			—			352
Interest expense, net		26,889		—			—			26,889
Other expense (income), net		377		(913	)		714			178
TOTAL COSTS AND EXPENSES		543,320		58,927			—			602,247
INCOME BEFORE INCOME TAXES AND EQUITY EARNINGS		5,553		3,788			—			9,341
Provision for income taxes		2,443		1,191			—			3,634
Equity in income of subsidiaries		2,597		—			(2,597	)		—
NET INCOME	$	5,707	$	2,597		$	(2,597	)	$	5,707

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Statement of Cash Flows Information

For the year ended October 1, 2006

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Other Subsidiaries			Eliminations		Consolidated
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	39,540		$	15,362		$	6,031		$	—	$	60,933
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(9,409	)		(15,632	)		—			—		(25,041	)
Business acquisitions		(18,427	)		—			(50,000	)		—		(68,427	)
Other		1,337			—			—			—		1,337
NET CASH USED IN INVESTING ACTIVITIES		(26,499	)		(15,632	)		(50,000	)		—		(92,131	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from term loan		190,000			—			50,000			—		240,000
Repayments of term loan		(195,800	)		—			(127	)		—		(195,927	)
Dividend paid to BCO Holding		(10,000	)		—			—			—		(10,000	)
Other		(3,785	)		—			—			—		(3,785	)
NET CASH PROVIDED BY FINANCING ACTIVITIES		(19,585	)		—			49,873			—		30,288
NET DECREASE IN CASH AND CASH EQUIVALENTS		(6,544	)		(270	)		5,904					(910	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		50,161			1,728			—			—		51,889
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	43,617		$	1,458		$	5,904		$	—	$	50,979

F-32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Statement of Cash Flows Information

For the year ended October 2, 2005

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Consolidated
Net cash provided by operating activities	$	55,784		$	8,540		$	64,324
Cash flows from investing activities
Capital expenditures		(8,945	)		(11,337	)		(20,282	)
Other		1,035			—			1,035
Net cash used in investing activities		(7,910	)		(11,337	)		(19,247	)
Cash flows from financing activities
Repayments of term loan		(19,700	)		—			(19,700	)
Other		(813	)		—			(813	)
Net cash used in financing activities		(20,513	)		—			(20,513	)
Net increase (decrease) in cash and cash equivalents		27,361			(2,797	)		24,564
Cash and cash equivalents, beginning of period		22,800			4,525			27,325
Cash and cash equivalents, ending of period	$	50,161		$	1,728		$	51,889

BWAY Corporation and Subsidiaries

Supplemental Condensed Consolidating Statement of Cash Flows Information

For the year ended October 3, 2004

(Dollars in thousands)	BWAY Corporation			Guarantor Subsidiaries			Consolidated
Net cash provided by (used in) operating activities	$	49,790		$	(4,692	)	$	45,098
Cash flows from investing activities
Capital expenditures		(16,932	)		(2,134	)		(19,066	)
Business acquisitions, net of cash acquired		(213,658	)		11,351			(202,307	)
Other		516			—			516
Net cash used in investing activities		(230,074	)		9,217			(220,857	)
Cash flows from financing activities
Net borrowings under revolving credit facility		(17,170	)		—			(17,170	)
Proceeds from term loan		225,000			—			225,000
Repayments of term loan		(10,000	)		—			(10,000	)
Capital contribution from BCO Holding		30,000			—			30,000
Decrease in unpresented bank drafts in excess of cash available for offset		(18,072	)		—			(18,072	)
Principal repayments under capital leases		(117	)		—			(117	)
Financing costs incurred		(6,805	)		—			(6,805	)
Net cash provided by financing activities		202,836			—			202,836
Net increase in cash and cash equivalents		22,552			4,525			27,077
Cash and cash equivalents, beginning of period		248			—			248
Cash and cash equivalents, ending of period	$	22,800		$	4,525		$	27,325

F-33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

BWAY Corporation and Subsidiaries

17. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

(Dollars in thousands)	First Quarter			Second Quarter		Third Quarter		Fourth Quarter(1)			Total(1)
FISCAL YEAR 2006
Net sales	$	201,373		$	225,419	$	242,675	$	249,046		$	918,513
Gross profit (excluding depreciation and amortization)		16,039			31,751		37,786		36,536			122,112
(Loss) income before cumulative effect of change in accounting principle, net of tax		(4,606	)		4,917		9,310		(3,826	)		5,795
Net (loss) income		(4,606	)		4,917		9,310		(4,224	)		5,397
FISCAL YEAR 2005
Net sales	$	174,707		$	206,830	$	227,412	$	220,160		$	829,109
Gross profit (excluding depreciation and amortization)		18,769			29,962		35,869		30,470			115,070
Net (loss) income		(1,889	)		1,420		6,012		2,586			8,129

⁽¹⁾ The results of operations in the fourth quarter of fiscal 2006 include the following items:

• ICL Asset Purchase was completed on July 17, 2006 and the related results of operations are included from the date of acquisition. See Note 2.

• We recorded an adjustment of approximately $0.8 million related to a change in our estimated sublease assumptions on a closed manufacturing facility, which resulted in additional restructuring expense. See Note 13.

• We expensed approximately $0.8 million in debt issuance costs that could not be capitalized related to the refinancing of the credit facility. The expense was recorded to other expense, net. See Note 6.

• We recorded approximately $8.8 million in stock based compensation related to the cash settlement of certain Exchange Options exercised. The expense was recorded in Selling and Administrative Expense. See Notes 1, 7 and 8.

• We adopted FIN 47 at the end of 2006, which resulted in a charge of $0.4 million, net of related tax effect, related to the cumulative effect of change in accounting principle. See Note 1.

• The provision for income taxes includes approximately $0.9 million related to a Puerto Rican tax assessment and to approximately $1.0 million related to adjustments to our estimated effective state tax rate.

F-34

INDEX TO FINANCIAL STATEMENT SCHEDULES

Schedule II Valuation and Qualifying Accounts of BWAY Corporation and Subsidiaries S-2

S-1

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

BWAY CORPORATION AND SUBSIDIARIES

(Dollars in thousands)

Description	Balance, Beginning of the Period		Additions Charged to Costs and Expenses		Acquired Balances (Purchase Accounting)			Deductions(2)		Balance, End of the Period
Allowance for Doubtful Accounts:
Year ended October 3, 2004	$	961	$	265	$	515	(1)	$	87	$	1,654
Year ended October 2, 2005		1,654		189		—			230		1,613
Year ended October 1, 2006		1,613		95		102	(3)		108		1,702

(1) Represents the opening balance established as part of purchase accounting associated with the NAMPAC Acquisition.

(2) Deductions represent the net write-offs of uncollectible items.

(3) Represents the opening balance established as part of purchase accounting associated with the ICL Acquisition.

S-2

EX-4.10

Exhibit 4.10

U.S. SUBSIDIARIES GUARANTY

U.S. SUBSIDIARIES GUARANTY, dated as of July 17, 2006 (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 “U.S. Borrower”), ICL Industrial Containers ULC, a Nova Scotia unlimited liability company (the “Canadian Borrower” and, together with the U.S. Borrower, the “Borrowers” and each a “Borrower”), the lenders party thereto from time to time (the “Lenders”), LaSalle Bank, N.A., as Documentation Agent, 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 17, 2006 (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 respective accounts of, the Borrowers 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, each Borrower and/or one or more of their respective 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 Wholly-Owned Domestic Subsidiary of the U.S. Borrower;

WHEREAS, it is a condition to the making of Loans to, and the issuance of Letters of Credit for the respective accounts of, the Borrowers 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 Borrowers under the Credit Agreement and the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Interest Rate Protection Agreements with the Other Creditors and, accordingly, desires to execute this Guaranty in order to satisfy the condition 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 (or, Face Amount of, as applicable), premium, if any, and interest on the Notes issued by, and the Loans made to, the Borrowers 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 each Borrower to the Lender Creditors under the Credit Agreement and each other Credit Document to which such 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 each Borrower with all of the terms, conditions and agreements contained in all such Credit Documents (all such principal (or, Face Amount, as applicable), 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 each 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 such 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 each Borrower and each respective 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 Borrowers, 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.

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 either Borrower or any such other Guaranteed Party upon the occurrence in respect of either Borrower or any such other Guaranteed Party of any of the events

2

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 either Borrower or any other Guaranteed Party, whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party, and 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 either Borrower, any other Guaranteed Party or 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 either Borrower or any other Guaranteed Party, (e) any payment made to any Secured Creditor on the indebtedness which any Secured Creditor repays either 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, either 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, either Borrower or any other Guaranteed Party and whether or not any other Guarantor, any other guarantor, either 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 either Borrower or any other Guaranteed Party or other circumstance which operates to toll any statute of limitations as to either Borrower or any such 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 liable thereon (including such Guarantor, any other Guarantor, any other guarantor, either Borrower or any other Guaranteed Party).

6. Any Secured Creditor may at any time and from time to time without the consent of, or notice to, any Guarantor (except as shall be required by applicable statute and cannot be waived), without incurring responsibility to such Guarantor, without impairing or

3

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 either 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, either 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 either Borrower or any other Guaranteed Party to creditors of such 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 either Borrower or any other Guaranteed Party to the Secured Creditors regardless of what liabilities of such 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 Rate Protection Agreements, the Credit Documents or any of such other instruments or agreements;

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(h) act or fail to act in any manner which may deprive such Guarantor of its right to subrogation against either 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 either 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 either Borrower or any other Guaranteed Party now or hereafter owing to any Guarantor is hereby subordinated to the Guaranteed Obligations of such Borrower or such other Guaranteed Party to the Secured Creditors, and such Guaranteed Obligations of such 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 such Borrower or such 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 either Borrower, any other Guaranteed Party, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from either 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

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defense of either 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 either 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 either 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 either 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 either 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).

11. In order to induce the Lenders to make Loans to, and issue Letters of Credit for the respective accounts of, the Borrowers pursuant to the Credit Agreement, and in

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order to induce the Other Creditors to execute, deliver and perform the Interest Rate Protection Agreements to which they are a party, 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.

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(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 Secured Creditors (it being understood that the addition or release of any Guarantor hereunder in

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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: Kevin Kern, 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 U.S. 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.

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19. (a) 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 either 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 either 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.

(b) The Guarantors’ obligations hereunder and under the other Credit Documents to make payments in the respective Applicable Currency (the “Obligation Currency”) shall not be discharged or satisfied by and tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent, the Collateral Agent or the respective Secured Creditor of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent, the Collateral Agent or such Secured Creditor under this Agreement or the other Credit Documents. If for the purpose of obtaining or enforcing judgment against any Guarantor in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made, at the Canadian Dollar Equivalent or the U.S. Dollar Equivalent thereof, as the case may be, and, in the case of other currencies, the rate of exchange (as quoted by the Administrative Agent or if the Administrative Agent does not quote a rate of exchange of such currency, by a known dealer in such currency designated by the Administrative Agent) determined, in each case, as of the day on which the judgment is given (such day being hereinafter referred to as the “Judgment Currency Conversation Date”).

(c) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due by any Guarantor, such Guarantor covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversation Date.

(d) For purposes of determining the U.S. Dollar Equivalent or the Canadian Dollar Equivalent or any other rate of exchange for this Section, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. If the amount of the Judgment Currency so purchased exceeds the sum originally due to the Secured Creditors in the Judgment Currency, the Secured Creditors shall, except during the occurrence and continuation of an Event of Default under Sections 10.01 of the Credit Agreement or 10.05

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of the Credit Agreement (in which case such excess shall be applied by such Secured Creditor to any outstanding Guaranteed Obligations owed to such Secured Creditor by any Guarantor), remit such excess to the relevant Guarantor.

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.

      (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.

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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 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

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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.

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 U.S. 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

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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.

*            *            *

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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/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
SC PLASTICS, LLC, as a Guarantor
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
NORTH AMERICA PACKAGING CORPORATION, as a Guarantor
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary

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NORTH AMERICA PACKAGING OF PUERTO RICO, INC.,
as a Guarantor
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary

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Accepted and Agreed to:

DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Administrative Agent
By:	/s/ Evelyn Thierry
Title:	Vice President
By:	/s/ Omayra Laucella
Title:	Vice President

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EX-4.11

Exhibit 4.11

U.S. SECURITY AGREEMENT

among

BCO HOLDING COMPANY,

BWAY CORPORATION,

CERTAIN SUBSIDIARIES OF BWAY CORPORATION

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as COLLATERAL AGENT

Dated as of July 17, 2006

TABLE OF CONTENTS

		Page
ARTICLE I SECURITY INTERESTS		2
	1.1 Grant of Security Interests	2
	1.2 Certain Exceptions	3
	1.3 Power of Attorney	4
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS		5
	2.1 Necessary Filings	5
	2.2 No Liens	5
	2.3 Other Financing Statements	5
	2.4 Chief Executive Office, Record Locations	6
	2.5 Location of Inventory and Equipment	6
	2.6 Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility);           Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc.	6
	2.7 Trade Names; Etc.	6
	2.8 Certain Significant Transactions	7
	2.9 As-Extracted Collateral; Timber-to-be-Cut	7
	2.10 Collateral in the Possession of a Bailee	7
	2.11 Recourse	7
ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS;           CHATTEL PAPER AND CERTAIN OTHER COLLATERAL		8
	3.1 Additional Representations and Warranties	8
	3.2 Maintenance of Records	8
	3.3 Direction to Account Debtors; Contracting Parties; etc.	8
	3.4 Modification of Terms; etc.	9
	3.5 Collection	9
	3.6 Instruments	9
	3.7 Assignors Remain Liable Under Accounts	10
	3.8 Assignors Remain Liable Under Contracts	10
	3.9 Deposit Accounts; Etc.	10
	3.10 Letter-of-Credit Rights	12
	3.11 Commercial Tort Claims	12
	3.12 Chattel Paper	12
	3.13 Further Actions	12
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES		13
	4.1 Additional Representations and Warranties	13

(i)

	4.2 Licenses and Assignments	13
	4.3 Infringements	13
	4.4 Preservation of Marks and Domain Names	14
	4.5 Maintenance of Registration	14
	4.6 Future Registered Marks and Domain Names	14
	4.7 Remedies	14
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS		15
	5.1 Additional Representations and Warranties	15
	5.2 Licenses and Assignments	15
	5.3 Infringements	15
	5.4 Maintenance of Patents or Copyrights	15
	5.5 Prosecution of Patent or Copyright Applications	15
	5.6 Other Patents and Copyrights	16
	5.7 Remedies	16
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL		16
	6.1 Protection of Collateral Agent’s Security	16
	6.2 Warehouse Receipts Non-Negotiable	17
	6.3 Additional Information.	17
	6.4 Further Actions	17
	6.5 Financing Statements	17
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT		17
	7.1 Remedies; Obtaining the Collateral Upon Default	17
	7.2 Remedies; Disposition of the Collateral	19
	7.3 Waiver of Claims	20
	7.4 Application of Proceeds	20
	7.5 Remedies Cumulative	23
	7.6 Discontinuance of Proceedings	24
ARTICLE VIII INDEMNITY		24
	8.1 Indemnity	24
	8.2 Indemnity Obligations Secured by Collateral; Survival	25
ARTICLE IX DEFINITIONS		26
ARTICLE X MISCELLANEOUS		34
	10.1 Notices	34
	10.2 Waiver; Amendment	35
	10.3 Obligations Absolute	35
	10.4 Successors and Assigns	36
	10.5 Headings Descriptive	36

(ii)

10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	36
10.7 Assignor’s Duties	37
10.8 Termination; Release	37
10.9 Counterparts	38
10.10 Severability	39
10.11 The Collateral Agent and the other Secured Creditors	39
10.12 Additional Assignors	39

ANNEX A	Schedule of Chief Executive Offices Address(es) of Chief Executive Office
ANNEX B	Schedule of Inventory and Equipment Locations
ANNEX C	Schedule of Legal Names, Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility), Jurisdiction of Organization, Location and Organizational Identification Numbers
ANNEX D	Schedule of Trade and Fictitious Names
ANNEX E	Description of Certain Significant Transactions Occurring Within One Year Prior to the Date of the Security Agreement
ANNEX F	Schedule of Deposit Accounts
ANNEX G	Form of Control Agreement Regarding Deposit Accounts
ANNEX H	Schedule of Commercial Tort Claims
ANNEX I	Schedule of Marks and Applications; Internet Domain Name Registrations
ANNEX J	Schedule of Patents
ANNEX K	Schedule of Copyrights
ANNEX L	Grant of Security Interest in United States Trademarks
ANNEX M	Grant of Security Interest in United States Patents
ANNEX N	Grant of Security Interest in United States Copyrights

[Remainder of this page intentionally left blank]

(iii)

U.S. SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of July 17, 2006, made by each of the undersigned assignors (each, an “Assignor” and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.12 hereof, the “Assignors”) in favor of Deutsche Bank Trust Company Americas, as Collateral Agent (together with any successor Collateral Agent, the “Collateral Agent”), for the benefit of the Secured Creditors (as defined below). Certain capitalized terms as used herein are defined in Article IX hereof. Except as otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined.

WITNESSETH:

WHEREAS, BCO Holding Company, a Delaware Corporation (“Holdings”), BWAY Corporation, a Delaware Corporation (the “U.S. Borrower”), ICL Industrial Containers ULC, a Nova Scotia unlimited liability company (the “Canadian Borrower” and, together with the U.S. Borrowers, the “Borrowers” and each a “Borrower”), the lenders party thereto from time to time (the “Lenders”), LaSalle Bank, N.A., as Documentation Agent, 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 17, 2006 (as amended, modified or supplemented from time to time, the “Credit Agreement”), providing for the making of Loans to, and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers, all as contemplated therein (the Lenders, each Issuing Lender, the Administrative Agent, the Collateral Agent and each other Agent are herein called the “Lender Creditors”);

WHEREAS, each Borrower and/or one or more of their respective 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 successors and assigns, if any, collectively, the “Other Creditors” and, together with the Lender Creditors, the “Secured Creditors”);

WHEREAS, pursuant to the Credit Agreement Party Guaranty, each of Holdings, the U.S. Borrower and the Canadian Borrower has guaranteed to the Secured Creditors the payment when due of all of its Relevant Guaranteed Obligations as described therein;

WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S. Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations (as defined in the U.S. Subsidiaries Guaranty);

WHEREAS, it is a condition precedent to the making of Loans to the Borrowers and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement and to the Other Creditors entering into Interest Rate

Protection Agreements that each Assignor shall have executed and delivered to the Collateral Agent this Agreement; and

WHEREAS, each Assignor will obtain benefits from the incurrence of Loans by the Borrowers and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement and the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Interest Rate Protection Agreements and, accordingly, desires to execute this Agreement in order to satisfy the condition described in the preceding paragraph and to induce the Lenders to make Loans to the Borrowers and issue, and/or participate in, Letters of Credit for the respective accounts of the Borrowers and the Other Creditors to enter into Interest Rate Protection Agreements with the Borrowers and/or one or more of their respective Subsidiaries;

NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows:

ARTICLE I

SECURITY INTERESTS

1.1 Grant of Security Interests. (a) As security for the prompt and complete payment and performance when due of all of its Obligations, each Assignor does hereby assign and transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent, for the benefit of the Secured Creditors, a continuing security interest in all of the right, title and interest of such Assignor in, to and under all of the following personal property and fixtures (and all rights therein) of such Assignor, or in which or to which such Assignor has any rights, in each case whether now existing or hereafter from time to time acquired:

(i) each and every Account;

(ii) all cash;

(iii) the Cash Collateral Account and all monies, securities, Instruments and other investments deposited or required to be deposited in the Cash Collateral Account;

(iv) all Chattel Paper (including, without limitation, all Tangible Chattel Paper and all Electronic Chattel Paper);

(v) all Commercial Tort Claims;

(vi) all computer programs of such Assignor and all intellectual property rights therein and all other proprietary information of such Assignor, including but not limited to Domain Names and Trade Secret Rights;

(vii) Contracts, together with all Contract Rights arising thereunder;

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(viii) all Copyrights;

(ix) all Equipment;

(x) all Deposit Accounts and all other demand, deposit, time, savings, cash management, passbook and similar accounts maintained by such Assignor with any Person and all monies, securities, Instruments and other investments deposited or required to be deposited in any of the foregoing;

(xi) all Documents;

(xii) all General Intangibles;

(xiii) all Goods;

(xiv) all Instruments;

(xv) all Inventory;

(xvi) all Investment Property;

(xvii) all Letter-of-Credit Rights (whether or not the respective letter of credit is evidenced by a writing);

(xviii) all Marks, together with the registrations and right to all renewals thereof, and the goodwill of the business of such Assignor symbolized by the Marks;

(xix) all Patents;

(xx) all Permits;

(xxi) all Software and all Software licensing rights, all writings, plans, specifications and schematics, all engineering drawings, customer lists, goodwill and licenses, and all recorded data of any kind or nature, regardless of the medium of recording;

(xxii) all Supporting Obligations; and

(xxiii) all Proceeds and products of any and all of the foregoing (all of the above, the “Collateral”).

(b) The security interest of the Collateral Agent under this Agreement extends to all Collateral which any Assignor may acquire, or with respect to which any Assignor may obtain rights, at any time during the term of this Agreement.

1.2 Certain Exceptions. No security interest is or will be granted pursuant hereto in any right, title or interest of any Assignor under or in:

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(a) any Instruments, Contracts, Chattel Paper, General Intangibles, licenses or other contracts or agreements with or issued by Persons other than Holdings or a Subsidiary of Holdings or an Affiliate thereof (collectively, “Excluded Agreements”) that would otherwise be included in the Collateral (and such Excluded Agreements shall not be deemed to constitute a part of the Collateral) for so long as, and to the extent that, the granting of such a security interest pursuant hereto would result in a breach, default or termination of such Excluded Agreements (in each case, except to the extent the granting of security interests therein can be made with the respective breach, default or termination being ineffective under the UCC or other applicable law); or

(b) any of the following:

(i) any asset that would otherwise be included in the Collateral (and such asset shall not be deemed to constitute a part of the Collateral) if such asset is subject to a Lien permitted by Section 9.01(vi) of the Credit Agreement;

(ii) any Equipment, machinery or other fixed asset that would otherwise be included in the Collateral (and such Equipment, machinery or other fixed asset shall not be deemed to constitute a part of the Collateral) if such Equipment, machinery or other fixed asset is subject to a Lien permitted by Section 9.01(vii) of the Credit Agreement;

(iii) any property that would otherwise be included in the Collateral (and such property shall not be deemed to constitute a part of the Collateral) if such property has been sold or otherwise transferred in connection with a sale-leaseback transaction permitted under Section 9.02(xiii) of the Credit Agreement, or is subject to any Liens permitted under Section 9.01(xviii) of the Credit Agreement, or constitutes the Proceeds or products of any property that has been so sold or otherwise transferred so long as such Proceeds or products remain subject to the Liens referenced above in this clause (b); and

(iv) any property or asset that would otherwise be included in the Collateral (and such property or asset shall not be deemed to constitute a part of the Collateral) if such property or assets is subject to a Lien permitted by Section 9.01(xiv) of the Credit Agreement;

in each case pursuant to preceding clauses (b)(i) through (iv), for so long as, and to the extent that, the granting or existence of such a security interest pursuant hereto would result in a breach, default or termination of any agreement relating to the respective Lien or obligations secured thereby (in each case except to the extent the granting of security interests therein can be made with the respective breach, default or termination being ineffective under the UCC or other applicable law).

1.3 Power of Attorney. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims

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or take any action or institute any proceedings which the Collateral Agent may deem to be reasonably necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest.

ARTICLE II

GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:

2.1 Necessary Filings. The security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral for the benefit of the Collateral Agent and the Secured Creditors creates a valid security interest and Lien upon such Assignor’s right, title and interest in and to the Collateral. Except with regard to (i) Liens (if any) on Specified Assets and (ii) any rights reserved in favor of the United States government as required by law (if any), such security interest will be duly perfected (A) upon the filing of the UCC financing statements delivered to the Collateral Agent for filing in the appropriate jurisdictions set forth on Annex C, (B) in Deposit Accounts and the Cash Collateral Account upon the obtaining and maintenance of “control” (as described in the UCC as in effect on the date hereof in the State of New York) by the Collateral Agent and (C) upon the recordation of certain assignments of Patents, Marks and Copyrights in the United States Patent and Trademark Office or the United States Copyright Office, as the case may be.

Upon the actions taken under this Section 2.1, such security interest will be prior to all other Liens of all other Persons (other than Permitted Liens which have priority under the UCC or other applicable law), and enforceable as such as against all other Persons other than Ordinary Course Transferees.

2.2 No Liens. Such Assignor is, and as to all Collateral acquired by it from time to time after the date hereof such Assignor will be, the owner of all Collateral free from any Lien, security interest, encumbrance or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent.

2.3 Other Financing Statements. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens.

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2.4 Chief Executive Office, Record Locations. The chief executive office of such Assignor is, on the date of this Agreement, located at the address indicated on Annex A hereto for such Assignor. During the period of the four calendar months preceding the date of this Agreement, the chief executive office of such Assignor has not been located at any address other than that indicated on Annex A in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Annex A hereto for such Assignor.

2.5 Location of Inventory and Equipment. All Inventory and Equipment held on the date hereof, or held at any time during the four calendar months prior to the date hereof, by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor.

2.6 Legal Names; Type of Organization (and Whether a Registered Organization and/or a Transmitting Utility); Jurisdiction of Organization; Location; Organizational Identification Numbers; Changes Thereto; etc. The exact legal name of each Assignor, the type of organization of such Assignor, whether or not such Assignor is a Registered Organization, the jurisdiction of organization of such Assignor, such Assignor’s Location, the organizational identification number (if any) of such Assignor, and whether or not such Assignor is a Transmitting Utility, is listed on Annex C hereto for such Assignor. Such Assignor shall not change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location, or its organizational identification number (if any) from that used on Annex C hereto, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) such Assignor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 10 Business Days’ prior written notice of each change to the information listed on Annex C (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex C which shall correct all information contained therein for such Assignor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected to the extent described in Section 2.1 and in full force and effect. In addition, to the extent that such Assignor does not have an organizational identification number on the date hereof and later obtains one, such Assignor shall promptly thereafter notify the Collateral Agent of such organizational identification number and shall take all actions reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected to the extent described in Section 2.1 and in full force and effect.

2.7 Trade Names; Etc. Such Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, no trade names, fictitious names or other names except its legal name as specified in Annex C and such other trade or fictitious names as are listed on Annex D hereto for such Assignor. Such Assignor shall not assume or operate in any jurisdiction under any new trade, fictitious or other name until (i) it shall have given to the Collateral Agent not less than 5 days’ written notice of its intention so to

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do, clearly describing such new name and the jurisdictions in which such new name will be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.

2.8 Certain Significant Transactions. During the one year period preceding the date of this Agreement, no Person shall have merged or consolidated with or into any Assignor, and no Person shall have liquidated into, or transferred all or substantially all of its assets to, any Assignor, in each case except as described in Annex E hereto. With respect to any transactions so described in Annex E hereto, the respective Assignor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into or consolidated with such Assignor, or was liquidated into or transferred all or substantially all of its assets to such Assignor, and shall have furnished to the Collateral Agent such UCC lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Permitted Liens) continues perfected on the date hereof with respect to any Person described above (or the assets transferred to the respective Assignor by such Person), including without limitation pursuant to Section 9-316(a)(3) of the UCC.

2.9 As-Extracted Collateral; Timber-to-be-Cut. On the date hereof, such Assignor does not own, or expect to acquire, any property which constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut. If at any time after the date of this Agreement such Assignor owns, acquires or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such Assignor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein.

2.10 Collateral in the Possession of a Bailee. If any Inventory or other Goods, the aggregate fair market value of which is equal to or greater than $250,000, are at any time in the possession of a bailee, such Assignor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of such Assignor. The Collateral Agent agrees with such Assignor that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the respective Assignor with respect to any such bailee.

2.11 Recourse. This Agreement is made with full recourse to each Assignor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

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ARTICLE III

SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL

3.1 Additional Representations and Warranties. As of the time when each of its Accounts arises, each Assignor shall be deemed to have represented and warranted that each such Account, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of such Assignor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account debtor arising out of the performance of labor or services or the sale or lease and delivery of the merchandise listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of such Assignor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (iv) will be in compliance and will conform in all material respects with all applicable federal, state and local laws and applicable laws of any relevant foreign jurisdiction.

3.2 Maintenance of Records. Each Assignor will keep and maintain at its own cost and expense accurate records of its Accounts and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor’s premises to the Collateral Agent for inspection, at such Assignor’s own cost and expense, at any and all reasonable times upon prior notice to such Assignor and otherwise in accordance with the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.

3.3 Direction to Account Debtors; Contracting Parties; etc. Upon the occurrence and during the continuance of an Event of Default following written notice to such Assignor, if the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Accounts and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any

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Assignor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Obligations in the manner provided in Section 7.4 of this Agreement. The reasonable costs and expenses of collection (including reasonable attorneys’ fees), whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, provided that (x) the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 10.05 of the Credit Agreement has occurred and is continuing.

3.4 Modification of Terms; etc. Except in accordance with such Assignor’s ordinary course of business and consistent with reasonable business judgment or as permitted by Section 3.5 or the Credit Documents, no Assignor shall rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein, without the prior written consent of the Collateral Agent unless such rescissions, cancellations, modifications, adjustments, extensions, renewals, compromises, settlements, releases, or sales would not reasonably be expected to materially adversely affect the value of the Accounts or Contracts constituting Collateral taken as a whole. No Assignor will do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.

3.5 Collection. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor.

3.6 Instruments. If any Assignor owns or acquires any Instrument constituting Collateral (other than checks and other payment instruments received and collected in the ordinary course of business), such Assignor will within 10 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent, provided that,

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so long as no Event of Default shall have occurred and be continuing, such Assignor may retain for collection in the ordinary course of business any Instrument received by such Assignor in the ordinary course of business, and the Collateral Agent shall, promptly upon request of such Assignor, make appropriate arrangements for making any Instruments in its possession and pledged by such Assignor available to such Assignor for purposes of presentation, collection or renewal. If such Assignor retains possession of any Instruments pursuant to the terms hereof, such Instrument shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interests of Deutsche Bank Trust Company Americas, as collateral agent, for the benefit of itself and certain Lenders.”.

3.7 Assignors Remain Liable Under Accounts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

3.8 Assignors Remain Liable Under Contracts. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

3.9 Deposit Accounts; Etc. (a) No Assignor maintains, or at any time after the date of this Agreement shall establish or maintain, any demand, time, savings, passbook or similar account, except for such accounts maintained with a bank (as defined in Section 9-102 of the UCC) whose jurisdiction (determined in accordance with Section 9-304 of the UCC) is within a State of the United States and such existing accounts maintained by such Assignor on the date hereof with a bank whose jurisdiction is within a Province of Canada or the Commonwealth of Puerto Rico. Annex F hereto accurately sets forth, as of the date of this

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Agreement, for each Assignor, each Deposit Account maintained by such Assignor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account. For each Deposit Account (other than the Excluded Deposit Accounts, the Cash Collateral Account or any other Deposit Account maintained with the Collateral Agent), the respective Assignor shall cause the bank with which the Deposit Account is maintained to execute and deliver to the Collateral Agent, within 90 days (or such later date as the Collateral Agent may determine in its sole discretion) after the date of this Agreement or, if later, at the time of the establishment of the respective Deposit Account, a “control agreement” in the form of Annex G hereto (appropriately completed), with such changes thereto as may be acceptable to the Collateral Agent. If any bank with which a Deposit Account is maintained refuses to, or does not, enter into such a “control agreement”, then the respective Assignor shall promptly (and in any event within 90 days (or such later date as the Collateral Agent may determine in its sole discretion) after the date of this Agreement or, if later, 60 days after the establishment of such account) close the respective Deposit Account and transfer all balances therein to the Cash Collateral Account or another Deposit Account meeting the requirements of this Section 3.9. If any bank with which a Deposit Account is maintained refuses to subordinate all its claims with respect to such Deposit Account to the Collateral Agent’s security interest therein on terms reasonably satisfactory to the Collateral Agent, then the Collateral Agent, at its option, may (x) require that such Deposit Account be terminated in accordance with the immediately preceding sentence or (y) agree to a “control agreement” without such subordination, provided that in such event the Collateral Agent may at any time, at its option, subsequently require that such Deposit Account be terminated (within 30 days after notice from the Collateral Agent) in accordance with the requirements of the immediately preceding sentence.

(b) After the date of this Agreement, no Assignor shall establish any new demand, time, savings, passbook or similar account, except for Deposit Accounts established and maintained with banks and meeting the requirements of preceding clause (a). At the time any such Deposit Account is established, the appropriate “control agreement” shall be entered into in accordance with the requirements of preceding clause (a) and the respective Assignor shall furnish to the Collateral Agent a supplement to Annex F hereto containing the relevant information with respect to the respective Deposit Account and the bank with which same is established.

(c) The U.S. Borrower shall, and shall cause each of its Domestic Subsidiaries to, cause all amounts held in all Excluded Deposit Accounts (other than the Pension Plan Account) at the close of each Business Day in excess of $250,000 in the aggregate (but calculated to exclude monies on deposit in the Excluded Deposit Accounts reserved for the payment of checks (x) actually presented against the Excluded Deposit Accounts on such Business Day to the bank and/or banks with which the Excluded Deposit Accounts are maintained or (y) actually issued and mailed (or sent by overnight courier) by the U.S. Borrower or its relevant Domestic Subsidiary to a payee (to the extent not (i) subsequently voided or cancelled or (ii) outstanding and unpaid for a period in excess of 30 days from the date of such issuance) but for which no presentment has been made to the relevant bank or banks with which the Excluded Deposit Accounts are maintained) to be wired no later than the opening of business on each next succeeding Business Day directly into the Lockbox Account.

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3.10 Letter-of-Credit Rights. If any Assignor is at any time a beneficiary under a letter of credit with a stated amount of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, such Assignor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, use its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement after the occurrence and during the continuance of an Event of Default (it being understood that unless an Event of Default has occurred and is continuing such proceeds shall be released to such Assignor).

3.11 Commercial Tort Claims. All Commercial Tort Claims of each Assignor in existence on the date of this Agreement are described in Annex H hereto. If any Assignor shall at any time after the date of this Agreement acquire a Commercial Tort Claim in an amount (taking the greater of the aggregate claimed damages thereunder or the reasonably estimated value thereof) of $1,000,000 or more, such Assignor shall promptly notify the Collateral Agent thereof in a writing signed by such Assignor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agent.

3.12 Chattel Paper. Upon the reasonable request of the Collateral Agent made at any time or from time to time, each Assignor shall promptly furnish to the Collateral Agent a list of all Electronic Chattel Paper held or owned by such Assignor. Furthermore, if requested by the Collateral Agent, each Assignor shall promptly take all actions which are reasonably practicable so that the Collateral Agent has “control” of all Electronic Chattel Paper in accordance with the requirements of Section 9-105 of the UCC. Each Assignor will promptly (and in any event within 10 days) following any reasonable request by the Collateral Agent, deliver all of its Tangible Chattel Paper to the Collateral Agent, provided that, so long as no Event of Default shall have occurred and be continuing, such Assignor may retain for collection in the ordinary course of business any Chattel Paper received by such Assignor in the ordinary course of business, and the Collateral Agent shall, promptly upon request of such Assignor, make appropriate arrangements for making any Chattel Paper in its possession and pledged by such Assignor available to such Assignor for purposes of presentation, collection or renewal. If such Assignor retains possession of any Chattel Paper pursuant to the terms hereof, such Chattel Paper shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interests of Deutsche Bank Trust Company Americas, as collateral agent, for the benefit of itself and certain Lenders.”.

3.13 Further Actions. Each Assignor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be necessary or required under the Federal Assignment of Claims Act, relating to its Accounts, Contracts, Instruments and other property or

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rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require.

ARTICLE IV

SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES

4.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks and Domain Names listed in Annex I hereto for such Assignor and that said listed Marks and Domain Names include all United States marks and applications for United States marks registered in the United States Patent and Trademark Office and all Domain Names that such Assignor owns or uses in connection with its business as of the date hereof. Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all Marks and Domain Names that it uses, except for such failure to own or have the right to use as have not had, and would not be reasonably expected to have, a Material Adverse Effect. Each Assignor further warrants that it has no knowledge of any third party claim received by it that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as has not, and would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications and Domain Name registrations listed in Annex I hereto and that said registrations are valid, subsisting, have not been canceled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by the United States Patent and Trademark Office or similar registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.

4.2 Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark or Domain Name absent prior written approval of the Collateral Agent.

4.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is, or may be, infringing or diluting or otherwise violating any of such Assignor’s rights in and to any Mark or Domain Name in any manner that would reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that such Assignor’s use of any Mark or Domain Name material to such Assignor’s business violates in any material respect any property right of that party. Each Assignor further agrees to prosecute diligently in accordance with reasonable business practices any Person infringing any Mark or Domain Name in any manner that would reasonably be expected to have a Material Adverse Effect.

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4.4 Preservation of Marks and Domain Names. Each Assignor agrees to use its Marks and Domain Names which are material to such Assignor’s business in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are reasonably necessary to preserve such Marks as trademarks or service marks under the laws of the United States (other than any such Marks which are no longer used or useful in its business or operations).

4.5 Maintenance of Registration. Each Assignor shall, at its own expense, diligently process all documents reasonably required to maintain all Mark and/or Domain Name registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent, not to be unreasonably withheld (other than with respect to registrations and applications deemed by such Assignor in its reasonable business judgment to be no longer prudent to pursue).

4.6 Future Registered Marks and Domain Names. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office or any Domain Name is registered by Assignor, within 60 days of receipt of such certificate or similar indicia of ownership, such Assignor shall deliver to the Collateral Agent a copy of such registration certificate or similar indicia of ownership, and a grant of a security interest in such Mark and/or Domain Name, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest in such Mark and/or Domain Name to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex L hereto or in such other form as may be reasonably satisfactory to the Collateral Agent.

4.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of such Assignor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of such Assignor in connection with which the Marks or Domain Names have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the United States Patent and Trademark Office or applicable Domain Name registrar to the Collateral Agent.

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ARTICLE V

SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS

5.1 Additional Representations and Warranties. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secret Rights, (ii) the Patents listed in Annex J hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex K hereto for such Assignor and that said Copyrights include all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor’s present or contemplated business operations infringes or will infringe any patent of any other Person or such Assignor has misappropriated any trade secret or proprietary information which, either individually or in the aggregate, has, or would reasonably be expected to have, a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office or the United States Copyright Office in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.

5.2 Licenses and Assignments. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright absent prior written approval of the Collateral Agent.

5.3 Infringements. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of such Assignor’s rights in any Patent or Copyright or to any claim that the practice of any Patent or use of any Copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any Trade Secret Right violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, absent direction of the Collateral Agent to the contrary, to diligently prosecute, in accordance with its reasonable business judgment, any Person infringing any Patent or Copyright or any Person misappropriating any Trade Secret Right, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

5.4 Maintenance of Patents or Copyrights. At its own expense, each Assignor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent (other than any such Patents or Copyrights which are no longer used or are deemed by such Assignor in its reasonable business judgment to no longer be useful in its business or operations).

5.5 Prosecution of Patent or Copyright Applications. At its own expense, each Assignor shall diligently prosecute all material applications for (i) United States Patents listed in

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Annex J hereto and (ii) Copyrights listed on Annex K hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by such Assignor in its reasonable business judgment to no longer be necessary in the conduct of the Assignor’s business), absent written consent of the Collateral Agent not to be unreasonably withheld.

5.6 Other Patents and Copyrights. Within 30 days of the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or Patent, or certificate or registration of, or application therefor, as the case may be, with a grant of a security interest as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such Assignor, confirming the grant of a security interest, the form of such grant of a security interest to be substantially in the form of Annex M or N hereto, as appropriate, or in such other form as may be reasonably satisfactory to the Collateral Agent.

5.7 Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Creditors, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Creditors.

ARTICLE VI

PROVISIONS CONCERNING ALL COLLATERAL

6.1 Protection of Collateral Agent’s Security. Except as otherwise permitted by the Secured Debt Agreements, each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor or an affiliate on behalf of such Assignor will at all times maintain insurance, at such Assignor’s own expense to the extent and in the manner provided in the Secured Debt Agreements. If any Event of Default shall have occurred and be continuing, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor.

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6.2 Warehouse Receipts Non-Negotiable. To the extent practicable, each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be “negotiable” (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law).

6.3 Additional Information. Each Assignor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been reasonably requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, each Assignor agrees that it shall promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such updated Annexes hereto as may from time to time be reasonably requested by the Collateral Agent.

6.4 Further Actions. Each Assignor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral at least to the extent described in Section 2.1.

6.5 Financing Statements. Each Assignor agrees to execute and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby at least to the extent described in Section 2.1. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law (and such authorization includes describing the Collateral as “all assets” of such Assignor).

ARTICLE VII

REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT

7.1 Remedies; Obtaining the Collateral Upon Default. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law and

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under the other provisions of this Agreement, shall have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect in all relevant jurisdictions and may:

(i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor’s premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor;

(ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Accounts and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral;

(iii) instruct all banks which have entered into a control agreement with the Collateral Agent to transfer all monies, securities and instruments held by such depositary bank to the Cash Collateral Account; it being understood and agreed that unless an Event of Default has occurred and is continuing, the Collateral Agent shall not deliver to such banks a Notice of Exclusive Control under, and as defined in the respective “control agreement” relating thereto;

(iv) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct such Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation;

(v) take possession of the Collateral or any part thereof, by directing such Assignor in writing to deliver the same to the Collateral Agent at any reasonable place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense:

(x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent;

(y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and

(z) while the Collateral shall be so stored and kept, provide such security and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain it in good condition;

(vi) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Domain Names, Patents or Copyrights included in the Collateral for such term

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and on such conditions and in such manner as the Collateral Agent shall in its sole judgment determine;

(vii) apply any monies constituting Collateral or proceeds thereof in accordance with the provisions of Section 7.4; and

(viii) take any other action as specified in clauses (1) through (5), inclusive, of Section 9-607 of the UCC;

it being understood that each Assignor’s obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of said obligation. By accepting the benefits of this Agreement and each other Security Document, the Secured Creditors expressly acknowledge and agree that this Agreement and each other Security Document may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent or 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 Agreement and the other Security Documents.

7.2 Remedies; Disposition of the Collateral. To the extent permitted by applicable law, if any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such sale, lease or other disposition may be effected by means of a public disposition or private disposition, effected in accordance with the applicable requirements (in each case if and to the extent applicable) of Sections 9-610 through 9-613 of the UCC and/or such other mandatory requirements of applicable law as may apply to the respective disposition. The Collateral Agent may, without notice or publication, adjourn any public or private disposition or cause the same to be adjourned from time to time by announcement at the time and place fixed for the disposition, and such disposition may be made at any time or place to which the disposition may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser (and may pay all or any portion of the purchase price by crediting Obligations against the purchase price) of the Collateral or any item thereof, offered for disposition in accordance with this Section 7.2 without accountability to the relevant Assignor. If, under applicable law, the Collateral Agent shall be permitted to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor

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only such notice of disposition as shall be required by such applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such disposition or dispositions of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor’s expense.

7.3 Waiver of Claims. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT’S TAKING POSSESSION OR THE COLLATERAL AGENT’S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law:

(a) all damages occasioned by such taking of possession or any such disposition except any damages which are the direct result of the Collateral Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision);

(b) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent’s rights hereunder; and

(c) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws.

Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor.

7.4 Application of Proceeds. (a) All moneys collected by the Collateral Agent (or, to the extent the Pledge Agreement or any other Security Document requires proceeds of collateral under such other Security Document to be applied in accordance with the provisions of this Agreement, the Pledgee under, and as defined in, the Pledge Agreement ,or collateral agent under such other Security Document) upon any sale or other disposition of the Collateral (or the collateral under the relevant Security Document), together with all other moneys received by the Collateral Agent hereunder (or under the relevant Security Document), shall be applied as follows:

(i) first, to the payment of all amounts owing the Collateral Agent of the type described in clauses (iii), (iv) and (v) of the definition of “Obligations”;

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(ii) second, to the extent proceeds remain after the application pursuant to the preceding clause (i), to the payment of all amounts owing to any Agent of the type described in clauses (v) and (vi) of the definition of “Obligations”;

(iii) third, but subject to the provisions of the following clauses (f) and (g), to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Primary U.S. Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary U.S. Borrower Obligations, its Pro Rata Share of the amount remaining to be distributed;

(iv) fourth, but subject to the provisons of the following clauses (f) and (g), to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), an amount equal to the outstanding Primary Canadian Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Primary Canadian Borrower Obligations or, if the proceeds are insufficient to pay in full all such Primary Canadian Borrower Obligations, its Pro Rata Share of the amount remaining to be distributed;

(v) fifth, but subject to the provisions of clauses (f) and (g), to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iv), inclusive, an amount equal to the outstanding Secondary U.S. Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary U.S. Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary U.S. Borrower Obligations, its Pro Rata Share of the amount remaining to be distributed;

(vi) sixth, but subject to the provisions of clauses (f) and (g), to the extent proceeds remain after the application pursuant to preceding clauses (i) through (v), inclusive, an amount equal to the outstanding Secondary Canadian Borrower Obligations shall be paid to the Secured Creditors as provided in Section 7.4(d) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Canadian Borrower Obligations or, if the proceeds are insufficient to pay in full all such Secondary Canadian Borrower Obligations, its Pro Rata Share of the amount remaining to be distributed;

(vii) seventh, but subject to the provisions of clauses (f) and (g), to the extent proceeds remain after the application pursuant to preceding clauses (i) through (vi), inclusive, ratably to any then remaining unpaid Obligations; and

(viii) eighth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (vii), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus.

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(b) For purposes of this Agreement, (i) “Pro Rata Share” shall mean, when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor’s Primary U.S. Borrower Obligations, Primary Canadian Borrower Obligations, Secondary U.S. Borrower Obligations or Secondary Canadian Borrower Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary U.S. Borrower Obligations, Primary Canadian Borrower Obligations, Secondary U.S. Borrower Obligations or Secondary Canadian Borrower Obligations, as the case may be, (ii) “Primary Obligations” shall mean (x) in the case of the Credit Document Obligations, all unpaid principal (or, Face Amount, as applicable) of, premium, if any, fees and interest on, all Loans, all Unpaid Drawings, the Stated Amount of all outstanding Letters of Credit and all Fees and (y) in the case of the Other Obligations, all amounts due under each Interest Rate Protection Agreement with an Other Creditor (other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities), (iii) “Secondary Obligations” shall mean all Obligations other than Primary Obligations, (iv) “Primary U.S. Borrower Obligations” shall mean all Primary Obligations which are also U.S. Borrower Obligations, (v) “Secondary U.S. Borrower Obligations” shall mean all Secondary Obligations which are also U.S. Borrower Obligations, (vi) “Primary Canadian Borrower Obligations” shall mean all Primary Obligations which are also Canadian Borrower Obligations and (vii) “Canadian Borrower Secondary Obligations” shall mean all Secondary Obligations which are also Canadian Borrower Secondary Obligations.

(c) Each of the Secured Creditors, by their acceptance of the benefits hereof and of the other Security Documents, agrees and acknowledges that if the Lender Creditors receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which shall only occur after all Loans and Unpaid Drawings constituting Primary U.S. Borrower Obligations or Primary Canadian Borrower Obligations, as the case may be, have been paid in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and ratable benefit of the respective Lender Creditors, as cash security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of all outstanding Letters of Credit under the Credit Agreement constituting Primary U.S. Borrower Obligations or Primary Canadian Borrower Obligations, as the case may be, and after the application of all such cash security to the repayment of all Obligations owing to the respective Lender Creditors after giving effect to the termination of all such Letters of Credit, if there remains any excess cash, such excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with Section 7.4(a) hereof.

(d) All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent for the account of the Lender Creditors and (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each, a “Representative”) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors.

(e) For purposes of applying payments received in accordance with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent and

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(ii) the Representative or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each Representative and the Other Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary U.S. Borrower Obligations, Primary Canadian Borrower Obligations, Secondary Canadian Borrower Obligations and Secondary Canadian Borrower Obligations owed to the Lender Creditors or the Other Creditors, as the case may be. Unless it has received written notice from a Lender Creditor or an Other Creditor to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless it has written notice from an Other Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Interest Rate Protection Agreements are in existence.

(f) Notwithstanding anything to the contrary contained above, to the extent monies or proceeds to be applied pursuant to this Section 7.4 consist of proceeds received from a sale or other disposition of Excess Exempted Foreign Entity Voting Stock, such proceeds will be applied as otherwise required above in this Section 7.4, but for this purpose treating the outstanding Primary Obligations and Secondary Obligations as only those obligations secured by the Excess Exempted Foreign Entity Voting Stock in accordance with the provisions of clause (x) to the proviso appearing at the end of Section 3.1 of the Pledge Agreement. In determining whether any Excess Exempted Foreign Entity Voting Stock has been sold or otherwise disposed of, the Collateral Agent shall treat any sale or disposition of Voting Stock of any Exempted Foreign Entity as first being a sale of Voting Stock which is not Excess Exempted Foreign Entity Voting Stock until such time as the stock sold represents 65% of the total combined voting power of all classes of Voting Stock of the respective Exempted Foreign Entity and, after such threshold has been met, any further sales of Voting Stock of the respective Exempted Foreign Entity shall be treated as sales of Excess Exempted Foreign Entity Voting Stock.

(g) Notwithstanding anything to the contrary contained above, to the extent monies or proceeds to be applied pursuant to this Section 7.4 consist of proceeds received under any Foreign Security Document, such proceeds will be applied as otherwise required above in this Section 7.4, but for this purpose (i) reversing clauses (iii) and (iv) above (thereby treating clause (iv) as if it were the third priority of distribution, and treating clause (iii) as if it were the fourth priority of distribution) and reversing clauses (v) and (vi) above (thereby treating clause (vi) above as if it were the fifth priority of distribution and treating clause (v) above as if it were the sixth priority distribution), in each case mutatis mutandis and with any necessary reference changes (to clauses, etc.) and (ii) treating the outstanding Primary Obligations and Secondary Obligations as only those obligations secured by the respective Foreign Security Document.

(h) It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations.

7.5 Remedies Cumulative. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given to the Collateral Agent under this Agreement, the other Secured Debt Agreements or now or hereafter existing at law, in equity or by statute and each and every right,

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power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence thereof. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may recover reasonable expenses, including reasonable attorneys’ fees, and the amounts thereof shall be included in such judgment.

7.6 Discontinuance of Proceedings. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted.

ARTICLE VIII

INDEMNITY

8.1 Indemnity. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, assigns, employees, affiliates and agents (hereinafter in this Section 8.1 referred to individually as “Indemnitee,” and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys’ fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called “Indemnified Liabilities”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee

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shall be indemnified pursuant to this Section 8.1(a) for Indemnified Liabilities to the extent caused by the gross negligence or willful misconduct of respective Indemnitee, any Affiliate of such Indemnitee, or any of their respective directors, officers, employees, representatives, agents, Affiliates, trustees or investment advisors (as determined by a court of competent jurisdiction in a final and non-appealable decision). Each Assignor agrees that upon written notice by any Indemnitee of the assertion of such Indemnified Liabilities, the relevant Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the relevant Assignor of any such assertion of which such Indemnitee has knowledge.

(b) Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly and severally, to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent’s Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral.

(c) Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Assignor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement.

(d) If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

8.2 Indemnity Obligations Secured by Collateral; Survival. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all the Notes issued, and Loans made, under the Credit Agreement, the termination of all Letters of Credit issued under the Credit Agreement, the termination of all Interest Rate Protection Agreements entered into with the Other Creditors and the payment of all other Obligations and notwithstanding the discharge thereof and the occurrence of the Termination Date.

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ARTICLE IX

DEFINITIONS

The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined.

“Account” shall mean any “account” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a State, governmental unit of a State, or person licensed or authorized to operate the game by a State or governmental unit of a State. Without limiting the foregoing, the term “account” shall include all Health-Care-Insurance Receivables.

“Administrative Agent” shall have the meaning provided in the recitals of this Agreement.

“Agreement” shall mean this Security Agreement as the same may be amended, modified, restated and/or supplemented from time to time in accordance with its terms.

“As-Extracted Collateral” shall mean “as-extracted collateral” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Assignor” shall have the meaning provided in the first paragraph of this Agreement.

“Borrower” and “Borrowers” shall have the meaning provided in the recitals of this Agreement.

“Canadian Borrower” shall have the meaning provided in the recitals of this Agreement.

“Canadian Borrower Obligations” shall mean all Obligations of the Canadian Borrower and any guarantees thereof (including by U.S. Credit Parties) pursuant to the Guaranties or pursuant to any other Credit Document.

“Cash Collateral Account” shall mean a non-interest bearing cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors.

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“Chattel Paper” shall mean “chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York. Without limiting the foregoing, the term “Chattel Paper” shall in any event include all Tangible Chattel Paper and all Electronic Chattel Paper.

“Class” shall have the meaning provided in Section 10.2 of this Agreement.

“Collateral” shall have the meaning provided in Section 1.1(a) of this Agreement.

“Collateral Agent” shall have the meaning provided in the first paragraph of this Agreement.

“Commercial Tort Claims” shall mean “commercial tort claims” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Contract Rights” shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.

“Contracts” shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging Agreements, licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements).

“Copyrights” shall mean any United States or foreign copyright now or hereafter owned by any Assignor, including any registrations of any copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor.

“Credit Agreement” shall have the meaning provided in the recitals of this Agreement.

“Credit Document Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Deposit Accounts” shall mean all “deposit accounts” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Documents” shall mean “documents” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Domain Names” shall mean all Internet domain names and associated URL addresses in or to which any Assignor now or hereafter has any right, title or interest.

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“Electronic Chattel Paper” shall mean “electronic chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Equipment” shall mean any “equipment” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, and in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing and all accessions thereto, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto.

“Event of Default” shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period.

“Excess Exempted Foreign Entity Voting Stock” shall have the meaning provided in the Pledge Agreement.

“Excluded Deposit Accounts” shall mean (x) the Pension Plan Account and (y) each other Deposit Account which is (i) designated by the U.S. Borrower in writing to the Collateral Agent as an “Excluded Deposit Account” and (ii) approved in writing as an “Excluded Account” by the Collateral Agent in its sole discretion (it being understood and agreed that it is the intention of the parties hereto that the amounts on deposit in all such accounts included as “Excluded Deposit Accounts” (other than the Pension Plan Account) at the end of each Business Day shall not exceed $250,000) in the aggregate (as calculated in the manner as set forth in Section 3.9(c)), although (subject to Section 3.9(c)) any departure from this intention shall not in and of itself constitute a breach of this Agreement).

“Exempted Foreign Entity” shall have the meaning provided in the Pledge Agreement.

“General Intangibles” shall mean “general intangibles” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Goods” shall mean “goods” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Health-Care-Insurance Receivable” shall mean any “health-care-insurance receivable” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Holdings” shall have the meaning provided in the recitals hereto.

“Indemnitee” shall have the meaning provided in Section 8.1(a) of this Agreement.

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“Instrument” shall mean “instruments” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Inventory” shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof and all accessions thereto, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production from raw materials through work in process to finished goods, and all products and proceeds of whatever sort and wherever located any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor’s customers, and shall specifically include all “inventory” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Investment Property” shall mean “investment property” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Lender Creditors” shall have the meaning provided in the recitals of this Agreement.

“Lenders” shall have the meaning provided in the recitals of this Agreement.

“Letter-of-Credit Rights” shall mean “letter-of-credit rights” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Location” of any Assignor, shall mean such Assignor’s “location” as determined pursuant to Section 9-307 of the UCC.

“Lockbox Account” shall mean (i) account no. 932789 of North America Packaging Corporation maintained with Wachovia Bank, N.A., (ii) account no. 375-069-1232 of BWAY Corporation maintained with Bank of America, N.A., or (iii) any other Deposit Account designated by the U.S. Borrower in writing to the Collateral Agent as a “Lockbox Account” so long as (x) a “control agreement” has been duly executed and entered into in respect of such account as contemplated by Section 3.9(a) and (y) such designation is accepted and agreed to by the Collateral Agent in its sole discretion.

“Marks” shall mean all right, title and interest in and to any trademarks, service marks and trade names now held or hereafter acquired by any Assignor, including any registration or application for registration of any trademarks and service marks now held or hereafter acquired by any Assignor (except for “intent to use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed), which are registered or filed in the United States Patent and Trademark Office or the equivalent thereof in any state of the United States or any equivalent foreign office or agency, as well as any unregistered trademarks and service marks used by an Assignor and any trade dress including logos, designs, fictitious business names and other business identifiers used by any Assignor.

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“Material Adverse Effect” shall mean a material adverse effect on the business, property, assets, liabilities (actual or contingent), operations or condition (financial or otherwise) of Holdings and its Subsidiaries taken as a whole.

“Obligations” shall mean and include, as to any Assignor, all of the following:

(i) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal (or, Face Amount, as applicable), premium, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of such Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, without limitation, in the event such Assignor is a Guarantor, all such obligations, liabilities and indebtedness of such Assignor under its Guaranty) and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate Protection Agreements, being herein collectively called the “Credit Document Obligations”);

(ii) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Assignor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Assignor to the Other Creditors, now existing or hereafter incurred under, arising out of or in connection with any Interest Rate Protection Agreement, whether such Interest Rate Protection Agreement is now in existence or hereinafter arising (including, without limitation, in the case of a Assignor that is a Guarantor, all obligations, liabilities and indebtedness of such Assignor under its Guaranty in respect of the Interest Rate Protection Agreements), and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in each such Interest Rate Protection Agreement (all such obligations, liabilities and indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

(iii) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral;

(iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable

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expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable attorneys’ fees and court costs;

(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; and

(vi) all amounts owing to any Agent pursuant to any of the Credit Documents in its capacity as such;

it being acknowledged and agreed that the “Obligations” shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

“Ordinary Course Transferees” shall mean: (i) with respect to Goods only, buyers in the ordinary course of business and lessees in the ordinary course of business to the extent provided in Section 9-320(a) and 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction, (ii) with respect to General Intangibles only, licensees in the ordinary course of business to the extent provided in Section 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction and (iii) any other Person who is entitled to take free of the Lien pursuant to the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.

“Other Creditors” shall have the meaning provided in the recitals of this Agreement.

“Other Obligations” shall have the meaning provided in the definition of “Obligations” in this Article IX.

“Patents” shall mean any patent in or to which any Assignor now or hereafter has any right, title or interest therein, and any divisions, continuations (including, but not limited to, continuations-in-parts) and improvements thereof, as well as any application for a patent now or hereafter made by any Assignor.

“Pension Plan Account” shall mean account no. 1040010888 of North America Packaging Corporation maintained with Wachovia Bank, N.A. and each such other Deposit Account designated by the U.S. Borrower in writing to the Administrative Agent as a “pension plan account” so long as such designation is accepted and agreed to by the Collateral Agent in its sole discretion.

“Permits” shall mean, to the extent permitted to be assigned by the terms thereof or by applicable law, all licenses, permits, rights, orders, variances, franchises or authorizations of or from any governmental authority or agency.

“Primary Canadian Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

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“Primary Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Primary U.S. Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Pro Rata Share” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Proceeds” shall mean all “proceeds” as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof and, in any event, shall also include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

“Registered Organization” shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York.

“Representative” shall have the meaning provided in Section 7.4(e) of this Agreement.

“Required Secured Creditors” shall mean (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, the holders of a majority of the Other Obligations.

“Requisite Creditors” shall have the meaning provided in Section 10.2 of this Agreement.

“Secondary Canadian Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secondary U.S. Borrower Obligations” shall have the meaning provided in Section 7.4(b) of this Agreement.

“Secured Creditors” shall have the meaning provided in the recitals of this Agreement.

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“Secured Debt Agreements” shall mean and include this Agreement, the other Credit Documents and the Interest Rate Protection Agreements entered into with an Other Creditor.

“Software” shall mean “software” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Specified Assets” shall mean the following property and assets of such Grantor:

(i) Equipment constituting Fixtures or Vehicles;

(ii) Accounts or receivables arising therefrom to the extent that the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction is not applicable to the creation or perfection of Liens thereon;

(iii) uncertificated securities;

(iv) Collateral for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside the United States of America, any State, territory or dependency thereof or the District of Columbia;

(v) Goods constituting Vehicles or included in Collateral received by any Person for “sale or return” within the meaning of Section 2-326 of the Uniform Commercial Code of the applicable jurisdiction, to the extent of claims of creditors of such Person;

(vi) Patents, Marks and Copyrights to the extent that Liens thereon cannot be perfected by the filing of UCC financing statements under the UCC or by a filing in the United States Patent and Trademark Office or the United States Copyright Office; and

(v) Proceeds which have not been transferred to or deposited in the Cash Collateral Account (if any) or a Deposit Account meeting the requirements of Section 3.9 hereof.

“Supporting Obligations” shall mean any “supporting obligation” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor, or in which any Assignor has any rights, and, in any event, shall include, but shall not be limited to all of such Assignor’s rights in any Letter-of-Credit Right or secondary obligation that supports the payment or performance of, and all security for, any Account, Chattel Paper, Document, General Intangible, Instrument or Investment Property.

“Tangible Chattel Paper” shall mean “tangible chattel paper” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Termination Date” shall have the meaning provided in Section 10.8(a) of this Agreement.

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“Timber-to-be-Cut” shall mean “timber-to-be-cut” as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York.

“Trade Secret Rights” shall mean the rights of an Assignor in any Trade Secret it holds.

“Trade Secrets” shall mean any secretly held existing engineering or other data, information, production procedures and other know-how relating to the design manufacture, assembly, installation, use, operation, marketing, sale and/or servicing of any products or business of an Assignor worldwide whether written or not.

“Transmitting Utility” shall have the meaning given such term in Section 9-102(a)(80) of the UCC.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.

“U.S. Borrower” shall have the meaning provided in the recitals of this Agreement.

“U.S. Borrower Obligations” shall mean all Obligations of the U.S. Borrower (but not as a Guarantor of the Canadian Borrower or any Canadian Subsidiary Guarantor) and any guarantees of such Obligations pursuant to the Guaranties or pursuant to any other Credit Document.

“Vehicles” shall mean all cars, trucks, construction and earth moving equipment covered by a certificate of title law of any state (and where perfection of security interests therein cannot be effected by filings under the UCC).

“Voting Stock” shall have the meaning provided in the Pledge Agreement.

ARTICLE X

MISCELLANEOUS

10.1 Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties 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 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 Collateral Agent or any Assignor shall not be effective until received by the Collateral Agent or such Assignor, as the case may be. All notices and other communications shall be in writing and addressed as follows:

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(a) if to any Assignor, c/o:

[8607 Roberts Drive, Suite 250

Atlanta, Georgia 30350

Attention: Kevin Kern

Telephone No.: (770) 645-4800

Telecopier No.: (770) 587-0186]

(b) if to the Collateral Agent, at:

Deutsche Bank Trust Company Americas

222 South Riverside Plaza

MS-CH 105-2600

Chicago, IL 60606

Attention: Marla Heller

Telephone No.: 312-537-4231

Telecopier No.: 312-537-1324

(c) if to any Lender Creditor (other than the Collateral Agent), at such address as such Lender Creditor shall have specified in the Credit Agreement;

(d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to each Assignor and the Collateral Agent;

or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.

10.2 Waiver; Amendment. Except as provided in Sections 10.8 and 10.12, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly affected thereby (it being understood that the addition or release of any Assignor hereunder shall not constitute a change, waiver, discharge or termination affecting any Assignor other than the Assignor so added or released) and the Collateral Agent (with the written consent of the Required Secured Creditors); provided, however, that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) also shall require the written consent of the Requisite Creditors of such affected Class. For the purpose of this Agreement, 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 Agreement, the term “Requisite Creditors” of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders), and (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time.

10.3 Obligations Absolute. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or

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the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing.

10.4 Successors and Assigns. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.8, (ii) be binding upon each Assignor, its successors and assigns; provided, however, that no Assignor shall assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.

10.5 Headings Descriptive. 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 any provision of this Agreement.

10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH SUCH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS JURISDICTION OVER IT. EACH SUCH PARTY 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, AS THE CASE MAY BE, AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS

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AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT 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 SUCH PARTY HEREBY IRREVOCABLY WAIVES 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 AGREEMENT OR ANY OTHER CREDIT DOCUMENT 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 ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

10.7 Assignor’s Duties. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral.

10.8 Termination; Release. (a) After the Termination Date, this Agreement shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Assignors (provided that all indemnities set forth herein including, without limitation in Section 8.1 hereof, shall survive such termination) and the Collateral Agent, at the request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, “Termination Date” shall mean the date upon which the Total Commitment under the Credit Agreement has been terminated and all Interest Rate Protection Agreements entered into with any Other Creditor have been terminated, no Note under the Credit Agreement is outstanding and all Loans thereunder have been repaid in full, all Letters of Credit issued under the Credit Agreement have been terminated and all Obligations then due and payable have been paid in full.

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(b) In the event that any part of the Collateral is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the time at which all Credit Document Obligations have been paid in full and all Commitments and Letters of Credit under the Credit Agreement have been terminated, in connection with a sale or disposition permitted by Section 9.02 of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 13.12 of the Credit Agreement) or (y) at any time thereafter, to the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y), the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the extent required to be so applied, the Collateral Agent, at the request and expense of such Assignor, will duly release from the security interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or otherwise disposed of, or released, and as may be in the possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement. Furthermore, upon the release of any U.S. Subsidiary Guarantor from the U.S. Subsidiaries Guaranty in accordance with the provisions thereof, such Assignor (and the Collateral at such time assigned by the respective Assignor pursuant hereto) shall be released from this Agreement.

(c) At any time that an Assignor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8 (b), such Assignor shall deliver to the Collateral Agent (and the relevant sub-agent, if any, designated hereunder) a certificate signed by a principal executive officer of such Assignor stating that the release of the respective Collateral is permitted pursuant to such Section 10.8 (b). At any time that either U.S. Borrower or the respective Assignor desires that a Subsidiary of the U.S. Borrower which has been released from the U.S. Subsidiaries Guaranty be released hereunder as provided in the last sentence of Section 10.8(b), it shall deliver to the Collateral Agent a certificate signed by a principal executive officer of the U.S. Borrower and the respective Assignor stating that the release of the respective Assignor (and its Collateral) is permitted pursuant to such Section 10.8(b). If reasonably requested by the Collateral Agent (although the Collateral Agent shall have no obligation to make such request), the relevant Assignor shall furnish appropriate legal opinions (from counsel, reasonably acceptable to the Collateral Agent) to the effect set forth in this Section 10.8(c).

(d) The Collateral Agent shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in the absence of gross negligence and willful misconduct believes to be in accordance with) this Section 10.8.

10.9 Counterparts. This Agreement 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 U.S. Borrower and the Collateral Agent.

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10.10 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10.11 The Collateral Agent and the other Secured Creditors. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Section 12 of the Credit Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth herein and in Section 12 of the Credit Agreement.

10.12 Additional Assignors. It is understood and agreed that any Subsidiary Guarantor that desires to become an Assignor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become an Assignor hereunder by executing a counterpart hereof and delivering same to the Collateral Agent, or by executing a joinder agreement in form and substance reasonably satisfactory to the Collateral Agent, (y) delivering supplements to Annexes A through F, inclusive, and H through K, inclusive, hereto as are necessary to cause such Annexes to be complete and accurate with respect to such additional Assignor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Assignor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Collateral Agent and with all documents and actions required above to be taken to the reasonable satisfaction of the Collateral Agent.

[Remainder of this page intentionally left blank; signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

BCO HOLDING COMPANY, as an Assignor
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President, Treasurer and Secretary
BWAY CORPORATION, as an Assignor
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President, Treasurer and Secretary

ARMSTRONG CONTAINERS, INC.
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
SC PLASTICS, LLC
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
NORTH AMERICA PACKAGING CORPORATION
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
NORTH AMERICA PACKAGING OF PUERTO RICO, INC.
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary

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Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent
By:	/s/ Evelyn Thierry
Title:	Vice President
By:	/s/ Omayra Laucella
Title:	Vice President

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EX-4.12

Exhibit 4.12

ICL INDUSTRIAL CONTAINERS ULC

as Obligor

and

DEUTSCHE BANK TRUST COMPANY AMERICAS

as Collateral Agent

SECURITY AGREEMENT

July 17, 2006

STIKEMAN ELLIOTT LLP

	TABLE OF CONTENTS
	ARTICLE 1
	INTERPRETATION
Section 1.1	Defined Terms.	1
Section 1.2	Interpretation.	9
	ARTICLE 2
	SECURITY
Section 2.1	Grant of Security.	10
Section 2.2	Secured Obligations.	11
Section 2.3	Attachment.	11
Section 2.4	Scope of Security Interest.	13
Section 2.5	Grant of Licence to Use Intellectual Property.	14
Section 2.6	Care and Custody of Collateral.	14
Section 2.7	Rights of the Obligor.	15
Section 2.8	Expenses.	15
	ARTICLE 3
	ENFORCEMENT
Section 3.1	Enforcement.	15
Section 3.2	Remedies.	15
Section 3.3	Additional Rights.	17
Section 3.4	Exercise of Remedies.	18
Section 3.5	Receiver’s Powers.	18
Section 3.6	Appointment of Attorney.	19
Section 3.7	Dealing with the Collateral.	19
Section 3.8	Standards of Sale.	20
Section 3.9	Dealings by Third Parties.	21
Section 3.10	Registration Rights.	21
	ARTICLE 4
	GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1	Necessary Filings.	22
Section 4.2	No Liens.	23
Section 4.3	Other Financing Statements.	23
Section 4.4	Chief Executive Office, Record Locations.	23
Section 4.5	Location of Inventory and Equipment.	23
Section 4.6	Legal Names; Type of Organization; Jurisdiction of Organization; Chief Executive Office; Changes Thereto; etc.	23
Section 4.7	Trade Names; etc.	24

Section 4.8	Certain Significant Transactions.	24
Section 4.9	Unextracted Collateral; Timber-Until-it-is-Cut.	25
Section 4.10	Collateral in the Possession of a Bailee.	25
Section 4.11	Recourse.	25
	ARTICLE 5
	SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
Section 5.1	Additional Representations and Warranties.	25
Section 5.2	Maintenance of Records.	26
Section 5.3	Direction to Account Debtors; Contracting Parties; etc.	26
Section 5.4	Modification of Terms; etc.	27
Section 5.5	Collection.	27
Section 5.6	Instruments.	28
Section 5.7	Obligor Remains Liable Under Accounts.	28
Section 5.8	Obligor Remains Liable Under Contracts.	28
Section 5.9	Deposit Accounts; etc.	29
Section 5.10	Letter-of-Credit Rights.	29
Section 5.11	Chattel Paper.	29
Section 5.12	Further Actions.	30
Section 5.13	Overriding Provisions with respect to TL Priority Collateral.	30
	ARTICLE 6
	SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
Section 6.1	Additional Representations and Warranties.	30
Section 6.2	Licenses and Assignments.	31
Section 6.3	Infringements.	31
Section 6.4	Preservation of Marks and Domain Names.	31
Section 6.5	Maintenance of Registration.	32
Section 6.6	Future Registered Marks and Domain Names.	32
Section 6.7	Remedies.	32
	ARTICLE 7
	SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
Section 7.1	Additional Representations and Warranties.	33
Section 7.2	Licenses and Assignments.	33
Section 7.3	Infringements.	33
Section 7.4	Maintenance of Patents or Copyrights.	34
Section 7.5	Prosecution of Patent or Copyright Applications.	34
Section 7.6	Other Patents and Copyrights.	34
Section 7.7	Remedies.	34

	ARTICLE 8
	PROVISIONS CONCERNING ALL COLLATERAL
Section 8.1	Protection of Collateral Agent’s Security.	35
Section 8.2	Warehouse Receipts Non-Negotiable.	35
Section 8.3	Additional Information.	35
Section 8.4	Further Actions.	36
Section 8.5	Financing Statements.	36
	ARTICLE 9
	INDEMNITY
Section 9.1	Indemnity.	36
Section 9.2	Indemnity Obligations Secured by Collateral; Survival.	38
	ARTICLE 10
	GENERAL
Section 10.1	Notices.	38
Section 10.2	The Collateral Agent and the other Secured Creditors.	38
Section 10.3	No Merger, Survival of Representations and Warranties.	38
Section 10.4	Further Assurances.	39
Section 10.5	Supplemental Security.	39
Section 10.6	Successors and Assigns.	39
Section 10.7	Severability.	39
Section 10.8	Amendment and Waiver.	40
Section 10.9	Termination; Release.	40
Section 10.10	Application of Proceeds of Security.	41
Section 10.11	Conflict	44
Section 10.12	Governing Law.	44

	ADDENDA
SCHEDULE “A”	INSTRUMENTS AND SECURITIES
SCHEDULE “B”	INTELLECTUAL PROPERTY
SCHEDULE “C”	LOCATIONS OF COLLATERAL
SCHEDULE “D”	FORM OF CONFIRMATION OF SECURITY INTEREST IN INTELLECTUAL PROPERTY
SCHEDULE “E”	DEPOSIT ACCOUNTS

SECURITY AGREEMENT

Security agreement dated as of July 17, 2006 made by ICL Industrial Containers ULC, to and in favour of Deutsche Bank Trust Company Americas, as Collateral Agent for the benefit of the Secured Creditors.

RECITALS:

(a) The Administrative Agent and the Lenders have agreed to make certain credit facilities available to the Obligor on the terms and conditions contained in the Credit Agreement;

(b) The Obliger 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 successors and assigns, if any, collectively, the “Other Creditors”); and

(c) It is a condition precedent to the extension of credit to the Obligor under the Credit Agreement and to the Other Creditors entering into Interest Rate Protection Agreements that the Obligor execute and deliver this Agreement in favour of the Collateral Agent as security for the payment and performance of the Obligor’s obligations under the Credit Agreement and the other Credit Documents to which it is a party.

In consideration of the foregoing and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Obligor agrees as follows.

ARTICLE 1 INTERPRETATION

Section 1.1 Defined Terms.

As used in this Agreement, the following terms have the following meanings:

“Account” means any “account” as such term is defined in the Personal Property Security Act (Ontario) as in effect on the date hereof, and in any event shall include but shall not be limited to, all rights to payment of any monetary obligation, whether or not earned by performance, (i) for property that has been or is to be sold, leased, licensed, assigned or otherwise disposed of, (ii) for services rendered or to be rendered, (iii) for a policy of insurance issued or

to be issued, (iv) for a secondary obligation incurred or to be incurred, (v) for energy provided or to be provided, (vi) for the use or hire of a vessel under a charter or other contract, (vii) arising out of the use of a credit or charge card or information contained on or for use with the card, or (viii) as winnings in a lottery or other game of chance operated or sponsored by a Governmental Entity, or person licensed or authorized to operate the game by a Governmental Entity. Without limiting the foregoing, the term “Account” shall include all health-care-insurance receivables.

“Administrative Agent” means Deutsche Bank Trust Company Americas acting as administrative agent for the Lenders under the Credit Agreement and any successor agent appointed under the Credit Agreement, and its successors and permitted assigns.

“Agreement” means this security agreement.

“Cash Collateral Account” means a non-interest bearing cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors.

“CIPO” means the Canadian Intellectual Property Office.

“Collateral” has the meaning specified in Section 2.1.

“Collateral Agent” means Deutsche Bank Trust Company Americas acting as collateral agent for the Secured Creditors and any successor collateral agent appointed under the Credit Agreement and its successors and permitted assigns.

“Contract Rights” means all rights of the Obligor under each Contract, including (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts.

“Contracts” means all contracts between the Obligor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements, Other Hedging Agreements, any licensing agreements and any partnership agreements, joint venture agreements and limited liability company agreements).

“Copyright” means all copyrights, whether statutory or common law, owned by or assigned to the Obligor, and all exclusive and nonexclusive licenses to the Obligor from third parties or rights to use copyrights owned by such third parties, including the registrations, applications and licenses of the Obligor

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listed on Schedule B, along with any and all (a) renewals and extensions thereof, (b) income, royalties, damages, claims and payments now and hereafter due and/or payable with respect thereto, including damages and payments for past, present or future infringements thereof, (c) rights to sue for past, present and future infringements thereof, and (d) foreign copyrights and any other rights corresponding thereto throughout the world.

“Credit Agreement” means the credit agreement dated as of July 17, 2006, among BCO Holding Company, BWAY Corporation, the Obligor, the Lenders, Deutsche Bank Securities Inc. and J.P. Morgan Securities Inc., as joint lead arrangers and the Administrative Agent, as the same may be amended, modified, extended, renewed, replaced, restated, supplemented or refinanced from time to time and includes any agreement extending the maturity of, refinancing or restructuring all or any portion of, the indebtedness under such agreement or any successor agreements, whether or not with the same Administrative Agent or Lenders.

“Credit Documents” means the Credit Agreement, this Agreement and each other Credit Document (as such term is defined in the Credit Agreement).

“Deposit Accounts” means all demand, time, savings, passbook or similar accounts.

“Domain Names” means all Internet domain names and associated URL addresses to which the Obligor now or hereafter has any right, title or interest.

“Event of Default” means any Event of Default under, and as defined in, the Credit Agreement.

“Expenses” has the meaning specified in Section 2.2(b).

“Governmental Entity” means any international tribunal, agency, body commission or other authority, any government, executive, parliament, legislature or local authority, or any governmental entity, ministry, department or agency or regulatory authority, court, tribunal, commission or board of or within Canada, or any other foreign jurisdiction, or any political subdivision of any thereof or any authority having jurisdiction therein or any quasi governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above.

“Indemnified Liabilities” has the meaning specified in Section 9.1(1).

“Indemnitee” has the meaning specified in Section 9.1(1).

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“Intellectual Property” means domestic and foreign: (i) patents, applications for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications; (ii) proprietary and non-public business information, including inventions (whether patentable or not), invention disclosures, improvements, discoveries, trade secrets, confidential information, know-how, methods, processes, designs, technology, technical data, schematics, formulae and customer lists, and documentation relating to any of the foregoing; (iii) copyrights, copyright registrations and applications for copyright registration; (iv) mask works, mask work registrations and applications for mask work registrations; (v) designs, design registrations, design registration applications and integrated circuit topographies; (vi) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trade-marks, trade-mark registrations, trade mark applications, trade dress and logos, and the goodwill associated with any of the foregoing; (vii) computer software and programs (both source code and object code form), all proprietary rights in the computer software and programs and all documentation and other materials related to the computer software and programs; and (viii) any other intellectual property and industrial property.

“Instruments” means (i) a bill, note or cheque within the meaning of the Bills of Exchange Act (Canada) or any other writing that evidences a right to the payment of money and is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment, or (ii) a letter of credit and an advice of credit if the letter or advice states that it must be surrendered upon claiming payment thereunder, or (iii) chattel paper or any other writing that evidences both a monetary obligation and a security interest in or a lease of specific goods, or (iv) documents of title or any other writing that purports to be issued by or addressed to a bailee and purports to cover such goods in the bailee’s possession as are identified or fungible portions of an identified mass, and that in the ordinary course of business is treated as establishing that the Person in possession of it is entitled to receive, hold and dispose of the document and the goods it covers, or (v) any document or writing commonly known as an instrument.

“Lender Creditors” means, collectively, the Lenders, the Administrative Agent and the Collateral Agent.

“Lenders” means the financial institutions listed on Schedule I of the Credit Agreement, any Person who may become a Lender pursuant to the Credit Agreement, and includes each Canadian Lender and any affiliate of any Lender which is acting as a Canadian Lender, and their respective successors and assigns.

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“Lien” means (i) any mortgage, charge, pledge, hypothecation, security interest, assignment by way of security, encumbrance, lien (statutory or otherwise), hire purchase agreement, conditional sale agreement, deposit arrangement, title retention agreement or arrangement, or any other assignment, arrangement or condition that in substance secures payment or performance of an obligation, (ii) any trust arrangement, (iii) any arrangement which creates a right of set-off out of the ordinary course of business, or (iv) any agreement to grant any such rights or interests.

“Marks” means all trademarks (including service marks), federal and provincial trademark registrations and applications made by the Obligor, common law trademarks and trade names owned by or assigned to the Obligor, all registrations and applications for the foregoing and all exclusive and nonexclusive licenses from third parties of the right to use trademarks of such third parties, including the registrations, applications, unregistered trademarks, service marks and licenses listed on Schedule B, along with any and all (a) renewals thereof, (b) income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including damages, claims and payments for past or future infringements thereof, (c) rights to sue for past, present and future infringements thereof, and (d) foreign trademarks, trademark registrations, and trade name applications for any thereof and any other rights corresponding thereto throughout the world.

“Obligations” means and includes all of the following:

(a) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal, if any, premium, interest (including all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Obligor thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of the Obligor owing to the Secured Creditors, or any one of them, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and each other Credit Document to which the Obligor is a party and the due performance and compliance by the Obligor with all of the terms, conditions and agreements contained in each such Credit Document (“Credit Document Obligations”);

(b) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and

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indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of the Obligor at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding) owing by the Obligor to the Other Creditors, or any one of them, now existing or hereafter incurred under, arising out of or in connection with any Interest Rate Protection Agreement, whether such Interest Rate Protection Agreement is now in existence or hereinafter arising (including, without limitation, in the case of a Assignor that is a Guarantor, all obligations, liabilities and indebtedness of such Assignor under its Guaranty in respect of the Interest Rate Protection Agreements), and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in each such Interest Rate Protection Agreement (“Other Obligations”);

(c) any and all sums advanced by the Collateral Agent in order to preserve the Collateral or preserve its security interest in the Collateral;

(d) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of the Obligor referred to in clauses (a) and (b) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Collateral Agent of its rights hereunder, together with reasonable and invoiced legal fees and court costs;

(e) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 9.1 of this Agreement; and

(f) all amounts owing to the Administrative Agent or Collateral Agent pursuant to any of the Credit Documents in its capacity as such;

it being acknowledged and agreed that the “Obligations” shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

“Obligor” means ICL Industrial Containers ULC, an unlimited liability company existing under the laws of Nova Scotia, and its successors and permitted assigns.

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“Other Creditors” has the meaning given to it in the recitals to this Agreement.

“Patents” means all patents issued or assigned to and all patent applications made by the Obligor and, to the extent that the grant of a security interest does not cause a breach or termination thereof, all exclusive and nonexclusive licenses to the Obligor from third parties or rights to use patents owned by such third parties, including the patents, patent applications and licenses listed on Schedule B, along with any and all (a) inventions and improvements described and claimed therein, (b) reissues, divisions, continuations, extensions and continuations-in-part thereof, (c) income, royalties, damages, claims and payments now and hereafter due and/or payable under and with respect thereto, including damages and payments for past or future infringements thereof, (d) rights to sue for past, present and future infringements thereof, and (e) any other rights corresponding thereto throughout the world.

“PPSA” means the Personal Property Security Act (Ontario) and the regulations promulgated thereunder or other personal property security legislation of the applicable Canadian province or provinces in respect of the Obligor (including the Civil Code of the Province of Quebec) and the Regulation respecting the register of personal and movable real rights promulgated thereunder as all such legislation now exists or may from time to time hereafter be amended, modified, recodified, supplemented or replaced, together with all rules, regulations and interpretations thereunder or related thereto.

“Primary Obligations” has the meaning specified in Section 10.10(2).

“Pro Rata Share” has the meaning specified in Section 10.10(2).

“Registrable Intellectual Property” means any Intellectual Property in respect of which ownership, title, security interests, charges or encumbrances are capable of registration, recording or notation with any Governmental Entity pursuant to applicable laws.

“Required Secured Creditors” means (i) at any time when any Credit Document Obligations are outstanding or any Commitments under the Credit Agreement exist, the Required Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any time after all of the Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated and no further Commitments may be provided thereunder, the holders of a majority of the Other Obligations.

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“Restricted Asset” has the meaning specified in Section 2.4(1).

“Secondary Obligations” has the meaning specified in Section 10.10(2).

“Secured Creditors” means the Lender Creditors and the Other Creditors.

“Secured Obligations” has the meaning specified in Section 2.2(b).

“Securities” means:

(a) a document that is (i) issued in bearer, order or registered form, (ii) of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment, (iii) one of a class or series or by its terms is divisible into a class or series of documents, and (iv) evidence of a share, participation or other interest in property or in any enterprise or is evidence of an obligation of the issuer and includes an uncertificated security; and

(b) a share, participation or other interest in a Person;

but excludes

(c) any ULC Shares.

“Security Interest” has the meaning specified in Section 2.2.

“Termination Date” means that date upon which the Total Commitment under the Credit Agreement has been terminated and all Interest Rate Protection Agreements entered into with any Other Creditor have been terminated, no Note under the Credit Agreement is outstanding and all Loans thereunder have been repaid in full, all Letters of Credit issued under the Credit Agreement have been terminated and all Obligations then due and payable have been paid in full.

“Trade Secrets” means any secretly held existing engineering or other proprietary data, information, formulas, production procedures and other know-how relating to the design, manufacture, assembly, installation, use, operation, marketing, sale and/or servicing of any products or business of the Obligor worldwide, whether written or not.

“Trade Secret Rights” means the rights of the Obligor in any Trade Secrets it holds or owns.

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“ULC Shares” means shares in any unlimited company (sometimes called an “unlimited liability company”) at any time owned or otherwise held by the Obligor.

Section 1.2 Interpretation.

(1) Terms defined in the Personal Property Security Act (Ontario) as in effect on the date hereof and used but not otherwise defined in this Agreement have the same meanings. Capitalized terms used in this Agreement but not defined have the meanings given to them in the Credit Agreement.

(2) Any reference in any Credit Document to Liens permitted by the Credit Agreement and any right of the Obligor to create or suffer to exist Liens permitted by the Credit Agreement are not intended to and do not and will not subordinate the Security Interest to any such Lien or give priority to any Person over the Secured Creditors.

(3) In this Agreement the words “including”, “includes” and “include” mean “including (or includes or include) without limitation”. The expressions “Article”, “Section” and other subdivision followed by a number mean and refer to the specified Article, Section or other subdivision of this Agreement.

(4) Any reference in this Agreement to gender includes all genders. Words importing the singular number only include the plural and vice versa.

(5) The division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenient reference only and do not affect its interpretation.

(6) The schedules attached to this Agreement form an integral part of it for all purposes of it.

(7) Any reference to this Agreement, any Credit Document or any Security Document refers to this Agreement or such Credit Document or Security Document as the same may have been or may from time to time be amended, modified, extended, renewed, restated, replaced or supplemented and includes all schedules attached to it. Except as otherwise provided in this Agreement, any reference in this Agreement to a statute refers to such statute and all rules and regulations made under it as the same may have been or may from time to time be amended or re-enacted.

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ARTICLE 2 SECURITY

Section 2.1 Grant of Security.

Subject to Section 2.4, the Obligor grants to the Collateral Agent, for the benefit of the Secured Creditors, a security interest in, and assigns, mortgages, charges, hypothecates and pledges to the Collateral Agent, for the benefit of the Secured Creditors, all of the property and undertaking of the Obligor now owned or hereafter acquired and all of the property and undertaking in which the Obligor now has or hereafter acquires any interest (collectively, the “Collateral”) including all of the Obligor’s:

(a) present and after acquired personal property;

(b) inventory including goods held for sale, lease or resale, goods furnished or to be furnished to third parties under contracts of lease, consignment or service, goods which are raw materials or work in process, goods used in or procured for packing and materials used or consumed in the business of the Obligor;

(c) equipment, machinery, furniture, fixtures, plant, vehicles and other goods of every kind and description and all licences and other rights and all related records, files, charts, plans, drawings, specifications, manuals and documents;

(d) accounts due or accruing and all related agreements, books, accounts, invoices, letters, documents and papers recording, evidencing or relating to them;

(e) money, documents of title and chattel paper;

(f) Instruments and Securities, including the Instruments and Securities listed in Schedule “A”;

(g) intangibles including all security interests, goodwill, choses in action, Contracts, Contract Rights, Deposit Accounts, licenses and other contractual benefits;

(h) Intellectual Property including the Registrable Intellectual Property listed in Schedule “B”;

(i) all substitutions and replacements of and increases, additions and, where applicable, accessions to the property described in Sections 2.1(a) through Section 2.1(h) inclusive; and

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(j) all proceeds in any form derived directly or indirectly from any dealing with all or any part of the property described in Section 2.1(a) through Section 2.1(i) inclusive, including the proceeds of such proceeds.

Section 2.2 Secured Obligations.

The security interest, assignment, mortgage, charge, hypothecation and pledge granted by this Agreement (collectively, the “Security Interest”) secures the payment and performance of:

(a) the Obligations; and

(b) all expenses, costs and charges incurred by or on behalf of the Secured Creditors in connection with this Agreement, the Security Interest or the Collateral, including all reasonable legal fees, court costs, receiver’s or agent’s remuneration and other expenses of taking possession of, repairing, protecting, insuring, preparing for disposition, realizing, collecting, selling, transferring, delivering or obtaining payment for the Collateral, and of taking, defending or participating in any action or proceeding in connection with any of the foregoing matters or otherwise in connection with the Secured Creditors’ interest in any Collateral, whether or not directly relating to the enforcement of this Agreement or any other Credit Document (collectively, the “Expenses” and, together with the Obligations, the “Secured Obligations”).

Section 2.3 Attachment.

(1) The Obligor acknowledges that (i) value has been given, (ii) it has rights in the Collateral (other than after-acquired Collateral), (iii) it has not agreed to postpone the time of attachment of the Security Interest, and (iv) it has received a copy of this Agreement.

(2) If any Securities or Instruments are now or at any time become evidenced, in whole or in part, by uncertified securities registered or recorded in records maintained by or on behalf of the issuer thereof in the name of a clearing agency or a custodian or of a nominee of either, the Obligor will, at the request of the Collateral Agent, cause an appropriate entry to be made in the records of the clearing agency or custodian to record the interest of the Collateral Agent in such Securities or Instruments created pursuant to this Agreement.

(3) The Obligor hereby delivers to and deposits with the Collateral Agent any and all certificates, notes and other instruments evidencing the Securities listed in Schedule A, together with, in each case, a stock power duly endorsed

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in blank for transfer or other undated instruments of transfer satisfactory to the Collateral Agent and duly executed in blank and such other instruments of transfer and documents as the Collateral Agent may reasonably request. The Obligor also hereby delivers to and deposits with the Collateral Agent the Instruments listed in Schedule A together with, in each case, undated instruments of transfer satisfactory to the Collateral Agent and duly executed in blank and such other instruments of endorsement or assignment and as the Collateral Agent may reasonably request.

(4) If the Obligor acquires any Instruments having a value in excess of US$50,000 or any Securities, the Obligor will notify the Collateral Agent in writing and provide the Collateral Agent with a revised Schedule A recording the acquisition and particulars of such Instruments or Securities within 10 Business Days after such acquisition, provided that at no time shall the aggregate principal amount of all Instruments held by the Obligor and not so delivered to the Collateral Agent exceed US$250,000. Upon request by the Collateral Agent, the Obligor will promptly deliver to and deposit with the Collateral Agent any such Securities or Instruments as security for the Secured Obligations. The Obligor will also promptly inform the Collateral Agent in writing of the acquisition by the Obligor of any ULC Shares.

(5) At the request of the Collateral Agent the Obligor will (i) cause the transfer of any Securities or Instruments to the Collateral Agent to be registered wherever such registration may be required or advisable in the reasonable opinion of the Collateral Agent, (ii) duly endorse any such Securities or Instruments for transfer in blank or register them in the name of the Collateral Agent or its nominee or otherwise as the Collateral Agent may reasonably direct, and (iii) immediately deliver to the Collateral Agent any and all consents or other documents which may be necessary to effect the transfer of any such Securities or Instruments to the Collateral Agent or any third party.

(6) Whenever the Obligor is obligated to deliver a stock power duly endorsed in blank for transfer it shall be accompanied by a certified copy of a resolution of the board of directors of the issuer. Upon the reasonable request of the Collateral Agent, the signature of the Obligor on the power of attorney and the stock transfer shall be guaranteed by a Canadian bank, trust or loan corporation or investment dealer. In order to allow the Obligor to vote any Securities registered in the Agent’s name or the name of its nominee, the Agent will prior to, and may after, the Security Interest being enforceable, at the request and the expense of the Obligor, (i) execute valid proxies appointing proxyholders to attend and act at meetings of shareholders, and (ii) execute resolutions in writing, all pursuant to the relevant provisions of the issuer’s governing legislation.

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(7) The Obligor will promptly notify the Collateral Agent in writing of the acquisition by the Obligor of any Registrable Intellectual Property. The Obligor will provide the Collateral Agent with a revised Schedule B recording the acquisition and particulars of such additional Intellectual Property.

(8) Immediately upon the request of the Collateral Agent, the Obligor will furnish the Collateral Agent in writing the description of all Registrable Intellectual Property or applications for Registrable Intellectual Property of the Obligor.

Section 2.4 Scope of Security Interest.

(1) To the extent that an assignment of amounts payable and other proceeds arising under or in connection with, or the grant of a security interest in any agreement, licence, permit or quota of the Obligor would result in the breach or termination of such agreement, licence, permit or quota (each, a “Restricted Asset”), the Security Interest with respect to each Restricted Asset will constitute a trust created in favour of the Collateral Agent, for the benefit of the Secured Creditors, pursuant to which the Obligor holds as trustee all proceeds arising under or in connection with the Restricted Asset in trust for the Collateral Agent, for the benefit of the Secured Creditors, on the following basis:

(a) subject to the Credit Agreement, until the Security Interest is enforceable, the Obligor is entitled to receive all such proceeds; and

(b) whenever the Security Interest is enforceable, (i) all rights of the Obligor to receive such proceeds cease and all such proceeds will be immediately paid over to the Collateral Agent for the benefit of the Secured Creditors, and (ii) the Obligor will take all actions requested by the Collateral Agent to collect and enforce payment and other rights arising under the Restricted Asset.

Subject to the next following sentence, the Obligor will use all commercially reasonable efforts to obtain the consent of each other party to any and all Restricted Assets to the assignment of such Restricted Asset to the Collateral Agent in accordance with this Agreement. Except for the landlord waivers required prior to the Initial Borrowing Date and other consents as may be required from time to time under the Credit Agreement, the Obligor will not be required to obtain the consent of the landlords in respect of the Leaseholds of the Obligor. The Obligor will also use all commercially reasonable efforts to ensure that all agreements entered into on and after the date of this Agreement expressly permit assignments of the benefits of such agreements as collateral security to the Collateral Agent in accordance with the terms of this Agreement.

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(2) The Security Interest with respect to trade-marks constitutes a security interest in, and a charge, hypothecation and pledge of, such Collateral in favour of the Collateral Agent for the benefit of the Secured Creditors, but does not constitute an assignment of such Collateral to the Collateral Agent or any Secured Creditor.

(3) Until the Security Interest is enforceable, the grant of the Security Interest in the Intellectual Property does not affect in any way the Obligor’s rights to commercially exploit the Intellectual Property, defend it, enforce the Obligor’s rights in it or with respect to it against third parties in any court or claim and be entitled to receive any damages with respect to any infringement of it.

(4) The Security Interest does not extend to consumer goods or ULC Shares.

(5) The Security Interest does not extend or apply to the last day of the term of any lease or sublease of real property or any agreement for a lease or sublease of real property, now held or hereafter acquired by the Obligor, but the Obligor will stand possessed of any such last day upon trust to assign and dispose of it as the Collateral Agent may reasonably direct.

Section 2.5 Grant of Licence to Use Intellectual Property.

At such time as the Collateral Agent is lawfully entitled to exercise its rights and remedies under Article 3, the Obligor grants to the Collateral Agent an irrevocable, nonexclusive licence (exercisable without payment of royalty or other compensation to the Obligor) to use, assign or sublicense any Intellectual Property in which the Obligor has rights wherever the same may be located, including in such licence access to (i) all media in which any of the licensed items may be recorded or stored, and (ii) all software and computer programs used for compilation or print-out. The license granted under this Section is to enable the Collateral Agent to exercise its rights and remedies under Article 3 and for no other purpose.

Section 2.6 Care and Custody of Collateral.

(1) Neither the Collateral Agent nor any other Secured Creditor has any obligation to keep Collateral in their possession identifiable.

(2) The Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, (i) notify any Person obligated on an Instrument, Security or account to make payments to the Collateral Agent, whether or not the Obligor was previously making collections on such accounts, chattel paper, instruments, and (ii) assume control of any proceeds arising from the Collateral.

(3) The Collateral Agent has no obligation to collect dividends, distributions or interest payable on, or exercise any option or right in connection with, any

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Securities or Instruments. The Collateral Agent has no obligation to protect or preserve any Securities or Instruments from depreciating in value or becoming worthless and is released from all responsibility for any loss of value. In the physical keeping of any Securities, the Collateral Agent is only obliged to exercise the same degree of care as it would exercise with respect to its own Securities kept at the same place.

Section 2.7 Rights of the Obligor.

(1) Until the occurrence of an Event of Default which is continuing, the Obligor is entitled to vote the Securities that are part of the Collateral and to receive all dividends and distributions on such Securities. Upon the occurrence and during the continuance of an Event of Default, all rights of the Obligor to vote (under any proxy given by the Collateral Agent (or its nominee) or otherwise) or to receive distributions or dividends cease and all such rights become vested solely and absolutely in the Collateral Agent.

(2) Any distributions or dividends received by the Obligor contrary to Section 2.7(1) or any other moneys or property received by the Obligor after the Security Interest is enforceable will be received as trustee for the Collateral Agent and the Secured Creditors and shall be immediately paid over to the Collateral Agent.

Section 2.8 Expenses.

The Obligor is liable for and will pay on demand by the Collateral Agent any and all Expenses.

ARTICLE 3

ENFORCEMENT

Section 3.1 Enforcement.

The Security Interest becomes and is enforceable against the Obligor upon the occurrence and during the continuance of an Event of Default.

Section 3.2 Remedies.

Whenever the Security Interest is enforceable, the Collateral Agent may realize upon the Collateral and enforce the rights of the Collateral Agent and the Secured Creditors by:

(a) entry onto any premises where Collateral consisting of tangible personal property may be located;

(b) entry into possession of the Collateral by any method permitted by law;

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(c) sale, grant of options to purchase, or lease of all or any part of the Collateral;

(d) holding, storing and keeping idle or operating all or any part of the Collateral;

(e) exercising and enforcing all rights and remedies of a holder of the Securities and Instruments as if the Collateral Agent were the absolute owner thereof (including, if necessary, causing the Collateral to be registered in the name of the Collateral Agent or its nominee if not already done);

(f) collection of any proceeds arising in respect of the Collateral;

(g) collection, realization or sale of, or other dealing with, the accounts;

(h) license or sublicense, whether on an exclusive or nonexclusive basis, any Intellectual Property for such term and on such conditions and in such manner as the Collateral Agent in its sole judgment determines (taking into account such provisions as may be necessary to protect and preserve such Intellectual Property);

(i) instruction to any bank which has entered into a control agreement with the Collateral Agent to transfer all moneys, Securities and Instruments held by such depositary bank to an account maintained with or by the Collateral Agent;

(j) application of any moneys constituting Collateral or proceeds thereof in accordance with Section 10.10;

(k) appointment by instrument in writing of a receiver (which term as used in this Agreement includes a receiver and manager) or agent of all or any part of the Collateral and removal or replacement from time to time of any receiver or agent;

(l) institution of proceedings in any court of competent jurisdiction for the appointment of a receiver of all or any part of the Collateral;

(m) institution of proceedings in any court of competent jurisdiction for sale or foreclosure of all or any part of the Collateral;

(n) filing of proofs of claim and other documents to establish claims to the Collateral in any proceeding relating to the Obligor; and

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(o) any other remedy or proceeding authorized or permitted under the Personal Property Security Act (Ontario) or otherwise by law or equity.

Section 3.3 Additional Rights.

In addition to the remedies set forth in Section 3.2 and elsewhere in this Agreement, whenever the Security Interest is enforceable, the Collateral Agent may:

(a) require the Obligor, at the Obligor’s expense, to assemble the Collateral at a place or places designated by notice in writing and the Obligor agrees to so assemble the Collateral immediately upon receipt of such notice;

(b) require the Obligor, by notice in writing, to disclose to the Collateral Agent the location or locations of the Collateral and the Obligor agrees to promptly make such disclosure when so required;

(c) repair, process, modify, complete or otherwise deal with the Collateral and prepare for the disposition of the Collateral, whether on the premises of the Obligor or otherwise;

(d) redeem any prior security interest against any Collateral, procure the transfer of such security interest to itself, or settle and pass the accounts of the prior mortgagee, chargee or encumbrancer (any accounts to be conclusive and binding on Obligor);

(e) pay any liability secured by any Lien against any Collateral (the Obligor will immediately on demand reimburse the Collateral Agent for all such payments);

(f) carry on all or any part of the business of the Obligor and, to the exclusion of all others including the Obligor, enter upon, occupy and use all or any of the premises, buildings, and other property of or used by the Obligor for such time as the Collateral Agent sees fit, free of charge, and the Collateral Agent and the Secured Creditors are not liable to the Obligor for any act, omission or negligence in so doing or for any rent, charges, depreciation or damages incurred in connection with or resulting from such action;

(g) borrow for the purpose of carrying on the business of the Obligor or for the maintenance, preservation or protection of the Collateral and grant a security interest in the Collateral, whether or not in priority to the Security Interest, to secure repayment;

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(h) commence, continue or defend any judicial or administrative proceedings for the purpose of protecting, seizing, collecting, realizing or obtaining possession or payment of the Collateral, and give good and valid receipts and discharges in respect of the Collateral and compromise or give time for the payment or performance of all or any part of the accounts or any other obligation of any third party to the Obligor; and

(i) at any public sale, and to the extent permitted by law on any private sale, bid for and purchase any or all of the Collateral offered for sale and upon compliance with the terms of such sale, hold, retain and dispose of such Collateral without any further accountability to the Obligor or any other Person with respect to such holding, retention or disposition, except as required by law. In any such sale to the Collateral Agent, the Collateral Agent may, for the purpose of making payment for all or any part of the Collateral so purchased, use any claim for Secured Obligations then due and payable to it as a credit against the purchase price.

Section 3.4 Exercise of Remedies.

The remedies under Section 3.2 and Section 3.3 may be exercised from time to time separately or in combination and are in addition to, and not in substitution for, any other rights of the Collateral Agent and the Secured Creditors however arising or created. The Collateral Agent and the Secured Creditors are not bound to exercise any right or remedy, and the exercise of rights and remedies is without prejudice to the rights of the Collateral Agent and the Secured Creditors in respect of the Secured Obligations including the right to claim for any deficiency.

Section 3.5 Receiver’s Powers.

(1) Any receiver appointed by the Collateral Agent is vested with the rights and remedies which could have been exercised by the Collateral Agent in respect of the Obligor or the Collateral and such other powers and discretions as are granted in the instrument of appointment and any supplemental instruments. The identity of the receiver, its replacement and its remuneration are within the sole and unfettered discretion of the Collateral Agent.

(2) Any receiver appointed by the Collateral Agent will act as agent for the Collateral Agent for the purposes of taking possession of the Collateral, but otherwise and for all other purposes (except as provided below), as agent for the Obligor. The receiver may sell, lease, or otherwise dispose of Collateral as agent for the Obligor or as agent for the Collateral Agent as the Collateral Agent may determine in its discretion. The Obligor agrees to ratify and confirm all actions of the receiver acting as agent for the Obligor, and to release and indemnify the receiver in respect of all such actions.

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(3) The Collateral Agent, in appointing or refraining from appointing any receiver, does not incur liability to the receiver, the Obligor or otherwise and is not responsible for any misconduct or negligence of such receiver.

Section 3.6 Appointment of Attorney.

The Obligor hereby irrevocably constitutes and appoints the Collateral Agent (and any officer of the Collateral Agent) the true and lawful attorney of the Obligor. As the attorney of the Obligor, the Collateral Agent has the power to exercise for and in the name of the Obligor with full power of substitution, upon the occurrence and during the continuance of an Event of Default, any of the Obligor’s right (including the right of disposal), title and interest in and to the Collateral including the execution, endorsement, delivery and transfer of the Collateral to the Collateral Agent, its nominees or transferees, and the Collateral Agent and its nominees or transferees are hereby empowered to exercise all rights and powers and to perform all acts of ownership with respect to the Collateral to the same extent as the Obligor might do. This power of attorney is irrevocable, is coupled with an interest, has been given for valuable consideration (the receipt and adequacy of which is acknowledged) and survives, and does not terminate upon, the bankruptcy, dissolution, winding up or insolvency of the Obligor. This power of attorney extends to and is binding upon the Obligor’s successors and permitted assigns. The Obligor authorizes the Collateral Agent to delegate in writing to another Person any power and authority of the Collateral Agent under this power of attorney as may be necessary or desirable in the opinion of the Collateral Agent, and to revoke or suspend such delegation.

Section 3.7 Dealing with the Collateral.

(1) The Collateral Agent and the Secured Creditors are not obliged to exhaust their recourse against the Obligor or any other Person or against any other security they may hold in respect of the Secured Obligations before realizing upon or otherwise dealing with the Collateral in such manner as the Collateral Agent may consider desirable.

(2) The Collateral Agent and the Secured Creditors may grant extensions or other indulgences, take and give up securities, accept compositions, grant releases and discharges and otherwise deal with the Obligor and with other Persons, sureties or securities as they may see fit without prejudice to the Secured Obligations, the liability of the Obligor or the rights of the Collateral Agent and the Secured Creditors in respect of the Collateral.

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(3) Except as otherwise provided by law or this Agreement, the Collateral Agent and the Secured Creditors are not (i) liable or accountable for any failure to collect, realize or obtain payment in respect of the Collateral, (ii) bound to institute proceedings for the purpose of collecting, enforcing, realizing or obtaining payment of the Collateral or for the purpose of preserving any rights of any Persons in respect of the Collateral, (iii) responsible for any loss occasioned by any sale or other dealing with the Collateral or by the retention of or failure to sell or otherwise deal with the Collateral, or (iv) bound to protect the Collateral from depreciating in value or becoming worthless.

Section 3.8 Standards of Sale.

Without prejudice to the ability of the Collateral Agent to dispose of the Collateral in any manner which is commercially reasonable, the Obligor acknowledges that:

(a) the Collateral may be disposed of in whole or in part;

(b) the Collateral may be disposed of by public auction, public tender or private contract, with or without advertising and without any other formality;

(c) any assignee of such Collateral may be the Collateral Agent, a Secured Creditor or a customer of any such Person;

(d) any sale conducted by the Collateral Agent will be at such time and place, on such notice and in accordance with such procedures as the Collateral Agent, in its sole discretion, may deem advantageous;

(e) the Collateral may be disposed of in any manner and on any terms necessary to avoid violation of applicable law (including compliance with such procedures as may restrict the number of prospective bidders and purchasers, require that the prospective bidders and purchasers have certain qualifications, and restrict the prospective bidders and purchasers to Persons who will represent and agree that they are purchasing for their own account for investment and not with a view to the distribution or resale of the Collateral) or in order to obtain any required approval of the disposition (or of the resulting purchase) by any governmental or regulatory authority or official;

(f) a disposition of the Collateral may be on such terms and conditions as to credit or otherwise as the Collateral Agent, in its sole discretion, may deem advantageous; and

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(g) the Collateral Agent may establish an upset or reserve bid or price in respect of the Collateral.

Section 3.9 Dealings by Third Parties.

(1) No Person dealing with the Collateral Agent, any of the Secured Creditors or an agent or receiver is required to determine (i) whether the Security Interest has become enforceable, (ii) whether the powers which such Person is purporting to exercise have become exercisable, (iii) whether any money remains due to the Collateral Agent or the Secured Creditors by the Obligor, (iv) the necessity or expediency of the stipulations and conditions subject to which any sale or lease is made, (v) the propriety or regularity of any sale or other dealing by the Collateral Agent or any Secured Creditor with the Collateral, or (vi) how any money paid to the Collateral Agent or the Secured Creditors has been applied.

(2) Any bona fide purchaser of all or any part of the Collateral from the Collateral Agent or any receiver or agent will hold the Collateral absolutely, free from any claim or right of whatever kind, including any equity of redemption, of the Obligor, which it specifically waives (to the fullest extent permitted by law) as against any such purchaser together with all rights of redemption, stay or appraisal which the Obligor has or may have under any rule of law or statute now existing or hereafter adopted.

Section 3.10 Registration Rights.

If the Collateral Agent determines to exercise its right to sell any or all of the Securities that are Collateral, and if in the opinion of the Collateral Agent it is necessary or advisable to have any such Securities:

(a) qualified for distribution by prospectus pursuant to the applicable securities legislation in any or all provinces and territories of Canada, the Obligor will use its best efforts to cause the issuer thereof to (i) use its best efforts to file, and obtain a receipt from the applicable securities regulatory authorities, for a preliminary and final prospectus offering for sale such number of Securities as the Collateral Agent directs; and (ii) execute and deliver, and cause the directors and officers of such issuer to execute and deliver, all such certificates, instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Collateral Agent, necessary or advisable to qualify such Securities for distribution by prospectus pursuant to the applicable securities legislation in any or all provinces of Canada; or

(b) sold or registered under the provisions of the U.S. Securities Act of 1933, as amended, the Obligor will use its best efforts to cause the

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issuer thereof to (i) execute and deliver, and cause the directors and officers of such issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register the Securities pledged hereunder, or that portion thereof to be sold, under the provisions of the U.S. Securities Act of 1933, as amended, (ii) use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Securities pledged hereunder, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the U.S. Securities Act of 1933, as amended, and the rules and regulations applicable thereto.

The Obligor agrees to use its best efforts to cause such issuer to comply with the provisions of the securities legislation in effect in any or all of the provinces of Canada, the U.S. Securities Act of 1933, as amended, and the securities or “Blue Sky” laws of any jurisdictions outside Canada, in each case, which the Collateral Agent designates.

ARTICLE 4

GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

The Obligor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows:

Section 4.1 Necessary Filings.

The Security Interest granted by the Obligor to the Collateral Agent pursuant to this Agreement in and to the Collateral for the benefit of the Collateral Agent and Secured Creditors creates a valid security interest and Lien upon the Obligor’s right, title and Interest to the Collateral and together with all such filings, registrations, recordings and other actions, a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the PPSA or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by possession or by filing a financing statement under the PPSA or other relevant law as enacted in any relevant jurisdiction. Upon the recordation of the Confirmation of Security Interest in the form of Schedule D in Registrable Intellectual Property with CIPO, together with the filings of financing statements under the PPSA made on or prior to the Effective

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Date, the Security Interest shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Obligor in the Registrable Intellectual Property, in each case prior and superior in right to any other person (it being understood that subsequent recordings in CIPO may be necessary to perfect a Lien on Registrable Intellectual Property acquired by the Obligor after the date hereof).

Section 4.2 No Liens.

The Obligor is, and as to all Collateral acquired by it from time to time after the date hereof the Obligor will be, the owner of all Collateral free from any Lien, security interest, encumbrance or other right, title or interest of any Person (other than Permitted Liens), and the Obligor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent.

Section 4.3 Other Financing Statements.

As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, the Obligor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by the Obligor or in connection with Permitted Liens.

Section 4.4 Chief Executive Office, Record Locations.

The chief executive office of the Obligor is, on the date of this Agreement, located at the address indicated on Schedule “C”. During the period of the four calendar months preceding the date of this Agreement, the chief executive office of the Obligor has not been located at any address other than that indicated on Schedule “C” in accordance with the immediately preceding sentence, in each case unless each such other address is also indicated on Schedule “C”.

Section 4.5 Location of Inventory and Equipment.

All inventory and equipment held on the date hereof, or held at any time during the four calendar months prior to the date hereof, by the Obligor is located at one of the locations, or in transit to one of the locations, shown on Schedule “C”.

Section 4.6 Legal Names; Type of Organization; Jurisdiction of Organization; Chief Executive Office; Changes Thereto; etc.

The exact legal name of the Obligor, the type of organization of the Obligor and the jurisdiction of organization of the Obligor is listed on Schedule “C”. The Obligor shall not change its legal name, its type of organization, its jurisdiction of

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organization or its chief executive office from that set forth on Schedule “C”, except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Credit Documents and so long as same do not involve the Obligor changing its jurisdiction of organization or chief executive office from Canada or a Province thereof to a jurisdiction of organization or chief executive office, as the case may be, outside Canada or a Province thereof) if (i) it shall have given to the Collateral Agent not less than 10 Business Days’ prior written notice of each change to the information listed on Schedule “C” (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Schedule “C” which shall correct all information contained therein, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.

Section 4.7 Trade Names; etc.

The Obligor does not have or operate in any jurisdiction under, or in the preceding five years has not had and has not operated in any jurisdiction under, any trade names, fictitious names or other names except its legal name as specified in Schedule “C” and such other trade or fictitious names as are listed on Schedule “B”. The Obligor shall not assume or operate in any jurisdiction under any new trade, fictitious or other name until (i) it shall have given to the Collateral Agent not less than 5 days’ written notice of its intention so to do, clearly describing such new name and the jurisdictions in which such new name will be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect.

Section 4.8 Certain Significant Transactions.

During the one year period preceding the date of this Agreement, no Person shall have merged or consolidated with or into the Obligor, and no Person shall have liquidated into, or transferred all or substantially all of its assets to, the Obligor, except as described in Schedule “C”. With respect to any transactions so described in Schedule “C”, the Obligor shall have furnished such information with respect to the Person (and the assets of the Person and locations thereof) which merged with or into or consolidated with the Obligor, or was liquidated into or transferred all or substantially all of its assets to the Obligor, and shall have furnished to the Collateral Agent such PPSA lien searches as may have been requested with respect to such Person and its assets, to establish that no security interest (excluding Permitted Liens) continues perfected on the date hereof with respect to any Person described above (or the assets transferred to the Obligor by such Person).

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Section 4.9 Unextracted Collateral; Timber-Until-it-is-Cut.

On the date hereof, the Obligor does not own, or expect to acquire, any property which constitutes, or would constitute, unextracted minerals or hydrocarbons or uncut timber. If at any time after the date of this Agreement the Obligor owns, acquires or obtains rights to any unextracted minerals or hydrocarbons or uncut timber, the Obligor shall furnish the Collateral Agent with prompt written notice thereof (which notice shall describe in reasonable detail the unextracted minerals or hydrocarbons or uncut timber and the locations thereof) and shall take all actions as may be deemed reasonably necessary or desirable by the Collateral Agent to perfect the security interest of the Collateral Agent therein.

Section 4.10 Collateral in the Possession of a Bailee.

If any inventory or other goods of the Obligor, the aggregate fair market value of which is equal to or greater than $250,000, are at any time in the possession of a bailee (other than the Collateral Agent), the Obligor shall promptly notify the Collateral Agent thereof and, if requested by the Collateral Agent, shall use its reasonable best efforts to promptly obtain an acknowledgment from such bailee, in form and substance reasonably satisfactory to the Collateral Agent, that the bailee holds such Collateral for the benefit of the Collateral Agent and shall act upon the instructions of the Collateral Agent, without the further consent of the Obligor. The Collateral Agent agrees with the Obligor that the Collateral Agent shall not give any such instructions unless an Event of Default has occurred and is continuing or would occur after taking into account any action by the Obligor with respect to any such bailee.

Section 4.11 Recourse.

This Agreement is made with full recourse to the Obligor and pursuant to and upon all the warranties, representations, covenants and agreements on the part of the Obligor contained herein, in the other Credit Documents and otherwise in writing in connection herewith or therewith.

ARTICLE 5

SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;

INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL

Section 5.1 Additional Representations and Warranties.

As of the time when each of its Accounts arises, the Obligor shall be deemed to have represented and warranted that each such Account, and all records, papers and documents relating thereto (if any) are genuine and what they purport to be, and that all papers and documents (if any) relating thereto (i) will, to the knowledge of the Obligor, represent the genuine, legal, valid and binding obligation of the account debtor evidencing indebtedness unpaid and owed by the respective account

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debtor arising out of the performance of labor or services or the sale or lease and delivery of the merchandise listed therein, or both, (ii) will be the only original writings evidencing and embodying such obligation of the account debtor named therein (other than copies created for general accounting purposes), (iii) will, to the knowledge of the Obligor, evidence true and valid obligations, enforceable in accordance with their respective terms, and (iv) will be in compliance and will conform in all material respects with all applicable federal, provincial and local laws and applicable laws of any relevant foreign jurisdiction.

Section 5.2 Maintenance of Records.

The Obligor will keep and maintain at its own cost and expense accurate records of its Accounts and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and the Obligor will make the same available on the Obligor’s premises to the Collateral Agent for inspection, at the Obligor’s own cost and expense, at any and all reasonable times upon prior notice to the Obligor and otherwise in accordance with the Credit Agreement. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, the Obligor shall, at its own cost and expense, deliver all tangible evidence of its Accounts and Contract Rights (including, without limitation, all documents evidencing the Accounts and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by the Obligor). Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs, the Obligor shall legend, in form and manner satisfactory to the Collateral Agent, the Accounts and the Contracts, as well as books, records and documents (if any) of the Obligor evidencing or pertaining to such Accounts and Contracts with an appropriate reference to the fact that such Accounts and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein.

Section 5.3 Direction to Account Debtors; Contracting Parties; etc.

Upon the occurrence and during the continuance of an Event of Default following written notice to the Obligor, if the Collateral Agent so directs the Obligor, the Obligor agrees (x) to cause all payments on account of the Accounts and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Accounts and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Accounts and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as the Obligor. Without notice to or assent by the Obligor, the Collateral Agent may, upon the occurrence and during the continuance of an Event of Default, apply any or all

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amounts then in, or thereafter deposited in, the Cash Collateral Account toward the payment of the Obligations in the manner provided in Section 10.10 of this Agreement. The reasonable costs and expenses of collection (including reasonable legal fees), whether incurred by the Obligor or the Collateral Agent, shall be borne by the Obligor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the Obligor, provided that (x) the failure by the Collateral Agent to so notify the Obligor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 5.3 and (y) no such notice shall be required if an Event of Default of the type described in Section 10.05 of the Credit Agreement has occurred and is continuing.

Section 5.4 Modification of Terms; etc.

Except in accordance with the Obligor’s ordinary course of business and consistent with reasonable business judgment or as permitted by Section 5.5, the Obligor shall not rescind or cancel any indebtedness evidenced by any Account or under any Contract, or modify any material term thereof or make any material adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Account or Contract, or interest therein without the prior written consent of the Collateral Agent unless such rescissions, cancellations, modifications, adjustments, extensions, renewals, compromises, settlements, releases or sales would not reasonably be expected to materially adversely affect the value of the Accounts or Contracts constituting Collateral taken as a whole. The Obligor will not do anything to impair the rights of the Collateral Agent in the Accounts or Contracts.

Section 5.5 Collection.

The Obligor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Accounts or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Account or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Account or under such Contract. Except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, the Obligor may allow in the ordinary course of business as adjustments to amounts owing under its Accounts and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which the Obligor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which the Obligor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable legal fees) of collection, whether incurred by the Obligor or the Collateral Agent, shall be borne by the Obligor.

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Section 5.6 Instruments.

If the Obligor owns or acquires any Instrument constituting Collateral (other than checks and other payment instruments received and collected in the ordinary course of business), the Obligor will within 10 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent, provided that, so long as no Event of Default shall have occurred and be continuing, the Obligor may retain for collection in the ordinary course of business any Instrument received by the Obligor in the ordinary course of business, and the Collateral Agent shall, promptly upon request of the Obligor, make appropriate arrangements for making any Instruments in its possession and pledged by the Obligor available to the Obligor for purposes of presentation, collection or renewal. If the Obligor retains possession of any Instruments pursuant to the terms hereof, such Instrument shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interests of Deutsche Bank Trust Company Americas, as collateral agent, for the benefit of itself and certain Lenders”.

Section 5.7 Obligor Remains Liable Under Accounts.

Anything herein to the contrary notwithstanding, the Obligor shall remain liable under each of the Accounts to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Accounts. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Account pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of the Obligor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the sufficiency of any performance by any party under any Account (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

Section 5.8 Obligor Remains Liable Under Contracts.

Anything herein to the contrary notwithstanding, the Obligor shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance

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with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of the Obligor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times.

Section 5.9 Deposit Accounts; etc.

The Obligor does not maintain, or at any time after the date of this Agreement shall not establish or maintain, any demand, time, savings, passbook or similar account, except for such accounts maintained with a bank whose jurisdiction is within a Province of Canada. Schedule “E” accurately sets forth, as of the date of this Agreement, each Deposit Account maintained by the Obligor (including a description thereof and the respective account number), the name of the respective bank with which such Deposit Account is maintained, and the jurisdiction of the respective bank with respect to such Deposit Account.

Section 5.10 Letter-of-Credit Rights.

If the Obligor is at any time a beneficiary under a letter of credit with a stated amount of $1,000,000 or more, the Obligor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, the Obligor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, use its reasonable best efforts to (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under such letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of such letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be applied as provided in this Agreement after the occurrence and during the continuance of an Event of Default (it being understood that unless an Event of Default has occurred and is continuing such proceeds shall be released to the Obligor).

Section 5.11 Chattel Paper.

The Obligor will promptly (and in any event within 10 days) following any reasonable request by the Collateral Agent, deliver all of its chattel paper to the Collateral Agent, provided that, so long as no Event of Default shall have occurred and be continuing, the Obligor may retain for collection in the ordinary course of business any chattel paper received by the Obligor in the ordinary course of

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business, and the Collateral Agent shall, promptly upon request of the Obligor, make appropriate arrangements for making any chattel paper in its possession and pledged by the Obligor available to the Obligor for purposes of presentation, collection or renewal. If the Obligor retains possession of any chattel paper pursuant to the terms hereof, such chattel paper shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interests of Deutsche Bank Trust Company Americas, as collateral agent, for the benefit of itself and certain Lenders”.

Section 5.12 Further Actions.

The Obligor will, at its own expense, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps, including any and all actions as may be necessary or required, relating to its Accounts, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require.

Section 5.13 Overriding Provisions with respect to TL Priority Collateral.

Notwithstanding anything to the contrary contained above in this Article III, or elsewhere in this Agreement or any other U.S. Security Agreement, to the extent the provisions of this Agreement (or any other Security Documents) require the delivery of, or control over, TL Priority Collateral to be granted to the Collateral Agent at any time prior to the TL Credit Documents Obligations Termination Date, then delivery of such TL Priority Collateral (or control with respect thereto) shall instead be granted to the Term Collateral Agent, to be held in accordance with the TL Credit Documents and the Intercreditor Agreement. Furthermore, at all times prior to the TL Credit Document Obligations Termination Date, the Collateral Agent is authorized by the parties hereto to effect the transfers of TL Priority Collateral at any time in it possession (and any “control” or similar agreements with respect to the TL Priority Collateral) to the Term Collateral Agent.

ARTICLE 6

SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN

NAMES

Section 6.1 Additional Representations and Warranties.

The Obligor represents and warrants that it is the true and lawful owner of all right, title and interest in and to the registered Marks and Domain Names listed in Schedule B and that said listed Marks and Domain Names include all Canadian marks registered in and applications for Canadian marks pending in CIPO and all

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Domain Names, that the Obligor owns or purports to own as of the date hereof. The Obligor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all Marks and Domain Names that it uses. The Obligor further warrants that it has no knowledge of any third party claim received by it that any aspect of the Obligor’s present or contemplated business operations infringes or will infringe any trademark, service mark or trade name of any other Person other than as has not, and would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Obligor represents and warrants that all Canadian trademark registrations and applications and Domain Name registrations listed in Schedule B are valid, subsisting, have not been cancelled and that the Obligor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said registrations is invalid or unenforceable, and is not aware that there is any reason that any of said applications will not mature into registrations. The Obligor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by CIPO or similar registrar in order to effect an absolute assignment of all right, title and interest in each Mark and/or Domain Name, and record the same.

Section 6.2 Licenses and Assignments.

Except as otherwise permitted by the Credit Documents, the Obligor hereby agrees not to divest itself of any right under any Mark or Domain Name absent prior written approval of the Collateral Agent.

Section 6.3 Infringements.

The Obligor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who the Obligor believes is, or may be, infringing or diluting or otherwise violating any of the Obligor’s rights in and to any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse Effect, or with respect to any party claiming that the Obligor’s use of any Mark or Domain Name material to the Obligor’s business violates in any material respect any property right of that party. The Obligor further agrees to prosecute diligently in accordance with reasonable business practices any Person infringing any Mark or Domain Name in any manner that could reasonably be expected to have a Material Adverse Effect.

Section 6.4 Preservation of Marks and Domain Names.

The Obligor agrees to use its Marks and Domain Names which are material to it’s business during the time in which this Agreement is in effect and to take all such other actions as are reasonably necessary to preserve such Marks as trademarks or service marks under the laws of Canada (other than any such Marks or Domain Names which are no longer used or useful in its business or operations).

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Section 6.5 Maintenance of Registration.

The Obligor shall, at its own expense, diligently process all documents reasonably required to maintain all Mark and/or Domain Name registrations, including but not limited to affidavits of use and applications for renewals of registration in CIPO for all of its material registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent such consent not to be unreasonably withheld or delayed (other than with respect to registrations and applications deemed by the Obligor in its reasonable business judgment to be no longer prudent to pursue).

Section 6.6 Future Registered Marks and Domain Names.

If any Mark registration is issued hereafter to the Obligor as a result of any application now or hereafter pending before CIPO or any Domain Name is registered by the Obligor, within 60 days of receipt of such certificate or similar indicia of ownership, the Obligor shall deliver to the Collateral Agent a copy of such registration certificate or similar indicia of ownership with a Confirmation of Security Interest in the form of Schedule D in respect of such Mark and/or Domain Name confirming the assignment for security of such Mark and/or Domain Name and immediately make all such filings, registrations and recordings as are necessary or appropriate to perfect the Security Interest granted to the Collateral Agent in the Mark and/or Domain Name.

Section 6.7 Remedies.

If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the Obligor, take any or all of the following actions: (i) declare the entire right, title and interest of the Obligor in and to each of the Marks and Domain Names, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 3.6 to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency or registrar; (ii) take and use or sell the Marks or Domain Names and the goodwill of the Obligor’s business symbolized by the Marks or Domain Names and the right to carry on the business and use the assets of the Obligor in connection with which the Marks or Domain Names have been used; and (iii) direct the Obligor to refrain, in which event the Obligor shall refrain, from using the Marks or Domain Names in any manner whatsoever, directly or indirectly, and the Obligor

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shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks or Domain Names and registrations and any pending trademark applications in the Canadian Intellectual Property Office or applicable Domain Name registrar to the Collateral Agent.

ARTICLE 7

SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND

TRADE SECRETS

Section 7.1 Additional Representations and Warranties.

The Obligor represents and warrants that it is the true and lawful owner of all rights in (i) all Trade Secret Rights, (ii) the Patents listed in Schedule “B” and that said Patents include all the Canadian patents and pending applications for Canadian patents that the Obligor owns or purports to own as of the date hereof and (iii) the Copyrights listed in Schedule “B” for and that said Copyrights include all the Canadian copyrights registered with CIPO and applications to Canadian copyrights that the Obligor owns or purports to own as of the date hereof. The Obligor further warrants and that it has no knowledge of any third party claim that any aspect of the Obligor’s present or contemplated business operations infringes or will infringe any patent or copyright of any other Person or the Obligor has misappropriated any trade secret or proprietary information which, in either of the foregoing cases either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. The Obligor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by CIPO in order to effect an absolute assignment of all right, title and interest in each Patent or Copyright, and to record the same.

Section 7.2 Licenses and Assignments.

Except as otherwise permitted by the Credit Documents, the Obligor hereby agrees not to divest itself of any right under any Patent or Copyright absent prior written approval of the Collateral Agent.

Section 7.3 Infringements.

The Obligor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to the Obligor with respect to any infringement, contributing infringement or active inducement to infringe or other violation of the Obligor’s rights in any Patent or Copyright or to any written claim received by the Obligor that the practice of any patent or use of any copyright violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any written claim received by the Obligor that practice

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of any trade secret violates any property right of a third party, in each case, in any manner which, either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The Obligor further agrees, absent direction of the Collateral Agent to the contrary, to diligently prosecute, in accordance with its reasonable business judgment, any Person infringing any Patent or Copyright or any Person misappropriating any Trade Secret Right, in each case to the extent that such infringement or misappropriation, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 7.4 Maintenance of Patents or Copyrights.

At its own expense, the Obligor shall make timely payment of all post-issuance fees required to maintain in force its rights under each Patent or Copyright, absent prior written consent of the Collateral Agent (other than any such Patents or Copyrights which are no longer used or are deemed by the Obligor in its reasonable business judgment to no longer be necessary or useful in its business or operations).

Section 7.5 Prosecution of Patent or Copyright Applications.

At its own expense, the Obligor shall diligently prosecute all material applications for (i) Canadian Patents listed in Schedule “B” and (ii) Copyrights listed on Schedule “B”, in each case for the Obligor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies (other than applications that are deemed by the Obligor in its reasonable business judgment to no longer be necessary in the conduct of the Obligor’s business), absent written consent of the Collateral Agent not to be unreasonably withheld.

Section 7.6 Other Patents and Copyrights.

Within 30 days of acquisition or issuance of a Patent, registration of a Copyright, acquisition of a Copyright, or a filing of an application for a Patent or Copyright, as the case may be, the Obligor shall deliver to the Collateral Agent a copy of said Copyright or Patent, or certificate or registration of, or application therefor, as the case may be with a Confirmation of Security Interest in the form of Schedule D in respect of such Patent or Copyright confirming the assignment for security of such Patent or Copyright and immediately make all such filings, registrations and recordings as are necessary or appropriate to perfect the Security Interest granted to the Collateral Agent in the Patent or Copyright.

Section 7.7 Remedies.

If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the Obligor, take any or all of the following actions: (i) declare the entire right, title, and interest of the Obligor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Creditors, in which case the Collateral Agent

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shall be entitled to exercise the power of attorney referred to in Section 3.6 to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct the Obligor to refrain, in which event the Obligor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and the Obligor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Creditors.

ARTICLE 8

PROVISIONS CONCERNING ALL COLLATERAL

Section 8.1 Protection of Collateral Agent’s Security.

Except as otherwise permitted by the Credit Documents, the Obligor will do nothing to impair the rights of the Collateral Agent in the Collateral. The Obligor will at all times maintain insurance, at the Obligor’s own expense to the extent and in the manner provided in the Credit Documents. If any Event of Default shall have occurred and be continuing, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 10.10. The Obligor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of the Obligor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to the Obligor.

Section 8.2 Warehouse Receipts Non-Negotiable.

To the extent practicable, the Obligor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its inventory, the Obligor shall request that such warehouse receipt or receipt in the nature thereof shall not be negotiable.

Section 8.3 Additional Information.

The Obligor will, at its own expense, from time to time upon the reasonable request of the Collateral Agent, promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such information with respect to the Collateral (including the identity of the Collateral or such components thereof as may have been reasonably requested by the Collateral Agent, the value and location of such Collateral, etc.) as may be requested by the Collateral Agent. Without limiting the forgoing, the Obligor agrees that it shall promptly (and in any event within 10 Business Days after its receipt of the respective request) furnish to the Collateral Agent such updated Schedules as may from time to time be reasonably requested by the Collateral Agent.

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Section 8.4 Further Actions.

The Obligor will, at its own expense and upon the reasonable request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral at leas to the extent described in Section 4.1.

Section 8.5 Financing Statements.

The Obligor agrees to execute if required and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are reasonably necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby at least to the extent described in Section 4.1. The Obligor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. The Obligor hereby authorizes the Collateral Agent to file any such financing statements without the signature of the Obligor where permitted by law (and such authorization includes describing the Collateral as Inventory, Equipment, Accounts, Other and Motor Vehicles Included or all of the present and after-acquired personal property of the Obligor, as applicable in such jurisdiction).

ARTICLE 9

INDEMNITY

Section 9.1 Indemnity.

(1) The Obligor agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, assigns, employees, affiliates and agents (hereinafter in this Section 9.1(1) referred to individually as “Indemnitee”, and collectively as “Indemnitees”) harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable legal fees and expenses) (for the purposes of this Section 9.1(1) the foregoing are collectively called “Indemnified Liabilities”) of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to

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or arising out of this Agreement, any other Credit Documents or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 9.1(1) for Indemnified Liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee, any Affiliate of such Indemnitee, or any of their respective directors, officers, employees, representatives, agents, Affiliates, trustees or investment advisors (as determined by a court of competent jurisdiction in a final and non-appealable decision). The Obligor agrees that upon written notice by any Indemnitee of the assertion of such Indemnified Liabilities, the Obligor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the Obligor of any such assertion of which such Indemnitee has knowledge.

(2) Without limiting the application of Section 9.1(1), the Obligor agrees to pay or reimburse the Collateral Agent for any and all reasonable fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent’s Liens on, and security interest in, the Collateral, including all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent’s interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral.

(3) Without limiting the application of Section 9.1(1) and Section 9.1(2), the Obligor agrees to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by the Obligor in this Agreement, any other Credit Document or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Credit Document.

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(4) If and to the extent that the obligations of the Obligor under this Section 9.1 are unenforceable for any reason, the Obligor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law.

Section 9.2 Indemnity Obligations Secured by Collateral; Survival.

Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of the Obligor contained in this Article 9 shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all of the Notes issued, and Loans made, under the Credit Agreement, and notwithstanding the discharge thereof and the occurrence of the Termination Date.

ARTICLE 10

GENERAL

Section 10.1 Notices.

Any notices, directions or other communications provided for in this Agreement must be in writing and given in accordance with the Credit Agreement.

Section 10.2 The Collateral Agent and the other Secured Creditors.

The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Section 12 of the Credit Agreement. The Collateral Agent shall act hereunder on the terms and conditions set forth in Section 12 of the Credit Agreement.

Section 10.3 No Merger, Survival of Representations and Warranties.

This Agreement does not operate by way of merger of any of the Secured Obligations and no judgment recovered by the Collateral Agent or any of the Secured Creditors will operate by way of merger of, or in any way affect, the Security Interest, which is in addition to, and not in substitution for, any other security now or hereafter held by the Collateral Agent and the Secured Creditors in respect of the Secured Obligations. The representations, warranties and covenants of the Obligor in this Agreement survive the execution and delivery of this Agreement and any advances under the Credit Agreement. Notwithstanding any investigation made by or on behalf of the Collateral Agent or the Secured Creditors the covenants, representations and warranties continue in full force and effect.

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Section 10.4 Further Assurances.

The Obligor will do all acts and things and execute and deliver, or cause to be executed and delivered, all documents and instruments that the Collateral Agent may require and take all further steps relating to the Collateral or any other property or assets of the Obligor that the Collateral Agent may require for (i) protecting the Collateral, (ii) perfecting the Security Interest, and (iii) exercising all powers, authorities and discretions conferred upon the Collateral Agent. After the Security Interest becomes enforceable, the Obligor will do all acts and things and execute and deliver all documents and instruments that the Collateral Agent may require for facilitating the sale or other disposition of the Collateral in connection with its realization.

Section 10.5 Supplemental Security.

This Agreement is in addition to, without prejudice to and supplemental to all other security now held or which may hereafter be held by the Collateral Agent or the Secured Creditors.

Section 10.6 Successors and Assigns.

This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 10.9, (ii) be binding upon the Obligor, its successors and assigns; provided, however, that the Obligor shall not assign any of its rights or obligations hereunder without the prior written consent of the Collateral Agent (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by the Obligor herein or in any certificate or other instrument delivered by the Obligor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Credit Documents regardless of any investigation made by the Secured Creditors or on their behalf.

Section 10.7 Severability.

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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Section 10.8 Amendment and Waiver.

Except as provided in Section 10.9, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by the Obligor (or, to the extent any other Security Document requires waivers or amendments thereunder to occur in accordance with the provisions of this Agreement, the pledgor, transferor, mortgagor under such other Security Document) and the Collateral Agent (with the written consent of the Required Secured Creditors); provided, however that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) also shall require the written consent of the Requisite Creditors of such affected Class. For the purpose of this Agreement, 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 Agreement, the term “Requisite Creditors” of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders (or, to the extent provided in Section 13.12 of the Credit Agreement, each of the Lenders), and (y) with respect to the Other Obligations, the holders of at least a majority of all Other Obligations outstanding from time to time.

Section 10.9 Termination; Release.

(1) After the Termination Date, this Agreement shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Obligor (provided that all indemnities set forth herein including, without limitation, in Section 9.1 hereof, shall survive termination) and the Collateral Agent, at the request and expense of the Obligor, will promptly execute and deliver to the Obligor a proper instrument or instruments (including PPSA discharge statements) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to the Obligor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent or any of its sub agents hereunder and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement.

(2) In the event that any part of the Collateral is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the Termination Date, in connection with a sale or disposition permitted by Section 9.02 of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 13.12 of the Credit Agreement), or (y) at any time thereafter, to the extent permitted by the Other Credit Documents, and in the case of clauses (x) and (y), the proceeds of such sale or disposition (or from such release) are applied in accordance with the

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terms of the Credit Agreement or other Credit Document, as the case maybe, to the extent required to be so applied, the Collateral Agent, at the request and expense of the Obligor, will duly release from the Security Interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to the Obligor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or otherwise disposed of, or released, and as may be in the possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement.

(3) At any time that the Obligor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.9(1) or (2), the Obligor shall deliver to the Collateral Agent a certificate signed by a principal executive officer of the Obligor stating that the release of the respective Collateral is permitted pursuant to such Section 10.9(1) or (2). If reasonably requested by the Collateral Agent (although the Collateral Agent shall have no obligation to make such request), the Obligor shall furnish appropriate legal opinions (from counsel, reasonably acceptable to the Collateral Agent) to the effect set forth in this Section 10.9(3).

(4) The Collateral Agent shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with (or which the Collateral Agent believes to be in accordance with) this Section 10.9.

Section 10.10 Application of Proceeds of Security.

(1) All monies collected by the Collateral Agent (or to the extent any other Security Document requires proceeds of collateral under such other Security Document to be applied in accordance with the provisions of this Agreement, the collateral agent under such other Security Document) upon any sale or other disposition of Collateral, together with all other moneys received by the Collateral Agent hereunder shall be applied as follows:

(a) first, to the payment of all amounts owing to the Collateral Agent of the type described in clauses (c), (d) and (e) of the definition of “Obligations”;

(b) second, to the extent proceeds remain after the application pursuant to the Section 10.10(1)(a), to the payment of all amounts owing to the Administrative Agent and the Collateral Agent of the type described in clauses (e) and (f) of the definition of “Obligations”;

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(c) third, to the extent proceeds remain after the applications pursuant to the preceding Section 10.10(1)(a) and (b), an amount equal to the outstanding Primary Obligations shall be paid to the Secured Creditors, with each Secured Creditor receiving an amount equal to its outstanding Primary Obligations or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share of the amount remaining to be distributed;

(d) fourth, to the extent proceeds remain after the applications pursuant to the Section 10.10(1)(a) through (c), inclusive, an amount equal to the outstanding Secondary Obligations shall be paid to the Secured Creditors, with each Secured Creditor receiving an amount equal to its outstanding Secondary Obligations or, if the proceeds are insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed;

(e) fifth, to the extent proceeds remain after the application pursuant to preceding clauses (a) through (d), inclusive, notably to any of their remaining unpaid Obligations; and

(f) sixth, to the extent proceeds remain after the applications pursuant to Section 10.10(1)(a) through (e), inclusive, and following the termination of this Agreement pursuant to Section 10.9, to the Obligor or to whomever may be lawfully entitled to receive such surplus.

(2) For the purposes of this Agreement: (i) “Pro Rata Share” means when calculating a Secured Creditor’s portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction, the numerator of which is the then unpaid amount of such Secured Creditor’s Primary Obligations or Secured Creditor’s Secondary Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary Obligations of all Secured Creditors or all Secondary Obligations of all Secured Creditors, respectively; (ii) “Primary Obligations” means (i) in the case of the Credit Document Obligations, all unpaid principal of, premium, if any, fees and interest on, all Loans, all Unpaid Drawings, the Stated Amount of all outstanding Letters of Credit and all Fees and (ii) in the case of the Other Obligations, all amounts due under each Interest Rate Protection Agreement with an Other Creditor (other than indemnities, fees (including, without limitation, attorneys’ fees) and similar obligations and liabilities); and (iii) “Secondary Obligations” means all Obligations which do not constitute Primary Obligations.

(3) When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall

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be applied (for the purposes of making determinations under this Section 10.10 only) (i) first, to their respective Primary Obligations; and (ii) second, to their respective Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution.

(4) Each of the Secured Creditors, by their acceptance of the benefits hereof and of the other Security Documents to which the Obligor is a party, agrees and acknowledges that if the Lender Creditors receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which shall only occur after all outstanding Revolving Loans under the Credit Agreement and Unpaid Drawings have been paid in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and rateable benefit of the Lender Creditors, as cash security for the repayment of Secured Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon termination of all outstanding Letters of Credit under the Credit Agreement, and after the application of all such cash security the repayment of all Secured Obligations owing to the Secured Creditors after giving effect to the termination of all such Letters of Credit, if there remains any excess cash, such excess cash shall be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with this Section.

(5) All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent for the account of the Lender Creditors and (y) if to the Other Creditors, to the trustee paying agent or other similar representation (each, a “Representative”) for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors.

(6) For the purposes of applying payments received in accordance with this Section, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent and (ii) the Representative or, in the absence of such a Representative, upon the Other Creditors for a determination (which the

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Administrative Agent, each Representative and the Other Creditors agree (or shall agree) to provide upon the request of the Collateral Agent) of the outstanding Primary Obligations and Secondary Obligations owed to the Secured Creditors. Until it has received written notice from a Secured Creditor to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless it has written notice from an Other Creditor to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Interest Rate Protection Agreements are in existence.

(7) It is understood that the Obligor shall remain liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Secured Obligations.

Section 10.11 Conflict

In the event of any conflict between the provisions of this Agreement and the provisions of the Credit Agreement which cannot be resolved by both provisions being complied with, the provisions contained in the Credit Agreement will prevail to the extent of such conflict.

Section 10.12 Governing Law.

(1) This Agreement will be governed by, interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

(2) The Obligor irrevocably attorns and submits to the exclusive jurisdiction of any court of competent jurisdiction of the Province of Ontario sitting in Toronto, Ontario in any action or proceeding arising out of or relating to this Agreement and the other Credit Documents to which it is a party. The Obligor irrevocably waives objection to the venue of any action or proceeding in such court or that such court provides an inconvenient forum. Nothing in this Section limits the right of the Collateral Agent to bring proceedings against the Obligor in the courts of any other jurisdiction.

(3) The Obligor hereby irrevocably consents to the service of any and all process in any such action or proceeding by the delivery of copies of such process to the Obligor at 8607 Roberts Drive, Suite 250, Atlanta, Georgia, USA 30350. Nothing in this Section affects the right of the Collateral Agent to serve process in any manner permitted by law.

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IN WITNESS WHEREOF the Obligor has executed this Agreement.

ICL INDUSTRIAL CONTAINERS ULC
Per:	/s/ Jeffrey M. O’Connell
	Title: Vice President and Secretary

EX-4.13

Exhibit 4.13

PLEDGE AGREEMENT

PLEDGE AGREEMENT (as amended, modified, restated and/or supplemented from time to time, this “Agreement”), dated as of July 17, 2006, among each of the undersigned pledgors (each, a “Pledgor” and, together with any other entity that becomes a pledgor hereunder pursuant to Section 30 hereof, the “Pledgors”) and Deutsche Bank Trust Company Americas, as collateral agent (together with any successor collateral agent, the “Pledgee”), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, all 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 “U.S. Borrower”), ICL Industrial Containers ULC, a Nova Scotia unlimited liability company (the “Canadian Borrower” and, together with the U.S. Borrower, the “Borrowers” and each a “Borrower”), the lenders party thereto from time to time (the “Lenders”), LaSalle Bank, N.A., as Documentation Agent, 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 17, 2006 (as amended, modified, restated and/or supplemented from time to time, the “Credit Agreement”), providing for the making of Loans to, and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers, all as contemplated therein (the Lenders, each Issuing Lender, the Administrative Agent, the Collateral Agent, each other Agent and the Pledgee are herein called the “Lender Creditors”);

WHEREAS, each Borrower and/or one or more of their respective 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 successors and assigns, if any, collectively, the “Other Creditors” and, together with the Lender Creditors, the “Secured Creditors”);

WHEREAS, pursuant to the Credit Agreement Party Guaranty, each of Holdings, the U.S. Borrower and the Canadian Borrower has guaranteed to the Secured Creditors the payment when due of all of its Relevant Guaranteed Obligations as described therein;

WHEREAS, pursuant to the U.S. Subsidiaries Guaranty, each U.S. Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations (as defined in the U.S. Subsidiaries Guaranty);

WHEREAS, it is a condition precedent to the making of Loans to the Borrowers and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement and to the Other Creditors entering into Interest Rate

Protection Agreements that each Pledgor shall have executed and delivered to the Pledgee this Agreement; and

WHEREAS, each Pledgor will obtain benefits from the incurrence of Loans by the Borrowers and the issuance of, and participation in, Letters of Credit for the respective accounts of the Borrowers under the Credit Agreement and the entering into by the Borrowers and/or one or more of their respective Subsidiaries of Interest Rate Protection Agreements and, accordingly, desires to execute this Agreement in order to satisfy the condition described in the preceding paragraph and to induce the Lenders to make Loans to the Borrowers and issue, and/or participate in, Letters of Credit for the respective accounts of the Borrowers and the Other Creditors to enter into Interest Rate Protection Agreements with the Borrowers and/or one or more of their respective Subsidiaries;

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

1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the benefit of the Secured Creditors to secure:

(i) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, unpaid principal (or Face Amount, as applicable), premium, if any, interest (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor or any Subsidiary thereof at the rate provided for in the respective documentation, whether or not a claim for post-petition interest is allowed in any such proceeding), reimbursement obligations under Letters of Credit, fees, costs and indemnities) of such Pledgor owing to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with, the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the case of each Pledgor that is a Guarantor, all such obligations, liabilities and indebtedness of such Pledgor under its Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations, liabilities and indebtedness under this clause (i), except to the extent consisting of obligations, liabilities or indebtedness with respect to Interest Rate Protection Agreements, entitled to the benefits of this Agreement being herein collectively called the “Credit Document Obligations”);

(ii) the full and prompt payment when due (whether at stated maturity, by acceleration or otherwise) of all obligations, liabilities and indebtedness (including, without limitation, all interest that accrues after the commencement of any case, proceeding or other action relating to the bankruptcy, insolvency, reorganization or similar proceeding of any Pledgor at the rate provided for in the respective documentation,

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whether or not a claim for post-petition interest is allowed in any such proceeding) owing by such Pledgor to the Other Creditors now existing or hereafter incurred under, arising out of or in connection with any Interest Rate Protection Agreement, whether such Interest Rate Protection Agreement is now in existence or hereinafter arising (including, in the case of a Pledgor that is a Guarantor, all obligations, liabilities and indebtedness of such Pledgor under its Guaranty in respect of the Interest Rate Protection Agreements), and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in each such Interest Rate Protection Agreement (all such obligations, liabilities and indebtedness under this clause (ii) being herein collectively called the “Other Obligations”);

(iii) any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral;

(iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of such Pledgor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys’ fees and court costs;

(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 11 of this Agreement; and

(vi) all amounts owing to any Agent or any of its affiliates pursuant to any of the Credit Documents in its capacity as such;

all such obligations, liabilities, indebtedness, sums and expenses set forth in clauses (i) through (vi) of this Section 1 being herein collectively called the “Obligations”, it being acknowledged and agreed that the “Obligations” shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement.

2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa.

(b) The following capitalized terms used herein shall have the definitions specified below:

“Administrative Agent” shall have the meaning set forth in the recitals hereto.

“Adverse Claim” shall have the meaning given such term in Section 8-102(a)(1) of the UCC.

“Agreement” shall have the meaning set forth in the first paragraph hereof.

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“Borrower” and “Borrowers” shall have the meaning set forth in the recitals hereto.

“Canadian Borrower” shall have the meaning set forth in the recitals hereto.

“Certificated Security” shall have the meaning given such term in Section 8-102(a)(4) of the UCC.

“Clearing Corporation” shall have the meaning given such term in Section 8-102(a)(5) of the UCC.

“Collateral” shall have the meaning set forth in Section 3.1 hereof.

“Collateral Accounts” shall mean any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited.

“Credit Agreement” shall have the meaning set forth in the recitals hereto.

“Credit Document Obligations” shall have the meaning set forth in Section 1(i) hereof.

“Domestic Corporation” shall have the meaning set forth in the definition of “Stock.”

“Event of Default” shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Obligations after the expiration of any applicable grace period.

“Excess Exempted Foreign Entity Voting Equity Interests” shall have the meaning provided in Section 3.1.

“Exempted Foreign Entity” shall mean any Foreign Corporation and any Person organized under the laws of a jurisdiction other than the United States or any State or Territory thereof that, in any such case, is treated as a corporation or an association taxable as a corporation for U.S. Federal income tax purposes.

“Financial Asset” shall have the meaning given such term in Section 8-102(a)(9) of the UCC.

“Foreign Corporation” shall have the meaning set forth in the definition of “Stock”.

“Holdings” shall have the meaning set forth in the recitals hereto.

“Indemnitees” shall have the meaning set forth in Section 11 hereof.

“Instrument” shall have the meaning given such term in Section 9-102(a)(47) of the UCC.

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“Investment Property” shall have the meaning given such term in Section 9-102(a)(49) of the UCC.

“Lender Creditors” shall have the meaning set forth in the recitals hereto.

“Lenders” shall have the meaning set forth in the recitals hereto.

“Limited Liability Company Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned by any Pledgor or represented by any Limited Liability Company Interest.

“Limited Liability Company Interests” shall mean the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company.

“Location” of any Pledgor has the meaning given such term in Section 9-307 of the UCC.

“Non-Voting Equity Interests” shall mean all Equity Interests of any Person which are not Voting Equity Interests.

“Notes” shall mean (x) all intercompany notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor.

“NSCA” shall mean the Companies Act (Nova Scotia).

“Obligations” shall have the meaning set forth in Section 1 hereof.

“Other Creditors” shall have the meaning set forth in the recitals hereto.

“Other Obligations” shall have the meaning set forth in Section 1(ii) hereof.

“Partnership Assets” shall mean all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned by any Pledgor or represented by any Partnership Interest.

“Partnership Interest” shall mean the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership.

“Pledged Notes” shall mean all Notes at any time pledged or required to be pledged hereunder.

“Pledgee” shall have the meaning set forth in the first paragraph hereof.

“Pledgor” shall have the meaning set forth in the first paragraph hereof.

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“Proceeds” shall have the meaning given such term in Section 9-102(a)(64) of the UCC.

“Registered Organization” shall have the meaning given such term in Section 9-102(a)(70) of the UCC.

“Required Lenders” shall have the meaning given such term in the Credit Agreement.

“Required Secured Creditors” shall have the meaning provided in the U.S. Security Agreement.

“Secured Creditors” shall have the meaning set forth in the recitals hereto.

“Secured Debt Agreements” shall mean and includes (x) this Agreement, (y) the other Credit Documents and (z) the Interest Rate Protection Agreements entered into with any Other Creditors.

“Securities Account” shall have the meaning given such term in Section 8-501(a) of the UCC.

“Securities Act” shall mean the Securities Act of 1933, as amended, as in effect from time to time.

“Securities Intermediary” shall have the meaning given such term in Section 8-102(a)(14) of the UCC.

“Security” and “Securities” shall have the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event also include all Stock and all Notes.

“Security Entitlement” shall have the meaning given such term in Section 8-102(a)(17) of the UCC.

“Stock” shall mean (x) with respect to corporations, companies or other bodies corporate incorporated under the laws of the United States or any State or territory thereof or the District of Columbia (each, a “Domestic Corporation”), all of the issued and outstanding shares of capital stock of any Domestic Corporation at any time owned by any Pledgor and (y) with respect to corporations, companies or other bodies corporate (including ULCs) not Domestic Corporations (each, a “Foreign Corporation”), all of the issued and outstanding shares of capital stock of any Foreign Corporation at any time owned by any Pledgor.

“Termination Date” shall have the meaning set forth in Section 20 hereof.

“Transmitting Utility” has the meaning given such term in Section 9-102(a)(80) of the UCC.

“UCC” shall mean the Uniform Commercial Code as in effect in the State of New York from time to time; provided that all references herein to specific Sections or sub-

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sections of the UCC are references to such Sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof.

“ULC” shall mean an unlimited company (sometimes called an “unlimited liability company”) existing under the NSCA.

“ULC Share” shall mean a share of Stock or other Equity Interest carrying membership rights issued by a ULC.

“Uncertificated Security” shall have the meaning given such term in Section 8-102(a)(18) of the UCC.

“U.S. Borrower” shall have the meaning set forth in the recitals hereto.

“Voting Equity Interests” of any Person shall mean all classes of Equity Interests of such Person entitled to vote.

3. PLEDGE OF SECURITIES, ETC.

3.1 Pledge. To secure the Obligations now or hereafter owed or to be performed by such Pledgor (but subject to clause (x) of the proviso at the end of this Section 3.1 in the case of the Voting Equity Interests of Exempted Foreign Entities pledged hereunder), each Pledgor does hereby grant, pledge and (except in the case of ULC Shares) assign to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest (subject to those Liens permitted to exist with respect to the Collateral pursuant to the terms of all Secured Debt Agreements then in effect) in favor of the Pledgee for the benefit of the Secured Creditors in, all of its right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the “Collateral”):

(a) each of the Collateral Accounts (to the extent a security interest therein is not created pursuant to the U.S. Security Agreement), including any and all assets of whatever type or kind deposited by such Pledgor in any such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, monies, checks, drafts, Instruments, Securities or interests therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing;

(b) all Securities owned or held by such Pledgor from time to time and all options and warrants owned by such Pledgor from time to time to purchase Securities;

(c) all Limited Liability Company Interests owned by such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such Limited Liability Company Interest relates, whether now existing or hereafter acquired, including, without limitation, to the fullest extent permitted under the terms and

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provisions of the documents and agreements governing such Limited Liability Company Interests and applicable law:

(A) all its capital therein and its interest in all profits, income, surpluses, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests;

(B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests;

(D) all present and future claims, if any, of such Pledgor against any such limited liability company for monies loaned or advanced, for services rendered or otherwise;

(E) all of such Pledgor’s rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any such limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and

(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

(d) all Partnership Interests owned by such Pledgor from time to time and all of its right, title and interest in each partnership to which each such Partnership Interest relates, whether now existing or hereafter acquired, including, without limitation, to the

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fullest extent permitted under the terms and provisions of the documents and agreements governing such Partnership Interests and applicable law:

(A) all its capital therein and its interest in all profits, income, surpluses, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests;

(B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise;

(C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests;

(D) all present and future claims, if any, of such Pledgor against any such partnership for monies loaned or advanced, for services rendered or otherwise;

(E) all of such Pledgor’s rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and

(F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof;

(e) all Financial Assets and Investment Property owned by such Pledgor from time to time;

(f) all Security Entitlements owned by such Pledgor from time to time in any and all of the foregoing; and

(g) all Proceeds of any and all of the foregoing;

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provided that (x) to the extent Voting Equity Interests of any Exempted Foreign Entity are pledged hereunder which represent more than 65% of the total combined voting power of all classes of Voting Equity Interests of the respective Exempted Foreign Entity (with all Voting Equity Interests of the respective Exempted Foreign Entity in excess of said 65% limit being herein called “Excess Exempted Foreign Entity Equity Interests”), such Excess Exempted Foreign Entity Equity Interests shall secure Obligations of the respective Pledgor only as a guarantor of the Obligations of the Canadian Borrower, and shall not secure any direct Obligations of the U.S. Borrower (or guarantees of such Obligations by the respective Pledgor) and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Exempted Foreign Entity at any time and from time to time acquired by such Pledgor, which Non-Voting Equity Interests shall not be subject to the limitations described in preceding clause (x).

3.2 Procedures. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by such Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) for the benefit of the Pledgee and the other Secured Creditors:

(i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall physically deliver such Certificated Security to the Pledgee, endorsed to the Pledgee or endorsed in blank to the extent the interests represented by such Certificated Security are required to be pledged hereunder;

(ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation or Securities Intermediary), such Pledgor shall cause the issuer of such Uncertificated Security to duly authorize, execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the other Secured Creditors substantially in the form of Annex H hereto (appropriately completed to the satisfaction of the Pledgee and with such modifications, if any, as shall be reasonably satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction;

(iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), such Pledgor shall promptly notify the Pledgee thereof and shall promptly take (x) all actions required (i) to comply with the applicable rules of such Clearing Corporation or Securities Intermediary and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event,

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under Sections 9-314(a), (b) and (c), 9-106 and 8-106(d) of the UCC) and (y) such other actions as the Pledgee deems necessary or desirable to effect the foregoing;

(iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate and is a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate or is not a Security for purposes of the UCC, the procedure set forth in Section 3.2(a)(ii) hereof;

(v) with respect to any Note (other than a Note which (i) is not an intercompany note and (ii) does not have a principal amount in excess of $300,000), physical delivery of such Note to the Pledgee, endorsed in blank, or, at the request of the Pledgee, endorsed to the Pledgee; and

(vi) with respect to cash proceeds from any of the Collateral described in Section 3.1 hereof, (i) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall have “control” within the meaning of the UCC and at any time any Default or Event of Default is in existence no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Pledgee and (ii) deposit of such cash in such cash account.

(b) In addition to the actions required to be taken pursuant to Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Collateral:

(i) with respect to all Collateral of such Pledgor whereby or with respect to which the Pledgee may obtain “control” thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), such Pledgor shall take all actions as may be reasonably requested from time to time by the Pledgee so that “control” of such Collateral is obtained and at all times held by the Pledgee; and

(ii) each Pledgor shall from time to time cause appropriate financing statements (on appropriate forms) under the Uniform Commercial Code or Personal Property Security Act as in effect in the various relevant States or provinces of Canada, covering all Collateral hereunder (with the form of such financing statements to be reasonably satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee’s security interest in all Investment Property and other Collateral which can be perfected by the filing of such financing statements (in each case to the maximum extent perfection by filing may be obtained under the laws of the relevant States or provinces, including, without limitation, Section 9-312(a) of the UCC) is so perfected.

3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire (by purchase, stock dividend, distribution or otherwise) any additional Collateral at any time or from time to

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time after the date hereof, (i) such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, such Pledgor will thereafter take (or cause to be taken) all action (as promptly as practicable and, in any event, within 10 Business Days after it obtains such Collateral) with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate executed by an authorized officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A through G hereto as are necessary to cause such Annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder the Equity Interests of any Exempted Foreign Entity at any time and from time to time after the date hereof acquired by such Pledgor, provided that (x) any such pledge of Voting Equity Interests of any Exempted Foreign Entity shall be subject to the provisions of clause (x) of the proviso to Section 3.1 hereof and (y) each Pledgor shall be required to pledge hereunder 100% of the Non-Voting Equity Interests of each Exempted Foreign Entity at any time and from time to time acquired by such Pledgor.

3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral.

3.5 Certain Representations and Warranties Regarding the Collateral. Each Pledgor represents and warrants that on the date hereof: (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex B hereto; (ii) the Stock (and any warrants or options to purchase Stock) held by such Pledgor consists of the number and type of shares of the stock (or warrants or options to purchase any stock) of the corporations as described in Annex C hereto; (iii) such Stock referenced in clause (ii) of this paragraph constitutes that percentage of the issued and outstanding capital stock of the issuing corporation (or other applicable issuer) as is set forth in Annex C hereto; (iv) the Notes held by such Pledgor consist of the promissory notes described in Annex D hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (vi) each such Limited Liability Company Interest referenced in clause (v) of this paragraph constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex E hereto; (vii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex F hereto; (viii) each such Partnership Interest referenced in clause (viii) of this paragraph constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex F hereto; (ix) the exact address of each chief executive office of such Pledgor is listed on Annex G hereto; (x) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes C through F hereto; and (xi) on the date hereof, such Pledgor owns no other Securities, Stock, Notes, Limited Liability Company Interests or Partnership Interests which are required to be pledged under Section 3.1 hereof.

4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall have the right to appoint one or more sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the reasonable discretion of the Pledgee) in

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the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee.

5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. For greater certainty, unless and until there shall have occurred and be continuing any Event of Default under the Credit Agreement, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; provided that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate, result in a breach of any covenant contained in, or be inconsistent with any of the terms of any Secured Debt Agreement, or which could reasonably be expected to have the effect of impairing the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral, unless expressly permitted by the terms of the Secured Debt Agreements. Except in the case of ULC Shares which remain registered in the name of the Pledgor, all such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable.

6. DIVIDENDS AND OTHER DISTRIBUTIONS. For greater certainty, unless and until there shall have occurred and be continuing an Event of Default and, other than in the case of an Event of Default under Section 10.05 of the Credit Agreement, the Pledgee shall have given notice of its intent to exercise such rights to the Pledgor, all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor, provided, that all cash dividends payable in respect of the Pledged Stock which are reasonably determined by the Pledgee to represent in whole or in part an extraordinary, liquidating or other distribution in return of capital shall be paid, to the extent so determined to represent an extraordinary, liquidating or other distribution in return of capital, to the Pledgee and retained by it as part of the Collateral. While this Agreement is in effect, the Pledgee shall be entitled to receive directly, and to retain as part of the Collateral:

(i) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral;

(ii) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash (although such cash may be paid directly to the respective Pledgor so long as no Event of Default then exists)) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and

(iii) all other or additional stock, notes, certificates, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate or other reorganization.

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Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee’s right to receive the proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 or Section 7 hereof shall be received in trust for the benefit of the Pledgee (or, in the case of ULC Shares, subject to the obligation to deliver such dividends, distributions or other payments to the Pledgee to hold as Collateral), shall be segregated from other property or funds of such Pledgor and shall be forthwith delivered to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).

7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default, then and in every such case, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the UCC as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, with each Pledgor hereby agreeing that the rights set forth in clauses (i), (ii), (iii), (iv) and (vi) below are commercially reasonable:

(i) except in the case of ULC Shares which have not been transferred on the register of the ULC issuer thereof, to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor;

(ii) except in the case of ULC Shares, to transfer all or any part of the Collateral into the Pledgee’s name or the name of its nominee or nominees;

(iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon);

(iv) except in the case of ULC Shares which have not been transferred on the register of the ULC issuer, to vote (and exercise all rights and powers in respect of voting) all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so);

(v) at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or, notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise purchase or dispose (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and at such time or times, at such place or places and on such terms as the Pledgee may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable, provided at least 10 days’

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written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security or the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and

(vi) to set off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations.

It is understood and agreed that in respect of Collateral consisting of Uncertificated Securities, Partnership Interests and Limited Liability Company Interests subject of an agreement substantially in the form of Annex H and as described in Section 3.2(ii), unless an Event of Default has occurred and is continuing, the Pledgee shall not deliver to the issuer of such Uncertificated Securities, Partnership Interests or Limited Liability Company Interests, as the case may be, a notice stating that the Pledgee is exercising exclusive control of such Uncertificated Securities, Partnership Interests or Limited Liability Company Interests, as the case may be, under, and as described in such respective agreement.

8. REMEDIES, CUMULATIVE, ETC. Each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and, subject to Section 12(c) hereof, shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. Notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced only by the action of the Pledgee, in each case, acting upon the instructions of the Required Secured Creditors, and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Pledgee for the benefit of the Secured Creditors upon the terms of this Agreement and the U.S. Security Agreement.

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9. APPLICATION OF PROCEEDS. (a) All monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in the U.S. Security Agreement.

(b) It is understood and agreed that each Pledgor shall remain jointly and severally liable with respect to its Obligations to the extent of any deficiency between the amount of the proceeds of the Collateral pledged by it hereunder and the aggregate amount of such Obligations.

10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making such sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.

11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify, reimburse and hold harmless the Pledgee and each other Secured Creditor and their respective successors, assigns, employees, agents and affiliates (individually an “Indemnitee”, and collectively, the “Indemnitees”) from and against any and all obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all reasonable costs, expenses and disbursements, including reasonable attorneys’ fees and expenses, in each case arising out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any obligations, damages, injuries, penalties, claims, demands, losses, judgments and liabilities (including, without limitation, liabilities for penalties) or expenses and disbursements of whatsoever kind or nature to the extent incurred or arising by reason of gross negligence or willful misconduct of the respective Indemnitee, any Affiliate of such Indemnitee, or any of their respective directors, officers, employees, representatives, agents, Affiliates, trustees or investment advisors (as determined by a court of competent jurisdiction in a final and non-appealable decision)). In no event shall the Pledgee hereunder be liable, in the absence of gross negligence or willful misconduct on its part (as determined by a court of competent jurisdiction in a final and non-appealable decision), for any matter or thing in connection with this Agreement other than to account for monies or other property actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. The indemnity obligations of each Pledgor contained in this Section 11 shall continue in full force and effect notwithstanding the full payment of all the Notes issued under the Credit Agreement, the termination of all Interest Rate Protection Agreements and Letters of Credit, and the payment of all other Obligations and notwithstanding the discharge thereof.

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12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY OR ULC MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or a Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor, any Pledgor and/or any other Person.

(b) Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor, any limited liability company, partnership and/or any other Person either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12.

(c) Notwithstanding any provisions to the contrary contained in this Agreement or any other document or agreement among all or some of the parties hereto, the relevant Pledgor is the sole registered and beneficial owner of all Collateral which are ULC Shares and will remain so until such time as such ULC Shares are effectively transferred into the name of the Pledgee, any Secured Creditor or any other person on the books and records of such ULC. Accordingly the Pledgor shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, in respect of such Collateral (except to hold as Collateral pursuant to Section 6 hereof) and shall have the right to vote such Collateral and to control the direction, management and policies of the ULC issuer to the same extent as the Pledgor would if such Collateral were not pledged to the Pledgee (for its own benefit and for the benefit of the Secured Creditors) pursuant hereto. Nothing in this Agreement or any other document or agreement among all or some of the parties hereto is intended to, and nothing in this Pledge Agreement or any other document or agreement among all or some of the parties hereto shall, constitute the Pledgee, any of the Secured Creditor or any person other than the Pledgor, a member of a ULC for the purposes of NSCA until such time as notice is given to the Pledgor and further steps are taken thereunder so as to register the Pledgee or other person as holder of ULC Shares. To the extent any provision hereof would have the effect of constituting the Pledgee or any Secured Creditor as a member of any ULC prior to such time, such provision shall be severed therefrom and ineffective with respect to Collateral which are ULC Shares without otherwise invalidating or rendering unenforceable this Pledge Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Collateral which are not ULC Shares. Except upon the exercise of rights to sell or otherwise dispose of the ULC Shares following the occurrence of an Event of Default, no Pledgor shall cause or permit, or enable any ULC in which it holds ULC Shares to cause or permit, the Pledgee or other Secured Creditor to: (a) be registered as shareholders or members of such ULC; (b) have any notation entered in their favour in the share register of such ULC; (c) be held out as shareholders or members of such ULC; (d) to receive, directly or indirectly, any dividends, property or other distributions from the ULC by reason of

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the Pledgee or the Secured Creditor holding a security interest in the ULC; or (e) to act as a shareholder or member of the ULC, or exercise any rights of a shareholder or member including the right to attend a meeting of, or to vote the shares of, the ULC.

(d) The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected.

(e) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral.

13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor’s own expense, file and refile under the UCC or other applicable law such financing statements, continuation statements and other documents, in form reasonably acceptable to the Pledgee, in such offices as the Pledgee (acting on its own or on the instructions of the Required Secured Creditors) may reasonably deem necessary or appropriate and wherever required or permitted by law in order to perfect and preserve the Pledgee’s security interest in the Collateral hereunder and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral (including, without limitation, (x) financing statements which list the Collateral specifically and/or “all assets” as collateral and (y) “in lieu of” financing statements) without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or deem advisable to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder or thereunder.

(b) Each Pledgor hereby constitutes and appoints the Pledgee its true and lawful attorney-in-fact, irrevocably, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, from time to time after the occurrence and during the continuance of an Event of Default, in the Pledgee’s discretion, to act, require, demand, receive and give acquittance for any and all monies and claims for monies due or to become due to such Pledgor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings and to execute any instrument which the Pledgee may deem reasonably necessary or advisable to accomplish the purposes of this Agreement to the fullest extent permitted by applicable law, which appointment as attorney is coupled with an interest.

14. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood, acknowledged and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those

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expressly set forth in this Agreement and in Section 12 of the Credit Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Section 12 of the Credit Agreement.

15. TRANSFER BY THE PLEDGORS. Except as permitted (i) prior to the date all Credit Document Obligations have been paid in full and all Commitments under the Credit Agreement have been terminated, pursuant to the Credit Agreement, and (ii) thereafter, pursuant to the other Secured Debt Agreements, no Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein.

16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants as to itself and each of its Subsidiaries that:

(i) it is the legal, beneficial and (except as to Securities credited on the books of a Clearing Corporation or a Securities Intermediary) record owner of, and has good and valid title to, all of its Collateral consisting of one or more Securities, Partnership Interests and Limited Liability Company Interests and that it has sufficient interest in all of its Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement or permitted under the Secured Debt Agreements);

(ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement;

(iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor in accordance with its terms, subject to (A) the effects of bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law) and (B) as it relates to the pledge of any capital stock of Foreign Subsidiaries of the U.S. Borrower, the effects of the possible judicial application of foreign laws or foreign governmental or judicial action affecting creditors’ rights;

(iv) except for the approval of directors of the issuer of ULC Shares pursuant to the articles of association thereof or to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder, partner, member or creditor of such Pledgor or any of its Subsidiaries) and no material consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement by such Pledgor, (b) the validity or enforceability of this Agreement against such Pledgor (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Pledgee’s security interest in such Pledgor’s Collateral or (d) except for compliance with

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or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein;

(v) neither the execution, delivery or performance by such Pledgor of this Agreement, or any other Secured Debt Agreement to which it is a party, nor compliance by it with the terms and provisions hereof and thereof nor the consummation of the transactions contemplated therein: (i) will contravene any provision of any applicable law, statute, rule or regulation, or any applicable order, writ, injunction or decree of any court, arbitrator or governmental instrumentality, domestic or foreign, applicable to such Pledgor; (ii) will conflict or be inconsistent 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 properties or assets of such Pledgor or any of its Subsidiaries pursuant to the terms of any indenture, lease, mortgage, deed of trust, credit agreement, loan agreement or any other material agreement, contract or other instrument to which such Pledgor or any of its Subsidiaries is a party or is otherwise bound, or by which it or any of its properties or assets is bound or to which it may be subject (except, in the case of preceding clauses (i) and (ii), other than in the case of any contravention or conflict as a result of the execution or performance of any Secured Debt Agreement, if such contraventions, breaches, defaults and/or conflicts, individually and in the aggregate would not reasonably be expected to have a Material Adverse Effect); or (iii) will violate any provision of the certificate of incorporation, by-laws, certificate of partnership, partnership agreement, certificate of formation or limited liability company agreement (or equivalent organizational or constating documents), as the case may be, of such Pledgor or any of its Subsidiaries;

(vi) all of such Pledgor’s Collateral (consisting of Securities, Limited Liability Company Interests and Partnership Interests issued by any Pledgor or any Subsidiary of any Pledgor) has been duly and validly issued, is fully paid and (except in the case of ULC Shares insofar as such are assessable pursuant to the NSCA) non-assessable and is subject to no options to purchase or similar rights;

(vii) each of such Pledgor’s Pledged Notes issued by any Pledgor or any Subsidiary of any Pledgor constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law);

(viii) the pledge, collateral assignment and delivery to the Pledgee of such Pledgor’s Collateral consisting of Certificated Securities and Pledged Notes pursuant to this Agreement and the continued possession thereof by the Pledgee or an Affiliate creates a valid and perfected first priority security interest in such Certificated Securities and Pledged Notes, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities (other than the

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liens and security interests permitted under the Secured Debt Agreements then in effect) and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and

(ix) with respect to Collateral consisting of a Security Entitlement, the respective Pledgor shall have taken all steps in its control so that the Pledgee obtains “control” (as defined in Section 8-106 of the UCC) over such Security Entitlement, except to the extent that the obligation of the applicable Pledgor to provide the Pledgee with “control” of such Collateral has not yet arisen under this Agreement.

(b) Each Pledgor covenants and agrees that it will defend the Pledgee’s right, title and security interest in and to such Pledgor’s Collateral and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee by such Pledgor as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors.

(c) Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Debt Agreement.

17. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC. The exact legal name of each Pledgor, the type of organization of such Pledgor, whether or not such Pledgor is a Registered Organization, the jurisdiction of organization of such Pledgor, such Pledgor’s Location, the organizational identification number (if any) of each Pledgor, and whether or not such Pledgor is a Transmitting Utility, is listed on Annex A hereto for such Pledgor. No Pledgor shall change its legal name, its type of organization, its status as a Registered Organization (in the case of a Registered Organization), its status as a Transmitting Utility or as a Person which is not a Transmitting Utility, as the case may be, its jurisdiction of organization, its Location, or its organizational identification number (if any), except that any such changes shall be permitted (so long as not in violation of the applicable requirements of the Secured Debt Agreements and so long as same do not involve (x) a Registered Organization ceasing to constitute same or (y) any Pledgor changing its jurisdiction of organization or Location from the United States or a State thereof to a jurisdiction of organization or Location, as the case may be, outside the United States or a State thereof) if (i) it shall have given to the Collateral Agent not less than 15 days’ prior written notice of each change to the information listed on Annex A (as adjusted for any subsequent changes thereto previously made in accordance with this sentence), together with a supplement to Annex A which shall correct all information contained therein for such Pledgor, and (ii) in connection with the respective such change or changes, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interests of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. In addition, to the extent that any Pledgor does not have an organizational identification number on the date hereof and later obtains one, such Pledgor shall promptly thereafter deliver a notification of the Collateral Agent of such organizational identification number and shall take all actions

Page 21

reasonably satisfactory to the Collateral Agent to the extent necessary to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby fully perfected and in full force and effect.

18. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever (other than termination of this Agreement pursuant to Section 20 or, with respect to a specific Pledgor, release of such Pledgor pursuant to Section 32 hereof), including, without limitation:

(i) any renewal, extension, amendment or modification of, or addition or supplement to or deletion from any Secured Debt Agreement (other than this Agreement in accordance with its terms), or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof;

(ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement (other than a waiver, consent or extension with respect to this Agreement in accordance with its terms);

(iii) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee;

(iv) any limitation on any party’s liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or

(v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing.

19. SALE OF COLLATERAL WITHOUT REGISTRATION. (a) If the Pledgee shall determine to exercise its rights to sell any or all of the Collateral pursuant to Section 7, and if in the reasonable opinion of the Pledgee it is necessary or reasonably advisable to have the Collateral, or that portion thereof to be sold, registered under the provisions of the federal or state securities laws, such Pledgor as soon as practicable and at its expense will use its reasonable best efforts to cause such registration to be effected (and be kept effective) and will use its reasonable best efforts to cause such qualification and compliance to be effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests, including, without limitation, registration under the Securities Act, as then in effect (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with any other governmental requirements; provided, that the Pledgee shall furnish to such Pledgor such information regarding the Pledgee as such Pledgor

Page 22

may request in writing and as shall be required in connection with any such registration, qualification or compliance. Each Pledgor will cause the Pledgee to be kept reasonably advised in writing as to the progress of each such registration, qualification or compliance and as to the completion thereof, will furnish to the Pledgee such number of prospectuses, offering circulars and other documents incident thereto as the Pledgee from time to time may reasonably request, and will indemnify, to the extent permitted by law, the Pledgee and all other Secured Creditors participating in the distribution of such Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests against all claims, losses, damages and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in any related registration statement, notification or the like) or by any omission (or alleged omission) to state therein (or in any related registration statement, notification or the like) a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same may have been caused by an untrue statement or omission based upon information furnished in writing to such Pledgor by the Pledgee or such other Secured Creditor expressly for use therein.

(b) If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and such Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until the registration as aforesaid.

20. TERMINATION; RELEASE . (a) On the Termination Date (as defined below), this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination) and the Pledgee, at the request and expense of such Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments (including UCC termination statements) acknowledging the satisfaction and termination of this Agreement (including, without limitation, UCC termination statements and instruments of satisfaction, discharge and/or reconveyance), and will duly release from the security interest created hereby and assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Pledgee or any of its sub-agents hereunder and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by the Pledgee or any of its sub-agents hereunder and, with respect to any Collateral

Page 23

consisting of an Uncertificated Security, a Partnership Interest or a Limited Liability Company Interest (other than an Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation or Securities Intermediary), a termination of the agreement relating thereto executed and delivered by the issuer of such Uncertificated Security pursuant to Section 3.2(a)(ii) or by the respective partnership or limited liability company pursuant to Section 3.2(a)(iv)(2). As used in this Agreement, “Termination Date” shall mean the date upon which the Commitments under the Credit Agreement have been terminated and all Interest Rate Protection Agreements entitled to the benefits of this Agreement have been terminated, no Letter of Credit or Note (as defined in the Credit Agreement) is outstanding (and all Loans have been paid in full), all Letters of Credit have been terminated, and all other Obligations (other than indemnities described in Section 11 hereof and described in Section 13.01 of the Credit Agreement, and any other indemnities set forth in any other Security Documents, in each case which are not then due and payable) then due and payable have been paid in full.

(b) In the event that any part of the Collateral is sold or otherwise disposed of (to a Person other than a Credit Party) (x) at any time prior to the time at which all Credit Document Obligations have been paid in full and all Commitments and Letters of Credit under the Credit Agreement have been terminated, in connection with a sale or disposition permitted by Section 9.02 of the Credit Agreement or is otherwise released at the direction of the Required Lenders (or all the Lenders if required by Section 13.12 of the Credit Agreement) or (y) at any time thereafter, to the extent permitted by the other Secured Debt Agreements, and in the case of clauses (x) and (y), the proceeds of such sale or disposition (or from such release) are applied in accordance with the terms of the Credit Agreement or such other Secured Debt Agreement, as the case may be, to the extent required to be so applied, the Pledgee, at the request and expense of such Pledgor, will duly release from the security interest created hereby (and will execute and deliver such documentation, including termination or partial release statements and the like in connection therewith) and assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Pledgee (or, in the case of Collateral held by any sub-agent designated pursuant to Section 4 hereto, such sub-agent) and has not theretofore been released pursuant to this Agreement.

(c) At any time that any Pledgor desires that Collateral be released as provided in the foregoing Section 20(a) or (b), it shall deliver to the Pledgee (and the relevant sub-agent, if any, designated pursuant to Section 4 hereof) a certificate signed by an authorized officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to Section 20(a) or (b) hereof. If reasonably requested by the Pledgee (although the Pledgee shall have no obligation to make any such request), the relevant Pledgor shall furnish appropriate legal opinions (from counsel, reasonably acceptable to the Pledgee) to the effect set forth in the immediately preceding sentence.

(d) The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in the absence of gross negligence and willful misconduct believes to be in accordance with) this Section 20.

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21. NOTICES, ETC. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties 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 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 Pledgee or any Pledgor shall not be effective until received by the Pledgee or such Pledgor, as the case may be. All notices and other communications shall be in writing and addressed as follows:

(a) if to any Pledgor, at its address set forth opposite its signature below;

(b) if to the Pledgee, at:

Deutsche Bank Trust Company Americas

222 South Riverside Plaza

MS-CH 105-2600

Chicago, IL 60606

Attention: Marla Heller

Telephone No.: 312-537-4231

Telecopier No.: 312-537-1324

(c) if to any Lender Creditor, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement, or (y) at such address as such Lender Creditor shall have specified in the Credit Agreement; and

(d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to the Pledgors and the Pledgee;

or at such other address or addressed to such other individual as shall have been furnished in writing by any Person described above to the party required to give notice hereunder.

22. WAIVER; AMENDMENT. Except as provided in Sections 30 and 32 hereof, none of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in accordance with the requirements specified in the U.S. Security Agreement.

23. SUCCESSORS AND ASSIGNS. This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to release and/or termination as set forth in Section 20, (ii) be binding upon each Pledgor, its successors and assigns; provided, however, that no Pledgor shall assign any of its rights or obligations hereunder without the prior written consent of the Pledgee (with the prior written consent of the Required Secured Creditors), and (iii) inure, together with the rights and remedies of the Pledgee hereunder, to the benefit of the Pledgee, the other Secured Creditors and their respective successors, transferees and assigns. All agreements, statements, representations and warranties made by each Pledgor herein or in any certificate or other instrument delivered by such Pledgor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other

Page 25

Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf.

24. HEADINGS DESCRIPTIVE. 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 any provision of this Agreement.

25. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES 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 AGREEMENT, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH SUCH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER IT. EACH SUCH PARTY 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 ANY SUCH PARTY AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 21 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH SUCH PARTY 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 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 OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES 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 AGREEMENT OR ANY OTHER CREDIT DOCUMENT 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 ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Page 26

(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

26. PLEDGOR’S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Pledgor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Pledgee shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, except for the safekeeping of Collateral actually in Pledgor’s possession, nor shall the Pledgee be required or obligated in any manner to perform or fulfill any of the obligations of any Pledgor under or with respect to any Collateral.

27. COUNTERPARTS. This Agreement 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 each Pledgor and the Pledgee.

28. SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

29. RECOURSE. This Agreement is made with full recourse to each Pledgor and pursuant to and upon all the representations, warranties, covenants and agreements on the part of such Pledgor contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith.

30. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of Holdings that is required to become a party to this Agreement after the date hereof pursuant to the requirements of the Credit Agreement or any other Credit Document, shall become a Pledgor hereunder by (x) executing a counterpart hereof, or a joinder agreement in form satisfactory to the Pledgee, and delivering the same to the Pledgee, (y) delivering supplements to Annexes A through G, hereto as are necessary to cause such annexes to be complete and accurate with respect to such additional Pledgor on such date and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgee and with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgee.

31. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor and the Secured Creditors that this Agreement shall be enforced against each Pledgor to the fullest extent permissible under the laws applied in each jurisdiction in which enforcement is sought. Notwithstanding anything to the contrary contained herein, in furtherance of the foregoing, it is

Page 27

noted that the obligations of each Pledgor constituting a U.S. Subsidiary Guarantor have been limited as provided in the U.S. Subsidiaries Guaranty.

32. RELEASE OF PLEDGORS. If at any time all of the Equity Interests of any Pledgor owned by the U.S. Borrower or any of its Subsidiaries are sold (to a Person other than a Credit Party) in a transaction permitted pursuant to the Credit Agreement (and which does not violate the terms of any other Secured Debt Agreement then in effect), then, such Pledgor shall be released as a Pledgor pursuant to this Agreement without any further action hereunder (it being understood that the sale of all of the Equity Interests in any Person that owns, directly or indirectly, all of the Equity Interests in any Pledgor shall be deemed to be a sale of all of the Equity Interests in such Pledgor for purposes of this Section), and the Pledgee is authorized and directed to execute and deliver such instruments of release as are reasonably satisfactory to it. At any time that the U.S. Borrower desires that a Pledgor be released from this Agreement as provided in this Section 32, the U.S. Borrower shall deliver to the Pledgee a certificate signed by a principal executive officer of the U.S. Borrower stating that the release of such Pledgor is permitted pursuant to this Section 32. If requested by Pledgee (although the Pledgee shall have no obligation to make any such request), the U.S. Borrower shall furnish legal opinions (from counsel acceptable to the Pledgee) to the effect set forth in the immediately preceding sentence. The Pledgee shall have no liability whatsoever to any other Secured Creditor as a result of the release of any Pledgor by it in accordance with, or which it believes to be in accordance with, this Section 32.

* * * *

Page 28

IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written.

Address:

8607 Roberts Drive, Suite 250	BWAY CORPORATION,
Atlanta, GA 30350	as a Pledgor
Tel: (770) 645-4800
Fax: (770) 645-4810
	By:	/s/ Jeffrey M. O’Connell
	Title:	Vice President, Treasurer and Secretary
	BCO HOLDING COMPANY,
	as a Pledgor
	By:	/s/ Jeffrey M. O’Connell
	Title:	Vice President, Treasurer and Secretary

ARMSTRONG CONTAINERS, INC.
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
SC PLASTICS, LLC
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
NORTH AMERICA PACKAGING CORPORATION
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary
NORTH AMERICA PACKAGING OF PUERTO RICO, INC.
By:	/s/ Jeffrey M. O’Connell
Title:	Vice President and Secretary

Page 2

Accepted and Agreed to:
DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent and Pledgee
By:	/s/ Evelyn Thierry
Title:	Vice President
By:	/s/ Omayra Laucella
Title:	Vice President

Page 3

Table of Contents

	Page
1. SECURITY FOR OBLIGATIONS	2
2. DEFINITIONS	3
3. PLEDGE OF SECURITIES, ETC.	7
3.1 Pledge	7
3.2 Procedures	10
3.3 Subsequently Acquired Collateral	11
3.4 Transfer Taxes	12
3.5 Certain Representations and Warranties Regarding the Collateral	12
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC.	12
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT	13
6. DIVIDENDS AND OTHER DISTRIBUTIONS	13
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT	14
8. REMEDIES, CUMULATIVE, ETC.	15
9. APPLICATION OF PROCEEDS	16
10. PURCHASERS OF COLLATERAL	16
11. INDEMNITY	16
12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER	17
13. FURTHER ASSURANCES; POWER-OF-ATTORNEY	18
14. THE PLEDGEE AS COLLATERAL AGENT	18
15. TRANSFER BY THE PLEDGORS	19
16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS	19

i

Table of Contents

(continued)

	Page
17. LEGAL NAMES; TYPE OF ORGANIZATION (AND WHETHER A REGISTERED ORGANIZATION AND/OR A TRANSMITTING UTILITY); JURISDICTION OF ORGANIZATION; LOCATION; ORGANIZATIONAL IDENTIFICATION NUMBERS; CHANGES THERETO; ETC.	21
18. PLEDGORS’ OBLIGATIONS ABSOLUTE, ETC.	22
19. SALE OF COLLATERAL WITHOUT REGISTRATION	22
20. TERMINATION; RELEASE	23
21. NOTICES, ETC.	25
22. WAIVER; AMENDMENT.	25
23. SUCCESSORS AND ASSIGNS	25
24. HEADINGS DESCRIPTIVE	26
25. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL	26
26. PLEDGOR’S DUTIES	27
27. COUNTERPARTS	27
28. SEVERABILITY	27
29. RECOURSE	27
30. ADDITIONAL PLEDGORS	27
31. LIMITED OBLIGATIONS	27
32. RELEASE OF PLEDGORS	28

ANNEX A - SCHEDULE OF LEGAL NAMES, TYPE OF ORGANIZATION,

ii

Table of Contents

(continued)

			Page
		JURISDICTION OF ORGANIZATION, LOCATION AND ORGANIZATIONAL IDENTIFICATION NUMBERS
ANNEX B	-	SCHEDULE OF SUBSIDIARIES
ANNEX C	-	SCHEDULE OF STOCK
ANNEX D	-	SCHEDULE OF NOTES
ANNEX E	-	SCHEDULE OF LIMITED LIABILITY COMPANY INTERESTS
ANNEX F	-	SCHEDULE OF PARTNERSHIP INTERESTS
ANNEX G	-	SCHEDULE OF CHIEF EXECUTIVE OFFICES
ANNEX H	-	FORM OF AGREEMENT REGARDING UNCERTIFICATED
		SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS

iii

EX-10.37

Exhibit 10.37

100 NORTH QUEEN STREET, TORONTO, ONTARIO

INDUSTRIAL LEASE

BETWEEN

80241 CANADA LTD.

(The “Landlord”)

AND

ICL INDUSTRIAL CONTAINERS ULC

(The “Tenant”)

TABLE OF CONTENTS

		Page
	ARTICLE 1 BASIC TERMS, SCHEDULES, DEFINITIONS
1.1	Basic Terms	1
1.2	Schedules	2
1.3	Definitions	2
	ARTICLE 2 PREMISES
2.1	Premises	2
	ARTICLE 3 TERM
3.1	Term	2
3.2	Option to Extend	2
3.3	Appraisals	3
	ARTICLE 4 RENT
4.1	Rent	4
4.2	Payment of Rent	4
4.3	Rent for Irregular Periods	5
4.4	Waiver of Offset	5
4.5	Net Lease	5
	ARTICLE 5 TENANT’S COVENANTS
5.1	Rent	5
5.2	Permitted Use	5
5.3	Waste and Nuisance	5
5.4	Insurance Risks	6
5.5	Cleanliness and Heating	6
5.6	Compliance with Laws	6
5.7	Overholding	6
5.8	Signs	7
5.9	Inspection and Access	7
5.10	Showing Premises	7

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TABLE OF CONTENTS

(continued)

		Page
5.11	Equipment	8
5.12	Floor Loads	8
5.13	Glass	8
	ARTICLE 6 LANDLORD’S COVENANTS
6.1	Quiet Enjoyment	8
	ARTICLE 7 REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION
7.1	Maintenance and Repairs	8
7.2	Capital Repairs	10
7.3	Damage, Destruction and Termination	10
	ARTICLE 8 TAXES AND OPERATING COSTS
8.1	Tenant’s Tax Obligations	11
8.2	Goods and Services Taxes	12
8.3	Tenant’s Share	12
8.4	Notices of Assessment etc	13
8.5	Utility/Communication/Service Charges	13
	ARTICLE 9 ENVIRONMENTAL MATTERS
9.1	Environmental Laws	14
9.2	Tenant’s Responsibility	14
9.3	Assessment of the Premises	15
9.4	Contaminants at the End of the Term	16
9.5	Landlord’s Indemnity and Covenant	16
	ARTICLE 10 TRANSFERS, ASSIGNMENTS AND SUBLETTINGS
10.1	Consent Required	17
10.2	Change of Control	18
10.3	Leasehold Charges	19
10.4	Permitted Transfers	20
10.5	Transfer by Landlord	20

-ii-

TABLE OF CONTENTS

(continued)

		Page
	ARTICLE 11 FIXTURES AND IMPROVEMENTS
11.1	Alterations	21
11.2	Liens and Encumbrances on Fixtures and Improvements	21
11.3	Removal of Fixtures and Improvements	22
11.4	Non-compliance	22
	ARTICLE 12 INSURANCE AND LIABILITY
12.1	Landlord’s Insurance	22
12.2	Tenant’s Insurance	23
12.3	Limitation of Liability	25
12.4	Indemnity	25
	ARTICLE 13 SALE OR FINANCING, SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES
13.1	Sale or Financing of Building	26
13.2	Subordination and Attornment	26
13.3	Registration	26
13.4	Certificates	26
	ARTICLE 14 DELAY; NO WAIVER
14.1	Unavoidable Delay	27
14.2	No Admission	27
14.3	Part Payment	27
	ARTICLE 15 TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER
15.1	Remedying by Landlord, Non-payment and Interest	27
15.2	Remedies Cumulative	28
15.3	Right of Re-entry on Default	28
15.4	Termination and Re-entry	29
15.5	Certain Consequences of Termination and Re-entry	29
15.6	Waiver of Distress	30

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TABLE OF CONTENTS

(continued)

		Page
15.7	Re-letting	30
15.8	Surrender on Termination	30
	ARTICLE 16 EVENTS TERMINATING LEASE
16.1	Cancellation of Insurance	30
16.2	Prohibited Occupancy, Bankruptcy and Other Events	31
	ARTICLE 17 MISCELLANEOUS
17.1	Notices	31
17.2	Extraneous Agreements	32
17.3	Time of Essence	32
17.4	Successors and Assigns	32
17.5	Waiver	32
17.6	Governing Law and Severability	32
17.7	Captions	33
17.8	Expropriation	33
17.9	Counterparts	33

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LEASE

THIS LEASE dated the 17th day of July, 2006, is made and entered into by 80241 Canada Ltd. (the “Landlord”) and ICL Industrial Containers ULC (the “Tenant”) who, in consideration of the covenants herein contained, agree as follows:

ARTICLE 1

BASIC TERMS, SCHEDULES, DEFINITIONS

1.1 Basic Terms

(a)	Landlord (i)     Landlord: (ii)    Address of Landlord:	80241 Canada Ltd. 167 Lord Seaton Road Willowdale, Ontario, M2P 1K8 Attention: Stephen Arshinoff
(b)	Tenant
	(i)     Tenant: (ii)    Address of Tenant:	ICL Industrial Containers ULC 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350 - 2230 Attention: Kevin C. Kern
	(iii)  Address of Premises:	100 North Queen Street, Toronto, Ontario
(c)	Indemnifier
	(i)     Indemnifier:	BWAY Corporation
	(ii)    Address of Indemnifier:	8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350-2230
(d)	Rentable Area of Building	Approximately 72,764 square feet
(e)	Term
	(i)     Term: (ii)    Commencement Date: (iii)  Lease Expiration Date:	ten (10) years July 17, 2006 July 16, 2016

(f)	Annual Base Rent Year of the Term Years 1 - 5	Per Square Foot $4.75	Per Annum $345,629.00	Per Month $28,802.42
(g)	Annual Base Rent Year of the Term Years 6 - 10	Per Square Foot $5.3675	Per Annum $390,560.77	Per Month $32,546.73

(h) Permitted Use

Industrial and ancillary office use, including without limitation: manufacturing industrial containers, including plastic pails, steel pails and steel drums; refurbishing containers and pallets; warehousing; office and ancillary uses.

(i) Extension Term

Two (2) Extension Terms of five (5) years each.

The foregoing Basic Terms are hereby approved by the parties and each reference in this Lease to any of the Basic Terms shall be construed to include the provisions set forth above as well as all of the additional terms and conditions of the applicable sections of this Lease where such Basic Terms are more fully set forth.

1.2 Schedules

All Schedules to this Lease are incorporated into and form an integral part of this Lease.

1.3 Definitions

In this Lease, the words, phrases and expressions set forth in Schedule B are used with the meanings defined therein.

ARTICLE 2

PREMISES

2.1 Premises

In consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Tenant to be paid, observed and performed, the Landlord hereby demises and leases to the Tenant and the Tenant leases from the Landlord the Premises.

ARTICLE 3

TERM

3.1 Term

The Term of this Lease shall be for the period set out in section l.l(e)(i), beginning on the Commencement Date.

3.2 Option to Extend

(a) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the Term, extend the Term for a further term of five (5) years (the “First Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the First Extension Term.

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(b) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the First Extension Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the First Extension Term, extend the First Extension Term for a further term of five (5) years (the “Second Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the Second Extension Term.

(c) The Annual Base Rent during any Extension Term shall be the Current Market Rent for the Premises. If the Landlord and the Tenant have not mutually agreed on the amount of the Annual Base Rent at least three (3) months prior to the commencement of such Extension Term, then Annual Base Rent shall be decided in the manner set out in Section 3.3. Until the Annual Base Rent has been determined, the Tenant shall pay the monthly Rent requested by the Landlord and, upon the determination of the Annual Base Rent, the Landlord and the Tenant shall make the appropriate adjustments together with interest at the Prime Rate.

3.3 Appraisals

If the Annual Base Rent payable during an Extension Term is not agreed upon at least three (3) months prior to the commencement of such Extension Term, then each party shall, within thirty (30) days thereafter, mandate an appraiser licensed in the Province where the Premises are located, to determine the Current Market Rent for the Premises. In the event that a party fails to appoint an appraiser within such thirty (30) days and has failed to remedy such failure within five (5) days of written notice thereof from the other party, then the Annual Base Rent shall be the Current Market Rent for the Premises, as determined by the sole appraiser. If two appraisers are appointed, in the event that the higher of the amounts so determined by one appraiser does not exceed the lower so determined by the other appraiser by more than 15%, then the Annual Base Rent shall be the average of the two, otherwise, the two appraisers shall jointly name a third appraiser licensed in the Province of Ontario who shall be mandated to determine the Current Market Rent for the Premises. The Annual Base Rent shall be equal to such amount as so determined if it is no less than the lower of the first two nor no more than the higher of the first two, otherwise, it shall be whichever of the first two amounts is closest in value to the third. Notwithstanding the foregoing, the Annual Base Rent during an Extension Term shall in no event be less than the Annual Base Rent during the initial Term or Extension Term then ending, as the case may be.

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ARTICLE 4

RENT

4.1 Rent

The Tenant shall pay to the Landlord, at 167 Lord Seaton Road, Willowdale, Ontario, M2P 1K8, or at such other place as the Landlord may direct in writing, during the Term in lawful money of Canada without any demand, set off, abatement, compensation or deduction whatsoever, on the days and at the times hereinafter specified, Rent, which shall include the aggregate of the sums specified in sections 4.1(a), 4.1(b) and 4.1(c) below:

(a) Annual Base Rent – During each of the first five (5) Lease Years, Annual Base Rent in the amounts per annum for the respective years of the Term as more particularly set out in section 1.1(f). During each of the next five (5) Lease Years, the Annual Base Rent shall be the Annual Base Rent as more particularly set out in section 1.1(g).

(b) Additional Rent - Together with such other amounts, charges, costs and expenses as are required to be paid by the Tenant to the Landlord pursuant to this Lease in addition to Annual Base Rent, whether or not such amounts are specifically designated elsewhere in this Lease as Additional Rent.

(c) Management Fee – The Management Fee.

4.2 Payment of Rent

The Annual Base Rent shall be paid in equal consecutive monthly instalments in advance on the first day of each and every month during the Term. Subject to section 4.3, the first monthly instalment of the Annual Base Rent shall be paid by the Tenant on the Commencement Date of the Term. The Landlord shall remit to the Tenant, before each Lease Year, the estimated amount of the Additional Rent (other than the portion thereof which the Tenant shall pay directly to third parties) and of the Management Fee for that period, and the monthly payments of Additional Rent and Management Fee which are payable to the Landlord shall then be established for said Lease Year based on that estimate. The Landlord may from time to time during a Lease Year re-evaluate its estimate of such Additional Rent and of the Management Fee, and in such case shall notify the Tenant in writing of the re-evaluation and establish monthly payments for the unexpired period of such Lease Year or of such part only of a Lease Year, so that after the Tenant is credited with the appropriate amounts paid by the Tenant in accordance with the previous estimate, such Additional Rent and the Management Fee is paid in full during such Lease Year or during a part only of such Lease Year. After each Lease Year, the Landlord shall remit to the Tenant a statement indicating the actual amount of the Additional Rent (other than the portion thereof which the Tenant has paid directly to third parties) and of the Management Fee for the said Lease Year. Should the amount of such Additional Rent and of the Management Fee then determined by the Landlord be greater or less than the total of the amounts already paid by the Tenant to the Landlord, then appropriate adjustments will be made within thirty (30) days following the delivery of the above-mentioned statement.

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4.3 Rent for Irregular Periods

All Rent reserved herein shall be deemed to accrue from day to day, and if for any reason it shall become necessary to calculate Rent for irregular periods of less than one (1) month a pro-rata adjustment, based on a per diem adjustment on the basis of a three hundred and sixty-five (365) day year, shall be made on a daily basis in order to compute Rent for such irregular period.

4.4 Waiver of Offset

The Tenant hereby waives and renounces any and all existing and future claims, offsets and compensation against any Rent and agrees to pay such Rent regardless of any claim, offset or compensation which may be asserted by the Tenant or on its behalf.

4.5 Net Lease

The Tenant acknowledges and agrees that it is intended that this Lease shall be a completely net lease for the Landlord except as shall be otherwise provided herein, and that the Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Premises, and the Tenant, except as shall be otherwise provided herein, shall pay all charges, impositions and costs of every nature and kind relating to the Premises.

ARTICLE 5

TENANT’S COVENANTS

The Tenant covenants with the Landlord as follows:

5.1 Rent

To pay the Annual Base Rent, Additional Rent and the Management Fee on the days and in the manner provided herein.

5.2 Permitted Use

To use the Premises only for the purpose set out in section 1.l(h) and not to use or permit to be used the Premises or any part thereof for any other purpose without first obtaining the consent of the Landlord (which shall not be unreasonably withheld or delayed).

5.3 Waste and Nuisance

Not to commit or permit any waste or injury to the Premises including the Leasehold Improvements and any overloading of the capacity of a utility, electrical or mechanical facility in the Premises.

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5.4 Insurance Risks

Not to do, omit to do or be done or permit to be done or omitted to be done upon the Premises anything that would cause any policy of insurance to be subject to cancellation.

5.5 Cleanliness and Heating

(a) Not to permit the Premises to become untidy, unsightly or hazardous or permit unreasonable quantities of waste or refuse to accumulate therein. In addition, the Tenant shall regulate the heating, ventilating and air-conditioning facilities serving the Premises so as to maintain reasonable conditions of temperature and humidity within the Premises so as to prevent any damage thereto by reason of frost, moisture or otherwise, shall make all necessary maintenance, repairs and, subject to Section 7.2, replacements to said facilities, (reasonable wear and tear excepted).

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the HVAC system with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding Section 5.5(b), so long as the Tenant is BWAY Corporation, or a direct or indirect wholly owned subsidiary of BWAY Corporation, the Tenant shall not be required to enter into a service contract for the HVAC system with a third party contractor, provided that the Tenant covenants to maintain or cause to be maintained the HVAC system to the same standard as would a professional third party contractor performing inspections at regular intervals in accordance with industry standards. In the event the Tenant breaches the foregoing covenant, the Tenant shall thereafter, for the balance of the Term, be required to enter into a service contract as required under Section 5.5(b) and, without limiting the Tenant’s obligations under Section 7.1, shall be responsible for the cost of all repairs and replacements to the HVAC system resulting from said breach.

5.6 Compliance with Laws

To comply at its own expense with all municipal, federal, provincial, sanitary, fire and safety laws, bylaws, regulations and requirements pertaining to the operation and use of the Premises, signage, trade fixtures, furniture and equipment installed therein and the making by the Tenant of any repairs, changes or improvements therein, provided that the Tenant’s obligations and covenants relating to compliance with Environmental Laws shall be governed by Article 9 below.

5.7 Overholding

That if the Tenant shall continue to occupy the Premises after the expiration of this Lease without any further written agreement and without objection by the Landlord (which

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shall not result in a tacit renewal of this Lease despite any legal presumption to the contrary) the Tenant shall be a monthly tenant at a monthly rent equal to 150% of the Annual Base Rent payable in respect of the last month of the Term, such rent to be payable by the Tenant as set forth in Article 4 hereof and (except as to length of tenancy) on and subject to the provisions and conditions herein set out, including the obligation to pay Additional Rent, the whole, without prejudice to the rights and recourses of the Landlord.

5.8 Signs

The Tenant shall be permitted to install, at its sole cost and expense, signage on the Premises, including the Building, provided such signage complies with all applicable lawful governmental requirements. The Tenant shall remove such signage at the expiry or earlier termination of the Term and shall repair any damage caused by the installation or removal of the signage.

5.9 Inspection and Access

To permit the Landlord, upon reasonable prior notice (which shall not in any event be less than 24 hours) and during normal business hours, from time to time, or at any time in the event of an emergency, to enter and to have its authorized agents, employees and contractors enter the Premises for the purpose of inspection, maintenance, making those repairs which the Landlord is required to make hereunder to the Premises; and the Tenant shall provide free and unimpeded access for the purpose, and shall not be entitled to compensation for any inconvenience, nuisance or discomfort caused thereby, but the Landlord in exercising its rights hereunder shall proceed to the extent reasonably possible so as to minimize interference with the Tenant’s use and enjoyment of the Premises.

5.10 Showing Premises

The Tenant shall permit the Landlord and its authorized agents and employees, acting reasonably and without interrupting the Tenant’s business, to show the Premises:

(a) to prospective tenants during the hours of 8:00 a.m. to 6:00 p.m. Monday to Friday, inclusive, of the last six (6) months of the Term, or if the Tenant has exercised a right to extend the Term under section 3.2, the last six (6) months of such Extension Term; and

(b) to prospective purchasers and lenders during the hours set forth in section 5.10(a) throughout the Term and any Extension Terms.

The Landlord shall give the Tenant reasonable prior notice of any such showing, and at the request of the Tenant shall effect such showing in the company of a Tenant representative (provided that the Tenant shall not unreasonably delay such showing by reason of making a Tenant representative available).

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5.11 Equipment

The Tenant shall be responsible for and pay the cost of installation, operation, maintenance and replacement of the equipment required by its occupancy of the Premises including, without limitation, security systems, sprinkler systems, racking, rail siding, fencing in and around the Premises, telephones, computers and other communications facilities and equipment.

5.12 Floor Loads

The Tenant shall not place a load upon any portion of any floor of the Premises which exceeds the floor load which the area of such floor being loaded was designed to carry, having regard to the loading of adjacent areas and that which is allowed by applicable provincial building codes. The Tenant shall repair any damage done in the Premises by reason of any excessive weight placed in the Premises or excessive vibration caused in the Premises.

5.13 Glass

The Tenant shall restore or replace forthwith, at its expense, any broken or damaged glass on, in or upon the Premises.

ARTICLE 6

LANDLORD’S COVENANTS

6.1 Quiet Enjoyment

The Landlord covenants with the Tenant that, provided the Tenant duly and punctually pays the rent hereby reserved and performs the covenants on its part contained, the Tenant shall and may peaceably possess and enjoy the Premises for the Term hereby granted without any interruption or disturbance from the Landlord, its successors and assigns or any other persons lawfully claiming by, from, through or under it.

ARTICLE 7

REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION

7.1 Maintenance and Repairs

(a) The Tenant shall keep the Premises as would a careful and prudent owner consistent with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located, including all Leasehold Improvements and all trade fixtures. This obligation includes, without limitation, the following:

(i) repairs and, maintenance to the plumbing, electrical ventilating, heating, air conditioning and HVAC systems and other base building systems and equipment, including the systems provided for bringing utilities to the Building, doors, door seals, rail siding, dock seals and levellers, the roof and all component parts thereof (including without limitation the repair

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and maintenance of the waterproof membrane, to the extent that such repairs and maintenance expenses do not constitute a capital cost in accordance with generally accepted accounting principles, which capital costs will be treated as capital repairs pursuant to Section 7.2 provided that they are not attributable to a breach by the Tenant under Section 7.1(b)), plate glass, signs, hardware, partitions, mechanical, electrical, lighting and plumbing fixtures and systems, wiring, piping, water, sewers and gas connections, drains and mains attributable to the Property and which serve the Building, ceilings, floors, stairs, platforms, walls, thresholds, and all operating equipment in the Premises, exterior walls, parking areas, driveways, entrances, glass windows, mouldings and all other machinery, operating equipment and facilities belonging to, forming part of or connected with the Premises and the Building;

(ii) normal levelling, grading and patching of yard and maintenance of asphalt and paving; and

(iii) keeping the driveways, parking areas, entrances, walks, grounds, sidewalks and curbs forming part of the Property clean and free of snow and ice;

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the maintenance of the roof components with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding anything herein, the Landlord shall carry out the repairs and replacements in respect of the identified costs for years 1 to 3 as set out in the Capital Reserve Table annexed as Appendix B to the Property Condition report dated April 21, 2006 prepared by Golder Associates in favour of BWAY Corporation at the Landlord’s sole cost and expense within such time frames as would a prudent landlord and in any event prior to the Lease Expiration Date set forth in Section l.1(e)(iii).

(d) At the expiration of the Lease or any renewals or extensions thereof, the Tenant shall surrender the Premises to the Landlord in the manner provided for in section 15.8.

(e) The Landlord shall be responsible for and shall carry out, at its sole cost and expense, all repairs required as a result of:

(i) inherent structural defects or weaknesses in the Premises;

(ii) defects in repairs or construction performed or installations made by or on behalf of the Landlord; and

(iii) the negligent acts or omissions of the Landlord.

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(f) Prior to or within thirty (30) days after occupation of the Premises by the Tenant, and prior to or within thirty (30) days following the departure from the Premises by the Tenant, representatives of the Tenant and the Landlord shall make a joint inspection of the Premises and record the condition thereof on an inspection checklist. Within ten (10) days after said initial joint inspection, a copy of the inspection checklist shall be sent to both the Landlord and the Tenant, and such inspection checklist shall form a part of this Lease.

7.2 Capital Repairs

Notwithstanding anything to the contrary contained in this Lease except for repairs and other work contemplated by sections 7.1(c) and (e) and Article 9, to the extent that the cost of any repair or replacement to the Premises constitute a capital cost in accordance with generally accepted accounting principles, the Landlord shall make such repairs or replacements, provided that all such repairs or replacements shall be consistent with the existing building standard and with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located. The cost of such repair or replacement shall be amortized over the useful life expectancy of the asset repaired or replaced on a straight line basis and the Tenant shall pay to the Landlord in each year of the Term the amortized amount of such cost within thirty (30) days after receipt of an invoice therefor from the Landlord. Any replacement or repair to the Structure of the Building, replacement of any of the base building systems servicing the Building and replacement of asphalt or other paving shall constitute a capital cost.

7.3 Damage, Destruction and Termination

(a) If the Building becomes Untenantable such that the Building or any substantial part thereof is rendered not reasonably capable of use and occupancy by the Tenant for its use thereof pursuant to this Lease then:

(i) from and after the date of occurrence of the event rendering the Building Untenantable and until the Premises are again reasonably capable of use and occupancy as aforesaid, Rent shall abate from time to time in proportion to the part or parts of the Building not reasonably capable of use and occupancy; and

(ii) unless this Lease is terminated as hereinafter provided, the Landlord shall repair such damage with all reasonable diligence to the extent only of insurance proceeds actually received by the Landlord (the “Landlord’s Work”). The Landlord’s obligation to rebuild and restore the Premises and the Building shall not include the obligation to rebuild, restore, replace or repair, without limitation, any chattel, furniture, inventory, fixtures (including trade fixtures), Leasehold Improvements including, without limitation, any alterations constructed or installed for or on behalf of the Tenant or for its benefit, installations, additions or partitions in respect of which the Tenant is required to maintain insurance under this Lease, or any other thing that is the property of the Tenant located on, in, under, above or which serve the Premises. Nothing herein shall require the

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Landlord to rebuild the Premises and the Building in the condition and state that existed before the damage, but the Premises and the Building, as rebuilt, will have reasonably similar facilities and services to those that existed prior to the damage.

(b) If the Building is substantially damaged or destroyed by any cause to the extent such that in the reasonable opinion of the Landlord’s architect or engineer (to be delivered to the Landlord and Tenant within thirty (30) days after the damage or destruction) it cannot be repaired or rebuilt (based on standard hours of construction work) or if access cannot be restored within twelve (12) months after the occurrence of the event rendering the Building Untenantable or the expiration of the Term (whichever is sooner), either the Landlord or the Tenant may at its option, exercisable by written notice to the other party given within ninety (90) days after the occurrence of such damage or destruction, terminate this Lease, in which event the Landlord shall not be bound to repair, and the Tenant shall instead deliver up possession of the Premises to the Landlord with reasonable expedition but in any event within sixty (60) days after delivery of such notice of termination, and Rent shall be apportioned and paid to the date upon which possession is so delivered up (but subject to any abatement to which the Tenant may be entitled under section 7.3(a) by reason of the Premises having been rendered in whole or in part not reasonably capable of use and occupancy), but otherwise the Landlord shall repair such damage with such reasonable diligence.

(c) If neither party has elected to terminate this lease pursuant to section 7.3(b) and if the Landlord has not completed the repair or the rebuilding to such an extent that it is substantially complete and ready for the Tenant’s occupancy within twelve (12) months after the occurrence of the event rendering the Building Untenantable (subject to any event of force majeure referred to in section 14.1 arising after the occurrence of the original event rendering the Building Untenantable) then the Tenant may by notice to the Landlord elect to terminate this Lease effective as of the date of the notice or such later date as may be specified therein.

(d) The Tenant shall make available all proceeds of insurance with respect to the Building for the purposes of any such repairing or rebuilding.

ARTICLE 8

TAXES AND OPERATING COSTS

8.1 Tenant’s Tax Obligations

During the Term, the Tenant shall be responsible to:

(a) pay when due, all taxes, business taxes, property taxes, business licence fees, permit fees and other taxes, rates, duties or charges levied, imposed or assessed by lawful authority in respect of the use and occupancy of the Premises by the Tenant, the business or businesses carried on therein by the Tenant, or the equipment, machinery or fixtures brought therein by or belonging to the Tenant, or to anyone occupying the Premises with the Tenant’s consent, or from time to

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time levied, imposed or assessed in the future in lieu thereof, and shall pay to the Landlord upon demand the portion of any tax, rate, duty or charge levied or assessed upon the Land and Building that is attributable to any equipment, machinery or fixtures on the Premises which are not the property of the Landlord; and

(b) (i) pay promptly directly to the relevant taxing authority as and when due all Taxes that are levied, rated, charged or assessed from time to time, in respect of the Premises on the basis of any real property tax bill or assessment notice rendered by any lawful taxing authority; (ii) within ten (10) days after receipt of any such real property tax bill or assessment notice, provide a copy thereof to the Landlord; and (iii) promptly deliver to the Landlord receipts evidencing the payment of all such Taxes and such other information in connection therewith as the Landlord reasonably requires. The Tenant will pay all Taxes when they become due and payable, before any interest, penalty, fine or cost may be imposed for late or non-payment, to the department, office or bureau charged with their collection. If the Tenant should fail to pay any Taxes as required under this Section, the Landlord shall have the right to pay such Taxes at the Tenant’s expense, and the Tenant shall pay to the Landlord as Additional Rent, upon demand, all costs and expenses incurred therefor.

8.2 Goods and Services Taxes

The Tenant shall pay to the Landlord all Goods and Services Tax exigible under the relevant taxing statute in respect of the Rent payable by the Tenant under this Lease, or in respect of the rental of premises by the Tenant under this Lease. Goods and Services Tax shall be payable at the same time as the Tenant pays Rent to the Landlord. Notwithstanding any other section of this Lease, the amount payable by the Tenant under this section shall be deemed not to be Rent, but the Landlord shall have the same remedies for and rights of recovery of such amount as it has for recovery of Rent under this Lease.

8.3 Tenant’s Share

Upon expiry or earlier termination of the Term or, if the Term is extended, the last Extension Term, the Landlord shall pay to the Tenant any overpayment or accrued credit balance of the Taxes paid by the Tenant to the taxing authority by the Tenant. Notwithstanding the foregoing, the Tenant acknowledges that there may be a delay in the invoicing of property taxes and business taxes for the Land for the last year of the Term and that for the last year of the Term, the Tenant shall be responsible for payment of its pro-rata share of the actual Taxes.

In any calendar year of the Term in which the Tenant does not lease the Premises for the entire twelve month period, the Landlord may estimate the Taxes payable by the Tenant, and the Tenant agrees to pay to the Landlord Taxes as so estimated, in monthly instalments, in advance, on the same dates and in the same manner as Annual Base Rent. The Landlord’s estimate of Taxes may be such that, by the due date of the last instalment of Taxes payable to the relevant taxing authority, the Landlord may or may not have received from the Tenant the full amount of the Tenant’s share of Taxes for such calendar year. Promptly following receipt of the

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final bill and/or assessment for Taxes for the period for which the estimated payments of Taxes have been made, the Landlord will give notice to the Tenant of exact amount of Taxes (together with copies of the relevant tax bills and/or assessments) and, if necessary, an adjustment will be made between the parties within thirty (30) days after such notice.

8.4 Notices of Assessment etc.

(a) The Tenant shall, at the Landlord’s request, promptly deliver to the Landlord,

(i) receipts for payment of all Taxes payable by the Tenant;

(ii) notices of any assessments for Taxes or other assessments received by the Tenant that relate to the Premises, and

(iii) whatever other information relating to Taxes in the Tenant’s possession that the Landlord reasonably requests from time to time.

(b) The Tenant shall deliver to the Landlord, at least ten (10) days before the last date for filing appeals, notice of any appeal or contestation that the Tenant intends to institute with respect to Taxes payable by the Tenant and obtain the prior written consent of the Landlord for the appeal or contestation, which consent shall not be unreasonably withheld. If the Tenant obtains the Landlord’s consent and does not pay the Taxes before the appeal or contestation, the Tenant shall,

(i) deliver to the Landlord such security for the payment of the Taxes as the Landlord reasonably requires;

(ii) promptly and diligently prosecute the appeal or contestation; and

(iii) keep the Landlord informed on all aspects of it.

(c) The Tenant shall indemnify and save the Landlord harmless from all loss, cost, charges and expenses arising from Taxes payable by the Tenant whether against the Landlord or the Tenant including, but not limited to increases in Taxes arising directly or indirectly out of an appeal or contestation by the Tenant.

(d) The Landlord shall promptly deliver to the Tenant notices of any assessments or bills for Taxes or other assessments or bills received by the Landlord that relate to the Premises. The Landlord shall not institute any tax appeal or other contestation of Taxes without first obtaining the consent of the Tenant which shall not be unreasonably withheld.

8.5 Utility/Communication/Service Charges

The Tenant shall pay all charges for services and utilities including electricity, gas, air-conditioning, heating, fuel, water, sewer, telephone, rail siding leases and security, delivered or provided to or made available upon the Premises, and other costs which are metered, charged, levied or rated directly to the Tenant in respect of the Premises, and if, at any time, for

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any reason, during the Term or any renewal or extension thereof, the Landlord is required to pay any or all of the foregoing, then a sum equal to the amount so paid shall forthwith become due and be collectible upon demand, failing which such sums shall become Additional Rent and the Landlord shall have the same rights and remedies with respect to said sum as if the same were Rent reserved hereunder.

ARTICLE 9

ENVIRONMENTAL MATTERS

9.1 Environmental Laws

(a) In its use and occupation of the Premises, the Tenant shall comply with Environmental Law in all material respects. To the extent that the Premises or the Tenant are not in compliance with applicable air approvals and related air emission matters under Environmental Law on the Commencement Date, the Tenant shall pursue diligently any approvals or certificates required by Environmental Law with respect to air emissions.

(b) Subject to compliance with Environmental Law, the Tenant may bring onto the Premises, store, handle, use and transport any substance, including any Contaminant or waste, that may be, or has been, used in connection with its operations, including injection molding, silkscreen printing and chiller operations, and drum and pail reconditioning, cleaning, painting and sealing.

(c) Subject to compliance with Environmental Law, the Tenant may continue to use any existing storage tanks at the Premises and may replace such tanks from time to time. In addition to replacing existing tanks, the Tenant may install new above ground and underground storage and settling tanks provided that, in the case of new tanks, the Tenant shall first obtain the consent of the Landlord as to the location and installation of any such tank in accordance with the provisions of section 11.1.

(d) All Contaminants brought or permitted onto the Premises during the Term by the Tenant, its employees or a Transferee, despite any other provisions of this Lease to the contrary and any expiry, termination or disclaimer of this Lease, shall be and remain the property and sole responsibility of the Tenant.

9.2 Tenant’s Responsibility

(a) Except to the extent contributed to by a Landlord Party and except for those matters listed in Section 9.5(a) for which the Landlord shall be responsible, the Tenant shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants on, in or under the Premises during the Term of the Lease. Except (i) as caused by or contributed to by a Landlord Party, and (ii) for those matters listed in Section 9.5(a), the Tenant shall indemnify, defend (utilizing counsel satisfactory to the Landlord) and hold harmless the Landlord and the Landlord’s respective officers, directors, beneficiaries, shareholders, partners, agents and employees from all

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Claims arising out of or in any way connected with any Release of any Contaminants that occurs during the Term of this Lease, at, in, on, from, under, or about the Premises or the Building, or which arises at any time from the Tenant’s use or occupancy of the Premises, or from the Tenant’s failure to provide all information, make all submissions, and take steps required by all authorities under Environmental Law.

(b) Upon the occurrence of any material Release of a Contaminant at the Premises and upon the Tenant becoming aware of such Release, the Tenant shall immediately give written notice to the Landlord. In any event, the Tenant shall immediately take all steps required by Environmental Law to remedy or otherwise address the situation giving rise to any Release.

(c) If any work is required in accordance with this section 9.2 the Tenant shall prepare all necessary studies, plans and proposals and submit them to the Landlord for approval, which approved shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Tenant shall keep the Landlord fully informed of the progress of the work. If the Landlord has reasonable grounds for believing that the Tenant will not promptly or properly carry out such work, the Landlord may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Landlord does so, the Tenant shall pay for all costs in connection therewith, within thirty (30) days after the Landlord has incurred the costs and made written demand to the Tenant.

(d) The Tenant covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

9.3 Assessment of the Premises

(a) Prior to the Commencement Date, or shortly thereafter, the Landlord will obtain, at its cost, a Phase II Environmental Site Assessment Report (the “Baseline Phase II”) to identify those Contaminants, and the quantities thereof, present at, in or under the Premises as at the Commencement Date (the “Baseline Condition”). Prior to causing any such environmental assessment, the Landlord will obtain a written proposal from its environmental consultant as to the recommended scope of the assessment for the Premises, which proposal is subject to the Tenant’s prior written approval, which approval shall not be unreasonably withheld (the “Baseline Scope”). The Landlord will deliver a copy of the Baseline Phase II to the Tenant prior to the Commencement Date, or shortly thereafter. Without limiting any other provision herein, the Landlord and the Tenant shall, throughout the term, maintain the Premises at the Baseline Condition in accordance with their respective obligations under this Article 9.

(b) The Landlord may at any time during the Term, if it has reasonable grounds to believe that the Tenant has not complied with Environmental Law in any material respect, including if it has in good faith reason to believe that there has been any

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Release of any Contaminant in, on, over, under or about the Promises that would reasonably be expected to give rise to a material liability pursuant to Environmental Law, enter the Premises upon reasonable prior notice to the Tenant and cause an environmental assessment with respect to the suspected non-compliance with Environmental Law. In the case of an assessment under this section 9.3(a) the Landlord shall consult with the Tenant as to when the assessment shall be carried out and shall minimize any interference with the Tenant’s business.

(c) The scope and breadth of such environmental assessment shall be reasonable and shall not unduly interfere with the conduct of business by the Tenant in the Premises. The resulting environmental assessment shall be addressed to both the Landlord and the Tenant and copies given to both. The Landlord shall be solely responsible for the cost of any such assessment unless such assessment reveals any material breach by the Tenant of Tenant’s covenant contained in this Lease, in which event the Tenant shall reimburse the Landlord the cost of such assessment.

(d) If any assessment reveals any breach by the Tenant of the Tenant’s covenant contained in this Lease, the Tenant shall take reasonable steps as are necessary so as to rectify such breach. In carrying out such work, the Tenant shall keep the Landlord informed of the progress of the work.

9.4 Contaminants at the End of the Term

Upon the expiry of the Term, or at such other times as may be required by any lawful governmental authority, the Tenant shall remove or otherwise address as required by Environmental Law all Contaminants from the Premises which were placed, brought or permitted onto the Premises during the Term by the Tenant, and carry out all work necessary to address such Contaminants, all at the Tenant’s sole cost and expense. The Tenant will, prior to the end of the Term, at its cost, deliver to the Landlord a Phase II Environmental Assessment prepared by a reputable consulting or engineering firm approved in advance by Landlord in writing, evidencing the environmental condition of the Property (the “Term Phase II”). The scope of the Term Phase II shall be equivalent to the Baseline Scope.

9.5 Landlord’s Indemnity and Covenant

(a) Except to the extent contributed to by a Tenant Party, the Landlord will indemnify, defend (utilizing counsel satisfactory to the Tenant) and hold harmless the Tenant and the Tenant’s respective officers, directors, beneficiaries, shareholders, partners, agents and employees from all Claims, and shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants that occur or arise as a result of:

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(i) the existence of any Contaminant on, in or under the Premises as at the Commencement Date or arising after the expiry of the Term and following the completion of any remediation and/or work for which the Tenant is responsible hereunder; or

(ii) the migration, transfer or movement of any Contaminant onto, into or through the Premises from any other lands; or

(iii) the existence of any Contaminant on, in or under the Premises contributed to or caused by a Landlord Party.

Upon the occurrence of any material quantity of a Contaminant at or from the Premises and upon the Landlord becoming aware of such Contaminant, the Landlord shall immediately give written notice to the Tenant. In any event, the Landlord shall immediately take all steps required by Environmental Law to remedy the situation giving rise to any such Contaminant arising or resulting from the matters listed in Subsections 9.5(a)(i), (ii) and (iii) above.

(b) If any work is required under section 9.5(a), the Landlord shall prepare all necessary studies, plans and proposals and submit them to the Tenant for approval, which approval shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Landlord shall keep the Tenant fully informed of the progress of the work. If the Tenant has reasonable grounds for believing that the Landlord will not promptly or properly carry out such work, the Tenant may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Tenant does so, the Landlord shall pay for all costs in connection therewith, within thirty (30) days after the Tenant has incurred the costs and made written demand to the Landlord.

(c) The Landlord covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

ARTICLE 10

TRANSFERS, ASSIGNMENTS AND SUBLETTINGS

10.1 Consent Required

(a) Subject to section 10.4, the Tenant shall not effect a Transfer without the prior written consent of the Landlord which consent may not be unreasonably withheld, delayed or conditioned. In determining whether or not to grant its consent, it shall not be unreasonable for the Landlord to withhold its consent if:

(i) the Transferee does not have a history of successful business operations in the business to be conducted in the Premises and a good credit rating; or

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(ii) there is a history of defaults under commercial leases by the Transferee, or by companies or partnerships of which the Transferee was a principal shareholder or partner at the time of the defaults.

The Tenant shall deliver to the Landlord such information as the Landlord may reasonably require to allow the Landlord to satisfy itself as to the foregoing.

(b) This prohibition against a Transfer shall be construed to include a prohibition against any Transfer by operation of law. If the Tenant effects a Transfer, the Landlord may collect Rent from the Transferee and apply the net amount collected to the Rent reserved in this Lease, but no such collection shall be deemed to be a waiver of this covenant or the acceptance of the Transferee as Tenant or a release of the Tenant from its obligations hereunder. Notwithstanding any Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder. Any consent by the Landlord to any Transfer shall not constitute a waiver of the requirement for consent by the Landlord to any subsequent Transfer by either the Tenant or any Transferee.

(c) Any consent granted by the Landlord shall be subject to the Tenant causing the Transferee to execute an agreement directly with the Landlord agreeing:

(i) if the Transferee is an assignee, to be bound by all of the terms contained in this Lease, as if the Transferee had originally executed this Lease as Tenant; or

(ii) if the Transferee is a subtenant or other occupant of the Premises, to do nothing, either by act or omission, that would cause the Tenant to be in default of its obligations under this Lease.

Such agreement and the consent of the Landlord to a Transfer shall be prepared by the Landlord or its solicitors and all reasonable legal and administrative costs with respect thereto shall be borne by the Tenant.

10.2 Change of Control

The prohibition against a Transfer set out in Section 10.01(a) applies to any change in the direct or indirect effective voting control of the Tenant (if the Tenant is or becomes a corporation), unless (i) the Tenant is a public corporation whose shares are listed and traded on any recognized stock exchange in Canada or the United States, and (ii) the Landlord is satisfied that there will be a continuity of business practices and policies, and management of the Tenant. If the Tenant is a partnership or is controlled by a partnership (either directly or indirectly), this prohibition against a Transfer also includes a change in the constitution of the partnership resulting from the withdrawal or addition of any partners. The prohibition also applies to an assignment by operation of law.

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10.3 Leasehold Charges

The Tenant may, without the consent of the Landlord effect one or more Transfers to one or more lenders as security for a loan or loans from time to time (such Transfer being a “Leasehold Mortgage”). All rights acquired by such a Transferee (a “Leasehold Lender”) under a Leasehold Mortgage shall be fully subordinate to the interest of the Landlord and to the interest of a Mortgagee and subject to the terms and conditions of this Lease.

The Leasehold Lender shall execute and deliver, prior to such Leasehold Mortgage becoming effective, a landlord/lender agreement (the “the Landlord/Lender Agreement”) in form and substance acceptable to the Landlord and the Leasehold Lender but which shall provide, inter alia, as follows:

(a) the Leasehold Lender shall have the unrestricted right to assign, sell, participate, securitize and otherwise deal with its interest in the Leasehold Mortgage without the Landlord’s consent provided that the holder of such interest is bound by the Landlord/Lender Agreement;

(b) the Leasehold Lender shall not take any action against the Premises for breach or default without first giving the Landlord notice of any default by the Tenant under any Leasehold Mortgage;

(c) no voluntary surrender by the Tenant to the Landlord of this Lease or the Premises shall be valid or effective and there shall be no amendment to or cancellation of this Lease without in each case the prior written consent of the Leasehold Lender;

(d) the Landlord shall, concurrently with the delivery to the Tenant of any notice required or permitted under this Lease and prior to commencement of any enforcement proceedings against the Tenant, deliver to the Leasehold Lender a copy of such notice and no such notice to the Tenant shall be effective against the Leasehold Lender until a copy of such notice is given in accordance with the notice provisions of this Lease to such Leasehold Lender. If the Tenant fails to cure the default, the Leasehold Lender shall have a further period often (10) days to cure the defaults;

(e) if the Leasehold Lender is enforcing its security under the Leasehold Mortgage it may effect a Transfer in accordance with the terms of this Lease;

(f) if, in the context of enforcing its security under the Leasehold Mortgage, the Leasehold Lender takes possession of the Premises it shall be bound by the terms of the Lease until such time as it shall effect a Transfer whereupon it shall be released;

(g) upon the Leasehold Lender effecting a Transfer the Leasehold Lender shall be released from any obligations under this Lease; and

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(h) if the Lease is terminated under any insolvency or bankruptcy proceedings or as a result of any default by the Tenant which is not susceptible to being cured by the Leasehold Lender, then at the request of the Leasehold Lender made within ten (10) days after the date of such termination, the Landlord will enter into a new lease on the same terms and conditions as this lease for a term expiring on the date noted in section l.l(e)(iii), subject to any rights of extension under section 3.2, provided, however, that all arrears of Rent shall have been paid to the Landlord and that an amount equal to the Rent that would have been payable under the Lease from the date of such termination to the commencement date of the new lease shall have been paid to the Landlord.

The Landlord shall postpone any right that it may have to distrain or right to remove the personal property of the Tenant in favour of any lender to the Tenant. The Landlord shall execute such waiver document as the lender may require, subject to such amendments and changes as may be reasonably requested by the Landlord.

10.4 Permitted Transfers

Notwithstanding the provisions of section 10.1 and provided that the Tenant is BWAY Corporation or a direct or indirect wholly-owned subsidiary of BWAY Corporation, the Landlord’s consent shall not be required in respect of any Transfer:

(a) which is effected in conjunction with the sale of all or substantially all of the business of the Tenant;

(b) a Transfer to an Affiliate of BWAY Corporation in connection with a bona fide corporate reorganization of the Tenant;

(c) a sublease of the Premises;.

provided, however, that the Landlord is given notice of such Transfer contemporaneously with the Transfer and that the transferee shall enter into an agreement under which it agrees to be bound by the Lease.

Notwithstanding any such Permitted Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder.

10.5 Transfer by Landlord

In the event of the sale, lease or disposition by the Landlord of the Premises or the assignment by the Landlord of this Lease or any interest of the Landlord hereunder and to the extent that the purchaser or assignee agrees in writing in favour of the Tenant to be bound by the covenants and obligations of the Landlord hereunder, the Landlord shall without further agreement be relieved of all liability with respect to such covenants and obligations.

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ARTICLE 11

FIXTURES AND IMPROVEMENTS

11.1 Alterations

The Tenant may make Alterations to the Premises without first obtaining the consent of the Landlord provided that such Alterations do not affect the Structure or the base building systems. The Tenant will not make any Alterations to the Leased Premises without the Landlord’s prior written approval if such Alterations will affect the Structure or the base building systems. Such consent will not be unreasonably withheld if:

(a) the Alterations will equal or exceed the then current standard for the Building;

(b) adequate plans and specifications are produced; and

(c) the Tenant has obtained all requisite governmental approvals.

All Alterations will be made in a good and workmanlike manner and, if applicable, in compliance with the plans and specifications approved by the Landlord. If the Tenant obtains the consent of the Landlord to any Alteration then, unless as a condition of granting such consent, the Landlord requires that such Alteration be removed at the expiry or earlier termination of the Term the Tenant shall not be required to remove or make good any such Alteration at the expiry or earlier termination of the Term. If the Landlord’s consent is not obtained then prior to the expiry or earlier termination of the Term, such Alteration shall be removed by the Tenant and all damage caused by the installation and removal of such Alteration be repaired unless the Tenant receives written notice from the Landlord prior to the expiry of the term advising the Tenant that the Landlord will not require the Tenant to remove such Alterations.

11.2 Liens and Encumbrances on Fixtures and Improvements

In connection with any Alterations to the Premises by the Tenant, the Tenant shall comply with all the provisions of the Construction Lien Act (Ontario) (or the equivalent statute in the jurisdiction in question) (the “Act”) and other statutes from time to time applicable thereto (including any provision requiring or enabling the retention of portions of any sums payable by way of holdbacks), shall permit the Landlord to take all steps to enable the Landlord to obtain the benefit of the provisions of the Act and except as to any lawful holdback, shall promptly pay all accounts relating thereto. If and when any builder’s or other lien for work, labour, services or materials supplied to or for the Tenant or for the cost of which the Tenant may be in any way liable or claims therefor shall arise or be filed the Tenant shall within twenty (20) days after receipt of notice thereof procure the discharge thereof, including any certificate of action registered in respect of any lien, by payment or giving security or in such other manner as may be required or permitted by law, and failing which the Landlord may in addition to all other remedies hereunder avail itself of its remedy under section 15.1 and may make any payments into court (but not in any event to the lien claimant) required to procure the discharge of any such liens, shall be entitled to be reimbursed by the Tenant as provided in section 15.1, and its right to reimbursement shall not be affected or impaired if the Tenant shall then or subsequently establish or claim that any lien so discharged was without merit or excessive or subject to any abatement, setoff or defence.

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11.3 Removal of Fixtures and Improvements

Subject to section 15.8, the Tenant may from time to time throughout the Term remove such of its trade fixtures, furniture and equipment from the Premises as it sees fit. The Tenant shall, in the case of every removal either during or at the end of the Term, immediately make good any damage caused to the Premises by the installation and removal of such furniture and equipment and, to the extent required pursuant to section 11.1, Leasehold Improvements.

11.4 Non-compliance

In the event that the Landlord determines that any alterations, additions or improvements made to the Premises or the Building systems serving the Premises by the Tenant do not comply with all applicable statutes, regulations or bylaws of any municipal, provincial or other governmental authority, and the Tenant, after receipt of notice from the Landlord, does not rectify such non-compliance with due diligence, then the Landlord may, at the Landlord’s option, rectify or repair said deficiency which shall be at the Tenant’s sole cost and expense, the same to be paid as Additional Rent by the Tenant to the Landlord upon demand.

ARTICLE 12

INSURANCE AND LIABILITY

12.1 Landlord’s Insurance

(a) The Landlord shall, at all times throughout the Term, carry: (i) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent landlords of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence; (ii) rental income insurance; and (iii) other forms of insurance as would be carried by a prudent owner of a similar building and considered advisable by the Landlord or any Mortgagee. The cost of such insurance shall be paid by the Tenant in accordance with Section 12.1(c). The Landlord may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies provided the premiums for such policy are allocated equitably among the properties covered by such blanket insurance policy.

(b) All Landlord’s insurers shall be registered and licensed to carry on the business of insurance in the Province in which the Premises are located and all insurance policies shall:

(i) contain a cross liability and/or severability of interest clause; and

(ii) contain an undertaking by the insurers to notify the Tenant in writing not less than thirty (30) days prior to any material change, cancellation or termination thereof.

(c) The Tenant will pay to the Landlord the insurance premiums in respect of the insurance required to be carried by the Landlord under this section 12.1, as

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Additional Rent, and in the event of any loss or damage the Tenant shall pay directly to the Landlord any deductible which the Landlord is required to pay toward or for any insured loss relating to the Premises as Additional Rent. The Landlord shall submit the invoice for such insurance premiums or deductibles to the Tenant as they come due and the Tenant shall pay all such amounts within thirty (30) days after receipt of such invoice. In the event that the Tenant fails to pay any such premium prior to its due date, the Landlord may pay such premium and claim it from the Tenant as Additional Rent. Notwithstanding any contribution by the Tenant to the cost of insurance premiums provided herein, the Tenant acknowledges and agrees that no insurable interest is conferred upon the Tenant under this Lease for purposes of any policies of insurance carried by the Landlord and the Tenant has no right to receive any proceeds of any such insurance policies carried by the Landlord.

12.2 Tenant’s Insurance

(a) The Tenant shall, at its expense, obtain and maintain in force throughout the Term and any Extension Term and any period when it is in possession of the Premises, in the name of the Tenant with the Landlord and the Mortgagee (if any) as additional named insureds on all property insurance policies, save that the insurance policies referred to in sections 12.2(a)(i) and (ii) below shall name the Landlord as the insured with the Mortgagee (if any), as additional named insured the following insurance:

(i) insurance on the Building and the heating, ventilating and air conditioning, and other building equipment, machinery and systems, and boilers contained therein whether owned by the Landlord or the Tenant against those risks covered by standard “all risks” (including flood and earthquake) property policies in an amount equal to the full replacement value thereof with such reasonable deductibles as would be carried by a prudent owner of a reasonably similar industrial building, having regard to size, age and location;

(ii) broad form boiler and machinery insurance on a blanket repair and replacement basis with limits for each accident in an amount of at least the replacement cost of the Premises and of all boilers, pressure vessels, air-conditioning equipment and miscellaneous electrical apparatus relating to or serving the Premises;

(iii) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent tenants of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence;

(iv) standard owners form vehicle insurance providing third-party liability insurance with not less than three million dollars ($3,000,000.00) inclusive

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limits, and accident benefits insurance, covering all licensed vehicles owned or operated by or on behalf of the Tenant;

(v) business interruption insurance covering the Annual Base Rent, the Additional Rent and all other costs and expenses in connection with the Premises, all for a twelve (12) month period; and

(vi) such other forms of insurance and increases of the amount of coverage stipulated in the foregoing sections against such risks and in such amounts as may be customarily obtained by tenants of premises similar to the Premises and any other forms of reasonable and customary insurance as the Landlord and/or a Mortgagee, reasonably requires from time to time, in forms and amounts and for risks against which a prudent tenant would insure with a use similar to that of the Tenant.

(b) All insurance policies provided for in this section 12.2 shall:

(i) be taken out with insurers licenced to carry on the business of insurance in the Province in which the Premises are located;

(ii) be non-contributing with and apply only as primary and not excess to any other insurance available to either or both of the Landlord and the Mortgagee;

(iii) not be invalidated as respects the interests of all and any of the Landlord and the Mortgagee by reason of a breach or violation of warranties, representations declarations or conditions contained in the policies; and

(iv) contain an undertaking by the insurers to notify the Landlord and its Mortgagee in writing not less than thirty (30) days before any material change, cancellation, or termination.

The Tenant may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies.

(c) The proceeds of the insurance under Sections 12.2(a)(i) and 12.2(a)(ii) above shall be and are hereby assigned and made payable to the Landlord.

(d) If the Tenant shall fail to take out, renew and keep in force such insurance the Landlord may do so as the agent of the Tenant and the Tenant shall repay to the Landlord any amounts paid by the Landlord as premiums forthwith upon demand.

(e) The Tenant shall furnish to the Landlord certificates or other evidence acceptable to the Landlord as to the insurance from time to time required to be effected by the Tenant pursuant to this Lease and its renewal or continuation in force. No review or approval of any insurance certificate or insurance policy by the Landlord derogates from or diminishes the Landlord’s rights under this Lease.

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12.3 Limitation of Liability

(a) The Landlord releases each Tenant Party from all claims or liabilities in respect of any damage which is actually insured against by the Landlord or is required to be insured against under section 12.1, but only to the extent of insurance proceeds actually received by the Landlord. The Landlord shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Tenant.

(b) The Tenant releases each Landlord Party from all claims or liabilities in respect of any damage which is actually insured against by the Tenant or is required to be insured against under section 12.2, but only to the extent of insurance proceeds actually received by the Tenant. The Tenant shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Landlord.

12.4 Indemnity

(a) Subject to section 12.3(a), the Tenant shall indemnify and save harmless the Landlord and each other Landlord Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Landlord Party arising from the conduct of any work by or any act or omission of the Tenant or any assignee, subtenant, agent, employee, contractor, invitee or licensee of the Tenant, and in respect of all costs, expenses and liabilities incurred by any Landlord Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Landlord Party arising from any breach by the Tenant of any of its covenants and obligations under this Lease. The provisions of this section 12.4(a) shall survive the expiry or earlier termination of this Lease.

(b) Subject to section 12.3(b), the Landlord shall indemnify and save harmless the Tenant and each other Tenant Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Tenant Party arising from the conduct of any work by or any act or omission of the Landlord or any assignee, agent, employee, or contractor of the Landlord, and in respect of all costs, expenses and liabilities incurred by any Tenant Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Tenant Party arising from any breach by the Landlord of any of its covenants and obligations under this Lease. The provisions of this section 12.4(b) shall survive the expiry or earlier termination of this Lease.

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ARTICLE 13

SALE OR FINANCING, SUBORDINATION, ATTORNMENT, REGISTRATION AND

CERTIFICATES

13.1 Sale or Financing of Building

The rights of the Landlord under this Lease may be mortgaged, charged, transferred or assigned to a purchaser or purchasers or to a mortgagee, lending institution or trustee for bond holders (the “Mortgagee”). In the event of a sale or of default by the Landlord under any mortgage, trust deed or trust indenture (the “Mortgage”) and the purchaser or the Mortgagee, entering into possession of the Premises, the Tenant agrees to attorn to and become the tenant of the Mortgagee or the Purchaser under the terms of this Lease. The Landlord shall provide the Tenant with a Non-Disturbance Agreement, in form and substance satisfactory to the Tenant, acting reasonably, from any Mortgagee who holds a Mortgage to which this Lease is subordinate.

The Landlord may assign its rights under this Lease to a lending institution as collateral security for a loan or other financing.

13.2 Subordination and Attornment

If required by any Mortgagee and, provided that such Mortgagee has first entered into a Non-Disturbance Agreement with the Tenant, this Lease and all rights of the Tenant hereunder shall be subject and subordinate to all Mortgages now or hereafter existing which may now or hereafter affect the Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. Subject to the foregoing, the Tenant agrees to execute and deliver promptly whenever requested by the Landlord or by such Mortgagee an instrument of subordination or attornment, as the case may be.

13.3 Registration

The Landlord agrees that the Tenant may prepare and register, at the Tenant’s cost, a notice of this Lease against title to the Premises, on terms and conditions acceptable to the Landlord. Such notice shall only describe the parties, the Premises, the Term, the Commencement Date, and any options to renew the Term. The Tenant covenants and agrees to discharge the notice of lease, at its cost, upon the expiry or earlier termination of the Lease.

13.4 Certificates

Each of the Tenant and the Landlord, whenever requested by the other, shall from time to time execute and deliver to the party making the request and to any other Person designated by the party making the request a certificate in writing as to the status of this Lease at that time, including as to whether it is in full force and effect, is modified or unmodified, confirming the rent payable hereunder and the state of the accounts between the Landlord and Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as to which as may reasonably be requested.

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ARTICLE 14

DELAY; NO WAIVER

14.1 Unavoidable Delay

Notwithstanding the terms of this Lease, if the Landlord or the Tenant is, in good faith, delayed or prevented from doing anything required by this Lease, because of a strike; labour trouble; inability to get materials or services; power failure; restrictive governmental laws or regulations; riots; insurrection; sabotage; rebellion; war; act of God; or any other similar reason, that is not the fault of the party delayed, the doing of the thing is excused for the period of the delay and the party delayed will do what was delayed or prevented within the appropriate period after the delay. The preceding sentence does not excuse the Tenant from payment of Rent in the amounts and at the times specified in this Lease.

14.2 No Admission

The acceptance of any Rent from or the performance of any obligation hereunder by a person other than the Tenant shall not be construed as an admission by the Landlord of any right, title or interest of such person as a subtenant, assignee, transferee or otherwise in the place and stead of the Tenant.

14.3 Part Payment

The acceptance by the Landlord of a part payment of any sums required to be paid hereunder shall not constitute waiver or release of the right of the Landlord to payment in full of such sums.

ARTICLE 15

TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER

15.1 Remedying by Landlord, Non-payment and Interest

In addition to all the rights and remedies of the Landlord available to it in the event of any default hereunder by the Tenant either by any other provision of this Lease or by statute or the common law, the Landlord, provided it has given the Tenant at least five (5) Business Days’ prior written notice in respect of monetary defaults and twenty (20) days’ prior written notice for non-monetary defaults (or such longer period as may be required under the circumstances provided that the Landlord’s interests are not prejudiced):

(a) shall have the right at all times to remedy or attempt to remedy any default of the Tenant, and in so doing may make any payments due or alleged to be due by the Tenant to third parties and may enter upon the Premises to do any work or other things therein and in such event all expenses of the Landlord in remedying or attempting to remedy such default shall be payable by the Tenant to the Landlord forthwith upon demand;

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(b) shall have the same rights and remedies in the event of any non-payment by the Tenant of any amounts payable by the Tenant under any provision of this Lease as in the case of non-payment of Rent;

(c) if the Tenant shall fail to pay any Rent promptly when due, shall be entitled, if it shall demand it, to interest thereon at the Prime Rate plus 2% from the date upon which the same was due until actual payment thereof; and

(d) shall be entitled to be reimbursed by the Tenant, and the Tenant shall forthwith pay the Landlord, the amount of all costs and expenses (including, without limitation, legal costs on a solicitor and own client basis) incurred by the Landlord in connection with the default or in efforts to enforce any of the rights, or to seek any of the remedies, to which the Landlord is or may be entitled hereunder.

Notwithstanding the foregoing, in the event of an emergency, the Landlord may take such of the foregoing actions as are required to prevent damage to the Premises or harm to individuals without first giving the above stated prior written notice provided that the Landlord shall give the Tenant as much notice as reasonably possible prior to taking such actions.

15.2 Remedies Cumulative

The Landlord may from time to time resort to any or all of the rights and remedies available to it in the event of any default hereunder by the Tenant, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative, as the express provisions hereunder as to certain rights and remedies are not to be interpreted as excluding any other or additional rights and remedies available to the Landlord by statute or the common law.

15.3 Right of Re-entry on Default

Provided and it is expressly agreed that:

(a) if and whenever the Rent hereby reserved or other monies payable by the Tenant or any part thereof, whether lawfully demanded or not, are unpaid and the Tenant shall have failed to pay such Rent or other monies within five (5) Business Days after the Landlord shall have given to the Tenant notice requiring such payment; or

(b) if the Tenant shall breach or fail to observe and perform any of the covenants, agreements, provisos, conditions, rules or regulations and other obligations on the part of the Tenant to be kept, observed or performed hereunder, and such breach or failure continues for a period of twenty (20) days (or such longer period as shall reasonably be necessary to cure the default or failure under the circumstances provided the Tenant is proceeding diligently to remedy same) after notice thereof by the Landlord to the Tenant; or

(c) if the Landlord shall have become entitled to terminate this Lease or to re-enter the Premises pursuant to any provision hereof,

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then and in every such case it shall be lawful for the Landlord thereafter to enter into and upon the Premises or any part thereof in the name of the whole and the same to have again, repossess and enjoy as of its former estate, anything in this Lease contained to the contrary notwithstanding.

15.4 Termination and Re-entry

If and whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord, in addition to all other rights and remedies, shall have the right to terminate this Lease forthwith by notice to the Tenant. Upon the giving by the Landlord of such notice, this Lease and the Term shall terminate, and the Tenant shall immediately deliver up possession of the Premises to the Landlord in accordance with section 15.8, and the Landlord may re-enter and take possession of them.

15.5 Certain Consequences of Termination and Re-entry

If the Landlord re-enters the Premises or if this Lease is terminated other than by the passing or expiration of time, then:

(a) notwithstanding any termination or the Term thereby becoming forfeited and void, the provisions of this Lease which relate to the consequences of termination, and the provisions of this Lease as they apply with respect to acts, events and omissions which occurred prior to the termination, shall all survive such termination;

(b) at the Landlord’s option, but without prejudice to the Landlord’s other rights and remedies with respect to recovery of costs, damages and expenses which relate to any default by the Tenant, the Tenant shall pay to the Landlord on demand:

(i) Rent and all other amounts payable under this Lease up to the time of re-entry or the date of termination, whichever is later, including any accelerated rent payable pursuant to section 16.2;

(ii) all damages the Landlord incurs in connection with the re-entering, terminating, re-letting, collecting sums due or payable by the Tenant and storing and realizing upon assets seized, including without limitation, brokerage fees, legal fees and disbursements, the expenses of cleaning and making and keeping the Premises in good order, and the expenses of repairing the Premises and preparing them for re-letting and including the worth at the time of such termination of the excess, if any, of the amount of Rent and charges equivalent to Rent required to be paid pursuant to this Lease for the unexpired remainder of the Term, had it not been terminated, over the then reasonable rental value of the Premises for the remainder of the Term, all of which amounts shall be immediately due and payable by the Tenant to the Landlord; and

(c) the Landlord shall take all such actions as are available to it, acting in a commercially reasonable manner, to mitigate its damages.

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15.6 Waiver of Distress

The Tenant waives and renounces the benefit of any present or future statute taking away or limiting the Landlord’s right of distress and covenants and agrees that notwithstanding any such statute none of the goods and chattels of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears. The Tenant will not sell, dispose of or remove any of the fixtures, goods or chattels of the Tenant from or out of the Premises during the Term without the consent of the Landlord, unless the Tenant is substituting new fixtures, goods or chattels of equal value or is bona fide disposing of individual items which have become excess for the Tenant’s purposes, and the Tenant will be the owner of its fixtures, goods and chattels and will not permit them to become subject to any lien, mortgage, charge or encumbrance.

15.7 Re-letting

Whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord in addition to all other rights it may have, shall have the right as agent of the Tenant to enter the Premises and re-let them (for a term or terms shorter or longer than the balance of the Term, granting reasonable concessions in connection therewith) and to receive the rent therefor and to apply any rent derived from re-letting the Premises upon account of the rent due and to become due under this Lease and the Tenant shall be liable to the Landlord for the deficiency, if any.

15.8 Surrender on Termination

Forthwith upon the termination of this Lease, whether by effluxion of time or otherwise, the Tenant shall vacate and deliver up possession of the Premises in a neat and tidy state in accordance with the Tenant’s obligation under this Lease to repair the Premises, but subject to the Tenant’s rights and obligations in respect of removal in accordance with section 11.3. At the same time the Tenant shall surrender to the Landlord at the place then fixed for the payment of Rent all keys and other devices which provide access to the Premises, the Building or any part thereof and shall inform the Landlord of all combinations to locks, safes and vaults, if any, in the Premises.

ARTICLE 16

EVENTS TERMINATING LEASE

16.1 Cancellation of Insurance

If any policy of insurance upon the Building from time to time effected by the Tenant shall be cancelled or about to be cancelled by the insurer by reason of the use or occupation of the Premises by the Tenant or any assignee, subtenant or licensee of the Tenant or anyone permitted by the Tenant to be upon the Premises, the Landlord shall give the Tenant notice thereof forthwith upon receipt of such notice. The Tenant shall have a reasonable period of time after receipt of such notice either:

(a) to take such steps in respect of such use or occupation as shall enable it to reinstate or avoid cancellation of (as the case may be) such policy of insurance; or

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(b) to acquire alternate insurance.

If the Tenant fails to take such steps or to acquire alternate insurance then the Landlord may at its option either (i) terminate the Lease by giving notice of termination to the Tenant as required hereunder; or (ii) enter upon the Premises and remedy such condition and the Tenant shall pay to the Landlord the costs thereof, as Additional Rent, and the Landlord shall not be liable for any loss or damage caused to any property of the Tenant or of other persons located on the Premises as a result of such entry. The Tenant agrees that the exercise by the Landlord of its rights under this Section shall not be deemed to be a re-entry or a breach of any covenant for quiet enjoyment contained in this Lease.

16.2 Prohibited Occupancy, Bankruptcy and Other Events

If without the written consent of the Landlord the Premises shall be used by any other persons than the Tenant or its permitted assigns or permitted subtenants or for any purpose other than that for which the Premises were leased or occupied by any persons whose occupancy is prohibited by this Lease, or if the Premises shall be vacated or abandoned or remain unoccupied for ten (10) consecutive days or more while capable of being occupied, or if the Term or any of the goods and chattels of the Tenant shall at any time be seized in execution or attachment, or if a receiver or receiver-manager is appointed of the business or property of the Tenant, or if the Tenant or any Indemnifier shall make any assignment for the benefit of creditors or any bulk sale, become bankrupt or insolvent or take the benefit of any statute now or hereafter in force for bankrupt or insolvent debtors or (if a corporation) shall take any steps or suffer any order to be made for its winding-up or other termination of its corporate existence, then in any such case the Landlord may at its option terminate this Lease by notice to the Tenant and thereupon, in addition to the payment by the Tenant of Rent and other payments for which the Tenant is liable under this Lease, Rent for the current month and the next ensuing three (3) months’ Rent shall immediately become due and be paid by the Tenant, or party then controlling the Tenant’s affairs.

ARTICLE 17

MISCELLANEOUS

17.1 Notices

All notices, demands and requests required or permitted to be given under this Lease must be in writing and must be delivered personally or by nationally recognized overnight courier or sent by United States certified mail or Canadian registered mail, as applicable, return receipt requested, postage prepaid and addressed to the parties at their respective addresses set forth in section 1.1 or at such other addresses as the parties may designate from time to time by written notice in the manner provided in this section. Notwithstanding the foregoing, if there is a mail strike, slowdown or other labour dispute which might affect delivery of such notice between the time of mailing and the actual receipt of notice, then such notice shall only be effective if actually delivered.

Upon at least ten (10) days’ prior written notice, each party shall have the right to change its address to any other address within the United States of America or Canada. Notices

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shall be deemed given on the date that such notices are deposited with a nationally recognized overnight courier, deposited with the U.S. Postal Service or Canada Post, as applicable, or personally delivered.

17.2 Extraneous Agreements

The Tenant acknowledges that there are no covenants, representations, warranties, agreements or conditions expressed or implied relating to this Lease of the Premises save as expressly set out in this Lease. This Lease may not be modified except by an agreement in writing executed by the Landlord and the Tenant. If there is any conflict between the provisions of this Lease and any such agreement to lease, the provisions of this Lease shall prevail.

17.3 Time of Essence

Time shall be of the essence of this Lease.

17.4 Successors and Assigns

This Lease and everything herein contained shall enure to the benefit of and be binding upon the Landlord and its successors and assigns and on the Tenant and its permitted successors and permitted assigns. References to the Tenant shall be read with such changes in gender as may be appropriate, depending upon whether the Tenant is a male or female person or a firm or corporation. If the Tenant is comprised of more than one person or entity, then each such person and entity is joint and severally bound by the representations, warranties, agreements and covenants of the Tenant herein and any notice given or deemed to have been given at any time to any such person or entity shall be deemed to have been given at the same time to each other such person and entity.

17.5 Waiver

No condoning, excusing or overlooking by the Landlord or the Tenant of any default, breach or non-observance by the Tenant or the Landlord at any time or times in respect of any covenant, proviso or condition herein contained shall operate as a waiver of the Landlord’s or the Tenant’s rights hereunder in respect of any continuing or subsequent default, breach or non-observance or so as to defeat or affect in any way the rights of the Landlord or the Tenant herein in respect of any such continuing or subsequent default or breach, no acceptance of Rent by the Landlord subsequent to a default by the Tenant (whether or not the Landlord knows of the default) shall operate as a waiver by the Landlord, and no waiver shall be inferred from or implied by anything done or omitted by the Landlord or the Tenant save only express waivers in writing.

17.6 Governing Law and Severability

This Lease shall be governed by and construed in accordance with the laws in force in the Province in which the Premises are located. Each of the provisions contained in this Lease is distinct and severable and a declaration of invalidity or unenforceability of any provision or part of a provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision in this Lease. To the extent permitted by applicable law,

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the parties waive any provision of law that renders any provision of this Lease invalid or unenforceable in any respect.

17.7 Captions

The captions appearing in this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any provision thereof. References to articles and sections in this Lease refer to articles and sections of this Lease. This Lease includes all of the schedules attached to it.

17.8 Expropriation

If during the Term the Premises or any part thereof are taken by any lawful power or authority by the right of expropriation the Landlord and the Tenant shall cooperate so that each may receive the maximum awarded to which it is entitled at law.

17.9 Counterparts

This Lease may be signed in counterparts and by electronic scanning or facsimile transmission with the same effect as if the parties had signed one original copy of this Lease. All counterparts shall be construed as if they constitute one and the same original document.

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IN WITNESS WHEREOF the parties have executed this Lease as of the date first above written.

80241 CANADA LTD.
	(Landlord)
By:	/s/ Morton Arshinoff
Name:	Morton Arshinoff
Title:	President
By:	/s/ Fred J. Arshinoff
Name:	Fred J. Arshinoff
Title:	Vice President
ICL INDUSTRIAL CONTAINERS ULC
	(Tenant)
By:	/s/ Kevin C. Kern
Name:	/s/ Kevin C. Kern
Title:	Vice President & Treasurer
By:
Name:
Title:

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SCHEDULE A

LEGAL DESCRIPTION OF THE LAND

Lots 1 and 2, part of Lots 3 and 4, Plan 4941, as in Instrument No. EB521291, City of Toronto

SCHEDULE B

DEFINITIONS

In this Lease the following expressions shall have the following meanings:

“Additional Rent” means all sums of money to be paid by the Tenant whether to the Landlord or otherwise pursuant to this Lease except for Annual Base Rent.

“Affiliate” has the meaning given to such term in the Business Corporations Act (Ontario) in force as of the date of this Lease.

“Alterations” means any repairs, alterations, replacements, decorations or improvements to the Premises.

“Annual Base Rent” means the annual rent set out in section 1.1(f) or (g) and payable by the Tenant as set forth in section 4.1(a).

“Basic Terms” means those terms of this Lease set out in section 1.1 hereof.

“Building” means that certain building including all fixtures, improvements and amenities located on the Land more particularly described in section 1.1(b)(iii) hereof.

“Business Day” means any day other than a Saturday, Sunday or statutory holiday in either the province in which the Premises are located or in the state of Georgia.

“Change of Control” means, in the case of any corporation or partnership, the transfer or issue by sale, assignment, subscription, transmission on death, mortgage, charge, security interest direct or indirect by, operation of law or otherwise, of any shares, voting rights or interest which would result in any change in the effective control of such corporation or partnership.

“Claim” means any claim made by a Person against another for any liabilities, damages, costs or expenses and any suits or actions involving any such claim.

“Commencement Date” has the meaning set out in section 1.1(e)(i).

“Contaminants” means any pollutants, contaminants, deleterious substances, underground tanks, asbestos materials, mould, lead-based paint, hazardous, corrosive, or toxic substances, special waste or waste of any kind, halon, radon, PCB’s, or other pollutants, contaminants or hazardous materials or any other substance which is now or hereafter prohibited, controlled, or regulated under Environmental Laws.

“Current Market Rent” means that rent that would be paid for improved industrial space in industrial buildings of similar age and class in the vicinity where the Premises are located, as between persons dealing in good faith and at arms’ length, without reduction for any cash payment, leasehold improvement allowance, rent-free period or other inducement.

“Environment” means the ambient air, all layers of the atmosphere, surface water, underground water, all land, all living organisms and the interacting natural systems that include components

of air, land, water, organic and inorganic matter and living organisms, and includes indoor spaces.

“Environmental Law” means all federal, provincial, municipal or local statutes, regulations, by-laws, Environmental Permits, orders or rules, and any policies or guidelines of any governmental or regulatory body or agency, and any requirements or obligations arising under the common law, relating to the Environment and, the transportation of dangerous goods or wastes and occupational safety and health law.

“Environmental Permits” means all permits, licences, approvals, consents, authorizations, registrations and certificates issued by or provided to, as the case may be, any governmental body pursuant to an Environmental Law.

“Extension Term” means any extension of the Term pursuant to a right granted to the Tenant under Article 3 or otherwise agreed to by the parties hereto.

“First Extension Term” has the meaning ascribed thereto in section 3.2(a).

“Goods and Services Taxes” means and includes any and all goods and services taxes, sales taxes, value added taxes, business transfer taxes, or any other taxes imposed on the Landlord or the Tenant from time to time in respect of the Rent payable by the Tenant to the Landlord under this Lease or the rental of the Premises or the provision of any goods, services or utilities, whatsoever by the Landlord to the Tenant under this Lease, whether characterized as a goods and services tax, sales tax, value added tax, business transfer tax, or otherwise.

“Indemnifier” means the person who has executed or agreed to execute the Indemnity Agreement that is attached to this Lease as Schedule C.

“Land” means all and singular those certain parcels or tracts of land legally described in Schedule A hereto, comprising the acreage as shown on the site plan in Schedule A hereto.

“Landlord/Lender Agreement” has meaning ascribed thereto in section 10.3.

“Landlord Party” means the Landlord, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Lease” means this Lease and all Schedules attached hereto, as amended from time to time.

“Leasehold Improvements” means all fixtures, improvements, installations, Alterations and additions now or from time to time hereafter made, erected or installed, whether by the Tenant, the Landlord or anyone else, in the Premises with the exception of trade fixtures, racking, and furniture and equipment not of the nature of fixtures, but includes all partitions however fixed (including movable partitions) and includes all wall-to-wall carpeting with the exception of such carpeting where laid over vinyl tile or other finished floor and affixed so as to be readily removable without damage.

“Leasehold Lender” has meaning ascribed thereto in section 10.3.

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“Leasehold Mortgage” has meaning ascribed thereto in section 10.3.

“Lease Year” means the twelve (12) month period from the Commencement Date of the Lease and each twelve (12) month period thereafter during the Term and any Extension Term.

“Management Fee” means an annual fee equal to one per cent (1%) of the Annual Base Rent.

“Mortgage” has the meaning ascribed thereto in section 13.1.

“Mortgagee” has meaning ascribed thereto in section 13.1.

“Non-Disturbance Agreement” means an agreement between the Tenant and a Mortgagee pursuant to which the Mortgagee agrees that provided the Tenant is not in default of any of its obligations hereunder beyond any applicable grace or call period the Tenant shall have quiet enjoyment of the Premises undisturbed by the Mortgagee or any Person claiming through or under the Mortgagee.

“Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted.

“Premises” means the Land the Building and all improvements and equipment thereon and therein.

“Prime Rate” means the commercial lending rate of interest, expressed as an annual rate, which the chartered bank designated by the Landlord from time to time quotes from time to time in its principal office in Canada as the reference rate of interest and commonly known as its “prime rate”, and which serves as the basis upon which effective rates of interest are calculated for Canadian dollar loans made in Canada to its commercial customers with interest payable as a function of its prime rate.

“Release” means any release, discharge, emission, deposit, issuance, spray, escape, spill, leak and shall also have the various meanings under Environmental Laws.

“Rent” means and includes the Annual Base Rent, Additional Rent and all other sums payable by the Tenant to the Landlord or to other Persons under this Lease.

“Second Extension Term” has the meaning ascribed thereto in section 3.2(b).

“Structure” means the structural elements of the Building including foundations, exterior wall assemblies including weather walls, load bearing walls, floor slab, roof, roof deck, structural columns.

“Taxes” means all taxes, rates, duties, levies and assessments whatsoever, whether municipal, parliamentary or otherwise, which are levied, imposed or assessed against or in respect of the Building, the Land or upon the Landlord in respect thereof or which are from time to time levied,

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imposed or assessed in the future in lieu thereof, including those levied, imposed or assessed for education, schools and local improvements and including all costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred by the Landlord in good faith in contesting, resisting or appealing any taxes, rates, duties, levies or assessments, and shall also include any and all taxes which may in future be levied in lieu of “Taxes” as hereinbefore defined, but excluding taxes and license fees in respect of any business carried on by tenants and occupants of the Building (including the Landlord), income or profits taxes upon the income of the Landlord to the extent such taxes are not levied in lieu of taxes, rates, duties, levies and assessments against the Building or the Land or upon the Landlord in respect thereof.

“Tenant Party” means the Tenant, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

‘Term” means the term of this Lease set forth in section 1.1(e)(i) hereof and any extension or renewal thereof and any period of permitted overholding.

“Transfer” means an assignment of this Lease in whole or in part, a sublease of all or any part of the Premises, any transaction whereby the rights of the Tenant under this Lease or to the Premises are transferred to another, any transaction by which any right of use or occupancy of all or any part of the Premises is conferred upon anyone, any mortgage charge or encumbrance of this Lease or the Premises or any part thereof or other arrangement under which either this Lease or the Premises become security for any indebtedness or other obligations and includes any transaction or occurrence whatsoever (including, but not limited to receivership proceedings, seizure by legal process directly or indirectly and transfer by operation of law), which has changed or might change the identity of the persons having lawful use or occupancy of any part of the Premises. The holding of possession of third party inventory and equipment does not constitute a Transfer.

“Transferee” means the Person to whom a Transfer is or is to be made.

“Untenantable” means that the Building is not capable of being used and occupied for the purpose for which it was intended whether by reason of damage or destruction to the Building by fire, tempest or other peril or a catastrophic event or by reason of access to the Building being cut off or impaired such that the Tenant is unable to access the Building and the Premises in the ordinary course of its business.

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SCHEDULE C

INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 1^ day of 1^, 200^.

BETWEEN:

1^

(the “Landlord”)

OF THE FIRST PART

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1^

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 1^ day of 1^ made between the Landlord and 1^, as tenant (the “Tenant”), and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the (date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or

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disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns

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of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and sealed this Indemnity.

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INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 17th day of July, 2006.

BETWEEN:

80241 CANADA LTD.

(the “Landlord”)

OF THE FIRST PART

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BWAY CORPORATION

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 17th day of July, 2006 made between the Landlord and ICL Industrial Containers ULC, as tenant (the “Tenant”), for the premises located at 100 North Queen Street, Toronto, Ontario, and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied

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mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of his Indemnity.

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IN WITNESS WHEREOF the Landlord and the Indemnifier have signed this Indemnity as of the date above first written.

80241 CANADA LTD.
By:	/s/ Morton Arshinoff
Title:	Morton Arshinoff, President
BWAY CORPORATION
By:	/s/ Kevin C. Kern
Title:	Vice President Administration & CFO

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EX-10.38

Exhibit 10.38

27 HANSEN ROAD SOUTH, BRAMPTON, ONTARIO

INDUSTRIAL LEASE

BETWEEN

80241 CANADA LTD.

(The “Landlord”)

AND

ICL INDUSTRIAL CONTAINERS ULC

(The “Tenant”)

TABLE OF CONTENTS

		Page
	ARTICLE 1 BASIC TERMS, SCHEDULES, DEFINITIONS
1.1	Basic Terms	1
1.2	Schedules	2
1.3	Definitions	2
	ARTICLE 2 PREMISES
2.1	Premises	2
	ARTICLE 3 TERM
3.1	Term	2
3.2	Option to Extend	2
3.3	Appraisals	3
	ARTICLE 4 RENT
4.1	Rent	4
4.2	Payment of Rent	4
4.3	Rent for Irregular Periods	5
4.4	Waiver of Offset	5
4.5	Net Lease	5
	ARTICLE 5 TENANT’S COVENANTS
5.1	Rent	5
5.2	Permitted Use	5
5.3	Waste and Nuisance	5
5.4	Insurance Risks	6
5.5	Cleanliness and Heating	6
5.6	Compliance with Laws	6
5.7	Overholding	6
5.8	Signs	7
5.9	Inspection and Access	7
5.10	Showing Premises	7

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TABLE OF CONTENTS

(continued)

		Page
5.11	Equipment	8
5.12	Floor Loads	8
5.13	Glass	8
	ARTICLE 6 LANDLORD’S COVENANTS
6.1	Quiet Enjoyment	8
	ARTICLE 7 REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION
7.1	Maintenance and Repairs	8
7.2	Capital Repairs	10
7.3	Damage, Destruction and Termination	10
	ARTICLE 8 TAXES AND OPERATING COSTS
8.1	Tenant’s Tax Obligations	11
8.2	Goods and Services Taxes	12
8.3	Tenant’s Share	12
8.4	Notices of Assessment etc	13
8.5	Utility/Communication/Service Charges	13
	ARTICLE 9 ENVIRONMENTAL MATTERS
9.1	Environmental Laws	14
9.2	Tenant’s Responsibility	14
9.3	Assessment of the Premises	15
9.4	Contaminants at the End of the Term	16
9.5	Landlord’s Indemnity and Covenant	16
	ARTICLE 10 TRANSFERS, ASSIGNMENTS AND SUBLETTINGS
10.1	Consent Required	17
10.2	Change of Control	18
10.3	Leasehold Charges	19
10.4	Permitted Transfers	20
10.5	Transfer by Landlord	20

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TABLE OF CONTENTS

(continued)

		Page
	ARTICLE 11 FIXTURES AND IMPROVEMENTS
11.1	Alterations	21
11.2	Liens and Encumbrances on Fixtures and Improvements	21
11.3	Removal of Fixtures and Improvements	22
11.4	Non-compliance	22
	ARTICLE 12 INSURANCE AND LIABILITY
12.1	Landlord’s Insurance	22
12.2	Tenant’s Insurance	23
12.3	Limitation of Liability	25
12.4	Indemnity	25
	ARTICLE 13 SALE OR FINANCING , SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES
13.1	Sale or Financing of Building	26
13.2	Subordination and Attornment	26
13.3	Registration	26
13.4	Certificates	26
	ARTICLE 14 DELAY; NO WAIVER
14.1	Unavoidable Delay	27
14.2	No Admission	27
14.3	Part Payment	27
	ARTICLE 15 TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER
15.1	Remedying by Landlord, Non-payment and Interest	27
15.2	Remedies Cumulative	28
15.3	Right of Re-entry on Default	28
15.4	Termination and Re-entry	29
15.5	Certain Consequences of Termination and Re-entry	29
15.6	Waiver of Distress	30

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TABLE OF CONTENTS

(continued)

		Page
15.7	Re-letting	30
15.8	Surrender on Termination	30
	ARTICLE 16 EVENTS TERMINATING LEASE
16.1	Cancellation of Insurance	30
16.2	Prohibited Occupancy, Bankruptcy and Other Events	31
	ARTICLE 17 MISCELLANEOUS
17.1	Notices	31
17.2	Extraneous Agreements	32
17.3	Time of Essence	32
17.4	Successors and Assigns	32
17.5	Waiver	32
17.6	Governing Law and Severability	32
17.7	Captions	33
17.8	Expropriation	33
17.9	Counterparts	33
	ARTICLE 18 ADDITIONAL PROVISIONS
18.1	Hansen Road Expansion Option	33
18.2	Determination of Project Cost; Engagement of Landlord’s Contractor	34
18.3	Optional Tender Process	35
18.4	Construction of Building Expansion	36
18.5	Completion of Building Expansion	37
18.6	Conditions to Exercise of Expansion Option	37
18.7	Other Property Lease	37
18.8	Modification of Lease Terms upon Substantial Completion of Building Expansion	38
18.9	Additional Land Reservation Option	38
18.10	Rent	39
18.11	Waiver of Rights with Respect to Additional Land	40

-iv-

LEASE

THIS LEASE dated the 17th day of July, 2006, is made and entered into by 80241 Canada Ltd. (the “Landlord”) and ICL Industrial Containers ULC (the “Tenant”) who, in consideration of the covenants herein contained, agree as follows:

ARTICLE 1

BASIC TERMS, SCHEDULES, DEFINITIONS

1.1 Basic Terms

(a)	Landlord
	(i)     Landlord: (ii)    Address of Landlord:	80241 Canada Ltd. 167 Lord Seaton Road Willowdale, Ontario Attention: Stephen Arshinoff
(b)	Tenant
	(i)     Tenant: (ii)    Address of Tenant:	ICL Industrial Containers ULC 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350-2230 Attention: Kevin C. Kern
	(iii) Address of Premises:	27 Hansen Road South, Brampton, Ontario
(c)	Indemnifier
	(i)     Indemnifier:	BWAY Corporation
	(ii)    Address of Indemnifier:	8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350-2230
(d)	Rentable Area of Building	Approximately 40,904 feet
(e)	Term
	(i)     Term: (ii)    Commencement Date: (iii)  Lease Expiration Date:	ten (10) years July 17, 2006 July 16, 2016

(f)	Annual Base Rent Year of the Term Years 1 - 5	Per Square Foot $4.50	Per Annum $184,374.00	Per Month $15,364.50
(g)	Annual Base Rent Year of the Term Years 6 – 10	Per Square Foot $5.085	Per Annum $208,342.62	Per Month $17,361.89

(h) Permitted Use

Industrial and ancillary office use, including without limitation: manufacturing industrial containers, including plastic pails, steel pails and steel drums; refurbishing containers and pallets; warehousing; office and ancillary uses.

(i) Extension Term

Two (2) Extension Terms of five (5) years each.

The foregoing Basic Terms are hereby approved by the parties and each reference in this Lease to any of the Basic Terms shall be construed to include the provisions set forth above as well as all of the additional terms and conditions of the applicable sections of this Lease where such Basic Terms are more fully set forth.

1.2 Schedules

All Schedules to this Lease are incorporated into and form an integral part of this Lease.

1.3 Definitions

In this Lease, the words, phrases and expressions set forth in Schedule B are used with the meanings defined therein.

ARTICLE 2

PREMISES

2.1 Premises

In consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Tenant to be paid, observed and performed, the Landlord hereby demises and leases to the Tenant and the Tenant leases from the Landlord the Premises.

ARTICLE 3

TERM

3.1 Term

The Term of this Lease shall be for the period set out in section 1.1(e)(i), beginning on the Commencement Date.

3.2 Option to Extend

(a) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the Term, extend the Term for a further term of five (5) years (the “First Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the First Extension Term.

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(b) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the First Extension Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the First Extension Term, extend the First Extension Term for a further term of five (5) years (the “Second Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the Second Extension Term.

(c) The Annual Base Rent during any Extension Term shall be the Current Market Rent for the Premises, If the Landlord and the Tenant have not mutually agreed on the amount of the Annual Base Rent at least three (3) months prior to the commencement of such Extension Term, then Annual Base Rent shall be decided in the manner set out in Section 3.3. Until the Annual Base Rent has been determined, the Tenant shall pay the monthly Rent requested by the Landlord and, upon the determination of the Annual Base Rent, the Landlord and the Tenant shall make the appropriate adjustments together with interest at the Prime Rate.

3.3 Appraisals

If the Annual Base Rent payable during an Extension Term is not agreed upon at least three (3) months prior to the commencement of such Extension Term, then each party shall, within thirty (30) days thereafter, mandate an appraiser licensed in the Province where the Premises are located, to determine the Current Market Rent for the Premises. In the event that a party fails to appoint an appraiser within such thirty (30) days and has failed to remedy such failure within five (5) days of written notice thereof from the other party, then the Annual Base Rent shall be the Current Market Rent for the Premises, as determined by the sole appraiser. If two appraisers are appointed, in the event that the higher of the amounts so determined by one appraiser does not exceed the lower so determined by the other appraiser by more than 15%, then the Annual Base Rent shall be the average of the two, otherwise, the two appraisers shall jointly name a third appraiser licensed in the Province of Ontario who shall be mandated to determine the Current Market Rent for the Premises. The Annual Base Rent shall be equal to such amount as so determined if it is no less than the lower of the first two nor no more than the higher of the first two, otherwise, it shall be whichever of the first two amounts is closest in value to the third. Notwithstanding the foregoing, the Annual Base Rent during an Extension Term shall in no event be less than the Annual Base Rent during the initial Term or Extension Term then ending, as the case may be.

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ARTICLE 4

RENT

4.1 Rent

The Tenant shall pay to the Landlord, at 167 Lord Seaton Road, Willowdale, Ontario, or at such other place as the Landlord may direct in writing, during the Term in lawful money of Canada without any demand, set off, abatement, compensation or deduction whatsoever, on the days and at the times hereinafter specified, Rent, which shall include the aggregate of the sums specified in sections 4.1(a), 4.l(b) and 4.1(c) below:

(a) Annual Base Rent – During each of the first five (5) Lease Years, Annual Base Rent in the amounts per annum for the respective years of the Term as more particularly set out in section 1.1(f). During each of the next five (5) Lease Years, the Annual Base Rent shall be the Annual Base Rent as more particularly set out in section 1.1(g).

(b) Additional Rent - Together with such other amounts, charges, costs and expenses as are required to be paid by the Tenant to the Landlord pursuant to this Lease in addition to Annual Base Rent, whether or not such amounts are specifically designated elsewhere in this Lease as Additional Rent.

(c) Management Fee – The Management Fee.

4.2 Payment of Rent

The Annual Base Rent shall be paid in equal consecutive monthly instalments in advance on the first day of each and every month during the Term. Subject to section 4.3, the first monthly instalment of the Annual Base Rent shall be paid by the Tenant on the Commencement Date of the Term. The Landlord shall remit to the Tenant, before each Lease Year, the estimated amount of the Additional Rent (other than the portion thereof which the Tenant shall pay directly to third parties) and of the Management Fee for that period, and the monthly payments of Additional Rent and Management Fee which are payable to the Landlord shall then be established for said Lease Year based on that estimate. The Landlord may from time to time during a Lease Year re-evaluate its estimate of such Additional Rent and of the Management Fee, and in such case shall notify the Tenant in writing of the re-evaluation and establish monthly payments for the unexpired period of such Lease Year or of such part only of a Lease Year, so that after the Tenant is credited with the appropriate amounts paid by the Tenant in accordance with the previous estimate, such Additional Rent and the Management Fee is paid in full during such Lease Year or during a part only of such Lease Year. After each Lease Year, the Landlord shall remit to the Tenant a statement indicating the actual amount of the Additional Rent (other than the portion thereof which the Tenant has paid directly to third parties) and of the Management Fee for the said Lease Year. Should the amount of such Additional Rent and of the Management Fee then determined by the Landlord be greater or less than the total of the amounts already paid by the Tenant to the Landlord, then appropriate adjustments will be made within thirty (30) days following the delivery of the above-mentioned statement.

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4.3 Rent for Irregular Periods

All Rent reserved herein shall be deemed to accrue from day to day, and if for any reason it shall become necessary to calculate Rent for irregular periods of less than one (1) month a pro-rata adjustment, based on a per diem adjustment on the basis of a three hundred and sixty-five (365) day year, shall be made on a daily basis in order to compute Rent for such irregular period.

4.4 Waiver of Offset

The Tenant hereby waives and renounces any and all existing and future claims, offsets and compensation against any Rent and agrees to pay such Rent regardless of any claim, offset or compensation which may be asserted by the Tenant or on its behalf.

4.5 Net Lease

The Tenant acknowledges and agrees that it is intended that this Lease shall be a completely net lease for the Landlord except as shall be otherwise provided herein, and that the Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Premises, and the Tenant, except as shall be otherwise provided herein, shall pay all charges, impositions and costs of every nature and kind relating to the Premises.

ARTICLE 5

TENANT’S COVENANTS

The Tenant covenants with the Landlord as follows:

5.1 Rent

To pay the Annual Base Rent, Additional Rent and the Management Fee on the days and in the manner provided herein.

5.2 Permitted Use

To use the Premises only for the purpose set out in section 1.1(h) and not to use or permit to be used the Premises or any part thereof for any other purpose without first obtaining the consent of the Landlord (which shall not be unreasonably withheld or delayed).

5.3 Waste and Nuisance

Not to commit or permit any waste or injury to the Premises including the Leasehold Improvements and any overloading of the capacity of a utility, electrical or mechanical facility in the Premises.

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5.4 Insurance Risks

Not to do, omit to do or be done or permit to be done or omitted to be done upon the Premises anything that would cause any policy of insurance to be subject to cancellation.

5.5 Cleanliness and Heating

(a) Not to permit the Premises to become untidy, unsightly or hazardous or permit unreasonable quantities of waste or refuse to accumulate therein. In addition, the Tenant shall regulate the heating, ventilating and air-conditioning facilities serving the Premises so as to maintain reasonable conditions of temperature and humidity within the Premises so as to prevent any damage thereto by reason of frost, moisture or otherwise, shall make all necessary maintenance, repairs and, subject to Section 7.2, replacements to said facilities, (reasonable wear and tear excepted).

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the HVAC system with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding Section 5.5(b), so long as the Tenant is BWAY Corporation, or a direct or indirect wholly owned subsidiary of BWAY Corporation, the Tenant shall not be required to enter into a service contract for the HVAC system with a third party contractor, provided that the Tenant covenants to maintain or cause to be maintained the HVAC system to the same standard as would a professional third party contractor performing inspections at regular intervals in accordance with industry standards. In the event the Tenant breaches the foregoing covenant, the Tenant shall thereafter, for the balance of the Term, be required to enter into a service contract as required under Section 5.5(b) and, without limiting the Tenant’s obligations under Section 7.1, shall be responsible for the cost of all repairs and replacements to the HVAC system resulting from said breach.

5.6 Compliance with Laws

To comply at its own expense with all municipal, federal, provincial, sanitary, fire and safety laws, bylaws, regulations and requirements pertaining to the operation and use of the Premises, signage, trade fixtures, furniture and equipment installed therein and the making by the Tenant of any repairs, changes or improvements therein, provided that the Tenant’s obligations and covenants relating to compliance with Environmental Laws shall be governed by Article 9 below.

5.7 Overholding

That if the Tenant shall continue to occupy the Premises after the expiration of this Lease without any further written agreement and without objection by the Landlord (which

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shall not result in a tacit renewal of this Lease despite any legal presumption to the contrary) the Tenant shall be a monthly tenant at a monthly rent equal to 150% of the Annual Base Rent payable in respect of the last month of the Term, such rent to be payable by the Tenant as set forth in Article 4 hereof and (except as to length of tenancy) on and subject to the provisions and conditions herein set out, including the obligation to pay Additional Rent, the whole, without prejudice to the rights and recourses of the Landlord.

5.8 Signs

The Tenant shall be permitted to install, at its sole cost and expense, signage on the Premises, including the Building, provided such signage complies with all applicable lawful governmental requirements. The Tenant shall remove such signage at the expiry or earlier termination of the Term and shall repair any damage caused by the installation or removal of the signage.

5.9 Inspection and Access

To permit the Landlord, upon reasonable prior notice (which shall not in any event be less than 24 hours) and during normal business hours, from time to time, or at any time in the event of an emergency, to enter and to have its authorized agents, employees and contractors enter the Premises for the purpose of inspection, maintenance, making those repairs which the Landlord is required to make hereunder to the Premises; and the Tenant shall provide free and unimpeded access for the purpose, and shall not be entitled to compensation for any inconvenience, nuisance or discomfort caused thereby, but the Landlord in exercising its rights hereunder shall proceed to the extent reasonably possible so as to minimize interference with the Tenant’s use and enjoyment of the Premises.

5.10 Showing Premises

The Tenant shall permit the Landlord and its authorized agents and employees, acting reasonably and without interrupting the Tenant’s business, to show the Premises:

(a) to prospective tenants during the hours of 8:00 a.m. to 6:00 p.m. Monday to Friday, inclusive, of the last six (6) months of the Term, or if the Tenant has exercised a right to extend the Term under section 3.2, the last six (6) months of such Extension Term; and

(b) to prospective purchasers and lenders during the hours set forth in section 5.10(a) throughout the Term and any Extension Terms.

The Landlord shall give the Tenant reasonable prior notice of any such showing, and at the request of the Tenant shall effect such showing in the company of a Tenant representative (provided that the Tenant shall not unreasonably delay such showing by reason of making a Tenant representative available).

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5.11 Equipment

The Tenant shall be responsible for and pay the cost of installation, operation, maintenance and replacement of the equipment required by its occupancy of the Premises including, without limitation, security systems, sprinkler systems, racking, rail siding, fencing in and around the Premises, telephones, computers and other communications facilities and equipment.

5.12 Floor Loads

The Tenant shall not place a load upon any portion of any floor of the Premises which exceeds the floor load which the area of such floor being loaded was designed to carry, having regard to the loading of adjacent areas and that which is allowed by applicable provincial building codes. The Tenant shall repair any damage done in the Premises by reason of any excessive weight placed in the Premises or excessive vibration caused in the Premises.

5.13 Glass

The Tenant shall restore or replace forthwith, at its expense, any broken or damaged glass on, in or upon the Premises.

ARTICLE 6

LANDLORD’S COVENANTS

6.1 Quiet Enjoyment

The Landlord covenants with the Tenant that, provided the Tenant duly and punctually pays the rent hereby reserved and performs the covenants on its part contained, the Tenant shall and may peaceably possess and enjoy the Premises for the Term hereby granted without any interruption or disturbance from the Landlord, its successors and assigns or any other persons lawfully claiming by, from, through or under it.

ARTICLE 7

REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION

7.1 Maintenance and Repairs

(a) The Tenant shall keep the Premises as would a careful and prudent owner consistent with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located, including all Leasehold Improvements and all trade fixtures. This obligation includes, without limitation, the following;

(i) repairs and, maintenance to the plumbing, electrical ventilating, heating, air conditioning and HVAC systems and other base building systems and equipment, including the systems provided for bringing utilities to the Building, doors, door seals, rail siding, dock seals and levellers, the roof and all component parts thereof (including without limitation the repair

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and maintenance of the waterproof membrane, to the extent that such repairs and maintenance expenses do not constitute a capital cost in accordance with generally accepted accounting principles, which capital costs will be treated as capital repairs pursuant to Section 7.2 provided that they are not attributable to a breach by the Tenant under Section 7. l(b)), plate glass, signs, hardware, partitions, mechanical, electrical, lighting and plumbing fixtures and systems, wiring, piping, water, sewers and gas connections, drains and mains attributable to the Property and which serve the Building, ceilings, floors, stairs, platforms, walls, thresholds, and all operating equipment in the Premises, exterior walls, parking areas, driveways, entrances, glass windows, mouldings and all other machinery, operating equipment and facilities belonging to, forming part of or connected with the Premises and the Building;

(ii) normal levelling, grading and patching of yard and maintenance of asphalt and paving; and

(iii) keeping the driveways, parking areas, entrances, walks, grounds, sidewalks and curbs forming part of the Property clean and free of snow and ice;

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the maintenance of the roof components with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding anything herein, the Landlord shall carry out the repairs and replacements in respect of the identified costs for years 1 to 3 as set out in the Capital Reserve Table annexed as Appendix B to the Property Condition report dated April 21, 2006 prepared by Golder Associates in favour of BWAY Corporation at the Landlord’s sole cost and expense within such time frames as would a prudent landlord and in any event prior to the Lease Expiration Date set forth in Section 1.1(e)(iii).

(d) At the expiration of the Lease or any renewals or extensions thereof, the Tenant shall surrender the Premises to the Landlord in the manner provided for in section 15.8.

(e) The Landlord shall be responsible for and shall carry out, at its sole cost and expense, all repairs required as a result of:

(i) inherent structural defects or weaknesses in the Premises;

(ii) defects in repairs or construction performed or installations made by or on behalf of the Landlord; and

(iii) the negligent acts or omissions of the Landlord.

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(f) Prior to or within thirty (30) days after occupation of the Premises by the Tenant, and prior to or within thirty (30) days following the departure from the Premises by the Tenant, representatives of the Tenant and the Landlord shall make a joint inspection of the Premises and record the condition thereof on an inspection checklist. Within ten (10) days after said initial joint inspection, a copy of the inspection checklist shall be sent to both the Landlord and the Tenant, and such inspection checklist shall form a part of this Lease.

7.2 Capital Repairs

Notwithstanding anything to the contrary contained in this Lease except for repairs and other work contemplated by sections 7.1(c) and 7.1(e) and Article 9, to the extent that the cost of any repair or replacement to the Premises constitute a capital cost in accordance with generally accepted accounting principles, the Landlord shall make such repairs or replacements, provided that all such repairs or replacements shall be consistent with the existing building standard and with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located. The cost of such repair or replacement shall be amortized over the useful life expectancy of the asset repaired or replaced on a straight line basis and the Tenant shall pay to the Landlord in each year of the Term the amortized amount of such cost within thirty (30) days after receipt of an invoice therefor from the Landlord. Any replacement or repair to the Structure of the Building, replacement of any of the base building systems servicing the Building and replacement of asphalt or other paving shall constitute a capital cost.

7.3 Damage, Destruction and Termination

(a) If the Building becomes Untenantable such that the Building or any substantial part thereof is rendered not reasonably capable of use and occupancy by the Tenant for its use thereof pursuant to this Lease then:

(i) from and after the date of occurrence of the event rendering the Building Untenantable and until the Premises are again reasonably capable of use and occupancy as aforesaid, Rent shall abate from time to time in proportion to the part or parts of the Building not reasonably capable of use and occupancy; and

(ii) unless this Lease is terminated as hereinafter provided, the Landlord shall repair such damage with all reasonable diligence to the extent only of insurance proceeds actually received by the Landlord (the “Landlord’s Work”). The Landlord’s obligation to rebuild and restore the Premises and the Building shall not include the obligation to rebuild, restore, replace or repair, without limitation, any chattel, furniture, inventory, fixtures (including trade fixtures), Leasehold Improvements including, without limitation, any alterations constructed or installed for or on behalf of the Tenant or for its benefit, installations, additions or partitions in respect of which the Tenant is required to maintain insurance under this Lease, or any other thing that is the property of the Tenant located on, in,

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under, above or which serve the Premises. Nothing herein shall require the Landlord to rebuild the Premises and the Building in the condition and state that existed before the damage, but the Premises and the Building, as rebuilt, will have reasonably similar facilities and services to those that existed prior to the damage.

(b) If the Building is substantially damaged or destroyed by any cause to the extent such that in the reasonable opinion of the Landlord’s architect or engineer (to be delivered to the Landlord and Tenant within thirty (30) days after the damage or destruction) it cannot be repaired or rebuilt (based on standard hours of construction work) or if access cannot be restored within twelve (12) months after the occurrence of the event rendering the Building Untenantable or the expiration of the Term (whichever is sooner), either the Landlord or the Tenant may at its option, exercisable by written notice to the other party given within ninety (90) days after the occurrence of such damage or destruction, terminate this Lease, in which event the Landlord shall not be bound to repair, and the Tenant shall instead deliver up possession of the Premises to the Landlord with reasonable expedition but in any event within sixty (60) days after delivery of such notice of termination, and Rent shall be apportioned and paid to the date upon which possession is so delivered up (but subject to any abatement to which the Tenant may be entitled under section 7.3(a) by reason of the Premises having been rendered in whole or in part not reasonably capable of use and occupancy), but otherwise the Landlord shall repair such damage with such reasonable diligence.

(c) If neither party has elected to terminate this lease pursuant to section 7.3(b) and if the Landlord has not completed the repair or the rebuilding to such an extent that it is substantially complete and ready for the Tenant’s occupancy within twelve (12) months after the occurrence of the event rendering the Building Untenantable (subject to any event of force majeure referred to in section 14.1 arising after the occurrence of the original event rendering the Building Untenantable) then the Tenant may by notice to the Landlord elect to terminate this Lease effective as of the date of the notice or such later date as may be specified therein.

(d) The Tenant shall make available all proceeds of insurance with respect to the Building for the purposes of any such repairing or rebuilding.

ARTICLE 8

TAXES AND OPERATING COSTS

8.1 Tenant’s Tax Obligations

During the Term, the Tenant shall be responsible to:

(a) pay when due, all taxes, business taxes, property taxes, business licence fees, permit fees and other taxes, rates, duties or charges levied, imposed or assessed by lawful authority in respect of the use and occupancy of the Premises by the Tenant, the business or businesses carried on therein by the Tenant, or the equipment, machinery or fixtures brought therein by or belonging to the Tenant,

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or to anyone occupying the Premises with the Tenant’s consent, or from time to time levied, imposed or assessed in the future in lieu thereof, and shall pay to the Landlord upon demand the portion of any tax, rate, duty or charge levied or assessed upon the Land and Building that is attributable to any equipment, machinery or fixtures on the Premises which are not the property of the Landlord; and

(b) (i) pay promptly directly to the relevant taxing authority as and when due all Taxes that are levied, rated, charged or assessed from time to time, in respect of the Premises on the basis of any real property tax bill or assessment notice rendered by any lawful taxing authority; (ii) within ten (10) days after receipt of any such real property tax bill or assessment notice, provide a copy thereof to the Landlord; and (iii) promptly deliver to the Landlord receipts evidencing the payment of all such Taxes and such other information in connection therewith as the Landlord reasonably requires. The Tenant will pay all Taxes when they become due and payable, before any interest, penalty, fine or cost may be imposed for late or non-payment, to the department, office or bureau charged with their collection. If the Tenant should fail to pay any Taxes as required under this Section, the Landlord shall have the right to pay such Taxes at the Tenant’s expense, and the Tenant shall pay to the Landlord as Additional Rent, upon demand, all costs and expenses incurred therefor.

8.2 Goods and Services Taxes

The Tenant shall pay to the Landlord all Goods and Services Tax exigible under the relevant taxing statute in respect of the Rent payable by the Tenant under this Lease, or in respect of the rental of premises by the Tenant under this Lease. Goods and Services Tax shall be payable at the same time as the Tenant pays Rent to the Landlord. Notwithstanding any other section of this Lease, the amount payable by the Tenant under this section shall be deemed not to be Rent, but the Landlord shall have the same remedies for and rights of recovery of such amount as it has for recovery of Rent under this Lease.

8.3 Tenant’s Share

Upon expiry or earlier termination of the Term or, if the Term is extended, the last Extension Term, the Landlord shall pay to the Tenant any overpayment or accrued credit balance of the Taxes paid by the Tenant to the taxing authority by the Tenant. Notwithstanding the foregoing, the Tenant acknowledges that there may be a delay in the invoicing of property taxes and business taxes for the Land for the last year of the Term and that for the last year of the Term, the Tenant shall be responsible for payment of its pro-rata share of the actual Taxes.

In any calendar year of the Term in which the Tenant does not lease the Premises for the entire twelve month period, the Landlord may estimate the Taxes payable by the Tenant, and the Tenant agrees to pay to the Landlord Taxes as so estimated, in monthly instalments, in advance, on the same dates and in the same manner as Annual Base Rent. The Landlord’s estimate of Taxes may be such that, by the due date of the last instalment of Taxes payable to the relevant taxing authority, the Landlord may or may not have received from the Tenant the full

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amount of the Tenant’s share of Taxes for such calendar year. Promptly following receipt of the final bill and/or assessment for Taxes for the period for which the estimated payments of Taxes have been made, the Landlord will give notice to the Tenant of exact amount of Taxes (together with copies of the relevant tax bills and/or assessments) and, if necessary, an adjustment will be made between the parties within thirty (30) days after such notice.

8.4 Notices of Assessment etc.

(a) The Tenant shall, at the Landlord’s request, promptly deliver to the Landlord,

(i) receipts for payment of all Taxes payable by the Tenant;

(ii) notices of any assessments for Taxes or other assessments received by the Tenant that relate to the Premises, and

(iii) whatever other information relating to Taxes in the Tenant’s possession that the Landlord reasonably requests from time to time.

(b) The Tenant shall deliver to the Landlord, at least ten (10) days before the last date for filing appeals, notice of any appeal or contestation that the Tenant intends to institute with respect to Taxes payable by the Tenant and obtain the prior written consent of the Landlord for the appeal or contestation, which consent shall not be unreasonably withheld. If the Tenant obtains the Landlord’s consent and does not pay the Taxes before the appeal or contestation, the Tenant shall,

(i) deliver to the Landlord such security for the payment of the Taxes as the Landlord reasonably requires;

(ii) promptly and diligently prosecute the appeal or contestation; and

(iii) keep the Landlord informed on all aspects of it.

(c) The Tenant shall indemnify and save the Landlord harmless from all loss, cost, charges and expenses arising from Taxes payable by the Tenant whether against the Landlord or the Tenant including, but not limited to increases in Taxes arising directly or indirectly out of an appeal or contestation by the Tenant.

(d) The Landlord shall promptly deliver to the Tenant notices of any assessments or bills for Taxes or other assessments or bills received by the Landlord that relate to the Premises. The Landlord shall not institute any tax appeal or other contestation of Taxes without first obtaining the consent of the Tenant which shall not be unreasonably withheld.

8.5 Utility/Communication/Service Charges

The Tenant shall pay all charges for services and utilities including electricity, gas, air-conditioning, heating, fuel, water, sewer, telephone, rail siding leases and security, delivered or provided to or made available upon the Premises, and other costs which are metered,

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charged, levied or rated directly to the Tenant in respect of the Premises, and if, at any time, for any reason, during the Term or any renewal or extension thereof, the Landlord is required to pay any or all of the foregoing, then a sum equal to the amount so paid shall forthwith become due and be collectible upon demand, failing which such sums shall become Additional Rent and the Landlord shall have the same rights and remedies with respect to said sum as if the same were Rent reserved hereunder.

ARTICLE 9

ENVIRONMENTAL MATTERS

9.1 Environmental Laws

(a) In its use and occupation of the Premises, the Tenant shall comply with Environmental Law in all material respects. To the extent that the Premises or the Tenant are not in compliance with applicable air approvals and related air emission matters under Environmental Law on the Commencement Date, the Tenant shall pursue diligently any approvals or certificates required by Environmental Law with respect to air emissions.

(b) Subject to compliance with Environmental Law, the Tenant may bring onto the Premises, store, handle, use and transport any substance, including any Contaminant or waste, that may be, or has been, used in connection with its operations, including injection molding, silkscreen printing and chiller operations, and drum and pail reconditioning, cleaning, painting and sealing.

(c) Subject to compliance with Environmental Law, the Tenant may continue to use any existing storage tanks at the Premises and may replace such tanks from time to time. In addition to replacing existing tanks, the Tenant may install new above ground and underground storage and settling tanks provided that, in the case of new tanks, the Tenant shall first obtain the consent of the Landlord as to the location and installation of any such tank in accordance with the provisions of section 11.1.

(d) All Contaminants brought or permitted onto the Premises during the Term by the Tenant, its employees or a Transferee, despite any other provisions of this Lease to the contrary and any expiry, termination or disclaimer of this Lease, shall be and remain the property and sole responsibility of the Tenant.

9.2 Tenant’s Responsibility

(a) Except to the extent contributed to by a Landlord Party and except for those matters listed in Section 9.5(a) for which the Landlord shall be responsible, the Tenant shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants on, in or under the Premises during the Term of the Lease. Except (i) as caused by or contributed to by a Landlord Party, and (ii) for those matters listed in Section 9.5(a), the Tenant shall indemnify, defend (utilizing counsel satisfactory to the Landlord) and hold harmless the Landlord and the Landlord’s respective

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officers, directors, beneficiaries, shareholders, partners, agents and employees from all Claims arising out of or in any way connected with any Release of any Contaminants that occurs during the Term of this Lease, at, in, on, from, under, or about the Premises or the Building, or which arises at any time from the Tenant’s use or occupancy of the Premises, or from the Tenant’s failure to provide all information, make all submissions, and take steps required by all authorities under Environmental Law.

(b) Upon the occurrence of any material Release of a Contaminant at the Premises and upon the Tenant becoming aware of such Release, the Tenant shall immediately give written notice to the Landlord. In any event, the Tenant shall immediately take all steps required by Environmental Law to remedy or otherwise address the situation giving rise to any Release.

(c) If any work is required in accordance with this section 9.2 the Tenant shall prepare all necessary studies, plans and proposals and submit them to the Landlord for approval, which approved shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Tenant shall keep the Landlord fully informed of the progress of the work. If the Landlord has reasonable grounds for believing that the Tenant will not promptly or properly carry out such work, the Landlord may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Landlord does so, the Tenant shall pay for all costs in connection therewith, within thirty (30) days after the Landlord has incurred the costs and made written demand to the Tenant.

(d) The Tenant covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

9.3 Assessment of the Premises

(a) Prior to the Commencement Date, or shortly thereafter, the Landlord will obtain, at its cost, a Phase II Environmental Site Assessment Report (the “Baseline Phase II”) to identify those Contaminants, and the quantities thereof, present at, in or under the Premises as at the Commencement Date (the “Baseline Condition”). Prior to causing any such environmental assessment, the Landlord will obtain a written proposal from its environmental consultant as to the recommended scope of the assessment for the Premises, which proposal is subject to the Tenant’s prior written approval, which approval shall not be unreasonably withheld (the “Baseline Scope”). The Landlord will deliver a copy of the Baseline Phase II to the Tenant prior to the Commencement Date, or shortly thereafter. Once in each calendar year of the Term, the Tenant shall, at its sole cost, complete or cause to be completed a Phase I Environmental Assessment (and if recommended thereby, a Phase II Environmental Assessment) of the Premises by a reputable consulting or engineering firm approved in advance by Landlord in writing. The report will be addressed to both the Landlord and the Tenant and a copy is to be delivered to the Landlord. Without limiting any other provision herein, the Landlord and the

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Tenant shall, throughout the term, maintain the Premises at the Baseline Condition in accordance with their respective obligations under this Article 9.

(b) The Landlord may at any time during the Term, if it has reasonable grounds to believe that the Tenant has not complied with Environmental Law in any material respect, including if it has in good faith reason to believe that there has been any Release of any Contaminant in, on, over, under or about the Premises that would reasonably be expected to give rise to a material liability pursuant to Environmental Law, enter the Premises upon reasonable prior notice to the Tenant and cause an environmental assessment with respect to the suspected non-compliance with Environmental Law. In the case of an assessment under this section 9.3(a) the Landlord shall consult with the Tenant as to when the assessment shall be carried out and shall minimize any interference with the Tenant’s business.

(c) The scope and breadth of such environmental assessment shall be reasonable and shall not unduly interfere with the conduct of business by the Tenant in the Premises. The resulting environmental assessment shall be addressed to both the Landlord and the Tenant and copies given to both. The Landlord shall be solely responsible for the cost of any such assessment unless such assessment reveals any material breach by the Tenant of Tenant’s covenant contained in this Lease, in which event the Tenant shall reimburse the Landlord the cost of such assessment.

(d) If any assessment reveals any breach by the Tenant of the Tenant’s covenant contained in this Lease, the Tenant shall take reasonable steps as are necessary so as to rectify such breach. In carrying out such work, the Tenant shall keep the Landlord informed of the progress of the work.

9.4 Contaminants at the End of the Term

Upon the expiry of the Term, or at such other times as may be required by any lawful governmental authority, the Tenant shall remove or otherwise address as required by Environmental Law all Contaminants from the Premises which were placed, brought or permitted onto the Premises during the Term by the Tenant, and carry out all work necessary to address such Contaminants, all at the Tenant’s sole cost and expense. The Tenant will, prior to the end of the Term, at its cost, deliver to the Landlord a Phase II Environmental Assessment prepared by a reputable consulting or engineering firm approved in advance by Landlord in writing, evidencing the environmental condition of the Property (the “Term Phase II”). The scope of the Term Phase II shall be equivalent to the Baseline Scope.

9.5 Landlord’s Indemnity and Covenant

(a) Except to the extent contributed to by a Tenant Party, the Landlord will indemnify, defend (utilizing counsel satisfactory to the Tenant) and hold harmless the Tenant and the Tenant’s respective officers, directors, beneficiaries,

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shareholders, partners, agents and employees from all Claims, and shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants that occur or arise as a result of:

(i) the existence of any Contaminant on, in or under the Premises as at the Commencement Date or arising after the expiry of the Term and following the completion of any remediation and/or work for which the Tenant is responsible hereunder; or

(ii) the migration, transfer or movement of any Contaminant onto, into or through the Premises from any other lands; or

(iii) the existence of any Contaminant on, in or under the Premises contributed to or caused by a Landlord Party.

Upon the occurrence of any material quantity of a Contaminant at or from the Premises and upon the Landlord becoming aware of such Contaminant, the Landlord shall immediately give written notice to the Tenant. In any event, the Landlord shall immediately take all steps required by Environmental Law to remedy the situation giving rise to any such Contaminant arising or resulting from the matters listed in Subsections 9.5(i), (ii) and (iii) above.

(b) If any work is required under section 9.5(a), the Landlord shall prepare all necessary studies, plans and proposals and submit them to the Tenant for approval, which approval shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Landlord shall keep the Tenant fully informed of the progress of the work. If the Tenant has reasonable grounds for believing that the Landlord will not promptly or properly carry out such work, the Tenant may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Tenant does so, the Landlord shall pay for all costs in connection therewith, within thirty (30) days after the Tenant has incurred the costs and made written demand to the Landlord.

(c) The Landlord covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

ARTICLE 10

TRANSFERS, ASSIGNMENTS AND SUBLETTINGS

10.1 Consent Required

(a) Subject to section 10.4, the Tenant shall not effect a Transfer without the prior written consent of the Landlord which consent may not be unreasonably withheld, delayed or conditioned. In determining whether or not to grant its consent, it shall not be unreasonable for the Landlord to withhold its consent if:

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(i) the Transferee does not have a history of successful business operations in the business to be conducted in the Premises and a good credit rating; or

(ii) there is a history of defaults under commercial leases by the Transferee, or by companies or partnerships of which the Transferee was a principal shareholder or partner at the time of the defaults.

The Tenant shall deliver to the Landlord such information as the Landlord may reasonably require to allow the Landlord to satisfy itself as to the foregoing.

(b) This prohibition against a Transfer shall be construed to include a prohibition against any Transfer by operation of law. If the Tenant effects a Transfer, the Landlord may collect Rent from the Transferee and apply the net amount collected to the Rent reserved in this Lease, but no such collection shall be deemed to be a waiver of this covenant or the acceptance of the Transferee as Tenant or a release of the Tenant from its obligations hereunder. Notwithstanding any Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder. Any consent by the Landlord to any Transfer shall not constitute a waiver of the requirement for consent by the Landlord to any subsequent Transfer by either the Tenant or any Transferee.

(c) Any consent granted by the Landlord shall be subject to the Tenant causing the Transferee to execute an agreement directly with the Landlord agreeing:

(i) if the Transferee is an assignee, to be bound by all of the terms contained in this Lease, as if the Transferee had originally executed this Lease as Tenant; or

(ii) if the Transferee is a subtenant or other occupant of the Premises, to do nothing, either by act or omission, that would cause the Tenant to be in default of its obligations under this Lease.

Such agreement and the consent of the Landlord to a Transfer shall be prepared by the Landlord or its solicitors and all reasonable legal and administrative costs with respect thereto shall he borne by the Tenant.

10.2 Change of Control

The prohibition against a Transfer set out in Section 10.1 (a) applies to any change in the direct or indirect effective voting control of the Tenant (if the Tenant is or becomes a corporation), unless (i) the Tenant is a public corporation whose shares are listed and traded on any recognized stock exchange in Canada or the United States, and (ii) the Landlord is satisfied that there will be a continuity of business practices and policies, and management of the Tenant. If the Tenant is a partnership or is controlled by a partnership (either directly or indirectly), this prohibition against a Transfer also includes a change in the constitution of the partnership

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resulting from the withdrawal or addition of any partners. The prohibition also applies to an assignment by operation of law.

10.3 Leasehold Charges

The Tenant may, without the consent of the Landlord effect one or more Transfers to one or more lenders as security for a loan or loans from time to time (such Transfer being a “Leasehold Mortgage”). All rights acquired by such a Transferee (a “Leasehold Lender”) under a Leasehold Mortgage shall be fully subordinate to the interest of the Landlord and to the interest of a Mortgagee and subject to the terms and conditions of this Lease.

The Leasehold Lender shall execute and deliver, prior to such Leasehold Mortgage becoming effective, a landlord/lender agreement (the “the Landlord/Lender Agreement”) in form and substance acceptable to the Landlord and the Leasehold Lender but which shall provide, inter alia, as follows:

(a) the Leasehold Lender shall have the unrestricted right to assign, sell, participate, securitize and otherwise deal with its interest in the Leasehold Mortgage without the Landlord’s consent provided that the holder of such interest is bound by the Landlord/Lender Agreement;

(b) the Leasehold Lender shall not take any action against the Premises for breach or default without first giving the Landlord notice of any default by the Tenant under any Leasehold Mortgage;

(c) no voluntary surrender by the Tenant to the Landlord of this Lease or the Premises shall be valid or effective and there shall be no amendment to or cancellation of this Lease without in each case the prior written consent of the Leasehold Lender;

(d) the Landlord shall, concurrently with the delivery to the Tenant of any notice required or permitted under this Lease and prior to commencement of any enforcement proceedings against the Tenant, deliver to the Leasehold Lender a copy of such notice and no such notice to the Tenant shall be effective against the Leasehold Lender until a copy of such notice is given in accordance with the notice provisions of this Lease to such Leasehold Lender. If the Tenant fails to cure the default, the Leasehold Lender shall have a further period of ten (10) days to cure the defaults;

(e) if the Leasehold Lender is enforcing its security under the Leasehold Mortgage it may effect a Transfer in accordance with the terms of this Lease;

(f) if, in the context of enforcing its security under the Leasehold Mortgage, the Leasehold Lender takes possession of the Premises it shall be bound by the terms of the Lease until such time as it shall effect a Transfer whereupon it shall be released;

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(g) upon the Leasehold Lender effecting a Transfer the Leasehold Lender shall be released from any obligations under this Lease; and

(h) if the Lease is terminated under any insolvency or bankruptcy proceedings or as a result of any default by the Tenant which is not susceptible to being cured by the Leasehold Lender, then at the request of the Leasehold Lender made within ten (10) days after the date of such termination, the Landlord will enter into a new lease on the same terms and conditions as this lease for a term expiring on the date noted in section 1.1(e)(iii), subject to any rights of extension under section 3.2, provided, however, that all arrears of Rent shall have been paid to the Landlord and that an amount equal to the Rent that would have been payable under the Lease from the date of such termination to the commencement date of the new lease shall have been paid to the Landlord.

The Landlord shall postpone any right that it may have to distrain or right to remove the personal property of the Tenant in favour of any lender to the Tenant. The Landlord shall execute such waiver document as the lender may require, subject to such amendments and changes as may be reasonably requested by the Landlord.

10.4 Permitted Transfers

Notwithstanding the provisions of section 10.1 and provided that the Tenant is BWAY Corporation or a direct or indirect wholly-owned subsidiary of BWAY Corporation, the Landlord’s consent shall not be required in respect of any Transfer:

(a) which is effected in conjunction with the sale of all or substantially all of the business of the Tenant;

(b) a Transfer to an Affiliate of BWAY Corporation in connection with a bona fide corporate reorganization of the Tenant;

(c) a sublease of the Premises;.

provided, however, that the Landlord is given notice of such Transfer contemporaneously with the Transfer and that the transferee shall enter into an agreement under which it agrees to be bound by the Lease.

Notwithstanding any such Permitted Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder.

10.5 Transfer by Landlord

In the event of the sale, lease or disposition by the Landlord of the Premises or the assignment by the Landlord of this Lease or any interest of the Landlord hereunder and to the extent that the purchaser or assignee agrees in writing in favour of the Tenant to be bound by the

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covenants and obligations of the Landlord hereunder, the Landlord shall without further agreement be relieved of all liability with respect to such covenants and obligations.

ARTICLE 11

FIXTURES AND IMPROVEMENTS

11.1 Alterations

The Tenant may make Alterations to the Premises without first obtaining the consent of the Landlord provided that such Alterations do not affect the Structure or the base building systems. The Tenant will not make any Alterations to the Leased Premises without the Landlord’s prior written approval if such Alterations will affect the Structure or the base building systems. Such consent will not be unreasonably withheld if:

(a) the Alterations will equal or exceed the then current standard for the Building;

(b) adequate plans and specifications are produced; and

(c) the Tenant has obtained all requisite governmental approvals.

All Alterations will be made in a good and workmanlike manner and, if applicable, in compliance with the plans and specifications approved by the Landlord. If the Tenant obtains the consent of the Landlord to any Alteration then, unless as a condition of granting such consent, the Landlord requires that such Alteration be removed at the expiry or earlier termination of the Term the Tenant shall not be required to remove or make good any such Alteration at the expiry or earlier termination of the Term. If the Landlord’s consent is not obtained then prior to the expiry or earlier termination of the Term, such Alteration shall be removed by the Tenant and all damage caused by the installation and removal of such Alteration be repaired unless the Tenant receives written notice from the Landlord prior to the expiry of the term advising the Tenant that the Landlord will not require the Tenant to remove such Alterations.

11.2 Liens and Encumbrances on Fixtures and Improvements

In connection with any Alterations to the Premises by the Tenant, the Tenant shall comply with all the provisions of the Construction Lien Act (Ontario) (or the equivalent statute in the jurisdiction in question) (the “Act”) and other statutes from time to time applicable thereto (including any provision requiring or enabling the retention of portions of any sums payable by way of holdbacks), shall permit the Landlord to take all steps to enable the Landlord to obtain the benefit of the provisions of the Act and except as to any lawful holdback, shall promptly pay all accounts relating thereto. If and when any builder’s or other lien for work, labour, services or materials supplied to or for the Tenant or for the cost of which the Tenant may be in any way liable or claims therefor shall arise or be filed the Tenant shall within twenty (20) days after receipt of notice thereof procure the discharge thereof, including any certificate of action registered in respect of any lien, by payment or giving security or in such other manner as may be required or permitted by law, and failing which the Landlord may in addition to all other remedies hereunder avail itself of its remedy under section 15.1 and may make any payments into court (but not in any event to the lien claimant) required to procure the discharge of any such liens, shall be entitled to be reimbursed by the Tenant as provided in section 15.1, and its right to

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reimbursement shall not be affected or impaired if the Tenant shall then or subsequently establish or claim that any lien so discharged was without merit or excessive or subject to any abatement, setoff or defence.

11.3 Removal of Fixtures and Improvements

Subject to section 15.8, the Tenant may from time to time throughout the Term remove such of its trade fixtures, furniture and equipment from the Premises as it sees fit. The Tenant shall, in the case of every removal either during or at the end of the Term, immediately make good any damage caused to the Premises by the installation and removal of such furniture and equipment and, to the extent required pursuant to section 11.1, Leasehold Improvements.

11.4 Non-compliance

In the event that the Landlord determines that any alterations, additions or improvements made to the Premises or the Building systems serving the Premises by the Tenant do not comply with all applicable statutes, regulations or bylaws of any municipal, provincial or other governmental authority, and the Tenant, after receipt of notice from the Landlord, does not rectify such non-compliance with due diligence, then the Landlord may, at the Landlord’s option, rectify or repair said deficiency which shall be at the Tenant’s sole cost and expense, the same to be paid as Additional Rent by the Tenant to the Landlord upon demand.

ARTICLE 12

INSURANCE AND LIABILITY

12.1 Landlord’s Insurance

(a) The Landlord shall, at all times throughout the Term, carry: (i) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent landlords of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence; (ii) rental income insurance; and (iii) other forms of insurance as would be carried by a prudent owner of a similar building and considered advisable by the Landlord or any Mortgagee. The cost of such insurance shall be paid by the Tenant in accordance with Section 12.1(c). The Landlord may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies provided the premiums for such policy are allocated equitably among the properties covered by such blanket insurance policy.

(b) All Landlord’s insurers shall be registered and licensed to carry on the business of insurance in the Province in which the Premises are located and all insurance policies shall:

(i) contain a cross liability and/or severability of interest clause; and

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(ii) contain an undertaking by the insurers to notify the Tenant in writing not less than thirty (30) days prior to any material change, cancellation or termination thereof.

(c) The Tenant will pay to the Landlord the insurance premiums in respect of the insurance required to be carried by the Landlord under this section 12.1, as Additional Rent, and in the event of any loss or damage the Tenant shall pay directly to the Landlord any deductible which the Landlord is required to pay toward or for any insured loss relating to the Premises as Additional Rent. The Landlord shall submit the invoice for such insurance premiums or deductibles to the Tenant as they come due and the Tenant shall pay all such amounts within thirty (30) days after receipt of such invoice. In the event that the Tenant fails to pay any such premium prior to its due date, the Landlord may pay such premium and claim it from the Tenant as Additional Rent. Notwithstanding any contribution by the Tenant to the cost of insurance premiums provided herein, the Tenant acknowledges and agrees that no insurable interest is conferred upon the Tenant under this Lease for purposes of any policies of insurance carried by the Landlord and the Tenant has no right to receive any proceeds of any such insurance policies carried by the Landlord.

12.2 Tenant’s Insurance

(a) The Tenant shall, at its expense, obtain and maintain in force throughout the Term and any Extension Term and any period when it is in possession of the Premises, in the name of the Tenant with the Landlord and the Mortgagee (if any) as additional named insureds on all property insurance policies, save that the insurance policies referred to in sections 12.2(a)(i) and (ii) below shall name the Landlord as the insured with the Mortgagee (if any), as additional named insured the following insurance:

(i) insurance on the Building and the heating, ventilating and air conditioning, and other building equipment, machinery and systems, and boilers contained therein whether owned by the Landlord or the Tenant against those risks covered by standard “all risks” (including flood and earthquake) property policies in an amount equal to the full replacement value thereof with such reasonable deductibles as would be carried by a prudent owner of a reasonably similar industrial building, having regard to size, age and location;

(ii) broad form boiler and machinery insurance on a blanket repair and replacement basis with limits for each accident in an amount of at least the replacement cost of the Premises and of all boilers, pressure vessels, air-conditioning equipment and miscellaneous electrical apparatus relating to or serving the Premises;

(iii) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such

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amounts as are normally carried by prudent tenants of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence;

(iv) standard owners form vehicle insurance providing third-party liability insurance with not less than three million dollars ($3,000,000.00) inclusive limits, and accident benefits insurance, covering all licensed vehicles owned or operated by or on behalf of the Tenant;

(v) business interruption insurance covering the Annual Base Rent, the Additional Rent and all other costs and expenses in connection with the Premises, all for a twelve (12) month period; and

(vi) such other forms of insurance and increases of the amount of coverage stipulated in the foregoing sections against such risks and in such amounts as may be customarily obtained by tenants of premises similar to the Premises and any other forms of reasonable and customary insurance as the Landlord and/or a Mortgagee, reasonably requires from time to time, in forms and amounts and for risks against which a prudent tenant would insure with a use similar to that of the Tenant.

(b) All insurance policies provided for in this section 12.2 shall:

(i) be taken out with insurers licensed to carry on the business of insurance in the Province in which the Premises are located;

(ii) be non-contributing with and apply only as primary and not excess to any other insurance available to either or both of the Landlord and the Mortgagee;

(iii) not be invalidated as respects the interests of all and any of the Landlord and the Mortgagee by reason of a breach or violation of warranties, representations declarations or conditions contained in the policies; and

(iv) contain an undertaking by the insurers to notify the Landlord and its Mortgagee in writing not less than thirty (30) days before any material change, cancellation, or termination.

The Tenant may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies.

(c) The proceeds of the insurance under Sections 12.2(a)(i) and 12.2(a)(i)(a)(ii) above shall be and are hereby assigned and made payable to the Landlord.

(d) If the Tenant shall fail to take out, renew and keep in force such insurance the Landlord may do so as the agent of the Tenant and the Tenant shall repay to the Landlord any amounts paid by the Landlord as premiums forthwith upon demand.

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(e) The Tenant shall furnish to the Landlord certificates or other evidence acceptable to the Landlord as to the insurance from time to time required to be effected by the Tenant pursuant to this Lease and its renewal or continuation in force. No review or approval of any insurance certificate or insurance policy by the Landlord derogates from or diminishes the Landlord’s rights under this Lease.

12.3 Limitation of Liability

(a) The Landlord releases each Tenant Party from all claims or liabilities in respect of any damage which is actually insured against by the Landlord or is required to be insured against under section 12.1, but only to the extent of insurance proceeds actually received by the Landlord. The Landlord shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Tenant.

(b) The Tenant releases each Landlord Party from all claims or liabilities in respect of any damage which is actually insured against by the Tenant or is required to be insured against under section 12.2, but only to the extent of insurance proceeds actually received by the Tenant. The Tenant shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Landlord.

12.4 Indemnity

(a) Subject to section 12.3(a), the Tenant shall indemnify and save harmless the Landlord and each other Landlord Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Landlord Party arising from the conduct of any work by or any act or omission of the Tenant or any assignee, subtenant, agent, employee, contractor, invitee or licensee of the Tenant, and in respect of all costs, expenses and liabilities incurred by any Landlord Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Landlord Party arising from any breach by the Tenant of any of its covenants and obligations under this Lease. The provisions of this section 12.4(a) shall survive the expiry or earlier termination of this Lease.

(b) Subject to section 12.3(b), the Landlord shall indemnify and save harmless the Tenant and each other Tenant Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Tenant Party arising from the conduct of any work by or any act or omission of the Landlord or any assignee, agent, employee, or contractor of the Landlord, and in respect of all costs, expenses and liabilities incurred by any Tenant Party in connection with or arising

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out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Tenant Party arising from any breach by the Landlord of any of its covenants and obligations under this Lease. The provisions of this section 12.4(b) shall survive the expiry or earlier termination of this Lease.

ARTICLE 13

SALE OR FINANCING, SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES

13.1 Sale or Financing of Building

The rights of the Landlord under this Lease may be mortgaged, charged, transferred or assigned to a purchaser or purchasers or to a mortgagee, lending institution or trustee for bond holders (the “Mortgagee”). In the event of a sale or of default by the Landlord under any mortgage, trust deed or trust indenture (the “Mortgage”) and the purchaser or the Mortgagee, entering into possession of the Premises, the Tenant agrees to attorn to and become the tenant of the Mortgagee or the Purchaser under the terms of this Lease. The Landlord shall provide the Tenant with a Non-Disturbance Agreement, in form and substance satisfactory to the Tenant, acting reasonably, from any Mortgagee who holds a Mortgage to which this Lease is subordinate.

The Landlord may assign its rights under this Lease to a lending institution as collateral security for a loan or other financing.

13.2 Subordination and Attornment

If required by any Mortgagee and, provided that such Mortgagee has first entered into a Non-Disturbance Agreement with the Tenant, this Lease and all rights of the Tenant hereunder shall be subject and subordinate to all Mortgages now or hereafter existing which may now or hereafter affect the Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. Subject to the foregoing, the Tenant agrees to execute and deliver promptly whenever requested by the Landlord or by such Mortgagee an instrument of subordination or attornment, as the case may be.

13.3 Registration

The Landlord agrees that the Tenant may prepare and register, at the Tenant’s cost, a notice of this Lease against title to the Premises, on terms and conditions acceptable to the Landlord. Such notice shall only describe the parties, the Premises, the Term, the Commencement Date, and any options to renew the Term. The Tenant covenants and agrees to discharge the notice of lease, at its cost, upon the expiry or earlier termination of the Lease.

13.4 Certificates

Each of the Tenant and the Landlord, whenever requested by the other, shall from time to time execute and deliver to the party making the request and to any other Person designated by the party making the request a certificate in writing as to the status of this Lease at

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that time, including as to whether it is in full force and effect, is modified or unmodified, confirming the rent payable hereunder and the state of the accounts between the Landlord and Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as to which as may reasonably be requested.

ARTICLE 14

DELAY; NO WAIVER

14.1 Unavoidable Delay

Notwithstanding the terms of this Lease, if the Landlord or the Tenant is, in good faith, delayed or prevented from doing anything required by this Lease, because of a strike; labour trouble; inability to get materials or services; power failure; restrictive governmental laws or regulations; riots; insurrection; sabotage; rebellion; war; act of God; or any other similar reason, that is not the fault of the party delayed, the doing of the thing is excused for the period of the delay and the party delayed will do what was delayed or prevented within the appropriate period after the delay. The preceding sentence does not excuse the Tenant from payment of Rent in the amounts and at the times specified in this Lease.

14.2 No Admission

The acceptance of any Rent from or the performance of any obligation hereunder by a person other than the Tenant shall not be construed as an admission by the Landlord of any right, title or interest of such person as a subtenant, assignee, transferee or otherwise in the place and stead of the Tenant.

14.3 Part Payment

The acceptance by the Landlord of a part payment of any sums required to be paid hereunder shall not constitute waiver or release of the right of the Landlord to payment in full of such sums.

ARTICLE 15

TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER

15.1 Remedying by Landlord, Non-payment and Interest

In addition to all the rights and remedies of the Landlord available to it in the event of any default hereunder by the Tenant either by any other provision of this Lease or by statute or the common law, the Landlord, provided it has given the Tenant at least five (5) Business Days’ prior written notice in respect of monetary defaults and twenty (20) days’ prior written notice for non-monetary defaults (or such longer period as may be required under the circumstances provided that the Landlord’s interests are not prejudiced):

(a) shall have the right at all times to remedy or attempt to remedy any default of the Tenant, and in so doing may make any payments due or alleged to be due by the Tenant to third parties and may enter upon the Premises to do any work or other things therein and in such event all expenses of the Landlord in remedying or

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attempting to remedy such default shall be payable by the Tenant to the Landlord forthwith upon demand;

(b) shall have the same rights and remedies in the event of any non-payment by the Tenant of any amounts payable by the Tenant under any provision of this Lease as in the case of non-payment of Rent;

(c) if the Tenant shall fail to pay any Rent promptly when due, shall be entitled, if it shall demand it, to interest thereon at the Prime Rate plus 2% from the date upon which the same was due until actual payment thereof; and

(d) shall be entitled to be reimbursed by the Tenant, and the Tenant shall forthwith pay the Landlord, the amount of all costs and expenses (including, without limitation, legal costs on a solicitor and own client basis) incurred by the Landlord in connection with the default or in efforts to enforce any of the rights, or to seek any of the remedies, to which the Landlord is or may be entitled hereunder.

Notwithstanding the foregoing, in the event of an emergency, the Landlord may take such of the foregoing actions as are required to prevent damage to the Premises or harm to individuals without first giving the above stated prior written notice provided that the Landlord shall give the Tenant as much notice as reasonably possible prior to taking such actions.

15.2 Remedies Cumulative

The Landlord may from time to time resort to any or all of the rights and remedies available to it in the event of any default hereunder by the Tenant, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative, as the express provisions hereunder as to certain rights and remedies are not to be interpreted as excluding any other or additional rights and remedies available to the Landlord by statute or the common law.

15.3 Right of Re-entry on Default

Provided and it is expressly agreed that:

(a) if and whenever the Rent hereby reserved or other monies payable by the Tenant or any part thereof, whether lawfully demanded or not, are unpaid and the Tenant shall have failed to pay such Rent or other monies within five (5) Business Days after the Landlord shall have given to the Tenant notice requiring such payment; or

(b) if the Tenant shall breach or fail to observe and perform any of the covenants, agreements, provisos, conditions, rules or regulations and other obligations on the part of the Tenant to be kept, observed or performed hereunder, and such breach or failure continues for a period of twenty (20) days (or such longer period as shall reasonably be necessary to cure the default or failure under the circumstances provided the Tenant is proceeding diligently to remedy same) after notice thereof by the Landlord to the Tenant; or

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(c) if the Landlord shall have become entitled to terminate this Lease or to re-enter the Premises pursuant to any provision hereof,

then and in every such case it shall be lawful for the Landlord thereafter to enter into and upon the Premises or any part thereof in the name of the whole and the same to have again, repossess and enjoy as of its former estate, anything in this Lease contained to the contrary notwithstanding.

15.4 Termination and Re-entry

If and whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord, in addition to all other rights and remedies, shall have the right to terminate this Lease forthwith by notice to the Tenant. Upon the giving by the Landlord of such notice, this Lease and the Term shall terminate, and the Tenant shall immediately deliver up possession of the Premises to the Landlord in accordance with section 15.8, and the Landlord may re-enter and take possession of them.

15.5 Certain Consequences of Termination and Re-entry

If the Landlord re-enters the Premises or if this Lease is terminated other than by the passing or expiration of time, then:

(a) notwithstanding any termination or the Term thereby becoming forfeited and void, the provisions of this Lease which relate to the consequences of termination, and the provisions of this Lease as they apply with respect to acts, events and omissions which occurred prior to the termination, shall all survive such termination;

(b) at the Landlord’s option, but without prejudice to the Landlord’s other rights and remedies with respect to recovery of costs, damages and expenses which relate to any default by the Tenant, the Tenant shall pay to the Landlord on demand:

(i) Rent and all other amounts payable under this Lease up to the time of re-entry or the date of termination, whichever is later, including any accelerated rent payable pursuant to section 16.2;

(ii) all damages the Landlord incurs in connection with the re-entering, terminating, re-letting, collecting sums due or payable by the Tenant and storing and realizing upon assets seized, including without limitation, brokerage fees, legal fees and disbursements, the expenses of cleaning and making and keeping the Premises in good order, and the expenses of repairing the Premises and preparing them for re-letting and including the worth at the time of such termination of the excess, if any, of the amount of Rent and charges equivalent to Rent required to be paid pursuant to this Lease for the unexpired remainder of the Term, had it not been terminated, over the then reasonable rental value of the Premises for the remainder of the Term, all of which amounts shall be immediately due and payable by the Tenant to the Landlord; and

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(c) the Landlord shall take all such actions as are available to it, acting in a commercially reasonable manner, to mitigate its damages.

15.6 Waiver of Distress

The Tenant waives and renounces the benefit of any present or future statute taking away or limiting the Landlord’s right of distress and covenants and agrees that notwithstanding any such statute none of the goods and chattels of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears. The Tenant will not sell, dispose of or remove any of the fixtures, goods or chattels of the Tenant from or out of the Premises during the Term without the consent of the Landlord, unless the Tenant is substituting new fixtures, goods or chattels of equal value or is bona fide disposing of individual items which have become excess for the Tenant’s purposes, and the Tenant will be the owner of its fixtures, goods and chattels and will not permit them to become subject to any lien, mortgage, charge or encumbrance.

15.7 Re-letting

Whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord in addition to all other rights it may have, shall have the right as agent of the Tenant to enter the Premises and re-let them (for a term or terms shorter or longer than the balance of the Term, granting reasonable concessions in connection therewith) and to receive the rent therefor and to apply any rent derived from re-letting the Premises upon account of the rent due and to become due under this Lease and the Tenant shall be liable to the Landlord for the deficiency, if any.

15.8 Surrender on Termination

Forthwith upon the termination of this Lease, whether by effluxion of time or otherwise, the Tenant shall vacate and deliver up possession of the Premises in a neat and tidy state in accordance with the Tenant’s obligation under this Lease to repair the Premises, but subject to the Tenant’s rights and obligations in respect of removal in accordance with section 11.3. At the same time the Tenant shall surrender to the Landlord at the place then fixed for the payment of Rent all keys and other devices which provide access to the Premises, the Building or any part thereof and shall inform the Landlord of all combinations to locks, safes and vaults, if any, in the Premises.

ARTICLE 16

EVENTS TERMINATING LEASE

16.1 Cancellation of Insurance

If any policy of insurance upon the Building from time to time effected by the Tenant shall be cancelled or about to be cancelled by the insurer by reason of the use or occupation of the Premises by the Tenant or any assignee, subtenant or licensee of the Tenant or anyone permitted by the Tenant to be upon the Premises, the Landlord shall give the Tenant notice thereof forthwith upon receipt of such notice. The Tenant shall have a reasonable period of time after receipt of such notice either:

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(a) to take such steps in respect of such use or occupation as shall enable it to reinstate or avoid cancellation of (as the case may be) such policy of insurance; or

(b) to acquire alternate insurance.

If the Tenant fails to take such steps or to acquire alternate insurance then the Landlord may at its option either (i) terminate the Lease by giving notice of termination to the Tenant as required hereunder; or (ii) enter upon the Premises and remedy such condition and the Tenant shall pay to the Landlord the costs thereof, as Additional Rent, and the Landlord shall not be liable for any loss or damage caused to any property of the Tenant or of other persons located on the Premises as a result of such entry. The Tenant agrees that the exercise by the Landlord of its rights under this Section shall not be deemed to be a re-entry or a breach of any covenant for quiet enjoyment contained in this Lease.

16.2 Prohibited Occupancy, Bankruptcy and Other Events

If without the written consent of the Landlord the Premises shall be used by any other persons than the Tenant or its permitted assigns or permitted subtenants or for any purpose other than that for which the Premises were leased or occupied by any persons whose occupancy is prohibited by this Lease, or if the Premises shall be vacated or abandoned or remain unoccupied for ten (10) consecutive days or more while capable of being occupied, or if the Term or any of the goods and chattels of the Tenant shall at any time be seized in execution or attachment, or if a receiver or receiver-manager is appointed of the business or property of the Tenant, or if the Tenant or any Indemnifier shall make any assignment for the benefit of creditors or any bulk sale, become bankrupt or insolvent or take the benefit of any statute now or hereafter in force for bankrupt or insolvent debtors or (if a corporation) shall take any steps or suffer any order to be made for its winding-up or other termination of its corporate existence, then in any such case the Landlord may at its option terminate this Lease by notice to the Tenant and thereupon, in addition to the payment by the Tenant of Rent and other payments for which the Tenant is liable under this Lease, Rent for the current month and the next ensuing three (3) months’ Rent shall immediately become due and be paid by the Tenant, or party then controlling the Tenant’s affairs.

ARTICLE 17

MISCELLANEOUS

17.1 Notices

All notices, demands and requests required or permitted to be given under this Lease must be in writing and must be delivered personally or by nationally recognized overnight courier or sent by United States certified mail or Canadian registered mail, as applicable, return receipt requested, postage prepaid and addressed to the parties at their respective addresses set forth in section 1.1 or at such other addresses as the parties may designate from time to time by written notice in the manner provided in this section. Notwithstanding the foregoing, if there is a mail strike, slowdown or other labour dispute winch might affect delivery of such notice between the time of mailing and the actual receipt of notice, then such notice shall only be effective if actually delivered.

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Upon at least ten (10) days’ prior written notice, each party shall have the right to change its address to any other address within the United States of America or Canada. Notices shall be deemed given on the date that such notices are deposited with a nationally recognized overnight courier, deposited with the U.S. Postal Service or Canada Post, as applicable, or personally delivered.

17.2 Extraneous Agreements

The Tenant acknowledges that there are no covenants, representations, warranties, agreements or conditions expressed or implied relating to this Lease of the Premises save as expressly set out in this Lease. This Lease may not be modified except by an agreement in writing executed by the Landlord and the Tenant. If there is any conflict between the provisions of this Lease and any such agreement to lease, the provisions of this Lease shall prevail.

17.3 Time of Essence

Time shall be of the essence of this Lease.

17.4 Successors and Assigns

This Lease and everything herein contained shall enure to the benefit of and be binding upon the Landlord and its successors and assigns and on the Tenant and its permitted successors and permitted assigns. References to the Tenant shall be read with such changes in gender as may be appropriate, depending upon whether the Tenant is a male or female person or a firm or corporation. If the Tenant is comprised of more than one person or entity, then each such person and entity is joint and severally bound by the representations, warranties, agreements and covenants of the Tenant herein and any notice given or deemed to have been given at any time to any such person or entity shall be deemed to have been given at the same time to each other such person and entity.

17.5 Waiver

No condoning, excusing or overlooking by the Landlord or the Tenant of any default, breach or non-observance by the Tenant or the Landlord at any time or times in respect of any covenant, proviso or condition herein contained shall operate as a waiver of the Landlord’s or the Tenant’s rights hereunder in respect of any continuing or subsequent default, breach or non-observance or so as to defeat or affect in any way the rights of the Landlord or the Tenant herein in respect of any such continuing or subsequent default or breach, no acceptance of Rent by the Landlord subsequent to a default by the Tenant (whether or not the Landlord knows of the default) shall operate as a waiver by the Landlord, and no waiver shall be inferred from or implied by anything done or omitted by the Landlord or the Tenant save only express waivers in writing.

17.6 Governing Law and Severability

This Lease shall be governed by and construed in accordance with the laws in force in the Province in which the Premises are located. Each of the provisions contained in this Lease is distinct and severable and a declaration of invalidity or unenforceability of any

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provision or part of a provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision in this Lease. To the extent permitted by applicable law, the parties waive any provision of law that renders any provision of this Lease invalid or unenforceable in any respect.

17.7 Captions

The captions appearing in this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any provision thereof. References to articles and sections in this Lease refer to articles and sections of this Lease. This Lease includes all of the schedules attached to it.

17.8 Expropriation

If during the Term the Premises or any part thereof are taken by any lawful power or authority by the right of expropriation the Landlord and the Tenant shall cooperate so that each may receive the maximum awarded to which it is entitled at law.

17.9 Counterparts

This Lease may be signed in counterparts and by electronic scanning or facsimile transmission with the same effect as if the parties had signed one original copy of this Lease. All counterparts shall be construed as if they constitute one and the same original document.

ARTICLE 18

ADDITIONAL PROVISIONS

18.1 Hansen Road Expansion Option

(a) The Tenant shall have an option to require the Landlord, at the Landlord’s sole cost and expense, to construct an expansion of the Building (the “Building Expansion”) on the Additional Land, all pursuant to the terms of this Article 18. The foregoing option (the “Expansion Option”) shall be exercisable by the Tenant upon written notice delivered to the Landlord not later than two (2) years after the Commencement Date. Except as set forth in paragraph (b) below, if not exercised by such date, the Expansion Option shall be null and void.

(b) If the Tenant exercises the Additional Land Reservation Option, as described in Section 18.9 below, the last date for exercise of the Expansion Option shall be the date which is six (6) years and six (6) months after the Commencement Date.

(c) Notwithstanding the provisions of Article 10 hereof (which provide that the Landlord shall not unreasonably withhold its consent to a Transfer), the Expansion Option is personal to Tenant, BWAY Corporation and the Affiliates of BWAY Corporation only, and shall not be assignable or transferable to any third party without the prior written consent of the Landlord, which consent may be withheld in the Landlord’s sole, absolute and unfettered discretion.

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(d) No rescission (or deemed rescission) of the Expansion Option by the Tenant shall be deemed to waive the Tenant’s right to again exercise the Expansion Option prior to the last day for exercise of the Expansion Option.

18.2 Determination of Project Cost; Engagement of Landlord’s Contractor.

(a) Upon exercise by the Tenant of the Expansion Option, the Tenant shall provide the Landlord with general requirements for the Building Expansion, including without limitation, square footage, general design and internal configuration, floor weight requirements, loading dock requirements and interconnectivity to the Building (“Tenant’s Specifications”); provided however that Tenant’s Specifications must be consistent with the final sentence of subsection 18.2(b). Upon receipt of Tenant’s Specifications, the Landlord shall, as promptly as reasonably possible but within thirty (30) days after receipt of Tenant’s Specifications, provide the Tenant with a preliminary estimate of the cost to construct the Building Expansion, which estimate shall include substantially all costs which would be included within the Annual Base Rent calculation set forth in Section 18.10(a) hereof (such estimate being herein referred to as “Landlord’s Estimate”).

(b) Not later than thirty (30) days after receipt of Landlord’s Estimate, the Tenant shall notify the Landlord in writing whether or not it desires to proceed with the Building Expansion. If the Tenant elects not to proceed with the Building Expansion or fails to give notice of its election within such thirty (30) day period, then the Tenant’s exercise of the Expansion Option shall be deemed rescinded. If the Tenant elects to proceed with the Building Expansion, then the Landlord shall designate its preferred contractor for the project (“Landlord’s Contractor”) and the parties shall work with Landlord’s Contractor in good faith to finalize (i) plans and specifications for the Building Expansion, such plans and specifications to be completed not later than sixty (60) days after the Tenant’s election to proceed with the Building Expansion (the final plans and specifications, as modified from time to time pursuant to the terms hereof, are hereinafter referred to as the “Plans and Specifications”) and (ii) a budget with respect to the Building Expansion, which Budget shall include all costs which would be included within the Annual Base Rent calculation set forth in Section 18.10(a) (the budget, as modified from time to time pursuant to the terms hereof, is hereinafter referred to as the “Budget”). All components of the Plans and Specifications, including without limitation, the configuration and specifications for all building systems (including electrical, mechanical, roofing systems), the overall size of the Building Expansion, the design, design standards and quality of the Building Expansion shall be completed with regard to the design, design standards and quality of typical industrial buildings in the immediate area and in keeping with the applicable zoning and building laws and other applicable laws and the proposed use of the addition (which shall be the manufacturing, warehousing and distribution of metal and plastic containers).

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(c) Upon completion of the Plans and Specifications and the Budget, the Tenant may, at its option and in its sole discretion, instruct the Landlord in writing to proceed to construct the Building Expansion using Landlord’s Contractor as general contractor. Notwithstanding the foregoing, at any time prior to the giving of such instruction, Tenant may elect (i) to abandon the Building Expansion project and rescind its exercise of the Expansion Option or (ii) to discontinue discussions with Landlord’s Contractor and to proceed pursuant to the tender process described in Section 18.3 below. Upon either such election, the Tenant shall pay to Landlord (for further delivery to Landlord’s Contractor) an amount equal to the costs and charges of Landlord’s Contractor for work performed to date with respect to the design and budgeting process for the Building Expansion, up to a maximum payment of $10,000.

18.3 Optional Tender Process.

(a) If Tenant elects to proceed pursuant to a tender process, all work to be performed in connection with the construction of the Building Expansion shall be tendered by the Landlord to at least three (3) contractors, each of which shall be subject to the prior written approval of the Tenant, which approval shall not be unreasonably withheld or delayed. Landlord’s bid request to such contractors shall establish an expiration date for the lender of bids. If all bids obtained through the tender process exceed Landlord’s Estimate by twelve percent (12%) or more, then the Tenant may, at its option and in its sole discretion, abandon the Building Expansion project and rescind its exercise of the Expansion Option, without payment of any termination or cancellation fee or other compensation or reimbursement to the Landlord or any contractor. The foregoing option shall be exercised within fifteen (15) days after expiration of the tender period. If the Tenant fails to give the foregoing notice of abandonment (and does not otherwise notify Landlord that it has elected to proceed with the Building Expansion), then it shall be deemed to have elected to abandon the Building Expansion project and to rescind its exercise of the Expansion Option.

(b) If any bid obtained through the tender process is less than or equal to Landlord’s Estimate, or does not exceed Landlord’s Estimate by twelve percent (12%) or more, then the Tenant shall be obligated to continue with the Building Expansion project pursuant to the terms of Section 18.4 hereof. Not later than seven (7) days after expiration of the tender period, the Tenant shall select a contractor from the tendering contractors upon written notice to the Landlord. If the Tenant fails to give the foregoing notice, it shall be deemed to have selected the contractor which submitted the lowest bid. Upon selection or deemed selection of the contractor, the Landlord shall proceed to enter into a contract with such contractor and the parties shall work with such contractor in good faith to complete, or to make any necessary modifications to, the Plans and Specifications and/or the Budget. Notwithstanding the foregoing, at any time prior to seven (7) days after expiration of the tender period, the Tenant may elect upon written notice to the Landlord to abandon the Building Expansion project and rescind its exercise of the Expansion

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Option. Upon any such election, the Tenant shall reimburse Landlord for its actual, documented out of pocket costs incurred in connection with the tender.

18.4 Construction of Building Expansion.

(a) As used herein, the term “Project Contractor” shall mean landlord’s Contractor or such other contractor as is selected or deemed selected by the Tenant to construct the Building Expansion. Upon (i) selection of the Project Contractor and completion of the Plans and Specifications and Budget, the Landlord shall, at its sole cost and expense (which shall be included in “soft costs”, as contemplated by Section 18.10(a)(ii) below), obtain all land use, zoning, site plan and all other approvals and permits necessary to permit the timely construction of the Building Expansion (collectively, the “Permits”) and shall be solely responsible, as soft costs, for all costs, fees, mitigation payments or exactions, and submissions necessary to obtain the Permits. The Landlord shall apply for the respective Permits as soon as reasonably possible after exercise by the Tenant of the Expansion Option, but in no event later than two business days after the date on which the Plans and Specifications have been finalized by the parties.

(b) Upon obtaining all necessary Permits, the Landlord shall construct the Building Expansion (using the Project Contractor) at its sole cost and expense, such construction to be completed in a good and workmanlike manner in accordance with the Plans and Specifications. Such work shall be completed expeditiously and, subject to obtaining all necessary Permits, shall commence no later than one hundred twenty (120) days following agreement by the Landlord and the Tenant as to the Project Contractor, the Plans and Specifications and the Budget.

(c) The Tenant may authorize changes in the Plans and Specifications during construction (a “Change Order”) only by written instructions to the Landlord, or such other person as the Landlord may designate. If the Landlord or the Project Contractor initiates a Change Order, the Landlord shall not finalize such Change Order without first obtaining the Tenant’s approval, which shall not be unreasonably withheld, conditioned, delayed. Notwithstanding the foregoing, the Tenant’s approval shall not be required for Building Code, Health and Safety Change Orders (as hereinafter defined); provided, however, that Landlord shall in any event notify the Tenant of such Building Code, Health and Safety Change Order and provide the Tenant with the information described below relating to Change Orders which require the Tenant’s approval. As used herein, Building Code, Health and Safety Change Orders shall mean (i) changes required by any governmental authority during the course of construction and (ii) changes recommended by the Project Contractor, project architect or project engineer (and approved by the Landlord) during the course of construction as a result of concern for health or safety issues. Any Change Orders requested by the Tenant shall be subject to the Landlord’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed. Before commencing any such change, the Landlord will prepare and deliver to the Tenant, for the Tenant’s approval, the Change Order selling forth (i) the impact to the construction schedule and (ii) the

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total cost of such Change Order (said total cost shall be limited to the incremental cost associated with the Change Order). The rent calculation set forth in Section 18.10(a) below shall include the incremental cost of any Building Code, Health and Safety Change Order (except to the extent that such Building Code, Health and Safety Change Order was necessitated by the negligence of an engineer, architect or other design professional) and any Change Order requested by the Tenant, and such incremental costs shall also be added to the Budget. Except for any Building Code, Health and Safety Change Order, the rent calculation set forth in Section 18.10(a) below shall not include the incremental cost of any Change Order requested by the Landlord.

18.5 Completion of Building Expansion.

(a) The Building Expansion shall be delivered by the Landlord to the Tenant upon Substantial Completion thereof. “Substantial Completion” of the Building Expansion shall mean that (i) the Building Expansion has been substantially completed in substantial accordance with the Plans and Specifications, as certified by the project architect for the Building Expansion, and (ii) the Building Expansion is fully finished and operational and ready for the Tenant’s immediate occupancy with no prohibition thereto from any relevant governmental entity. Substantial Completion shall be deemed to have occurred even though minor details of construction, decoration, landscaping and mechanical adjustment remain to be completed by the Landlord and “punch list” items remain to be repaired by Landlord, so long as such minor details do not materially interfere with safe access to, or occupancy of, the Building Expansion by the Tenant, nor otherwise prohibit the Tenant from the using the Building Expansion for its intended purposes.

(b) Upon delivery of the Building Expansion, the parties shall conduct a walk through and shall compile a list of any and all “punch list” items to be repaired by the Landlord, which shall repair such items at its sole cost and expense as expeditiously as possible.

18.6 Conditions to Exercise of Expansion Option.

The Tenant’s right to exercise the Expansion Option shall be subject to the Tenant not being in material default under this Lease or the Other Properly Lease (as hereinafter defined) and not having been in material default under this Lease or the Other Property Lease (for which it has received written notice from the Landlord) on more than five (5) previous occasions.

18.7 Other Property Lease.

It is understood by both parties that, on or prior to commencement of construction of the Building Expansion, the Tenant may terminate the Lease from the Landlord on the property located at 120 Walker Drive, Brampton, Ontario (the “Other Property Lease”), such termination to be effective as of the date on which both of the following conditions have been

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satisfied: (i) the Building Expansion has been delivered to the Tenant pursuant to Section 18.5(a) hereof and (ii) the Tenant shall have surrendered the “Premises” under the Other Property Lease to the Landlord pursuant to the terms thereof.

18.8 Modification of Lease Terms upon Substantial Completion of Building Expansion

Upon Substantial Completion of the Building Expansion and delivery of the Building Expansion to the Tenant, (a) the Building Expansion and the Additional Land shall be deemed to be part of the “Premises” hereunder, (b) the Term of this Lease shall be extended for a ten (10) year period from and commencing on the date of delivery of the Building Expansion to the Tenant and (c) the Annual Base Rent shall be increased as provided in Section 18.9 below. By way of example, if the Building Expansion is delivered to the Tenant on May 15, 2010, the Term hereof (as to the original Premises, the Building Expansion and the Additional Land) shall be extended to expire on May 14, 2020).

18.9 Additional Land Reservation Option

(a) In the event that the Tenant does not elect to exercise the Expansion Option, the Landlord has reserved the right to sell or lease all or parts of the Additional Land to third parties. In the event that the Tenant does not exercise the Expansion Option within two (2) years after the Commencement Date (or, after any such exercise, rescinds or is deemed to have rescinded such exercise), but wishes to reserve the Additional Land for possible future expansion, the Tenant may elect to so reserve the Additional Land for a period of five (5) years, commencing on the second anniversary of the Commencement Date. Such option (the “Additional Land Reservation Option”) shall be exercisable by the Tenant upon written notice delivered to the Landlord not later than the second anniversary of the Commencement Date. If not exercised by such date, the Additional Land Reservation Option shall be null and void.

(b) Upon exercise of the Additional Land Reservation Option, effective on the second anniversary of the Commencement Date, the Annual Base Rent shall be increased during such five (5) year reservation period as provided in subsection (c) below.

(c) The increase in Annual Base Rent attributable to the Additional Land shall be computed by capitalizing the agreed market value of the Additional Land at a rate of 350 basis points above the then current five-year Government of Canada Bond Rate, however in no event shall such capitalization rate be less than 8.5%. (For example purposes only, if the appraised value of Additional Lands is $1,350,000.00 and the then current five-year Government of Canada Bond Rate is 5%, the Annual Base Rent will be increased by $114,750 per annum). Notwithstanding the foregoing, the increase in Annual Base Rent pursuant to Section 4.1(a) above shall not apply to the portion of Annual Base Rent which is attributable to the Additional Land. If the parties are unable to agree as to the market value of the Additional Land, the value shall be the appraised value of the

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Additional Land, as determined pursuant to the appraisal procedures set forth in Section 3.3 hereof.

18.10 Rent

(a) In the event the Expansion Option is exercised by the Tenant, the Annual Base Rent attributable to the Building Expansion shall be as follows:

(i) The Annual Base Rent attributable to the Building Expansion, from and after Substantial Completion and delivery of the Building Expansion to the Tenant, for the first five years of the ten year extension of the Term, shall be calculated by multiplying (A) the total cost of constructing the Building Expansion (including “soft costs” and the construction management fee described below), such total amount not to exceed the total project costs set forth in the Budget by (B) the current five-year Government of Canada Bond Rate as of the date the Expansion Option is exercised by the Tenant, plus 350 basis points, however in no event shall such capitalization rate be less than 8.5%. Thereafter, the Annual Base Rent for the last five years of the extended Term shall increase by 13% of the Annual Base Rent payable in the immediately preceding five-year period. (For example purposes only, if the total cost of construction is $2,000,000.00 and the then current five-year Government of Canada Bond Rate is 5%, the Annual Base Rent attributable to the Building Expansion for the first five years of the ten year extension of the Term would be $170,000);

(ii) For purposes of calculating the total cost of constructing the Building Expansion. “soft costs” shall include actual fees and expenses paid by the Landlord to independent third party consultants, professionals and contractors, including without limitation, for architectural, engineering, surveying, legal, geotechnical and HVAC related services, together with development charges, permit fees and other disbursements to governmental authorities relating to the permits and approvals contemplated by Section 18.4(a) above. Overhead and other internal costs of the Landlord attributable to the Building Expansion shall not be included in the calculation of construction costs; provided, however, that the total cost of constructing the Building Expansion shall include a one percent (1.0%) construction management fee, which fee shall be calculated on all costs of constructing the Building Expansion, other than development charges, permit fees and other disbursements to governmental authorities.

(iii) In determining the Annual Base Rent attributable to the Building Expansion, the Additional Land shall have an imputed value of “nil” so as not increase the rental rate above the cost of construction calculation.

(b) In the event that the Additional Land Reservation Option is exercised, upon Substantial Completion of the Building Expansion and delivery of the Building

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Expansion to the Tenant, the increase to Annual Base Rent attributable to the Building Expansion calculated pursuant to subsection (a) above shall commence and supersede and replace the increase to Annual Base Rent attributable to the Additional Land and calculated pursuant to Section 18.9(c) above.

(c) Notwithstanding the foregoing, the increase in Annual Base Rent pursuant to Section 4.1(a) above pertaining to the original Premises shall not apply to the portion of Annual Base Rent which is attributable to the Building Expansion, and accordingly the Annual Base Rent for the original Premises shall remain unchanged, save for the increase in years six through ten in accordance with Section 4.1 of the Lease, and thereafter the Annual Base Rent for the remaining years of the extended Term beyond the original ten year term of the Lease shall increase by 13% of the Annual Base Rent payable with regard to the original Premises in the immediately preceding year.

18.11 Waiver of Rights with Respect to Additional Land

In the event that the Expansion Option is not exercised by the Tenant by the relevant deadline set forth in Section 18.1 above, then the Landlord shall have the unfettered right to:

(a) develop all or any parts of the Additional Land; and/or

(b) sever and lease or sell all or any parts of the Additional Land; and/or

(c) partially sever and develop all or any parts of the Additional Land.

In any and all of the cases (a), (b) or (c) above, the Landlord shall have the right to lease or sell all or any parts of the Additional Land to third parties. Upon any exercise of rights by the Landlord pursuant to this Section 18.11 during the last six (6) months of the reservation period for the Additional Land or thereafter, such part or parts of the Additional Land as is developed, leased, severed or sold by the Landlord (“Landlord’s Utilized Portion”) shall no longer be part of the “Land” or the “Premises” hereunder (and the Tenant shall surrender and deliver up vacant possession of Landlord’s Utilized Portion), and Annual Base Rent hereunder, if any is then applicable to the Additional Land, shall be reduced by the amount of such Annual Base Rent which is attributable to Landlord’s Utilized Portion of the Additional Land and, in the event that there are not separate real property tax bills and separate real property assessment notices for such part or parts of the Additional Land, the Landlord will reasonably allocate the Taxes as between the Premises and Landlord’s Utilized Portion of the Additional Land on an equitable basis.

The Landlord undertakes to minimize disruption to the Tenant’s operations during any development of the Additional Land. In the event of development, lease or sale of all or any parts of the Additional Land, as aforesaid, the Tenant agrees to cooperate with the Landlord, both acting reasonably and in good faith, with regard to the granting of any easements, rights of way or other agreements necessary in order to facilitate access to or the servicing of the Additional Land, but only to the extent such easements, rights of way or other agreements do not materially negatively affect the Tenant’s use or enjoyment of the Premises.

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(d) sever and lease or sell all or any parts of the Additional Land; and/or

(e) partially sever and develop all or any parts of the Additional Land.

In any and all of the cases (a), (b) or (c) above, the Landlord shall have the right to lease or sell all or any parts of the Additional Land to third parties. Upon any exercise of rights by the Landlord pursuant to this Section, such part or parts of the Additional Land shall no longer be part of the “Premises” hereunder (and the Tenant shall surrender and deliver up vacant possession of such part or parts of the Additional Land) and, in the event that the Additional Land is not severed from the Premises and/or there are not separate real property tax bills and separate real property assessment notices for such part or parts of the Additional Land, the Landlord will reasonably allocate the Taxes as between the Premises and the said part or parts of the Additional Land on an equitable basis.

The Landlord undertakes to minimize disruption to the Tenant’s operations during any development of the Additional Land. In the event of development, lease or sale of all or any parts of the Additional Land, us aforesaid, the Tenant agrees to cooperate with the Landlord, both acting reasonably and in good faith, with regard to the granting of any easements, rights of way or other agreements necessary in order 10 facilitate access to or the servicing of the Additional Land, but only to the extent such easements, rights of way or other agreements do not materially negatively affect the Tenant’s use or enjoyment of the Premises.

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IN WITNESS WHEREOF the parties have executed this Lease as of the date first above written.

80241 CANADA LTD.
	(Landlord)
By:	/s/ Morton Arshinoff
Name:	Morton Arshinoff
Title:	President
By:	/s/ Fred J. Arshinoff
Name:	Fred J. Arshinoff
Title:	Vice President
ICL INDUSTRIAL CONTAINERS ULC
	(Tenant)
By:	/s/ Kevin C.Kern
Name:	Kevin C.Kern
Title:	Vice President & Treasurer
By:
Name:
Title:

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SCHEDULE A

LEGAL DESCRIPTION OF THE LAND

Part Block F, Plan 518, as in Instrument No. VS13624, City of Brampton.

SCHEDULE B

DEFINITIONS

In this Lease the following expressions shall have the following meanings:

“Additional Land” means all and singular those certain parcels or tracts as shown and labelled as the “Additional Land” on the site plan attached as Schedule D hereto, which Additional Land comprises a portion of the Land.

“Additional Rent” means all sums of money to be paid by the Tenant whether to the Landlord or otherwise pursuant to this Lease except for Annual Base Rent.

“Affiliate” has the meaning given to such term in the Business Corporations Act (Ontario) in force as of the date of this Lease.

“Alterations” means any repairs, alterations, replacements, decorations or improvements to the Premises.

“Annual Base Rent” means the annual rent set out in section 1.1(f) or (g) and payable by the Tenant as set forth in section 4.1(a), as the same may be modified from time to time for Annual Base Rent attributable to the Building Expansion or the Additional Land, as contemplated by Article 18 hereof.

“Basic Terms” means those terms of this Lease set out in section 1.1 hereof.

“Building” means that certain building including all fixtures, improvements and amenities located on the Land more particularly described in section 1.1(b)(iii) hereof.

“Building Expansion” has the meaning ascribed thereto in Section 18.1 hereof.

“Business Day” means any day other than a Saturday, Sunday or statutory holiday in either the province in which the Premises are located or in the state of Georgia.

“Change of Control” means, in the case of any corporation or partnership, the transfer or issue by sale, assignment, subscription, transmission on death, mortgage, charge, security interest direct or indirect by, operation of law or otherwise, of any shares, voting rights or interest which would result in any change in the effective control of such corporation or partnership.

“Change Order” has the meaning ascribed thereto in Section 18.4(c) hereof.

“Claim” means any claim made by a Person against another for any liabilities, damages, costs or expenses and any suits or actions involving any such claim.

“Commencement Date” has the meaning set out in section 1.1(e)(i).

“Contaminants” means any pollutants, contaminants, deleterious substances, underground tanks, asbestos materials, mould, lead-based paint, hazardous, corrosive, or toxic substances, special waste or waste of any kind, halon, radon, PCB’s, or other pollutants, contaminants or hazardous

materials or any other substance which is now or hereafter prohibited, controlled, or regulated under Environmental Laws.

“Current Market Rent” means that rent that would be paid for improved industrial space in industrial buildings of similar age and class in the vicinity where the Premises are located, as between persons dealing in good faith and at arms’ length, without reduction for any cash payment, leasehold improvement allowance, rent-free period or other inducement.

“Environment” means the ambient air, all layers of the atmosphere, surface water, underground water, all land, all living organisms and the interacting natural systems that include components of air, land, water, organic and inorganic matter and living organisms, and includes indoor spaces.

“Environmental Law” means all federal, provincial, municipal or local statutes, regulations, by-laws, Environmental Permits, orders or rules, and any policies or guidelines of any governmental or regulatory body or agency, and any requirements or obligations arising under the common law, relating to the Environment and, the transportation of dangerous goods or wastes and occupational safety and health law.

“Environmental Permits” means all permits, licences, approvals, consents, authorizations, registrations and certificates issued by or provided to, as the case may be, any governmental body pursuant to an Environmental Law.

“Extension Term” means any extension of the Term pursuant to a right granted to the Tenant under Article 3 or otherwise agreed to by the parties hereto.

“First Extension Term” has the meaning ascribed thereto in section 3.2(a).

“Goods and Services Taxes” means and includes any and all goods and services taxes, sales taxes, value added taxes, business transfer taxes, or any other taxes imposed on the Landlord or the Tenant from time to time in respect of the Rent payable by the Tenant to the Landlord under this Lease or the rental of the Premises or the provision of any goods, services or utilities, whatsoever by the Landlord to the Tenant under this Lease, whether characterized as a goods and services tax, sales tax, value added tax, business transfer tax, or otherwise.

“Indemnifier” means the person who has executed or agreed to execute the Indemnity Agreement that is attached to this Lease as Schedule C.

“Land” means all and singular those certain parcels or tracts of land legally described in Schedule A hereto, comprising the acreage as shown on the site plan in Schedule A hereto.

“Landlord’s Contractor” has the meaning ascribed thereto in Section 18.2(b) hereof.

“Landlord’s Estimate” has the meaning ascribed thereto in Section 18.2(a) hereof.

“Landlord/Lender Agreement” has meaning ascribed thereto in section 10.3.

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“Landlord Party” means the Landlord, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Lease” means this Lease and all Schedules attached hereto, as amended from time to time.

“Leasehold Improvements” means all fixtures, improvements, installations, Alterations and additions now or from time to time hereafter made, erected or installed, whether by the Tenant, the Landlord or anyone else, in the Premises with the exception of trade fixtures, racking, and furniture and equipment not of the nature of fixtures, but includes all partitions however fixed (including movable partitions) and includes all wall-to-wall carpeting with the exception of such carpeting where laid over vinyl tile or other finished floor and affixed so as to be readily removable without damage.

“Leasehold Lender” has meaning ascribed thereto in section 10.3.

“Leasehold Mortgage” has meaning ascribed thereto in section 10.3.

“Lease Year” means the twelve (12) month period from the Commencement Date of the Lease and each twelve (12) month period thereafter during the Term and any Extension Term.

“Management Fee” means an annual fee equal to one per cent (1%) of the Annual Base Rent.

“Mortgage” has the meaning ascribed thereto in section 13.1.

“Mortgagee” has meaning ascribed thereto in section 13.1.

“Non-Disturbance Agreement” means an agreement between the Tenant and a Mortgagee pursuant to which the Mortgagee agrees that provided the Tenant is not in default of any of its obligations hereunder beyond any applicable grace or call period the Tenant shall have quiet enjoyment of the Premises undisturbed by the Mortgagee or any Person claiming through or under the Mortgagee.

“Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted.

“Plans and Specifications” has the meaning ascribed thereto in Section 18.2(b) hereof.

“Premises” means the Land the Building and all improvements and equipment thereon and therein, together with the Building Expansion, if and to the extent that any Building Expansion is added to the Premises pursuant to Article 18 hereof.

“Prime Rate” means the commercial lending rate of interest, expressed as an annual rate, which the chartered bank designated by the Landlord from time to time quotes from time to time in its principal office in Canada as the reference rate of interest and commonly known as its “prime rate”, and which serves as the basis upon which effective rates of interest are calculated for

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Canadian dollar loans made in Canada to its commercial customers with interest payable as a function of its prime rate.

“Release” means any release, discharge, emission, deposit, issuance, spray, escape, spill, leak and shall also have the various meanings under Environmental Laws.

“Rent” means and includes the Annual Base Rent, Additional Rent and all other sums payable by the Tenant to the Landlord or to other Persons under this Lease.

“Second Extension Term” has the meaning ascribed thereto in section 3.2(b).

“Structure” means the structural elements of the Building including foundations, exterior wall assemblies including weather walls, load bearing walls, floor slab, roof, roof deck, structural columns.

“Substantial Completion” has the meaning ascribed thereto in Section 18.5 hereof.

“Taxes” means all taxes, rates, duties, levies and assessments whatsoever, whether municipal, parliamentary or otherwise, which are levied, imposed or assessed against or in respect of the Building, the Land or upon the Landlord in respect thereof or which are from time to time levied, imposed or assessed in the future in lieu thereof, including those levied, imposed or assessed for education, schools and local improvements and including all costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred by the Landlord in good faith in contesting, resisting or appealing any taxes, rates, duties, levies or assessments, and shall also include any and all taxes which may in future he levied in lieu of “Taxes” as hereinbefore defined, but excluding taxes and license fees in respect of any business carried on by tenants and occupants of the Building (including the Landlord), income or profits taxes upon the income of the Landlord to the extent such taxes are not levied in lieu of taxes, rates, duties, levies and assessments against the Building or the Land or upon the Landlord in respect thereof.

“Tenant Party” means the Tenant, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Tenant’s Specifications” has the meaning ascribed thereto in Section 18.2(a) hereof.

“Term” means the term of this Lease set forth in section 1.1(e)(i) hereof and any extension or renewal thereof and any period of permitted overholding.

“Transfer” means an assignment of this Lease in whole or in part, a sublease of all or any part of the Premises, any transaction whereby the rights of the Tenant under this Lease or to the Premises are transferred to another, any transaction by which any right of use or occupancy of all or any part of the Premises is conferred upon anyone, any mortgage charge or encumbrance of this Lease or the Premises or any part thereof or other arrangement under which either this Lease or the Premises become security for any indebtedness or other obligations and includes any transaction or occurrence whatsoever (including, but not limited to receivership proceedings, seizure by legal process directly or indirectly and transfer by operation of law), which has changed or might change the identity of the persons having lawful use or occupancy of any part

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of the Premises. The holding of possession of third party inventory and equipment does not constitute a Transfer.

“Transferee” means the Person to whom a Transfer is or is to be made.

“Untenantable” means that the Building is not capable of being used and occupied for the purpose for which it was intended whether by reason of damage or destruction to the Building by fire, tempest or other peril or a catastrophic event or by reason of access to the Building being cut off or impaired such that the Tenant is unable to access the Building and the Premises in the ordinary course of its business.

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SCHEDULE C

INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 1^ day of 1^, 200^.

BETWEEN:

1^

(the “Landlord”)

OF THE FIRST PART

- and -

1^

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 1^ day of 1^ made between the Landlord and 1^, as tenant (the “Tenant”), and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or

- 2 -

disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns

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of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and sealed this Indemnity.

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SCHEDULE D

ADDITIONAL LAND

The attached drawing represents the parties’ general agreement as to the configuration of the Additional Land. In the event that,

(i) based upon Tenant’s actual operations at the Premises, Tenant reasonably determines that the severance, lease and/or development of the Additional Land (as shown on the attached drawing) would adversely impact or interfere with Tenant’s access to and from the Building or the operation by Tenant of its business on the Premises (including without limitation, the staging and/or docking of truck and trailers), or

(ii) based upon the Landlord’s intended use of the Additional Land, the Landlord reasonably determines that a re-configuration of the Additional Land is necessary (provided that such re-configuration shall not adversely impact or interfere with Tenant’s access to and from the Building or the operation by Tenant of its business on the Premises as aforesaid),

the parties shall cooperate in good faith to reconfigure the Additional Land as necessary to avoid such impact or interference.

INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 17th day of July, 2006.

BETWEEN:

80241 CANADA LTD.

(the “Landlord”)

OF THE FIRST PART

- and -

BWAY CORPORATION

(the “lndemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 17th day of July, 2006 made between the Landlord and ICL Industrial Containers ULC, as tenant (the “Tenant”), for the premises located at 27 Hansen Road, Brampton, Ontario, and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied

- 2 -

mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

- 3 -

IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and sealed this Indemnity.

80241 CANADA LTD.
By:	/s/ Morton Arshinoff
Title:	Morton Arshinoff, President
BWAY CORPORATION
By:	/s/ Kevin C. Kern
Title:	Vice President Administration & CFO

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EX-10.39

Exhibit 10.39

120 WALKER DRIVE, BRAMPTON, ONTARIO

INDUSTRIAL LEASE

BETWEEN

80241 CANADA LTD.

(The “Landlord”)

AND

ICL INDUSTRIAL CONTAINERS ULC

(The “Tenant”)

TABLE OF CONTENTS

		Page
	ARTICLE 1 BASIC TERMS, SCHEDULES, DEFINITIONS
1.1	Basic Terms	1
1.2	Schedules	2
1.3	Definitions	2
	ARTICLE 2 PREMISES
2.1	Premises	2
	ARTICLE 3 TERM
3.1	Term	2
3.2	Option to Extend	3
3.3	Appraisals	3
	ARTICLE 4 RENT
4.1	Rent	4
4.2	Payment of Rent	4
4.3	Rent for Irregular Periods	5
4.4	Waiver of Offset	5
4.5	Net Lease	5
	ARTICLE 5 TENANT’S COVENANTS
5.1	Rent	5
5.2	Permitted Use	6
5.3	Waste and Nuisance	6
5.4	Insurance Risks	6
5.5	Cleanliness and Heating	6
5.6	Compliance with Laws	7
5.7	Overholding	7
5.8	Signs	7
5.9	Inspection and Access	7
5.10	Showing Premises	7

- i -

TABLE OF CONTENTS

(continued)

		Page
5.11	Equipment	8
5.12	Floor Loads	8
5.13	Glass	8
	ARTICLE 6 LANDLORD’S COVENANTS
6.1	Quiet Enjoyment	8
	ARTICLE 7 REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION
7.1	Maintenance and Repairs	9
7.2	Capital Repairs	10
7.3	Damage, Destruction and Termination	10
	ARTICLE 8 TAXES AND OPERATING COSTS
8.1	Tenant’s Tax Obligations	12
8.2	Goods and Services Taxes	12
8.3	Tenant’s Share	13
8.4	Notices of Assessment etc	13
8.5	Utility/Communication/Service Charges	14
	ARTICLE 9 ENVIRONMENTAL MATTERS
9.1	Environmental Laws	14
9.2	Tenant’s Responsibility	15
9.3	Assessment of the Premises	16
9.4	Contaminants at the End of the Term	16
9.5	Landlord’s Indemnity and Covenant	17
	ARTICLE 10 TRANSFERS, ASSIGNMENTS AND SUBLETTINGS
10.1	Consent Required	18
10.2	Change of Control	19
10.3	Leasehold Charges	19
10.4	Permitted Transfers	20
10.5	Transfer by Landlord	21

-ii-

TABLE OF CONTENTS

(continued)

		Page
	ARTICLE 11 FIXTURES AND IMPROVEMENTS
11.1	Alterations	21
11.2	Liens and Encumbrances on Fixtures and Improvements	21
11.3	Removal of Fixtures and Improvements	22
11.4	Non-compliance	22
	ARTICLE 12 INSURANCE AND LIABILITY
12.1	Landlord’s Insurance	22
12.2	Tenant’s Insurance	23
12.3	Limitation of Liability	25
12.4	Indemnity	25
	ARTICLE 13 SALE OR FINANCING, SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES
13.1	Sale or Financing of Building	26
13.2	Subordination and Attornment	26
13.3	Registration	26
13.4	Certificates	27
	ARTICLE 14 DELAY; NO WAIVER
14.1	Unavoidable Delay	27
14.2	No Admission	27
14.3	Part Payment	27
	ARTICLE 15 TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER
15.1	Remedying by Landlord, Non-payment and Interest	27
15.2	Remedies Cumulative	28
15.3	Right of Re-entry on Default	28
15.4	Termination and Re-entry	29
15.5	Certain Consequences of Termination and Re-entry	29
15.6	Waiver of Distress	30

-iii-

TABLE OF CONTENTS

(continued)

		Page
15.7	Re-letting	30
15.8	Surrender on Termination	30
	ARTICLE 16 EVENTS TERMINATING LEASE
16.1	Cancellation of Insurance	31
16.2	Prohibited Occupancy, Bankruptcy and Other Events	31
	ARTICLE 17 MISCELLANEOUS
17.1	Notices	32
17.2	Extraneous Agreements	32
17.3	Time of Essence	32
17.4	Successors and Assigns	32
17.5	Waiver	33
17.6	Governing Law and Severability	33
17.7	Captions	33
17.8	Expropriation	33
17.9	Counterparts	33
	ARTICLE 18 ADDITIONAL PROVISIONS
18.1	Landlord’s Right of Development Re Walker Drive Additional Lands	34

-iv-

LEASE

THIS LEASE dated the 17th day of July, 2006, is made and entered into by 80241 Canada Ltd, (the “Landlord”) and ICL Industrial Containers ULC (the “Tenant”) who, in consideration of the covenants herein contained, agree as follows:

ARTICLE 1

BASIC TERMS, SCHEDULES, DEFINITIONS

1.1 Basic Terms

(a)	Landlord
	(i)     Landlord: (ii)    Address of Landlord:	80241 Canada Ltd. 167 Lord Seaton Road Willowdale, Ontario, M2P 2K8 Attention: Stephen Arshinoff
(b)	Tenant
	(i)     Tenant: (ii)    Address of Tenant:	ICL Industrial Containers ULC 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30530-2230 Attention: Kevin C. Kern
	(iii)  Address of Premises:	120 Walker Drive, Brampton, Ontario
(c)	Indemnifier
	(i)     Indemnifier:	BWAY Corporation
	(ii)    Address of Indemnifier:	8607 Roberts Drive, Suite 250 Atlanta, Georgia 30530-2230
(d)	Rentable Area of Building	Approximately 40,904 square feet
(e)	Term
	(i)       Term:	ten (10) years
	(ii)      Commencement Date:	July 17, 2006
	(iii)     Lease Expiration Date:	July 16, 2016

(f)	Annual Base Rent Year of the Term	Per Square Foot	Per Annum	Per Month
	Years 1 - 5	$5.75	$235,198.00	$19,599.83
(g)	Annual Base Rent Year of the Term	Per Square Foot	Per Annum	Per Month
	Years 6 -10	$6.50	$265,876.00	$22,156.33

(h) Permitted Use

Industrial and ancillary office use, including without limitation: manufacturing industrial containers, including plastic pails, steel pails and steel drums; refurbishing containers and pallets; warehousing; office and ancillary uses.

(i) Extension Term

Two (2) Extension Terms of five (5) years each.

The foregoing Basic Terms are hereby approved by the parties and each reference in this Lease to any of the Basic Terms shall be construed to include the provisions set forth above as well as all of the additional terms and conditions of the applicable sections of this Lease where such Basic Terms are more fully set forth.

1.2 Schedules

All Schedules to this Lease are incorporated into and form an integral part of this Lease.

1.3 Definitions

In this Lease, the words, phrases and expressions set forth in Schedule B are used with the meanings defined therein.

ARTICLE 2

PREMISES

2.1 Premises

In consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Tenant to be paid, observed and performed, the Landlord hereby demises and leases to the Tenant and the Tenant leases from the Landlord the Premises.

ARTICLE 3

TERM

3.1 Term

(a) The Term of this Lease shall be for the period set out in section 1.l(e)(i), beginning on the Commencement Date.

(b) The Landlord and the Tenant are parties to that certain Industrial Lease, dated as of even date herewith, relating to property located at 27 Hansen Road, Brampton, Ontario (as the same may be amended from time to time, herein referred to as the “Hansen Road Lease”). Capitalized terms used in this Section 3.1(b) without definition shall have the meanings set forth in Article 18 of the Hansen Road Lease. Notwithstanding anything in this Lease to the contrary, the Tenant shall have the right, at its option and in its sole discretion, to terminate this Lease without payment of a termination fee in connection with the exercise by Tenant of the Expansion Option. Unless otherwise stipulated by the Tenant in writing, the foregoing termination option shall be deemed to have been exercised upon the

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commencement of construction of the Building Expansion. Such termination shall be effective as of the date on which both of the following conditions have been satisfied: (i) the Building Expansion has been delivered to the Tenant pursuant to Section 18.5(a) of the Hansen Road Lease and (ii) the Tenant shall have surrendered the Premises hereunder to the Landlord pursuant to the terms hereof. From and after the effective date of such termination, the Term hereof shall end; this Lease shall be null, void and of no further force or effect, except for such provisions that expressly survive the expiration or termination hereof, and the Tenant shall be entitled to a refund of any rents paid with respect to periods after the effective date of such termination.

3.2 Option to Extend

(a) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the Term, extend the Term for a further term of five (5) years (the “First Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the First Extension Term.

(b) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the First Extension Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the First Extension Term, extend the First Extension Term for a further term of five (5) years (the “Second Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the Second Extension Term.

(c) The Annual Base Rent during any Extension Term shall be the Current Market Rent for the Premises. If the Landlord and the Tenant have not mutually agreed on the amount of the Annual Base Rent at least three (3) months prior to the commencement of such Extension Term, then Annual Base Rent shall be decided in the manner set out in Section 3.3. Until the Annual Base Rent has been determined, the Tenant shall pay the monthly Rent requested by the Landlord and, upon the determination of the Annual Base Rent, the Landlord and the Tenant shall make the appropriate adjustments together with interest at the Prime Rate.

3.3 Appraisals

If the Annual Base Rent payable during an Extension Term is not agreed upon at least three (3) months prior to the commencement of such Extension Term, then each party shall, within thirty (30) days thereafter, mandate an appraiser licensed in the Province where the Premises are located, to determine the Current Market Rent for the Premises. In the event that a party fails to appoint an appraiser within such thirty (30) days and has failed to remedy such

- 3 -

failure within five (5) days of written notice thereof from the other party, then the Annual Base Rent shall be the Current Market Rent for the Premises, as determined by the sole appraiser. If two appraisers are appointed, in the event that the higher of the amounts so determined by one appraiser does not exceed the lower so determined by the other appraiser by more than 15%, then the Annual Base Rent shall be the average of the two, otherwise, the two appraisers shall jointly name a third appraiser licensed in the Province of Ontario who shall be mandated to determine the Current Market Rent for the Premises. The Annual Base Rent shall be equal to such amount as so determined if it is no less than the lower of the first two nor no more than the higher of the first two, otherwise, it shall be whichever of the first two amounts is closest in value to the third. Notwithstanding the foregoing, the Annual Base Rent during an Extension Term shall in no event be less than the Annual Base Rent during the initial Term or Extension Term then ending, as the case may be.

ARTICLE 4

RENT

4.1 Rent

The Tenant shall pay to the Landlord, at 167 Lord Seaton Road, Willowdale, Ontario M2P 2K8, or at such other place as the Landlord may direct in writing, during the Term in lawful money of Canada without any demand, set off, abatement, compensation or deduction whatsoever, on the days and at the times hereinafter specified, Rent, which shall include the aggregate of the sums specified in sections 4.1(a), 4.1(b) and 4.1(c) below:

(a) Annual Base Rent – During each of the first five (5) Lease Years, Annual Base Rent in the amounts per annum for the respective years of the Term as more particularly set out in section 1.1(f). During each of the next five (5) Lease Years, the Annual Base Rent shall be the Annual Base Rent as more particularly set out in section l.l(g).

(b) Additional Rent - Together with such other amounts, charges, costs and expenses as are required to be paid by the Tenant to the Landlord pursuant to this Lease in addition to Annual Base Rent, whether or not such amounts are specifically designated elsewhere in this Lease as Additional Rent.

(c) Management Fee – The Management Fee.

4.2 Payment of Rent

The Annual Base Rent shall be paid in equal consecutive monthly instalments in advance on the first day of each and every month during the Term. Subject to section 4.3, the first monthly instalment of the Annual Base Rent shall be paid by the Tenant on the Commencement Date of the Term. The Landlord shall remit to the Tenant, before each Lease Year, the estimated amount of the Additional Rent (other than the portion thereof which the Tenant shall pay directly to third parties) and of the Management Fee for that period, and the monthly payments of Additional Rent and Management Fee which are payable to the Landlord shall then be established for said Lease Year based on that estimate. The Landlord may from time to time during a Lease Year re-evaluate its estimate of such Additional Rent and of the

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Management Fee, and in such case shall notify the Tenant in writing of the re-evaluation and establish monthly payments for the unexpired period of such Lease Year or of such part only of a Lease Year, so that after the Tenant is credited with the appropriate amounts paid by the Tenant in accordance with the previous estimate, such Additional Rent and the Management Fee is paid in full during such Lease Year or during a part only of such Lease Year. After each Lease Year, the Landlord shall remit to the Tenant a statement indicating the actual amount of the Additional Rent (other than the portion thereof which the Tenant has paid directly to third parties) and of the Management Fee for the said Lease Year. Should the amount of such Additional Rent and of the Management Fee then determined by the Landlord be greater or less than the total of the amounts already paid by the Tenant to the Landlord, then appropriate adjustments will be made within thirty (30) days following the delivery of the above-mentioned statement.

4.3 Rent for Irregular Periods

All Rent reserved herein shall be deemed to accrue from day to day, and if for any reason it shall become necessary to calculate Rent for irregular periods of less than one (l) month a pro-rata adjustment, based on a per diem adjustment on the basis of a three hundred and sixty-five (365) day year, shall be made on a daily basis in order to compute Rent for such irregular period.

4.4 Waiver of Offset

The Tenant hereby waives and renounces any and all existing and future claims, offsets and compensation against any Rent and agrees to pay such Rent regardless of any claim, offset or compensation which may be asserted by the Tenant or on its behalf.

4.5 Net Lease

The Tenant acknowledges and agrees that it is intended that this Lease shall be a completely net lease for the Landlord except as shall be otherwise provided herein, and that the Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Premises, and the Tenant, except as shall be otherwise provided herein, shall pay all charges, impositions and costs of every nature and kind relating to the Premises.

ARTICLE 5

TENANT’S COVENANTS

The Tenant covenants with the Landlord as follows:

5.1 Rent

To pay the Annual Base Rent, Additional Rent and the Management Fee on the days and in the manner provided herein.

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5.2 Permitted Use

To use the Premises only for the purpose set out in section 1.l(h) and not to use or permit to be used the Premises or any part thereof for any other purpose without first obtaining the consent of the Landlord (which shall not be unreasonably withheld or delayed).

5.3 Waste and Nuisance

Not to commit or permit any waste or injury to the Premises including the Leasehold Improvements and any overloading of the capacity of a utility, electrical or mechanical facility in the Premises.

5.4 Insurance Risks

Not to do, omit to do or be done or permit to be done or omitted to be done upon the Premises anything that would cause any policy of insurance to be subject to cancellation.

5.5 Cleanliness and Heating

(a) Not to permit the Premises to become untidy, unsightly or hazardous or permit unreasonable quantities of waste or refuse to accumulate therein. In addition, the Tenant shall regulate the heating, ventilating and air-conditioning facilities serving the Premises so as to maintain reasonable conditions of temperature and humidity within the Premises so as to prevent any damage thereto by reason of frost, moisture or otherwise, shall make all necessary maintenance, repairs and, subject to Section 7.2, replacements to said facilities, (reasonable wear and tear excepted).

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the HVAC system with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding Section 5.5(b), so long as the Tenant is BWAY Corporation, or a direct or indirect wholly owned subsidiary of BWAY Corporation, the Tenant shall not be required to enter into a service contract for the HVAC system with a third party contractor, provided that the Tenant covenants to maintain or cause to be maintained the HVAC system to the same standard as would a professional third party contractor performing inspections at regular intervals in accordance with industry standards. In the event the Tenant breaches the foregoing covenant, the Tenant shall thereafter, for the balance of the Term, be required to enter into a service contract as required under Section 5.5(b) and, without limiting the Tenant’s obligations under Section 7.1, shall be responsible for the cost of all repairs and replacements to the HVAC system resulting from said breach.

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5.6 Compliance with Laws

To comply at its own expense with all municipal, federal, provincial, sanitary, fire and safety laws, bylaws, regulations and requirements pertaining to the operation and use of the Premises, signage, trade fixtures, furniture and equipment installed therein and the making by the Tenant of any repairs, changes or improvements therein, provided that the Tenant’s obligations and covenants relating to compliance with Environmental Laws shall be governed by Article 9 below.

5.7 Overholding

That if the Tenant shall continue to occupy the Premises after the expiration of this Lease without any further written agreement and without objection by the Landlord (which shall not result in a tacit renewal of this Lease despite any legal presumption to the contrary) the Tenant shall be a monthly tenant at a monthly rent equal to 150% of the Annual Base Rent payable in respect of the last month of the Term, such rent to be payable by the Tenant as set forth in Article 4 hereof and (except as to length of tenancy) on and subject to the provisions and conditions herein set out, including the obligation to pay Additional Rent, the whole, without prejudice to the rights and recourses of the Landlord.

5.8 Signs

The Tenant shall be permitted to install, at its sole cost and expense, signage on the Premises, including the Building, provided such signage complies with all applicable lawful governmental requirements. The Tenant shall remove such signage at the expiry or earlier termination of the Term and shall repair any damage caused by the installation or removal of the signage.

5.9 Inspection and Access

To permit the Landlord, upon reasonable prior notice (which shall not in any event be less than 24 hours) and during normal business hours, from time to time, or at any time in the event of an emergency, to enter and to have its authorized agents, employees and contractors enter the Premises for the purpose of inspection, maintenance, making those repairs which the Landlord is required to make hereunder to the Premises; and the Tenant shall provide free and unimpeded access for the purpose, and shall not be entitled to compensation for any inconvenience, nuisance or discomfort caused thereby, but the Landlord in exercising its rights hereunder shall proceed to the extent reasonably possible so as to minimize interference with the Tenant’s use and enjoyment of the Premises.

5.10 Showing Premises

The Tenant shall permit the Landlord and its authorized agents and employees, acting reasonably and without interrupting the Tenant’s business, to show the Premises:

(a) to prospective tenants during the hours of 8:00 a.m. to 6:00 p.m. Monday to Friday, inclusive, of the last six (6) months of the Term, or if the Tenant has

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exercised a right to extend the Term under section 3.2, the last six (6) months of such Extension Term; and

(b) to prospective purchasers and lenders during the hours set forth in section 5.10(a) throughout the Term and any Extension Terms.

The Landlord shall give the Tenant reasonable prior notice of any such showing, and at the request of the Tenant shall effect such showing in the company of a Tenant representative (provided that the Tenant shall not unreasonably delay such showing by reason of making a Tenant representative available).

5.11 Equipment

The Tenant shall be responsible for and pay the cost of installation, operation, maintenance and replacement of the equipment required by its occupancy of the Premises including, without limitation, security systems, sprinkler systems, racking, rail siding, fencing in and around the Premises, telephones, computers and other communications facilities and equipment.

5.12 Floor Loads

The Tenant shall not place a load upon any portion of any floor of the Premises which exceeds the floor load which the area of such floor being loaded was designed to carry, having regard to the loading of adjacent areas and that which is allowed by applicable provincial building codes. The Tenant shall repair any damage done in the Premises by reason of any excessive weight placed in the Premises or excessive vibration caused in the Premises.

5.13 Glass

The Tenant shall restore or replace forthwith, at its expense, any broken or damaged glass on, in or upon the Premises.

ARTICLE 6

LANDLORD’S COVENANTS

6.1 Quiet Enjoyment

The Landlord covenants with the Tenant that, provided the Tenant duly and punctually pays the rent hereby reserved and performs the covenants on its part contained, the Tenant shall and may peaceably possess and enjoy the Premises for the Term hereby granted without any interruption or disturbance from the Landlord, its successors and assigns or any other persons lawfully claiming by, from, through or under it.

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ARTICLE 7

REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION

7.1 Maintenance and Repairs

(a) The Tenant shall keep the Premises as would a careful and prudent owner consistent with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located, including all Leasehold Improvements and all trade fixtures. This obligation includes, without limitation, the following:

(i) repairs and, maintenance to the plumbing, electrical ventilating, heating, air conditioning and HVAC systems and other base building systems and equipment, including the systems provided for bringing utilities to the Building, doors, door seals, rail siding, dock seals and levellers, the roof and all component parts thereof (including without limitation the repair and maintenance of the waterproof membrane, to the extent that such repairs and maintenance expenses do not constitute a capital cost in accordance with generally accepted accounting principles, which capital costs will be treated as capital repairs pursuant to Section 7.2 provided that they are not attributable to a breach by the Tenant under Section 7.1(b)), plate glass, signs, hardware, partitions, mechanical, electrical, lighting and plumbing fixtures and systems, wiring, piping, water, sewers and gas connections, drains and mains attributable to the Property and which serve the Building, ceilings, floors, stairs, platforms, walls, thresholds, and all operating equipment in the Premises, exterior walls, parking areas, driveways, entrances, glass windows, mouldings and all other machinery, operating equipment and facilities belonging to, forming part of or connected with the Premises and the Building;

(ii) normal levelling, grading and patching of yard and maintenance of asphalt and paving; and

(iii) keeping the driveways, parking areas, entrances, walks, grounds, sidewalks and curbs forming part of the Property clean and free of snow and ice;

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the maintenance of the roof components with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding anything herein, the Landlord shall carry out the repairs and replacements in respect of the identified costs for years 1 to 3 as set out in the Capital Reserve Table annexed as Appendix B to the Property Condition report

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dated April 21, 2006 prepared by Golder Associates in favour of BWAY Corporation at the Landlord’s sole cost and expense within such time frames as would a prudent landlord and in any event prior to the Lease Expiration Date set forth in Section l.l(e)(iii).

(d) At the expiration of the Lease or any renewals or extensions thereof, the Tenant shall surrender the Premises to the Landlord in the manner provided for in section 15.8.

(e) The Landlord shall be responsible for and shall carry out, at its sole cost and expense, all repairs required as a result of:

(i) inherent structural defects or weaknesses in the Premises;

(ii) defects in repairs or construction performed or installations made by or on behalf of the Landlord; and

(iii) the negligent acts or omissions of the Landlord.

(f) Prior to or within thirty (30) days after occupation of the Premises by the Tenant, and prior to or within thirty (30) days following the departure from the Premises by the Tenant, representatives of the Tenant and the Landlord shall make a joint inspection of the Premises and record the condition thereof on an inspection checklist. Within ten (10) days after said initial joint inspection, a copy of the inspection checklist shall be sent to both the Landlord and the Tenant, and such inspection checklist shall form a part of this Lease.

7.2 Capital Repairs

Notwithstanding anything to the contrary contained in this Lease except for repairs and other work contemplated by sections 7.17.1(c) and (e) and Article 9, to the extent that the cost of any repair or replacement to the Premises constitute a capital cost in accordance with generally accepted accounting principles, the Landlord shall make such repairs or replacements, provided that all such repairs or replacements shall be consistent with the existing building standard and with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located. The cost of such repair or replacement shall be amortized over the useful life expectancy of the asset repaired or replaced on a straight line basis and the Tenant shall pay to the Landlord in each year of the Term the amortized amount of such cost within thirty (30) days after receipt of an invoice therefor from the Landlord. Any replacement or repair to the Structure of the Building, replacement of any of the base building systems servicing the Building and replacement of asphalt or other paving shall constitute a capital cost.

7.3 Damage, Destruction and Termination

(a) If the Building becomes Untenantable such that the Building or any substantial part thereof is rendered not reasonably capable of use and occupancy by the Tenant for its use thereof pursuant to this Lease then:

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(i) from and after the date of occurrence of the event rendering the Building Untenantable and until the Premises are again reasonably capable of use and occupancy as aforesaid, Rent shall abate from time to time in proportion to the part or parts of the Building not reasonably capable of use and occupancy; and

(ii) unless this Lease is terminated as hereinafter provided, the Landlord shall repair such damage with all reasonable diligence to the extent only of insurance proceeds actually received by the Landlord (the “Landlord’s Work”). The Landlord’s obligation to rebuild and restore the Premises and the Building shall not include the obligation to rebuild, restore, replace or repair, without limitation, any chattel, furniture, inventory, fixtures (including trade fixtures), Leasehold Improvements including, without limitation, any alterations constructed or installed for or on behalf of the Tenant or for its benefit, installations, additions or partitions in respect of which the Tenant is required to maintain insurance under this Lease, or any other thing that is the property of the Tenant located on, in, under, above or which serve the Premises. Nothing herein shall require the Landlord to rebuild the Premises and the Building in the condition and state that existed before the damage, but the Premises and the Building, as rebuilt, will have reasonably similar facilities and services to those that existed prior to the damage.

(b) If the Building is substantially damaged or destroyed by any cause to the extent such that in the reasonable opinion of the Landlord’s architect or engineer (to be delivered to the Landlord and Tenant within thirty (30) days after the damage or destruction) it cannot be repaired or rebuilt (based on standard hours of construction work) or if access cannot be restored within twelve (12) months after the occurrence of the event rendering the Building Untenantable or the expiration of the Term (whichever is sooner), either the Landlord or the Tenant may at its option, exercisable by written notice to the other party given within ninety (90) days after the occurrence of such damage or destruction, terminate this Lease, in which event the Landlord shall not be bound to repair, and the Tenant shall instead deliver up possession of the Premises to the Landlord with reasonable expedition but in any event within sixty (60) days after delivery of such notice of termination, and Rent shall be apportioned and paid to the date upon which possession is so delivered up (but subject to any abatement to which the Tenant may be entitled under section 7.3(a) by reason of the Premises having been rendered in whole or in part not reasonably capable of use and occupancy), but otherwise the Landlord shall repair such damage with such reasonable diligence.

(c) If neither party has elected to terminate this lease pursuant to section 7.3(b) and if the Landlord has not completed the repair or the rebuilding to such an extent that it is substantially complete and ready for the Tenant’s occupancy within twelve (12) months after the occurrence of the event rendering the Building Untenantable (subject to any event of force majeure referred to in section 14.1 arising after the occurrence of the original event rendering the Building Untenantable) then the

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Tenant may by notice to the Landlord elect to terminate this Lease effective as of the date of the notice or such later date as may be specified therein.

(d) The Tenant shall make available all proceeds of insurance with respect to the Building for the purposes of any such repairing or rebuilding.

ARTICLE 8

TAXES AND OPERATING COSTS

8.1 Tenant’s Tax Obligations

During the Term, the Tenant shall be responsible to:

(a) pay when due, all taxes, business taxes, property taxes, business licence fees, permit fees and other taxes, rates, duties or charges levied, imposed or assessed by lawful authority in respect of the use and occupancy of the Premises by the Tenant, the business or businesses carried on therein by the Tenant, or the equipment, machinery or fixtures brought therein by or belonging to the Tenant, or to anyone occupying the Premises with the Tenant’s consent, or from time to time levied, imposed or assessed in the future in lieu thereof, and shall pay to the Landlord upon demand the portion of any tax, rate, duty or charge levied or assessed upon the Land and Building that is attributable to any equipment, machinery or fixtures on the Premises which are not the property of the Landlord; and

(b) (i) pay promptly directly to the relevant taxing authority as and when due all Taxes that are levied, rated, charged or assessed from time to time, in respect of the Premises on the basis of any real property tax bill or assessment notice rendered by any lawful taxing authority; (ii) within ten (10) days after receipt of any such real property tax bill or assessment notice, provide a copy thereof to the Landlord; and (iii) promptly deliver to the Landlord receipts evidencing the payment of all such Taxes and such other information in connection therewith as the Landlord reasonably requires. The Tenant will pay all Taxes when they become due and payable, before any interest, penalty, fine or cost may be imposed for late or non-payment, to the department, office or bureau charged with their collection. If the Tenant should fail to pay any Taxes as required under this Section, the Landlord shall have the right to pay such Taxes at the Tenant’s expense, and the Tenant shall pay to the Landlord as Additional Rent, upon demand, all costs and expenses incurred therefor.

8.2 Goods and Services Taxes

The Tenant shall pay to the Landlord all Goods and Services Tax exigible under the relevant taxing statute in respect of the Rent payable by the Tenant under this Lease, or in respect of the rental of premises by the Tenant under this Lease. Goods and Services Tax shall be payable at the same time as the Tenant pays Rent to the Landlord. Notwithstanding any other section of this Lease, the amount payable by the Tenant under this section shall be deemed not to be Rent, but the Landlord shall have the same remedies for and rights of recovery of such amount as it has for recovery of Rent under this Lease.

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8.3 Tenant’s Share

Upon expiry or earlier termination of the Term or, if the Term is extended, the last Extension Term, the Landlord shall pay to the Tenant any overpayment or accrued credit balance of the Taxes paid by the Tenant to the taxing authority by the Tenant. Notwithstanding the foregoing, the Tenant acknowledges that there may be a delay in the invoicing of property taxes and business taxes for the Land for the last year of the Term and that for the last year of the Term, the Tenant shall be responsible for payment of its pro-rata share of the actual Taxes.

In any calendar year of the Term in which the Tenant does not lease the Premises for the entire twelve month period, the Landlord may estimate the Taxes payable by the Tenant, and the Tenant agrees to pay to the Landlord Taxes as so estimated, in monthly instalments, in advance, on the same dates and in the same manner as Annual Base Rent. The Landlord’s estimate of Taxes may be such that, by the due date of the last instalment of Taxes payable to the relevant taxing authority, the Landlord may or may not have received from the Tenant the full amount of the Tenant’s share of Taxes for such calendar year. Promptly following receipt of the final bill and/or assessment for Taxes for the period for which the estimated payments of Taxes have been made, the Landlord will give notice to the Tenant of exact amount of Taxes (together with copies of the relevant tax bills and/or assessments) and, if necessary, an adjustment will be made between the parties within thirty (30) days after such notice.

8.4 Notices of Assessment etc.

(a) The Tenant shall, at the Landlord’s request, promptly deliver to the Landlord,

(i) receipts for payment of all Taxes payable by the Tenant;

(ii) notices of any assessments for Taxes or other assessments received by the Tenant that relate to the Premises, and

(iii) whatever other information relating to Taxes in the Tenant’s possession that the Landlord reasonably requests from time to time.

(b) The Tenant shall deliver to the Landlord, at least ten (10) days before the last date for filing appeals, notice of any appeal or contestation that the Tenant intends to institute with respect to Taxes payable by the Tenant and obtain the prior written consent of the Landlord for the appeal or contestation, which consent shall not be unreasonably withheld. If the Tenant obtains the Landlord’s consent and does not pay the Taxes before the appeal or contestation, the Tenant shall,

(i) deliver to the Landlord such security for the payment of the Taxes as the Landlord reasonably requires;

(ii) promptly and diligently prosecute the appeal or contestation; and

(iii) keep the Landlord informed on all aspects of it.

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(c) The Tenant shall indemnify and save the Landlord harmless from all loss, cost, charges and expenses arising from Taxes payable by the Tenant whether against the Landlord or the Tenant including, but not limited to increases in Taxes arising directly or indirectly out of an appeal or contestation by the Tenant.

(d) The Landlord shall promptly deliver to the Tenant notices of any assessments or bills for Taxes or other assessments or bills received by the Landlord that relate to the Premises. The Landlord shall not institute any tax appeal or other contestation of Taxes without first obtaining the consent of the Tenant which shall not be unreasonably withheld.

8.5 Utility/Communication/Service Charges

The Tenant shall pay all charges for services and utilities including electricity, gas, air-conditioning, heating, fuel, water, sewer, telephone, rail siding leases and security, delivered or provided to or made available upon the Premises, and other costs which are metered, charged, levied or rated directly to the Tenant in respect of the Premises, and if, at any time, for any reason, during the Term or any renewal or extension thereof, the Landlord is required to pay any or all of the foregoing, then a sum equal to the amount so paid shall forthwith become due and be collectible upon demand, failing which such sums shall become Additional Rent and the Landlord shall have the same rights and remedies with respect to said sum as if the same were Rent reserved hereunder.

ARTICLE 9

ENVIRONMENTAL MATTERS

9.1 Environmental Laws

(a) In its use and occupation of the Premises, the Tenant shall comply with Environmental Law in all material respects. To the extent that the Premises or the Tenant are not in compliance with applicable air approvals and related air emission matters under Environmental Law on the Commencement Date, the Tenant shall pursue diligently any approvals or certificates required by Environmental Law with respect to air emissions.

(b) Subject to compliance with Environmental Law, the Tenant may bring onto the Premises, store, handle, use and transport any substance, including any Contaminant or waste, that may be, or has been, used in connection with its operations, including injection molding, silkscreen printing and chiller operations, and drum and pail reconditioning, cleaning, painting and sealing.

(c) Subject to compliance with Environmental Law, the Tenant may continue to use any existing storage tanks at the Premises and may replace such tanks from time to time. In addition to replacing existing tanks, the Tenant may install new above ground and underground storage and settling tanks provided that, in the case of new tanks, the Tenant shall first obtain the consent of the Landlord as to the location and installation of any such tank in accordance with the provisions of section 11.1.

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(d) All Contaminants brought or permitted onto the Premises during the Term by the Tenant, its employees or a Transferee, despite any other provisions of this Lease to the contrary and any expiry, termination or disclaimer of this Lease, shall be and remain the property and sole responsibility of the Tenant.

9.2 Tenant’s Responsibility

(a) Except to the extent contributed to by a Landlord Party and except for those matters listed in Section 9.5(a) for which the Landlord shall be responsible, the Tenant shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants on, in or under the Premises during the Term of the Lease. Except (i) as caused by or contributed to by a Landlord Party, and (ii) for those matters listed in Section 9.5(a), the Tenant shall indemnify, defend (utilizing counsel satisfactory to the Landlord) and hold harmless the Landlord and the Landlord’s respective officers, directors, beneficiaries, shareholders, partners, agents and employees from all Claims arising out of or in any way connected with any Release of any Contaminants that occurs during the Term of this Lease, at, in, on, from, under, or about the Premises or the Building, or which arises at any time from the Tenant’s use or occupancy of the Premises, or from the Tenant’s failure to provide all information, make all submissions, and take steps required by all authorities under Environmental Law.

(b) Upon the occurrence of any material Release of a Contaminant at the Premises and upon the Tenant becoming aware of such Release, the Tenant shall immediately give written notice to the Landlord. In any event, the Tenant shall immediately take all steps required by Environmental Law to remedy or otherwise address the situation giving rise to any Release.

(c) If any work is required in accordance with this section 9.2 the Tenant shall prepare all necessary studies, plans and proposals and submit them to the Landlord for approval, which approved shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Tenant shall keep the Landlord fully informed of the progress of the work. If the Landlord has reasonable grounds for believing that the Tenant will not promptly or properly carry out such work, the Landlord may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Landlord does so, the Tenant shall pay for all costs in connection therewith, within thirty (30) days after the Landlord has incurred the costs and made written demand to the Tenant.

(d) The Tenant covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

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9.3 Assessment of the Premises

(a) Prior to the Commencement Date, or shortly thereafter, the Landlord will obtain, at its cost, a Phase II Environmental Site Assessment Report (the “Baseline Phase II”) to identify those Contaminants, and the quantities thereof, present at, in or under the Premises as at the Commencement Date (the “Baseline Condition”). Prior to causing any such environmental assessment, the Landlord will obtain a written proposal from its environmental consultant as to the recommended scope of the assessment for the Premises, which proposal is subject to the Tenant’s prior written approval, which approval shall not be unreasonably withheld (the “Baseline Scope”). The Landlord will deliver a copy of the Baseline Phase II to the Tenant prior to the Commencement Date, or shortly thereafter. Without limiting any other provision herein, the Landlord and the Tenant shall, throughout the term, maintain the Premises at the Baseline Condition in accordance with their respective obligations under this Article 9.

(b) The Landlord may at any time during the Term, if it has reasonable grounds to believe that the Tenant has not complied with Environmental Law in any material respect, including if it has in good faith reason to believe that there has been any Release of any Contaminant in, on, over, under or about the Premises that would reasonably be expected to give rise to a material liability pursuant to Environmental Law, enter the Premises upon reasonable prior notice to the Tenant and cause an environmental assessment with respect to the suspected non-compliance with Environmental Law. In the case of an assessment under this section 9.3(a) the Landlord shall consult with the Tenant as to when the assessment shall be carried out and shall minimize any interference with the Tenant’s business.

(c) The scope and breadth of such environmental assessment shall be reasonable and shall not unduly interfere with the conduct of business by the Tenant in the Premises. The resulting environmental assessment shall be addressed to both the Landlord and the Tenant and copies given to both. The Landlord shall be solely responsible for the cost of any such assessment unless such assessment reveals any material breach by the Tenant of Tenant’s covenant contained in this Lease, in which event the Tenant shall reimburse the Landlord the cost of such assessment.

(d) If any assessment reveals any breach by the Tenant of the Tenant’s covenant contained in this Lease, the Tenant shall take reasonable steps as are necessary so as to rectify such breach. In carrying out such work, the Tenant shall keep the Landlord informed of the progress of the work.

9.4 Contaminants at the End of the Term

Upon the expiry of the Term, or at such other times as may be required by any lawful governmental authority, the Tenant shall remove or otherwise address as required by Environmental Law all Contaminants from the Premises which were placed, brought or

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permitted onto the Premises during the Term by the Tenant, and carry out all work necessary to address such Contaminants, all at the Tenant’s sole cost and expense. The Tenant will, prior to the end of the Term, at its cost, deliver to the Landlord a Phase II Environmental Assessment prepared by a reputable consulting or engineering firm approved in advance by Landlord in writing, evidencing the environmental condition of the Property (the “Term Phase II”). The scope of the Term Phase II shall be equivalent to the Baseline Scope.

9.5 Landlord’s Indemnity and Covenant

(a) Except to the extent contributed to by a Tenant Party, the Landlord will indemnify, defend (utilizing counsel satisfactory to the Tenant) and hold harmless the Tenant and the Tenant’s respective officers, directors, beneficiaries, shareholders, partners, agents and employees from all Claims, and shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants that occur or arise as a result of:

(i) the existence of any Contaminant on, in or under the Premises as at the Commencement Date or arising after the expiry of the Term and following the completion of any remediation and/or work for which the Tenant is responsible hereunder; or

(ii) the migration, transfer or movement of any Contaminant onto, into or through the Premises from any other lands; or

(iii) the existence of any Contaminant on, in or under the Premises contributed to or caused by a Landlord Party.

Upon the occurrence of any material quantity of a Contaminant at or from the Premises and upon the Landlord becoming aware of such Contaminant, the Landlord shall immediately give written notice to the Tenant. In any event, the Landlord shall immediately take all steps required by Environmental Law to remedy the situation giving rise to any such Contaminant arising or resulting from the matters listed in Subsections 9.5(a)(i), (ii) and (iii) above.

(b) If any work is required under section 9.5(a), the Landlord shall prepare all necessary studies, plans and proposals and submit them to the Tenant for approval, which approval shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Landlord shall keep the Tenant fully informed of the progress of the work. If the Tenant has reasonable grounds for believing that the Landlord will not promptly or properly carry out such work, the Tenant may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Tenant does so, the Landlord shall pay for all costs in connection therewith, within thirty (30) days after the Tenant has incurred the costs and made written demand to the Landlord.

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(c) The Landlord covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

ARTICLE 10

TRANSFERS, ASSIGNMENTS AND SUBLETTINGS

10.1 Consent Required

(a) Subject to section 10.4, the Tenant shall not effect a Transfer without the prior written consent of the Landlord which consent may not be unreasonably withheld, delayed or conditioned. In determining whether or not to grant its consent, it shall not be unreasonable for the Landlord to withhold its consent if:

(i) the Transferee does not have a history of successful business operations in the business to be conducted in the Premises and a good credit rating; or

(ii) there is a history of defaults under commercial leases by the Transferee, or by companies or partnerships of which the Transferee was a principal shareholder or partner at the time of the defaults.

The Tenant shall deliver to the Landlord such information as the Landlord may reasonably require to allow the Landlord to satisfy itself as to the foregoing.

(b) This prohibition against a Transfer shall be construed to include a prohibition against any Transfer by operation of law. If the Tenant effects a Transfer, the Landlord may collect Rent from the Transferee and apply the net amount collected to the Rent reserved in this Lease, but no such collection shall be deemed to be a waiver of this covenant or the acceptance of the Transferee as Tenant or a release of the Tenant from its obligations hereunder. Notwithstanding any Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder. Any consent by the Landlord to any Transfer shall not constitute a waiver of the requirement for consent by the Landlord to any subsequent Transfer by either the Tenant or any Transferee.

(c) Any consent granted by the Landlord shall be subject to the Tenant causing the Transferee to execute an agreement directly with the Landlord agreeing:

(i) if the Transferee is an assignee, to be bound by all of the terms contained in this Lease, as if the Transferee had originally executed this Lease as Tenant; or

(ii) if the Transferee is a subtenant or other occupant of the Premises, to do nothing, either by act or omission, that would cause the Tenant to be in default of its obligations under this Lease.

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Such agreement and the consent of the Landlord to a Transfer shall be prepared by the Landlord or its solicitors and all reasonable legal and administrative costs with respect thereto shall be borne by the Tenant.

10.2 Change of Control

The prohibition against a Transfer set out in Section 10.1(a) applies to any change in the direct or indirect effective voting control of the Tenant (if the Tenant is or becomes a corporation), unless (i) the Tenant is a public corporation whose shares are listed and traded on any recognized stock exchange in Canada or the United States, and (ii) the Landlord is satisfied that there will be a continuity of business practices and policies, and management of the Tenant. If the Tenant is a partnership or is controlled by a partnership (either directly or indirectly), this prohibition against a Transfer also includes a change in the constitution of the partnership resulting from the withdrawal or addition of any partners. The prohibition also applies to an assignment by operation of law.

10.3 Leasehold Charges

The Tenant may, without the consent of the Landlord effect one or more Transfers to one or more lenders as security for a loan or loans from time to time (such Transfer being a “Leasehold Mortgage”). All rights acquired by such a Transferee (a “Leasehold Lender”) under a Leasehold Mortgage shall be fully subordinate to the interest of the Landlord and to the interest of a Mortgagee and subject to the terms and conditions of this Lease.

The Leasehold Lender shall execute and deliver, prior to such Leasehold Mortgage becoming effective, a landlord/lender agreement (the “the Landlord/Lender Agreement”) in form and substance acceptable to the Landlord and the Leasehold Lender but which shall provide, inter alia, as follows:

(a) the Leasehold Lender shall have the unrestricted right to assign, sell, participate, securitize and otherwise deal with its interest in the Leasehold Mortgage without the Landlord’s consent provided that the holder of such interest is bound by the Landlord/Lender Agreement;

(b) the Leasehold Lender shall not take any action against the Premises for breach or default without first giving the Landlord notice of any default by the Tenant under any Leasehold Mortgage;

(c) no voluntary surrender by the Tenant to the Landlord of this Lease or the Premises shall be valid or effective and there shall be no amendment to or cancellation of this Lease without in each case the prior written consent of the Leasehold Lender;

(d) the Landlord shall, concurrently with the delivery to the Tenant of any notice required or permitted under this Lease and prior to commencement of any enforcement proceedings against the Tenant, deliver to the Leasehold Lender a copy of such notice and no such notice to the Tenant shall be effective against the Leasehold Lender until a copy of such notice is given in accordance with the

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notice provisions of this Lease to such Leasehold Lender. If the Tenant fails to cure the default, the Leasehold Lender shall have a further period of ten (10) days to cure the defaults;

(e) if the Leasehold Lender is enforcing its security under the Leasehold Mortgage it may effect a Transfer in accordance with the terms of this Lease;

(f) if, in the context of enforcing its security under the Leasehold Mortgage, the Leasehold Lender takes possession of the Premises it shall be bound by the terms of the Lease until such time as it shall effect a Transfer whereupon it shall be released;

(g) upon the Leasehold Lender effecting a Transfer the Leasehold Lender shall be released from any obligations under this Lease; and

(h) if the Lease is terminated under any insolvency or bankruptcy proceedings or as a result of any default by the Tenant which is not susceptible to being cured by the Leasehold Lender, then at the request of the Leasehold Lender made within ten (10) days after the date of such termination, the Landlord will enter into a new lease on the same terms and conditions as this lease for a term expiring on the date noted in section l.l(e)(iii), subject to any rights of extension under section 3.2, provided, however, that all arrears of Rent shall have been paid to the Landlord and that an amount equal to the Rent that would have been payable under the Lease from the date of such termination to the commencement date of the new lease shall have been paid to the Landlord.

The Landlord shall postpone any right that it may have to distrain or right to remove the personal property of the Tenant in favour of any lender to the Tenant. The Landlord shall execute such waiver document as the lender may require, subject to such amendments and changes as may be reasonably requested by the Landlord.

10.4 Permitted Transfers

Notwithstanding the provisions of section 10.1 and provided that the Tenant is BWAY Corporation or a direct or indirect wholly-owned subsidiary of BWAY Corporation, the Landlord’s consent shall not be required in respect of any Transfer:

(a) which is effected in conjunction with the sale of all or substantially all of the business of the Tenant;

(b) a Transfer to an Affiliate of BWAY Corporation in connection with a bona fide corporate reorganization of the Tenant;

(c) a sublease of the Premises;.

provided, however, that the Landlord is given notice of such Transfer contemporaneously with the Transfer and that the transferee shall enter into an agreement under which it agrees to be bound by the Lease.

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Notwithstanding any such Permitted Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder.

10.5 Transfer by Landlord

In the event of the sale, lease or disposition by the Landlord of the Premises or the assignment by the Landlord of this Lease or any interest of the Landlord hereunder and to the extent that the purchaser or assignee agrees in writing in favour of the Tenant to be bound by the covenants and obligations of the Landlord hereunder, the Landlord shall without further agreement be relieved of all liability with respect to such covenants and obligations.

ARTICLE 11

FIXTURES AND IMPROVEMENTS

11.1 Alterations

The Tenant may make Alterations to the Premises without first obtaining the consent of the Landlord provided that such Alterations do not affect the Structure or the base building systems. The Tenant will not make any Alterations to the Leased Premises without the Landlord’s prior written approval if such Alterations will affect the Structure or the base building systems. Such consent will not be unreasonably withheld if:

(a) the Alterations will equal or exceed the then current standard for the Building;

(b) adequate plans and specifications are produced; and

(c) the Tenant has obtained all requisite govemmental approvals.

All Alterations will be made in a good and workmanlike manner and, if applicable, in compliance with the plans and specifications approved by the Landlord. If the Tenant obtains the consent of the Landlord to any Alteration then, unless as a condition of granting such consent, the Landlord requires that such Alteration be removed at the expiry or earlier termination of the Term the Tenant shall not be required to remove or make good any such Alteration at the expiry or earlier termination of the Term. If the Landlord’s consent is not obtained then prior to the expiry or earlier termination of the Term, such Alteration shall be removed by the Tenant and all damage caused by the installation and removal of such Alteration be repaired unless the Tenant receives written notice from the Landlord prior to the expiry of the term advising the Tenant that the Landlord will not require the Tenant to remove such Alterations.

11.2 Liens and Encumbrances on Fixtures and Improvements

In connection with any Alterations to the Premises by the Tenant, the Tenant shall comply with all the provisions of the Construction Lien Act (Ontario) (or the equivalent statute in the jurisdiction in question) (the “Act”) and other statutes from time to time applicable thereto (including any provision requiring or enabling the retention of portions of any sums payable by way of holdbacks), shall permit the Landlord to take all steps to enable the Landlord to obtain the

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benefit of the provisions of the Act and except as to any lawful holdback, shall promptly pay all accounts relating thereto. If and when any builder’s or other lien for work, labour, services or materials supplied to or for the Tenant or for the cost of which the Tenant may be in any way liable or claims therefor shall arise or be filed the Tenant shall within twenty (20) days after receipt of notice thereof procure the discharge thereof, including any certificate of action registered in respect of any lien, by payment or giving security or in such other manner as may be required or permitted by law, and failing which the Landlord may in addition to all other remedies hereunder avail itself of its remedy under section 15.1 and may make any payments into court (but not in any event to the lien claimant) required to procure the discharge of any such liens, shall be entitled to be reimbursed by the Tenant as provided in section 15.1, and its right to reimbursement shall not be affected or impaired if the Tenant shall then or subsequently establish or claim that any lien so discharged was without merit or excessive or subject to any abatement, setoff or defence.

11.3 Removal of Fixtures and Improvements

Subject to section 15.8, the Tenant may from time to time throughout the Term remove such of its trade fixtures, furniture and equipment from the Premises as it sees fit. The Tenant shall, in the case of every removal either during or at the end of the Term, immediately make good any damage caused to the Premises by the installation and removal of such furniture and equipment and, to the extent required pursuant to section 11.1, Leasehold Improvements.

11.4 Non-compliance

In the event that the Landlord determines that any alterations, additions or improvements made to the Premises or the Building systems serving the Premises by the Tenant do not comply with all applicable statutes, regulations or bylaws of any municipal, provincial or other governmental authority, and the Tenant, after receipt of notice from the Landlord, does not rectify such non-compliance with due diligence, then the Landlord may, at the Landlord’s option, rectify or repair said deficiency which shall be at the Tenant’s sole cost and expense, the same to be paid as Additional Rent by the Tenant to the Landlord upon demand.

ARTICLE 12

INSURANCE AND LIABILITY

12.1 Landlord’s Insurance

(a) The Landlord shall, at all times throughout the Term, carry: (i) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent landlords of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence; (ii) rental income insurance; and (iii) other forms of insurance as would be carried by a prudent owner of a similar building and considered advisable by the Landlord or any Mortgagee. The cost of such insurance shall be paid by the Tenant in accordance with Section 12.l(c). The Landlord may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more

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insurance policies provided the premiums for such policy are allocated equitably among the properties covered by such blanket insurance policy.

(b) All Landlord’s insurers shall be registered and licensed to carry on the business of insurance in the Province in which the Premises are located and all insurance policies shall:

(i) contain a cross liability and/or severability of interest clause; and

(ii) contain an undertaking by the insurers to notify the Tenant in writing not less than thirty (30) days prior to any material change, cancellation or termination thereof.

(c) The Tenant will pay to the Landlord the insurance premiums in respect of the insurance required to be carried by the Landlord under this section 12.1, as Additional Rent, and in the event of any loss or damage the Tenant shall pay directly to the Landlord any deductible which the Landlord is required to pay toward or for any insured loss relating to the Premises as Additional Rent. The Landlord shall submit the invoice for such insurance premiums or deductibles to the Tenant as they come due and the Tenant shall pay all such amounts within thirty (30) days after receipt of such invoice. In the event that the Tenant fails to pay any such premium prior to its due date, the Landlord may pay such premium and claim it from the Tenant as Additional Rent. Notwithstanding any contribution by the Tenant to the cost of insurance premiums provided herein, the Tenant acknowledges and agrees that no insurable interest is conferred upon the Tenant under this Lease for purposes of any policies of insurance carried by the Landlord and the Tenant has no right to receive any proceeds of any such insurance policies carried by the Landlord.

12.2 Tenant’s Insurance

(a) The Tenant shall, at its expense, obtain and maintain in force throughout the Term and any Extension Term and any period when it is in possession of the Premises, in the name of the Tenant with the Landlord and the Mortgagee (if any) as additional named insureds on all property insurance policies, save that the insurance policies referred to in sections 12.2(a)(i) and (ii) below shall name the Landlord as the insured with the Mortgagee (if any), as additional named insured the following insurance:

(i) insurance on the Building and the heating, ventilating and air conditioning, and other building equipment, machinery and systems, and boilers contained therein whether owned by the Landlord or the Tenant against those risks covered by standard “all risks” (including flood and earthquake) property policies in an amount equal to the full replacement value thereof with such reasonable deductibles as would be carried by a prudent owner of a reasonably similar industrial building, having regard to size, age and location;

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(ii) broad form boiler and machinery insurance on a blanket repair and replacement basis with limits for each accident in an amount of at least the replacement cost of the Premises and of all boilers, pressure vessels, air-conditioning equipment and miscellaneous electrical apparatus relating to or serving the Premises;

(iii) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent tenants of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence;

(iv) standard owners form vehicle insurance providing third-party liability insurance with not less than three million dollars ($3,000,000.00) inclusive limits, and accident benefits insurance, covering all licensed vehicles owned or operated by or on behalf of the Tenant;

(v) business interruption insurance covering the Annual Base Rent, the Additional Rent and all other costs and expenses in connection with the Premises, all for a twelve (12) month period; and

(vi) such other forms of insurance and increases of the amount of coverage stipulated in the foregoing sections against such risks and in such amounts as may be customarily obtained by tenants of premises similar to the Premises and any other forms of reasonable and customary insurance as the Landlord and/or a Mortgagee, reasonably requires from time to time, in forms and amounts and for risks against which a prudent tenant would insure with a use similar to that of the Tenant.

(b) All insurance policies provided for in this section 12.2 shall:

(i) be taken out with insurers licensed to carry on the business of insurance in the Province in which the Premises are located;

(ii) be non-contributing with and apply only as primary and not excess to any other insurance available to either or both of the Landlord and the Mortgagee;

(iii) not be invalidated as respects the interests of all and any of the Landlord and the Mortgagee by reason of a breach or violation of warranties, representations declarations or conditions contained in the policies; and

(iv) contain an undertaking by the insurers to notify the Landlord and its Mortgagee in writing not less than thirty (30) days before any material change, cancellation, or termination.

The Tenant may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies.

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(c) The proceeds of the insurance under Sections 12.2(a)(a)(i) and 12.2(a)(a)(ii) above shall be and are hereby assigned and made payable to the Landlord.

(d) If the Tenant shall fail to take out, renew and keep in force such insurance the Landlord may do so as the agent of the Tenant and the Tenant shall repay to the Landlord any amounts paid by the Landlord as premiums forthwith upon demand.

(e) The Tenant shall furnish to the Landlord certificates or other evidence acceptable to the Landlord as to the insurance from time to time required to be effected by the Tenant pursuant to this Lease and its renewal or continuation in force. No review or approval of any insurance certificate or insurance policy by the Landlord derogates from or diminishes the Landlord’s rights under this Lease.

12.3 Limitation of Liability

(a) The Landlord releases each Tenant Party from all claims or liabilities in respect of any damage which is actually insured against by the Landlord or is required to be insured against under section 12.1, but only to the extent of insurance proceeds actually received by the Landlord, The Landlord shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Tenant.

(b) The Tenant releases each Landlord Party from all claims or liabilities in respect of any damage which is actually insured against by the Tenant or is required to be insured against under section 12.2, but only to the extent of insurance proceeds actually received by the Tenant. The Tenant shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Landlord.

12.4 Indemnity

(a) Subject to section 12.3(a), the Tenant shall indemnify and save harmless the Landlord and each other Landlord Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Landlord Party arising from the conduct of any work by or any act or omission of the Tenant or any assignee, subtenant, agent, employee, contractor, invitee or licensee of the Tenant, and in respect of all costs, expenses and liabilities incurred by any Landlord Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Landlord Party arising from any breach by the Tenant of any of its covenants and obligations under this Lease. The provisions of this section 12.4(a) shall survive the expiry or earlier termination of this Lease.

(b) Subject to section 12.3(b), the Landlord shall indemnify and save harmless the Tenant and each other Tenant Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial

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indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Tenant Party arising from the conduct of any work by or any act or omission of the Landlord or any assignee, agent, employee, or contractor of the Landlord, and in respect of all costs, expenses and liabilities incurred by any Tenant Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Tenant Party arising from any breach by the Landlord of any of its covenants and obligations under this Lease. The provisions of this section 12.4(b) shall survive the expiry or earlier termination of this Lease.

ARTICLE 13

SALE OR FINANCING , SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES

13.1 Sale or Financing of Building

The rights of the Landlord under this Lease may be mortgaged, charged, transferred or assigned to a purchaser or purchasers or to a mortgagee, lending institution or trustee for bond holders (the “Mortgagee”). In the event of a sale or of default by the Landlord under any mortgage, trust deed or trust indenture (the “Mortgage”) and the purchaser or the Mortgagee, entering into possession of the Premises, the Tenant agrees to attorn to and become the tenant of the Mortgagee or the Purchaser under the terms of this Lease. The Landlord shall provide the Tenant with a Non-Disturbance Agreement, in form and substance satisfactory to the Tenant, acting reasonably, from any Mortgagee who holds a Mortgage to which this Lease is subordinate.

The Landlord may assign its rights under this Lease to a lending institution as collateral security for a loan or other financing.

13.2 Subordination and Attornment

If required by any Mortgagee and, provided that such Mortgagee has first entered into a Non-Disturbance Agreement with the Tenant, this Lease and all rights of the Tenant hereunder shall be subject and subordinate to all Mortgages now or hereafter existing which may now or hereafter affect the Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. Subject to the foregoing, the Tenant agrees to execute and deliver promptly whenever requested by the Landlord or by such Mortgagee an instrument of subordination or attornment, as the case may be.

13.3 Registration

The Landlord agrees that the Tenant may prepare and register, at the Tenant’s cost, a notice of this Lease against title to the Premises, on terms and conditions acceptable to the Landlord. Such notice shall only describe the parties, the Premises, the Term, the Commencement Date, and any options to renew the Term. The Tenant covenants and agrees to discharge the notice of lease, at its cost, upon the expiry or earlier termination of the Lease.

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13.4 Certificates

Each of the Tenant and the Landlord, whenever requested by the other, shall from time to time execute and deliver to the party making the request and to any other Person designated by the party making the request a certificate in writing as to the status of this Lease at that time, including as to whether it is in full force and effect, is modified or unmodified, confirming the rent payable hereunder and the state of the accounts between the Landlord and Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as to which as may reasonably be requested.

ARTICLE 14

DELAY; NO WAIVER

14.1 Unavoidable Delay

Notwithstanding the terms of this Lease, if the Landlord or the Tenant is, in good faith, delayed or prevented from doing anything required by this Lease, because of a strike; labour trouble; inability to get materials or services; power failure; restrictive governmental laws or regulations; riots; insurrection; sabotage; rebellion; war; act of God; or any other similar reason, that is not the fault of the party delayed, the doing of the thing is excused for the period of the delay and the party delayed will do what was delayed or prevented within the appropriate period after the delay. The preceding sentence does not excuse the Tenant from payment of Rent in the amounts and at the times specified in this Lease.

14.2 No Admission

The acceptance of any Rent from or the performance of any obligation hereunder by a person other than the Tenant shall not be construed as an admission by the Landlord of any right, title or interest of such person as a subtenant, assignee, transferee or otherwise in the place and stead of the Tenant.

14.3 Part Payment

The acceptance by the Landlord of a part payment of any sums required to be paid hereunder shall not constitute waiver or release of the right of the Landlord to payment in full of such sums.

ARTICLE 15

TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER

15.1 Remedying by Landlord, Non-payment and Interest

In addition to all the rights and remedies of the Landlord available to it in the event of any default hereunder by the Tenant either by any other provision of this Lease or by statute or the common law, the Landlord, provided it has given the Tenant at least five (5) Business Days’ prior written notice in respect of monetary defaults and twenty (20) days’ prior written notice for non-monetary defaults (or such longer period as may be required under the circumstances provided that the Landlord’s interests are not prejudiced):

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(a) shall have the right at all times to remedy or attempt to remedy any default of the Tenant, and in so doing may make any payments due or alleged to be due by the Tenant to third parties and may enter upon the Premises to do any work or other things therein and in such event all expenses of the Landlord in remedying or attempting to remedy such default shall be payable by the Tenant to the Landlord forthwith upon demand;

(b) shall have the same rights and remedies in the event of any non-payment by the Tenant of any amounts payable by the Tenant under any provision of this Lease as in the case of non-payment of Rent;

(c) if the Tenant shall fail to pay any Rent promptly when due, shall be entitled, if it shall demand it, to interest thereon at the Prime Rate plus 2% from the date upon which the same was due until actual payment thereof; and

(d) shall be entitled to be reimbursed by the Tenant, and the Tenant shall forthwith pay the Landlord, the amount of all costs and expenses (including, without limitation, legal costs on a solicitor and own client basis) incurred by the Landlord in connection with the default or in efforts to enforce any of the rights, or to seek any of the remedies, to which the Landlord is or may be entitled hereunder.

Notwithstanding the foregoing, in the event of an emergency, the Landlord may take such of the foregoing actions as are required to prevent damage to the Premises or harm to individuals without first giving the above stated prior written notice provided that the Landlord shall give the Tenant as much notice as reasonably possible prior to taking such actions.

15.2 Remedies Cumulative

The Landlord may from time to time resort to any or all of the rights and remedies available to it in the event of any default hereunder by the Tenant, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative, as the express provisions hereunder as to certain rights and remedies are not to be interpreted as excluding any other or additional rights and remedies available to the Landlord by statute or the common law.

15.3 Right of Re-entry on Default

Provided and it is expressly agreed that:

(a) if and whenever the Rent hereby reserved or other monies payable by the Tenant or any part thereof, whether lawfully demanded or not, are unpaid and the Tenant shall have failed to pay such Rent or other monies within five (5) Business Days after the Landlord shall have given to the Tenant notice requiring such payment; or

(b) if the Tenant shall breach or fail to observe and perform any of the covenants, agreements, provisos, conditions, rules or regulations and other obligations on the part of the Tenant to be kept, observed or performed hereunder, and such breach

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or failure continues for a period of twenty (20) days (or such longer period as shall reasonably be necessary to cure the default or failure under the circumstances provided the Tenant is proceeding diligently to remedy same) after notice thereof by the Landlord to the Tenant; or

(c) if the Landlord shall have become entitled to terminate this Lease or to re-enter the Premises pursuant to any provision hereof,

then and in every such case it shall be lawful for the Landlord thereafter to enter into and upon the Premises or any part thereof in the name of the whole and the same to have again, repossess and enjoy as of its former estate, anything in this Lease contained to the contrary notwithstanding.

15.4 Termination and Re-entry

If and whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord, in addition to all other rights and remedies, shall have the right to terminate this Lease forthwith by notice to the Tenant. Upon the giving by the Landlord of such notice, this Lease and the Term shall terminate, and the Tenant shall immediately deliver up possession of the Premises to the Landlord in accordance with section 15.8, and the Landlord may re-enter and take possession of them.

15.5 Certain Consequences of Termination and Re-entry

If the Landlord re-enters the Premises or if this Lease is terminated other than by the passing or expiration of time, then:

(a) notwithstanding any termination or the Term thereby becoming forfeited and void, the provisions of this Lease which relate to the consequences of termination, and the provisions of this Lease as they apply with respect to acts, events and omissions which occurred prior to the termination, shall all survive such termination;

(b) at the Landlord’s option, but without prejudice to the Landlord’s other rights and remedies with respect to recovery of costs, damages and expenses which relate to any default by the Tenant, the Tenant shall pay to the Landlord on demand:

(i) Rent and all other amounts payable under this Lease up to the time of reentry or the date of termination, whichever is later, including any accelerated rent payable pursuant to section 16.2;

(ii) all damages the Landlord incurs in connection with the re-entering, terminating, re-letting, collecting sums due or payable by the Tenant and storing and realizing upon assets seized, including without limitation, brokerage fees, legal fees and disbursements, the expenses of cleaning and making and keeping the Premises in good order, and the expenses of repairing the Premises and preparing them for re-letting and including the worth at the time of such termination of the excess, if any, of the amount

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of Rent and charges equivalent to Rent required to be paid pursuant to this Lease for the unexpired remainder of the Term, had it not been terminated, over the then reasonable rental value of the Premises for the remainder of the Term, all of which amounts shall be immediately due and payable by the Tenant to the Landlord; and

(c) the Landlord shall take all such actions as are available to it, acting in a commercially reasonable manner, to mitigate its damages.

15.6 Waiver of Distress

The Tenant waives and renounces the benefit of any present or future statute taking away or limiting the Landlord’s right of distress and covenants and agrees that notwithstanding any such statute none of the goods and chattels of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears. The Tenant will not sell, dispose of or remove any of the fixtures, goods or chattels of the Tenant from or out of the Premises during the Term without the consent of the Landlord, unless the Tenant is substituting new fixtures, goods or chattels of equal value or is bona fide disposing of individual items which have become excess for the Tenant’s purposes, and the Tenant will be the owner of its fixtures, goods and chattels and will not permit them to become subject to any lien, mortgage, charge or encumbrance.

15.7 Re-letting

Whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord in addition to all other rights it may have, shall have the right as agent of the Tenant to enter the Premises and re-let them (for a term or terms shorter or longer than the balance of the Term, granting reasonable concessions in connection therewith) and to receive the rent therefor and to apply any rent derived from re-letting the Premises upon account of the rent due and to become due under this Lease and the Tenant shall be liable to the Landlord for the deficiency, if any.

15.8 Surrender on Termination

Forthwith upon the termination of this Lease, whether by effluxion of time or otherwise, the Tenant shall vacate and deliver up possession of the Premises in a neat and tidy state in accordance with the Tenant’s obligation under this Lease to repair the Premises, but subject to the Tenant’s rights and obligations in respect of removal in accordance with section 11.3. At the same time the Tenant shall surrender to the Landlord at the place then fixed for the payment of Rent all keys and other devices which provide access to the Premises, the Building or any part thereof and shall inform the Landlord of all combinations to locks, safes and vaults, if any, in the Premises.

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ARTICLE 16

EVENTS TERMINATING LEASE

16.1 Cancellation of Insurance

If any policy of insurance upon the Building from time to time effected by the Tenant shall be cancelled or about to be cancelled by the insurer by reason of the use or occupation of the Premises by the Tenant or any assignee, subtenant or licensee of the Tenant or anyone permitted by the Tenant to be upon the Premises, the Landlord shall give the Tenant notice thereof forthwith upon receipt of such notice. The Tenant shall have a reasonable period of time after receipt of such notice either:

(a) to take such steps in respect of such use or occupation as shall enable it to reinstate or avoid cancellation of (as the case may be) such policy of insurance; or

(b) to acquire alternate insurance.

If the Tenant fails to take such steps or to acquire alternate insurance then the Landlord may at its option either (i) terminate the Lease by giving notice of termination to the Tenant as required hereunder; or (ii) enter upon the Premises and remedy such condition and the Tenant shall pay to the Landlord the costs thereof, as Additional Rent, and the Landlord shall not be liable for any loss or damage caused to any property of the Tenant or of other persons located on the Premises as a result of such entry. The Tenant agrees that the exercise by the Landlord of its rights under this Section shall not be deemed to be a re-entry or a breach of any covenant for quiet enjoyment contained in this Lease.

16.2 Prohibited Occupancy, Bankruptcy and Other Events

If without the written consent of the Landlord the Premises shall be used by any other persons than the Tenant or its permitted assigns or permitted subtenants or for any purpose other than that for which the Premises were leased or occupied by any persons whose occupancy is prohibited by this Lease, or if the Premises shall be vacated or abandoned or remain unoccupied for ten (10) consecutive days or more while capable of being occupied, or if the Term or any of the goods and chattels of the Tenant shall at any time be seized in execution or attachment, or if a receiver or receiver-manager is appointed of the business or property of the Tenant, or if the Tenant or any Indemnifier shall make any assignment for the benefit of creditors or any bulk sale, become bankrupt or insolvent or take the benefit of any statute now or hereafter in force for bankrupt or insolvent debtors or (if a corporation) shall take any steps or suffer any order to be made for its winding-up or other termination of its corporate existence, then in any such case the Landlord may at its option terminate this Lease by notice to the Tenant and thereupon, in addition to the payment by the Tenant of Rent and other payments for which the Tenant is liable under this Lease, Rent for the current month and the next ensuing three (3) months’ Rent shall immediately become due and be paid by the Tenant, or party then controlling the Tenant’s affairs.

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ARTICLE 17

MISCELLANEOUS

17.1 Notices

All notices, demands and requests required or permitted to be given under this Lease must be in writing and must be delivered personally or by nationally recognized overnight courier or sent by United States certified mail or Canadian registered mail, as applicable, return receipt requested, postage prepaid and addressed to the parties at their respective addresses set forth in section 1.1 or at such other addresses as the parties may designate from time to time by written notice in the manner provided in this section. Notwithstanding the foregoing, if there is a mail strike, slowdown or other labour dispute which might affect delivery of such notice between the time of mailing and the actual receipt of notice, then such notice shall only be effective if actually delivered.

Upon at least ten (10) days’ prior written notice, each party shall have the right to change its address to any other address within the United States of America or Canada. Notices shall be deemed given on the date that such notices are deposited with a nationally recognized overnight courier, deposited with the U.S. Postal Service or Canada Post, as applicable, or personally delivered.

17.2 Extraneous Agreements

The Tenant acknowledges that there are no covenants, representations, warranties, agreements or conditions expressed or implied relating to this Lease of the Premises save as expressly set out in this Lease. This Lease may not be modified except by an agreement in writing executed by the Landlord and the Tenant. If there is any conflict between the provisions of this Lease and any such agreement to lease, the provisions of this Lease shall prevail.

17.3 Time of Essence

Time shall be of the essence of this Lease.

17.4 Successors and Assigns

This Lease and everything herein contained shall enure to the benefit of and be binding upon the Landlord and its successors and assigns and on the Tenant and its permitted successors and permitted assigns. References to the Tenant shall be read with such changes in gender as may be appropriate, depending upon whether the Tenant is a male or female person or a firm or corporation. If the Tenant is comprised of more than one person or entity, then each such person and entity is joint and severally bound by the representations, warranties, agreements and covenants of the Tenant herein and any notice given or deemed to have been given at any time to any such person or entity shall be deemed to have been given at the same time to each other such person and entity.

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17.5 Waiver

No condoning, excusing or overlooking by the Landlord or the Tenant of any default, breach or non-observance by the Tenant or the Landlord at any time or times in respect of any covenant, proviso or condition herein contained shall operate as a waiver of the Landlord’s or the Tenant’s rights hereunder in respect of any continuing or subsequent default, breach or non-observance or so as to defeat or affect in any way the rights of the Landlord or the Tenant herein in respect of any such continuing or subsequent default or breach, no acceptance of Rent by the Landlord subsequent to a default by the Tenant (whether or not the Landlord knows of the default) shall operate as a waiver by the Landlord, and no waiver shall be inferred from or implied by anything done or omitted by the Landlord or the Tenant save only express waivers in writing.

17.6 Governing Law and Severability

This Lease shall be governed by and construed in accordance with the laws in force in the Province in which the Premises are located. Each of the provisions contained in this Lease is distinct and severable and a declaration of invalidity or unenforceability of any provision or part of a provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision in this Lease. To the extent permitted by applicable law, the parties waive any provision of law that renders any provision of this Lease invalid or unenforceable in any respect.

17.7 Captions

The captions appearing in this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any provision thereof. References to articles and sections in this Lease refer to articles and sections of this Lease. This Lease includes all of the schedules attached to it.

17.8 Expropriation

If during the Term the Premises or any part thereof are taken by any lawful power or authority by the right of expropriation the Landlord and the Tenant shall cooperate so that each may receive the maximum awarded to which it is entitled at law.

17.9 Counterparts

This Lease may be signed in counterparts and by electronic scanning or facsimile transmission with the same effect as if the parties had signed one original copy of this Lease. All counterparts shall be construed as if they constitute one and the same original document.

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ARTICLE 18

ADDITIONAL PROVISIONS

18.1 Landlord’s Right of Development Re Walker Drive Additional Lands

At any time during the Term, the Landlord shall have the unfettered right to:

(a) develop all or any parts of the additional land as identified on the Site Plan/Survey attached hereto as Schedule D (the “Additional Land”); and/or

(b) sever and lease or sell all or any parts of the Additional Land; and/or

(c) partially sever and develop all or any parts of the Additional Land.

In any and all of the cases (a), (b) or (c) above, the Landlord shall have the right to lease or sell all or any parts of the Additional Land to third parties. Upon any exercise of rights by the Landlord pursuant to this Section, such part or parts of the Additional Land shall no longer be part of the “Premises” hereunder (and the Tenant shall surrender and deliver up vacant possession of such part or parts of the Additional Land) and, in the event that the Additional Land is not severed from the Premises and/or there are not separate real properly tax bills and separate real property assessment notices for such part or parts of the Additional Land, the Landlord will reasonably allocate the Taxes as between the Premises and the said part or parts of the Additional Land on an equitable basis.

The Landlord undertakes to minimize disruption to the Tenant’s operations during any development of the Additional Land. In the event of development, lease or sale of all or any parts of the Additional Land, as aforesaid, the Tenant agrees to cooperate with the Landlord, both acting reasonably and in good faith, with regard to the granting of any easements, rights of way or other agreements necessary in order to facilitate access to or the servicing of the Additional Land, but only to the extent such easements, rights of way or other agreements do not materially negatively affect the Tenant’s use or enjoyment of the Premises.

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IN WITNESS WHEREOF the parties have executed this Lease as of the date first above written.

80241 CANADA LTD. (Landlord)
By:	/s/ Morton Arshinoff
Name:	Morton Arshinoff
Title:	President
By:	/s/ Fred J. Arshinoff
Name:	Fred J. Arshinoff
Title:	Vice President
ICL INDUSTRIAL CONTAINERS ULC (Tenant)
By:	/s/ Kevin C. Kern
Name:	Kevin C. Kern
Title:	Vice President & Treasurer
By:
Name:
Title:

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SCHEDULE A

LEGAL DESCRIPTION OF THE LAND

Part Block J, Plan 977, designated as Part 1, Plan 43R-7462, City of Brampton.

SCHEDULE B

DEFINITIONS

In this Lease the following expressions shall have the following meanings:

“Additional Rent” means all sums of money to be paid by the Tenant whether to the Landlord or otherwise pursuant to this Lease except for Annual Base Rent.

“Affiliate” has the meaning given to such term in the Business Corporations Act (Ontario) in force as of the date of this Lease.

“Alterations” means any repairs, alterations, replacements, decorations or improvements to the Premises.

“Annual Base Rent” means the annual rent set out in section 1.1(f) or (g) and payable by the Tenant as set forth in section 4.1(a).

“Basic Terms” means those terms of this Lease set out in section 1.1 hereof.

“Building” means that certain building including all fixtures, improvements and amenities located on the Land more particularly described in section 1.1(b)(iii) hereof.

“Business Day” means any day other than a Saturday, Sunday or statutory holiday in either the province in which the Premises are located or in the state of Georgia.

“Change of Control” means, in the case of any corporation or partnership, the transfer or issue by sale, assignment, subscription, transmission on death, mortgage, charge, security interest direct or indirect by, operation of law or otherwise, of any shares, voting rights or interest which would result in any change in the effective control of such corporation or partnership.

“Claim” means any claim made by a Person against another for any liabilities, damages, costs or expenses and any suits or actions involving any such claim.

“Commencement Date” has the meaning set out in section 1.1(e)(i).

“Contaminants” means any pollutants, contaminants, deleterious substances, underground tanks, asbestos materials, mould, lead-based paint, hazardous, corrosive, or toxic substances, special waste or waste of any kind, halon, radon, PCB’s, or other pollutants, contaminants or hazardous materials or any other substance which is now or hereafter prohibited, controlled, or regulated under Environmental Laws.

“Current Market Rent” means that rent that would be paid for improved industrial space in industrial buildings of similar age and class in the vicinity where the Premises are located, as between persons dealing in good faith and at arms’ length, without reduction for any cash payment, leasehold improvement allowance, rent-free period or other inducement.

“Environment” means the ambient air, all layers of the atmosphere, surface water, underground water, all land, all living organisms and the interacting natural systems that include components

of air, land, water, organic and inorganic matter and living organisms, and includes indoor spaces.

“Environmental Law” means all federal, provincial, municipal or local statutes, regulations, by-laws, Environmental Permits, orders or rules, and any policies or guidelines of any governmental or regulatory body or agency, and any requirements or obligations arising under the common law, relating to the Environment and, the transportation of dangerous goods or wastes and occupational safety and health law.

“Environmental Permits” means all permits, licences, approvals, consents, authorizations, registrations and certificates issued by or provided to, as the case may be, any governmental body pursuant to an Environmental Law.

“Extension Term” means any extension of the Term pursuant to a right granted to the Tenant under Article 3 or otherwise agreed to by the parties hereto.

“First Extension Term” has the meaning ascribed thereto in section 3.2(a).

“Goods and Services Taxes” means and includes any and all goods and services taxes, sales taxes, value added taxes, business transfer taxes, or any other taxes imposed on the Landlord or the Tenant from time to time in respect of the Rent payable by the Tenant to the Landlord under this Lease or the rental of the Premises or the provision of any goods, services or utilities, whatsoever by the Landlord to the Tenant under this Lease, whether characterized as a goods and services tax, sales tax, value added tax, business transfer tax, or otherwise.

“Indemnifier” means the person who has executed or agreed to execute the Indemnity Agreement that is attached to this Lease as Schedule C.

“Land” means all and singular those certain parcels or tracts of land legally described in Schedule A hereto, comprising the acreage as shown on the site plan in Schedule A hereto.

“Landlord/Lender Agreement” has meaning ascribed thereto in section 10.3.

“Landlord Party” means the Landlord, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Lease” means this Lease and all Schedules attached hereto, as amended from time to time.

“Leasehold Improvements” means all fixtures, improvements, installations, Alterations and additions now or from time to time hereafter made, erected or installed, whether by the Tenant, the Landlord or anyone else, in the Premises with the exception of trade fixtures, racking, and furniture and equipment not of the nature of fixtures, but includes all partitions however fixed (including movable partitions) and includes all wall-to-wall carpeting with the exception of such carpeting where laid over vinyl tile or other finished floor and affixed so as to be readily removable without damage.

“Leasehold Lender” has meaning ascribed thereto in section 10.3.

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“Leasehold Mortgage” has meaning ascribed thereto in section 10.3.

“Lease Year” means the twelve (12) month period from the Commencement Date of the Lease and each twelve (12) month period thereafter during the Term and any Extension Term.

“Management Fee” means an annual fee equal to one per cent (1%) of the Annual Base Rent.

“Mortgage” has the meaning ascribed thereto in section 13.1.

“Mortgagee” has meaning ascribed thereto in section 13.1.

“Non-Disturbance Agreement” means an agreement between the Tenant and a Mortgagee pursuant to which the Mortgagee agrees that provided the Tenant is not in default of any of its obligations hereunder beyond any applicable grace or call period the Tenant shall have quiet enjoyment of the Premises undisturbed by the Mortgagee or any Person claiming through or under the Mortgagee.

“Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted.

“Premises” means the Land the Building and all improvements and equipment thereon and therein.

“Prime Rate” means the commercial lending rate of interest, expressed as an annual rate, which the chartered bank designated by the Landlord from time to time quotes from time to time in its principal office in Canada as the reference rate of interest and commonly known as its “prime rate”, and which serves as the basis upon which effective rates of interest are calculated for Canadian dollar loans made in Canada to its commercial customers with interest payable as a function of its prime rate.

“Release” means any release, discharge, emission, deposit, issuance, spray, escape, spill, leak and shall also have the various meanings under Environmental Laws.

“Rent” means and includes the Annual Base Rent, Additional Rent and all other sums payable by the Tenant to the Landlord or to other Persons under this Lease.

“Second Extension Term” has the meaning ascribed thereto in section 3.2(b).

“Structure” means the structural elements of the Building including foundations, exterior wall assemblies including weather walls, load bearing walls, floor slab, roof, roof deck, structural columns.

“Taxes” means all taxes, rates, duties, levies and assessments whatsoever, whether municipal, parliamentary or otherwise, which are levied, imposed or assessed against or in respect of the Building, the Land or upon the Landlord in respect thereof or which are from time to time levied,

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imposed or assessed in the future in lieu thereof, including those levied, imposed or assessed for education, schools and local improvements and including all costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred by the Landlord in good faith in contesting, resisting or appealing any taxes, rates, duties, levies or assessments, and shall also include any and all taxes which may in future be levied in lieu of “Taxes” as hereinbefore defined, but excluding taxes and license fees in respect of any business carried on by tenants and occupants of the Building (including the Landlord), income or profits taxes upon the income of the Landlord to the extent such taxes are not levied in lieu of taxes, rates, duties, levies and assessments against the Building or the Land or upon the Landlord in respect thereof.

“Tenant Party” means the Tenant, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Term” means the term of this Lease set forth in section l.l(e)(i) hereof and any extension or renewal thereof and any period of permitted overholding.

“Transfer” means an assignment of this Lease in whole or in part, a sublease of all or any part of the Premises, any transaction whereby the rights of the Tenant under this Lease or to the Premises are transferred to another, any transaction by which any right of use or occupancy of all or any part of the Premises is conferred upon anyone, any mortgage charge or encumbrance of this Lease or the Premises or any part thereof or other arrangement under which either this Lease or the Premises become security for any indebtedness or other obligations and includes any transaction or occurrence whatsoever (including, but not limited to receivership proceedings, seizure by legal process directly or indirectly and transfer by operation of law), which has changed or might change the identity of the persons having lawful use or occupancy of any part of the Premises. The holding of possession of third party inventory and equipment does not constitute a Transfer.

“Transferee” means the Person to whom a Transfer is or is to be made.

“Untenantable” means that the Building is not capable of being used and occupied for the purpose for which it was intended whether by reason of damage or destruction to the Building by fire, tempest or other peril or a catastrophic event or by reason of access to the Building being cut off or impaired such that the Tenant is unable to access the Building and the Premises in the ordinary course of its business.

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SCHEDULE C

INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 1^ day of 1^, 200^.

BETWEEN:
	1^ (the “Landlord”)
		OF THE FIRST PART
	- and -
	1^ (the “Indemnifier”)
		OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 1^ day of 1^ made between the Landlord and 1^, as tenant (the “Tenant”), and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or

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disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns

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of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and sealed this Indemnity.

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SCHEDULE D

ADDITIONAL LAND

The attached drawing represents the parties’ general agreement as to the configuration of the Additional Land. In the event that,

(i) based upon Tenant’s actual operations at the Premises, Tenant reasonably determines that the severance, lease and/or development of the Additional Land (as shown on the attached drawing) would adversely impact or interfere with Tenant’s access to and from the Building or the operation by Tenant of its business on the Premises (including without limitation, the staging and/or docking of truck and trailers),

(ii) based upon the Landlord’s intended use of the Additional Land, the Landlord reasonably determines that a re-configuration of the Additional Land is necessary (provided that such re-configuration shall not adversely impact or interfere with Tenant’s access to and from the Building or the operation by Tenant of its business on the Premises as aforesaid),

the parties shall cooperate in good faith to reconfigure the Additional Land as necessary to avoid such impact or interference.

INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 17th day of July, 2006.

BETWEEN:

80241 CANADA LTD.

(the “Landlord”)

OF THE FIRST PART

- and -

BWAY CORPORATION

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 17th day of July, 2006 made between the Landlord and ICL Industrial Containers ULC, as tenant (the “Tenant”), for the premises located at 120 Walker Drive, Brampton, Ontario and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied

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mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

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IN WITNESS WHEREOF the Landlord and the Indemnifier have signed this Indemnity as of the date above first written.

80241 CANADA LTD.
By:	/s/ Morton Arshinoff
Title:	Morton Arshinoff, President
BWAY CORPORATION
By:	[Illegible]
Title:	Vice President Administration & CFO

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EX-10.40

Exhibit 10.40

35 CALDER PLACE, ST. ALBERT, ALBERTA

INDUSTRIAL LEASE

BETWEEN

80241 CANADA LTD.

(The “Landlord”)

AND

ICL INDUSTRIAL CONTAINERS ULC

(The “Tenant”)

TABLE OF CONTENTS

		Page
	ARTICLE 1
	BASIC TERMS, SCHEDULES, DEFINITIONS
1.1	Basic Terms	1
1.2	Schedules	2
1.3	Definitions	2
	ARTICLE 2
	PREMISES
2.1	Premises	2
	ARTICLE 3
	TERM
3.1	Term	2
3.2	Option to Extend	2
3.3	Appraisals	3
	ARTICLE 4
	RENT
4.1	Rent	4
4.2	Payment of Rent	4
4.3	Rent for Irregular Periods	5
4.4	Waiver of Offset	5
4.5	Net Lease	5
	ARTICLE 5
	TENANT’S COVENANTS
5.1	Rent	5
5.2	Permitted Use	5
5.3	Waste and Nuisance	5
5.4	Insurance Risks	6
5.5	Cleanliness and Heating	6
5.6	Compliance with Laws	6
5.7	Overholding	6
5.8	Signs	7
5.9	Inspection and Access	7
5.10	Showing Premises	7

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TABLE OF CONTENTS

(continued)

		page
5.11	Equipment	8
5.12	Floor Loads	8
5.13	Glass	8
	ARTICLE 6
	LANDLORD’S COVENANTS
6.1	Quiet Enjoyment	8
	ARTICLE 7
	REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION
7.1	Maintenance and Repairs	8
7.2	Capital Repairs	10
7.3	Damage, Destruction and Termination	10
	ARTICLE 8
	TAXES AND OPERATING COSTS
8.1	Tenant’s Tax Obligations	11
8.2	Goods and Services Taxes	12
8.3	Tenant’s Share	12
8.4	Notices of Assessment etc	13
8.5	Utility/Communication/Service Charges	13
	ARTICLE 9
	ENVIRONMENTAL MATTERS
9.1	Environmental Laws	14
9.2	Tenant’s Responsibility	14
9.3	Assessment of the Premises	15
9.4	Contaminants at the End of the Term	16
9.5	Landlord’s Indemnity and Covenant	16
	ARTICLE 10
	TRANSFERS, ASSIGNMENTS AND SUBLETTINGS
10.1	Consent Required	17
10.2	Change of Control	18
10.3	Leasehold Charges	18
10.4	Permitted Transfers	20
10.5	Transfer by Landlord	20

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TABLE OF CONTENTS

(continued)

		Page
	ARTICLE 11
	FIXTURES AND IMPROVEMENTS
11.1	Alterations	20
11.2	Liens and Encumbrances on Fixtures and Improvements	21
11.3	Removal of Fixtures and Improvements	21
11.4	Non-compliance	22
	ARTICLE 12
	INSURANCE AND LIABILITY
12.1	Landlord’s Insurance	22
12.2	Tenant’s Insurance	23
12.3	Limitation of Liability	25
12.4	Indemnity	25
	ARTICLE 13
	SALE OR FINANCING, SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES
13.1	Sale or Financing of Building	26
13.2	Subordination and Attornment	26
13.3	Registration	26
13.4	Certificates	26
	ARTICLE 14
	DELAY; NO WAIVER
14.1	Unavoidable Delay	27
14.2	No Admission	27
14.3	Part Payment	27
	ARTICLE 15
	TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER
15.1	Remedying by Landlord, Non-payment and Interest	27
15.2	Remedies Cumulative	28
15.3	Right of Re-entry on Default	28
15.4	Termination and Re-entry	29
15.5	Certain Consequences of Termination and Re-entry	29
15.6	Waiver of Distress	30

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TABLE OF CONTENTS

(continued)

		Page
15.7	Re-letting	30
15.8	Surrender on Termination	30
	ARTICLE 16
	EVENTS TERMINATING LEASE
16.1	Cancellation of Insurance	30
16.2	Prohibited Occupancy, Bankruptcy and Other Events	31
	ARTICLE 17
	MISCELLANEOUS
17.1	Notices	31
17.2	Extraneous Agreements	32
17.3	Time of Essence	32
17.4	Successors and Assigns	32
17.5	Waiver	32
17.6	Governing Law and Severability	32
17.7	Captions	33
17.8	Expropriation	33
17.9	Counterparts	33

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LEASE

THIS LEASE dated the 17th day of July, 2006, is made and entered into by 80241 Canada Ltd. (the “Landlord”) and ICL Industrial Containers ULC (the “Tenant”) who, in consideration of the covenants herein contained, agree as follows:

ARTICLE 1

BASIC TERMS, SCHEDULES, DEFINITIONS

1.1 Basic Terms

(a)	Landlord
	(i)     Landlord: (ii)    Address of Landlord:	80241 Canada Ltd. 167 Lord Seaton Road Willowdale, Ontario, M2P 2K8 Attention: Stephen Arshinoff
(b)	Tenant
	(i)     Tenant: (ii)    Address of Tenant:	ICL Industrial Containers ULC 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350-2230 Attention: Kevin C. Kern
	(iii)  Address of Premises:	35 Calder Place, St. Albert, Alberta
(c)	Indemnifier
	(i)     Indemnifier: (ii)    Address of Indemnifier:	BWAY Corporation 8607 Roberts Drive, Suite 250 Atlanta, Georgia 30350-2230
(d)	Rentable Area of Building	Approximately 61,895 square feet
(e)	Term
	(i)     Term:	ten (10) years
	(ii)    Commencement Date:	July 17, 2006
	(iii)  Lease Expiration Date:	July 16, 2016

(f)	Annual Base Rent Year of the Term	Per Square Foot	Per Annum	Per Month
	Years 1 - 5	$5.00	$309,475.00	$25,789.58
(g)	Annual Base Rent Year of the Term Year 6 - 1 0	Per Square Foot	Per Annum	Per Month
		$5.65	$349,706.75	$29,142.23

(h) Permitted Use

Industrial and ancillary office use, including without limitation: manufacturing industrial containers, including plastic pails, steel pails and steel drums; refurbishing containers and pallets; warehousing; office and ancillary uses.

(i) Extension Term

Two (2) Extension Terms of five (5) years each.

The foregoing Basic Terms are hereby approved by the parties and each reference in this Lease to any of the Basic Terms shall be construed to include the provisions set forth above as well as all of the additional terms and conditions of the applicable sections of this Lease where such Basic Terms are more fully set forth.

1.2 Schedules

All Schedules to this Lease are incorporated into and form an integral part of this Lease.

1.3 Definitions

In this Lease, the words, phrases and expressions set forth in Schedule B are used with the meanings defined therein.

ARTICLE 2

PREMISES

2.1 Premises

In consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Tenant to be paid, observed and performed, the Landlord hereby demises and leases to the Tenant and the Tenant leases from the Landlord the Premises.

ARTICLE 3

TERM

3.1 Term

The Term of this Lease shall be for the period set out in section 1.1(e)(i), beginning on the Commencement Date.

3.2 Option to Extend

(a) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the Term, extend the Term for a further term of five (5) years (the “First Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the First Extension Term.

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(b) Provided that the Tenant is not then in default of its obligations under this Lease beyond any applicable cure or grace period, the Landlord shall at the expiration of the First Extension Term, provided the Tenant has given the Landlord notice of its exercise of the option to extend at least twelve (12) months prior to the expiration of the First Extension Term, extend the First Extension Term for a further term of five (5) years (the “Second Extension Term”) from the expiration of the Term, upon the same terms and conditions contained in this Lease except extension options and the Annual Base Rent to be paid during the Second Extension Term.

(c) The Annual Base Rent during any Extension Term shall be the Current Market Rent for the Premises. If the Landlord and the Tenant have not mutually agreed on the amount of the Annual Base Rent at least three (3) months prior to the commencement of such Extension Term, then Annual Base Rent shall be decided in the manner set out in Section 3.3. Until the Annual Base Rent has been determined, the Tenant shall pay the monthly Rent requested by the Landlord and, upon the determination of the Annual Base Rent, the Landlord and the Tenant shall make the appropriate adjustments together with interest at the Prime Rate.

3.3 Appraisals

If the Annual Base Rent payable during an Extension Term is not agreed upon at least three (3) months prior to the commencement of such Extension Term, then each party shall, within thirty (30) days thereafter, mandate an appraiser licensed in the Province where the Premises are located, to determine the Current Market Rent for the Premises. In the event that a party fails to appoint an appraiser within such thirty (30) days and has failed to remedy such failure within five (5) days of written notice thereof from the other party, then the Annual Base Rent shall be the Current Market Rent for the Premises, as determined by the sole appraiser. If two appraisers are appointed, in the event that the higher of the amounts so determined by one appraiser does not exceed the lower so determined by the other appraiser by more than 15%, then the Annual Base Rent shall be the average of the two, otherwise, the two appraisers shall jointly name a third appraiser licensed in the Province of Alberta who shall be mandated to determine the Current Market Rent for the Premises. The Annual Base Rent shall be equal to such amount as so determined if it is no less than the lower of the first two nor no more than the higher of the first two, otherwise, it shall be whichever of the first two amounts is closest in value to the third. Notwithstanding the foregoing, the Annual Base Rent during an Extension Term shall in no event be less than the Annual Base Rent during the initial Term or Extension Term then ending, as the case may be.

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ARTICLE 4

RENT

4.1 Rent

The Tenant shall pay to the Landlord, at 167 Lord Seaton Road, Willowdale, Ontario, or at such other place as the Landlord may direct in writing, during the Term in lawful money of Canada without any demand, set off, abatement, compensation or deduction whatsoever, on the days and at the times hereinafter specified, Rent, which shall include the aggregate of the sums specified in sections 4.1(a), 4.1(b) and 4.1(c) below:

(a) Annual Base Rent – During each of the first five (5) Lease Years, Annual Base Rent in the amounts per annum for the respective years of the Term as more particularly set out in section 1.1(f). During each of the next five (5) Lease Years, the Annual Base Rent shall be the Annual Base Rent as more particularly set out in section 1.1(g).

(b) Additional Rent - Together with such other amounts, charges, costs and expenses as are required to be paid by the Tenant to the Landlord pursuant to this Lease in addition to Annual Base Rent, whether or not such amounts are specifically designated elsewhere in this Lease as Additional Rent.

(c) Management Fee – The Management Fee.

4.2 Payment of Rent

The Annual Base Rent shall be paid in equal consecutive monthly instalments in advance on the first day of each and every month during the Term. Subject to section 4.3, the first monthly instalment of the Annual Base Rent shall be paid by the Tenant on the Commencement Date of the Term, The Landlord shall remit to the Tenant, before each Lease Year, the estimated amount of the Additional Rent (other than the portion thereof which the Tenant shall pay directly to third parties) and of the Management Fee for that period, and the monthly payments of Additional Rent and Management Fee which are payable to the Landlord shall then be established for said Lease Year based on that estimate. The Landlord may from time to time during a Lease Year re-evaluate its estimate of such Additional Rent and of the Management Fee, and in such case shall notify the Tenant in writing of the re-evaluation and establish monthly payments for the unexpired period of such Lease Year or of such part only of a Lease Year, so that after the Tenant is credited with the appropriate amounts paid by the Tenant in accordance with the previous estimate, such Additional Rent and the Management Fee is paid in full during such Lease Year or during a part only of such Lease Year. After each Lease Year, the Landlord shall remit to the Tenant a statement indicating the actual amount of the Additional Rent (other than the portion thereof which the Tenant has paid directly to third parties) and of the Management Fee for the said Lease Year. Should the amount of such Additional Rent and of the Management Fee then determined by the Landlord be greater or less than the total of the amounts already paid by the Tenant to the Landlord, then appropriate adjustments will be made within thirty (30) days following the delivery of the above-mentioned statement.

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4.3 Rent for Irregular Periods

All Rent reserved herein shall be deemed to accrue from day to day, and if for any reason it shall become necessary to calculate Rent for irregular periods of less than one (l) month a pro-rata adjustment, based on a per diem adjustment on the basis of a three hundred and sixty-five (365) day year, shall be made on a daily basis in order to compute Rent for such irregular period.

4.4 Waiver of Offset

The Tenant hereby waives and renounces any and all existing and future claims, offsets and compensation against any Rent and agrees to pay such Rent regardless of any claim, offset or compensation which may be asserted by the Tenant or on its behalf.

4.5 Net Lease

The Tenant acknowledges and agrees that it is intended that this Lease shall be a completely net lease for the Landlord except as shall be otherwise provided herein, and that the Landlord shall not be responsible during the Term for any costs, charges, expenses and outlays of any nature whatsoever arising from or relating to the Premises, and the Tenant, except as shall be otherwise provided herein, shall pay all charges, impositions and costs of every nature and kind relating to the Premises.

ARTICLE 5

TENANT’S COVENANTS

The Tenant covenants with the Landlord as follows:

5.1 Rent

To pay the Annual Base Rent, Additional Rent and the Management Fee on the days and in the manner provided herein.

5.2 Permitted Use

To use the Premises only for the purpose set out in section 1.1 (h) and not to use or permit to be used the Premises or any part thereof for any other purpose without first obtaining the consent of the Landlord (which shall not be unreasonably withheld or delayed).

5.3 Waste and Nuisance

Not to commit or permit any waste or injury to the Premises including the Leasehold Improvements and any overloading of the capacity of a utility, electrical or mechanical facility in the Premises.

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5.4 Insurance Risks

Not to do, omit to do or be done or permit to be done or omitted to be done upon the Premises anything that would cause any policy of insurance to be subject to cancellation.

5.5 Cleanliness and Heating

(a) Not to permit the Premises to become untidy, unsightly or hazardous or permit unreasonable quantities of waste or refuse to accumulate therein. In addition, the Tenant shall regulate the heating, ventilating and air-conditioning facilities serving the Premises so as to maintain reasonable conditions of temperature and humidity within the Premises so as to prevent any damage thereto by reason of frost, moisture or otherwise, shall make all necessary maintenance, repairs and, subject to Section 7.2, replacements to said facilities, (reasonable wear and tear excepted).

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the HVAC system with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding Section 5.5(b), so long as the Tenant is BWAY Corporation, or a direct or indirect wholly owned subsidiary of BWAY Corporation, the Tenant shall not be required to enter into a service contract for the HVAC system with a third party contractor, provided that the Tenant covenants to maintain or cause to be maintained the HVAC system to the same standard as would a professional third party contractor performing inspections at regular intervals in accordance with industry standards. In the event the Tenant breaches the foregoing covenant, the Tenant shall thereafter, for the balance of the Term, be required to enter into a service contract as required under Section 5.5(b) and, without limiting the Tenant’s obligations under Section 7.1, shall be responsible for the cost of all repairs and replacements to the HVAC system resulting from said breach.

5.6 Compliance with Laws

To comply at its own expense with all municipal, federal, provincial, sanitary, fire and safety laws, bylaws, regulations and requirements pertaining to the operation and use of the Premises, signage, trade fixtures, furniture and equipment installed therein and the making by the Tenant of any repairs, changes or improvements therein, provided that the Tenant’s obligations and covenants relating to compliance with Environmental Laws shall be governed by Article 9 below.

5.7 Overholding

That if the Tenant shall continue to occupy the Premises after the expiration of this Lease without any further written agreement and without objection by the Landlord (which

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shall not result in a tacit renewal of this Lease despite any legal presumption to the contrary) the Tenant shall be a monthly tenant at a monthly rent equal to 150% of the Annual Base Rent payable in respect of the last month of the Term, such rent to be payable by the Tenant as set forth in Article 4 hereof and (except as to length of tenancy) on and subject to the provisions and conditions herein set out, including the obligation to pay Additional Rent, the whole, without prejudice to the rights and recourses of the Landlord.

5.8 Signs

The Tenant shall be permitted to install, at its sole cost and expense, signage on the Premises, including the Building, provided such signage complies with all applicable lawful governmental requirements. The Tenant shall remove such signage at the expiry or earlier termination of the Term and shall repair any damage caused by the installation or removal of the signage.

5.9 Inspection and Access

To permit the Landlord, upon reasonable prior notice (which shall not in any event be less than 24 hours) and during normal business hours, from time to time, or at any time in the event of an emergency, to enter and to have its authorized agents, employees and contractors enter the Premises for the purpose of inspection, maintenance, making those repairs which the Landlord is required to make hereunder to the Premises; and the Tenant shall provide free and unimpeded access for the purpose, and shall not be entitled to compensation for any inconvenience, nuisance or discomfort caused thereby, but the Landlord in exercising its rights hereunder shall proceed to the extent reasonably possible so as to minimize interference with the Tenant’s use and enjoyment of the Premises.

5.10 Showing Premises

The Tenant shall permit the Landlord and its authorized agents and employees, acting reasonably and without interrupting the Tenant’s business, to show the Premises:

(a) to prospective tenants during the hours of 8:00 a.m. to 6:00 p.m. Monday to Friday, inclusive, of the last six (6) months of the Term, or if the Tenant has exercised a right to extend the Term under section 3.2, the last six (6) months of such Extension Term; and

(b) to prospective purchasers and lenders during the hours set forth in section 5.10(a) throughout the Term and any Extension Terms.

The Landlord shall give the Tenant reasonable prior notice of any such showing, and at the request of the Tenant shall effect such showing in the company of a Tenant representative (provided that the Tenant shall not unreasonably delay such showing by reason of making a Tenant representative available).

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5.11 Equipment

The Tenant shall be responsible for and pay the cost of installation, operation, maintenance and replacement of the equipment required by its occupancy of the Premises including, without limitation, security systems, sprinkler systems, racking, rail siding, fencing in and around the Premises, telephones, computers and other communications facilities and equipment.

5.12 Floor Loads

The Tenant shall not place a load upon any portion of any floor of the Premises which exceeds the floor load which the area of such floor being loaded was designed to carry, having regard to the loading of adjacent areas and that which is allowed by applicable provincial building codes. The Tenant shall repair any damage done in the Premises by reason of any excessive weight placed in the Premises or excessive vibration caused in the Premises.

5.13 Glass

The Tenant shall restore or replace forthwith, at its expense, any broken or damaged glass on, in or upon the Premises.

ARTICLE 6

LANDLORD’S COVENANTS

6.1 Quiet Enjoyment

The Landlord covenants with the Tenant that, provided the Tenant duly and punctually pays the rent hereby reserved and performs the covenants on its part contained, the Tenant shall and may peaceably possess and enjoy the Premises for the Term hereby granted without any interruption or disturbance from the Landlord, its successors and assigns or any other persons lawfully claiming by, from, through or under it.

ARTICLE 7

REPAIR, MAINTENANCE, DAMAGE AND DESTRUCTION

7.1 Maintenance and Repairs

(a) The Tenant shall keep the Premises as would a careful and prudent owner consistent with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located, including all Leasehold Improvements and all trade fixtures. This obligation includes, without limitation, the following:

(i) repairs and, maintenance to the plumbing, electrical ventilating, heating, air conditioning and HVAC systems and other base building systems and equipment, including the systems provided for bringing utilities to the Building, doors, door seals, rail siding, dock seals and levellers, the roof and all component parts thereof (including without limitation the repair

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and maintenance of the waterproof membrane, to the extent that such repairs and maintenance expenses do not constitute a capital cost in accordance with generally accepted accounting principles, which capital costs will be treated as capital repairs pursuant to Section 7.2 provided that they are not attributable to a breach by the Tenant under Section 7.1(b)), plate glass, signs, hardware, partitions, mechanical, electrical, lighting and plumbing fixtures and systems, wiring, piping, water, sewers and gas connections, drains and mains attributable to the Property and which serve the Building, ceilings, floors, stairs, platforms, walls, thresholds, and all operating equipment in the Premises, exterior walls, parking areas, driveways, entrances, glass windows, mouldings and all other machinery, operating equipment and facilities belonging to, forming part of or connected with the Premises and the Building;

(ii) normal levelling, grading and patching of yard and maintenance of asphalt and paving; and

(iii) keeping the driveways, parking areas, entrances, walks, grounds, sidewalks and curbs forming part of the Property clean and free of snow and ice;

(b) The Tenant shall maintain, at the Tenant’s expense, a service contract for the maintenance of the roof components with a reputable third party contractor chosen by the Tenant and approved in advance by Landlord in writing (such approval not to be unreasonably withheld or delayed), and shall ensure that the Landlord is at all times in possession of a copy of such service contract and shall promptly deliver to Landlord copies of regular inspection reports and details of repairs.

(c) Notwithstanding anything herein, the Landlord shall carry out the repairs and replacements in respect of the identified costs for years 1 to 3 as set out in the Capital Reserve Table dated May 3, 2006 annexed as Appendix B to the Property Condition report dated April 21, 2006 prepared by Golder Associates in favour of BWAY Corporation at the Landlord’s sole cost and expense within such time frames as would a prudent landlord and in any event prior to the Lease Expiration Date set forth in Section 1.1(e)(iii).

(d) At the expiration of the Lease or any renewals or extensions thereof, the Tenant shall surrender the Premises to the Landlord in the manner provided for in section 15.8.

(e) The Landlord shall be responsible for and shall carry out, at its sole cost and expense, all repairs required as a result of:

(i) inherent structural defects or weaknesses in the Premises;

(ii) defects in repairs or construction performed or installations made by or on behalf of the Landlord; and

(iii) the negligent acts or omissions of the Landlord.

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(f) Prior to or within thirty (30) days after occupation of the Premises by the Tenant, and prior to or within thirty (30) days following the departure from the Premises by the Tenant, representatives of the Tenant and the Landlord shall make a joint inspection of the Premises and record the condition thereof on an inspection checklist. Within ten (10) days after said initial joint inspection, a copy of the inspection checklist shall be sent to both the Landlord and the Tenant, and such inspection checklist shall form a part of this Lease.

7.2 Capital Repairs

Notwithstanding anything to the contrary contained in this Lease except for repairs and other work contemplated by sections 7.1(c) and (e) and Article 9, to the extent that the cost of any repair or replacement to the Premises constitute a capital cost in accordance with generally accepted accounting principles, the Landlord shall make such repairs or replacements, provided that all such repairs or replacements shall be consistent with the existing building standard and with the general standards of industrial buildings of similar age, character and location in the city in which the Building is located. The cost of such repair or replacement shall be amortized over the useful life expectancy of the asset repaired or replaced on a straight line basis and the Tenant shall pay to the Landlord in each year of the Term the amortized amount of such cost within thirty (30) days after receipt of an invoice therefor from the Landlord. Any replacement or repair to the Structure of the Building, replacement of any of the base building systems servicing the Building and replacement of asphalt or other paving shall constitute a capital cost.

7.3 Damage, Destruction and Termination

(a) If the Building becomes Untenantable such that the Building or any substantial part thereof is rendered not reasonably capable of use and occupancy by the Tenant for its use thereof pursuant to this Lease then:

(i) from and after the date of occurrence of the event rendering the Building Untenantable and until the Premises are again reasonably capable of use and occupancy as aforesaid, Rent shall abate from time to time in proportion to the part or parts of the Building not reasonably capable of use and occupancy; and

(ii) unless this Lease is terminated as hereinafter provided, the Landlord shall repair such damage with all reasonable diligence to the extent only of insurance proceeds actually received by the Landlord (the “Landlord’s Work”). The Landlord’s obligation to rebuild and restore the Premises and the Building shall not include the obligation to rebuild, restore, replace or repair, without limitation, any chattel, furniture, inventory, fixtures (including trade fixtures), Leasehold Improvements including, without limitation, any alterations constructed or installed for or on behalf of the Tenant or for its benefit, installations, additions or partitions in respect of which the Tenant is required to maintain insurance under this Lease, or any other thing that is the property of the Tenant located on, in, under, above or which serve the Premises. Nothing herein shall require

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the Landlord to rebuild the Premises and the Building in the condition and state that existed before the damage, but the Premises and the Building, as rebuilt, will have reasonably similar facilities and services to those that existed prior to the damage.

(b) If the Building is substantially damaged or destroyed by any cause to the extent such that in the reasonable opinion of the Landlord’s architect or engineer (to be delivered to the Landlord and Tenant within thirty (30) days after the damage or destruction) it cannot be repaired or rebuilt (based on standard hours of construction work) or if access cannot be restored within twelve (12) months after the occurrence of the event rendering the Building Untenantable or the expiration of the Term (whichever is sooner), either the Landlord or the Tenant may at its option, exercisable by written notice to the other party given within ninety (90) days after the occurrence of such damage or destruction, terminate this Lease, in which event the Landlord shall not be bound to repair, and the Tenant shall instead deliver up possession of the Premises to the Landlord with reasonable expedition but in any event within sixty (60) days after delivery of such notice of termination, and Rent shall be apportioned and paid to the date upon which possession is so delivered up (but subject to any abatement to which the Tenant may be entitled under section 7.3(a) by reason of the Premises having been rendered in whole or in part not reasonably capable of use and occupancy), but otherwise the Landlord shall repair such damage with such reasonable diligence.

(c) If neither party has elected to terminate this lease pursuant to section 7.3(b) and if the Landlord has not completed the repair or the rebuilding to such an extent that it is substantially complete and ready for the Tenant’s occupancy within twelve (12) months after the occurrence of the event rendering the Building Untenantable (subject to any event of force majeure referred to in section 14.1 arising after the occurrence of the original event rendering the Building Untenantable) then the Tenant may by notice to the Landlord elect to terminate this Lease effective as of the date of the notice or such later date as may be specified therein.

(d) The Tenant shall make available all proceeds of insurance with respect to the Building for the purposes of any such repairing or rebuilding.

ARTICLE 8

TAXES AND OPERATING COSTS

8.1 Tenant’s Tax Obligations

During the Term, the Tenant shall be responsible to:

(a) pay when due, all taxes, business taxes, property taxes, business licence fees, permit fees and other taxes, rates, duties or charges levied, imposed or assessed by lawful authority in respect of the use and occupancy of the Premises by the Tenant, the business or businesses carried on therein by the Tenant, or the equipment, machinery or fixtures brought therein by or belonging to the Tenant, or to anyone occupying the Premises with the Tenant’s consent, or from time to

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time levied, imposed or assessed in the future in lieu thereof, and shall pay to the Landlord upon demand the portion of any tax, rate, duty or charge levied or assessed upon the Land and Building that is attributable to any equipment, machinery or fixtures on the Premises which are not the property of the Landlord; and

(b) (i) pay promptly directly to the relevant taxing authority as and when due all Taxes that are levied, rated, charged or assessed from time to time, in respect of the Premises on the basis of any real property tax bill or assessment notice rendered by any lawful taxing authority; (ii) within ten (10) days after receipt of any such real property tax bill or assessment notice, provide a copy thereof to the Landlord; and (iii) promptly deliver to the Landlord receipts evidencing the payment of all such Taxes and such other information in connection therewith as the Landlord reasonably requires. The Tenant will pay all Taxes when they become due and payable, before any interest, penalty, fine or cost may be imposed for late or non-payment, to the department, office or bureau charged with their collection. If the Tenant should fail to pay any Taxes as required under this Section, the Landlord shall have the right to pay such Taxes at the Tenant’s expense, and the Tenant shall pay to the Landlord as Additional Rent, upon demand, all costs and expenses incurred therefor.

8.2 Goods and Services Taxes

The Tenant shall pay to the Landlord all Goods and Services Tax exigible under the relevant taxing statute in respect of the Rent payable by the Tenant under this Lease, or in respect of the rental of premises by the Tenant under this Lease. Goods and Services Tax shall be payable at the same time as the Tenant pays Rent to the Landlord. Notwithstanding any other section of this Lease, the amount payable by the Tenant under this section shall be deemed not to be Rent, but the Landlord shall have the same remedies for and rights of recovery of such amount as it has for recovery of Rent under this Lease.

8.3 Tenant’s Share

Upon expiry or earlier termination of the Term or, if the Term is extended, the last Extension Term, the Landlord shall pay to the Tenant any overpayment or accrued credit balance of the Taxes paid by the Tenant to the taxing authority by the Tenant. Notwithstanding the foregoing, the Tenant acknowledges that there may be a delay in the invoicing of property taxes and business taxes for the Land for the last year of the Term and that for the last year of the Term, the Tenant shall be responsible for payment of its pro-rata share of the actual Taxes.

In any calendar year of the Term in which the Tenant does not lease the Premises for the entire twelve month period, the Landlord may estimate the Taxes payable by the Tenant, and the Tenant agrees to pay to the Landlord Taxes as so estimated, in monthly instalments, in advance, on the same dates and in the same manner as Annual Base Rent. The Landlord’s estimate of Taxes may be such that, by the due date of the last instalment of Taxes payable to the relevant taxing authority, the Landlord may or may not have received from the Tenant the full amount of the Tenant’s share of Taxes for such calendar year. Promptly following receipt of the

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final bill and/or assessment for Taxes for the period for which the estimated payments of Taxes have been made, the Landlord will give notice to the Tenant of exact amount of Taxes (together with copies of the relevant tax bills and/or assessments) and, if necessary, an adjustment will be made between the parties within thirty (30) days after such notice.

8.4 Notices of Assessment etc.

(a) The Tenant shall, at the Landlord’s request, promptly deliver to the Landlord,

(i) receipts for payment of all Taxes payable by the Tenant;

(ii) notices of any assessments for Taxes or other assessments received by the Tenant that relate to the Premises, and

(iii) whatever other information relating to Taxes in the Tenant’s possession that the Landlord reasonably requests from time to time.

(b) The Tenant shall deliver to the Landlord, at least ten (10) days before the last date for filing appeals, notice of any appeal or contestation that the Tenant intends to institute with respect to Taxes payable by the Tenant and obtain the prior written consent of the Landlord for the appeal or contestation, which consent shall not be unreasonably withheld. If the Tenant obtains the Landlord’s consent and does not pay the Taxes before the appeal or contestation, the Tenant shall,

(i) deliver to the Landlord such security for the payment of the Taxes as the Landlord reasonably requires;

(ii) promptly and diligently prosecute the appeal or contestation; and

(iii) keep the Landlord informed on all aspects of it.

(c) The Tenant shall indemnify and save the Landlord harmless from all loss, cost, charges and expenses arising from Taxes payable by the Tenant whether against the Landlord or the Tenant including, but not limited to increases in Taxes arising directly or indirectly out of an appeal or contestation by the Tenant.

(d) The Landlord shall promptly deliver to the Tenant notices of any assessments or bills for Taxes or other assessments or bills received by the Landlord that relate to the Premises. The Landlord shall not institute any tax appeal or other contestation of Taxes without first obtaining the consent of the Tenant which shall not be unreasonably withheld.

8.5 Utility/Communication/Service Charges

The Tenant shall pay all charges for services and utilities including electricity, gas, air-conditioning, heating, fuel, water, sewer, telephone, rail siding leases and security, delivered or provided to or made available upon the Premises, and other costs which are metered, charged, levied or rated directly to the Tenant in respect of the Premises, and if, at any time, for

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any reason, during the Term or any renewal or extension thereof, the Landlord is required to pay any or all of the foregoing, then a sum equal to the amount so paid shall forthwith become due and be collectible upon demand, failing which such sums shall become Additional Rent and the Landlord shall have the same rights and remedies with respect to said sum as if the same were Rent reserved hereunder.

ARTICLE 9

ENVIRONMENTAL MATTERS

9.1 Environmental Laws

(a) In its use and occupation of the Premises, the Tenant shall comply with Environmental Law in all material respects. To the extent that the Premises or the Tenant are not in compliance with applicable air approvals and related air emission matters under Environmental Law on the Commencement Date, the Tenant shall pursue diligently any approvals or certificates required by Environmental Law with respect to air emissions.

(b) Subject to compliance with Environmental Law, the Tenant may bring onto the Premises, store, handle, use and transport any substance, including any Contaminant or waste, that may be, or has been, used in connection with its operations, including injection molding, silkscreen printing and chiller operations, and drum and pail reconditioning, cleaning, painting and sealing.

(c) Subject to compliance with Environmental Law, the Tenant may continue to use any existing storage tanks at the Premises and may replace such tanks from time to time. In addition to replacing existing tanks, the Tenant may install new above ground and underground storage and settling tanks provided that, in the case of new tanks, the Tenant shall first obtain the consent of the Landlord as to the location and installation of any such tank in accordance with the provisions of section 11.1.

(d) All Contaminants brought or permitted onto the Premises during the Term by the Tenant, its employees or a Transferee, despite any other provisions of this Lease to the contrary and any expiry, termination or disclaimer of this Lease, shall be and remain the property and sole responsibility of the Tenant.

9.2 Tenant’s Responsibility

(a) Except to the extent contributed to by a Landlord Party and except for those matters listed in Section 9.5(a) for which the Landlord shall be responsible, the Tenant shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants on, in or under the Premises during the Term of the Lease. Except (i) as caused by or contributed to by a Landlord Party, and (ii) for those matters listed in Section 9.5(a), the Tenant shall indemnify, defend (utilizing counsel satisfactory to the Landlord) and hold harmless the Landlord and the Landlord’s respective officers, directors, beneficiaries, shareholders, partners, agents and employees

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from all Claims arising out of or in any way connected with any Release of any Contaminants that occurs during the Term of this Lease, at, in, on, from, under, or about the Premises or the Building, or which arises at any time from the Tenant’s use or occupancy of the Premises, or from the Tenant’s failure to provide all information, make all submissions, and take steps required by all authorities under Environmental Law.

(b) Upon the occurrence of any material Release of a Contaminant at the Premises and upon the Tenant becoming aware of such Release, the Tenant shall immediately give written notice to the Landlord. In any event, the Tenant shall immediately take all steps required by Environmental Law to remedy or otherwise address the situation giving rise to any Release.

(c) If any work is required in accordance with this section 9.2 the Tenant shall prepare all necessary studies, plans and proposals and submit them to the Landlord for approval, which approved shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Tenant shall keep the Landlord fully informed of the progress of the work. If the Landlord has reasonable grounds for believing that the Tenant will not promptly or properly carry out such work, the Landlord may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Landlord does so, the Tenant shall pay for all costs in connection therewith, within thirty (30) days after the Landlord has incurred the costs and made written demand to the Tenant.

(d) The Tenant covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

9.3 Assessment of the Premises

(a) Prior to the Commencement Date, or shortly thereafter, the Landlord will obtain, at its cost, a Phase II Environmental Site Assessment Report (the “Baseline Phase II”) to identify those Contaminants, and the quantities thereof, present at, in or under the Premises as at the Commencement Date (the “Baseline Condition”). Prior to causing any such environmental assessment, the Landlord will obtain a written proposal from its environmental consultant as to the recommended scope of the assessment for the Premises, which proposal is subject to the Tenant’s prior written approval, which approval shall not be unreasonably withheld (the “Baseline Scope”). The Landlord will deliver a copy of the Baseline Phase II to the Tenant prior to the Commencement Date, or shortly thereafter. Without limiting any other provision herein, the Landlord and the Tenant shall, throughout the term, maintain the Premises at the Baseline Condition in accordance with their respective obligations under this Article 9.

(b) The Landlord may at any time during the Term, if it has reasonable grounds to believe that the Tenant has not complied with Environmental Law in any material respect, including if it has in good faith reason to believe that there has been any

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Release of any Contaminant in, on, over, under or about the Premises that would reasonably be expected to give rise to a material liability pursuant to Environmental Law, enter the Premises upon reasonable prior notice to the Tenant and cause an environmental assessment with respect to the suspected non-compliance with Environmental Law. In the case of an assessment under this section 9.3(a) the Landlord shall consult with the Tenant as to when the assessment shall be carried out and shall minimize any interference with the Tenant’s business.

(c) The scope and breadth of such environmental assessment shall be reasonable and shall not unduly interfere with the conduct of business by the Tenant in the Premises. The resulting environmental assessment shall be addressed to both the Landlord and the Tenant and copies given to both. The Landlord shall be solely responsible for the cost of any such assessment unless such assessment reveals any material breach by the Tenant of Tenant’s covenant contained in this Lease, in which event the Tenant shall reimburse the Landlord the cost of such assessment.

(d) If any assessment reveals any breach by the Tenant of the Tenant’s covenant contained in this Lease, the Tenant shall take reasonable steps as are necessary so as to rectify such breach. In carrying out such work, the Tenant shall keep the Landlord informed of the progress of the work.

9.4 Contaminants at the End of the Term

Upon the expiry of the Term, or at such other times as may be required by any lawful governmental authority, the Tenant shall remove or otherwise address as required by Environmental Law all Contaminants from the Premises which were placed, brought or permitted onto the Premises during the Term by the Tenant, and carry out all work necessary to address such Contaminants, all at the Tenant’s sole cost and expense. The Tenant will, prior to the end of the Term, at its cost, deliver to the Landlord a Phase II Environmental Assessment prepared by a reputable consulting or engineering firm approved in advance by Landlord in writing, evidencing the environmental condition of the Property (the “Term Phase II”). The scope of the Term Phase II shall be equivalent to the Baseline Scope.

9.5 Landlord’s Indemnity and Covenant

(a) Except to the extent contributed to by a Tenant Party, the Landlord will indemnify, defend (utilizing counsel satisfactory to the Tenant) and hold harmless the Tenant and the Tenant’s respective officers, directors, beneficiaries, shareholders, partners, agents and employees from all Claims, and shall be solely responsible and liable for any work required by any governmental authority having jurisdiction with respect to any Contaminants that occur or arise as a result of:

(i) the existence of any Contaminant on, in or under the Premises as at the Commencement Date or arising after the expiry of the Term and following

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the completion of any remediation and/or work for which the Tenant is responsible hereunder; or

(ii) the migration, transfer or movement of any Contaminant onto, into or through the Premises from any other lands; or

(iii) the existence of any Contaminant on, in or under the Premises contributed to or caused by a Landlord Party.

Upon the occurrence of any material quantity of a Contaminant at or from the Premises and upon the Landlord becoming aware of such Contaminant, the Landlord shall immediately give written notice to the Tenant. In any event, the Landlord shall immediately take all steps required by Environmental Law to remedy the situation giving rise to any such Contaminant arising or resulting from the matters listed in Subsections 9.5(a)(i), (ii) and (iii) above.

(b) If any work is required under section 9.5(a), the Landlord shall prepare all necessary studies, plans and proposals and submit them to the Tenant for approval, which approval shall not be unreasonably withheld, provide all bonds and other security required by any lawful governmental authorities and carry out the work required. In carrying out such work, the Landlord shall keep the Tenant fully informed of the progress of the work. If the Tenant has reasonable grounds for believing that the Landlord will not promptly or properly carry out such work, the Tenant may, in its sole discretion, elect to carry out all such work, or any part of it, and if the Tenant does so, the Landlord shall pay for all costs in connection therewith, within thirty (30) days after the Tenant has incurred the costs and made written demand to the Landlord.

(c) The Landlord covenants, acknowledges and agrees that its obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

ARTICLE 10

TRANSFERS, ASSIGNMENTS AND SUBLETTINGS

10.1 Consent Required

(a) Subject to section 10.4, the Tenant shall not effect a Transfer without the prior written consent of the Landlord which consent may not be unreasonably withheld, delayed or conditioned. In determining whether or not to grant its consent, it shall not be unreasonable for the Landlord to withhold its consent if:

(i) the Transferee does not have a history of successful business operations in the business to be conducted in the Premises and a good credit rating; or

(ii) there is a history of defaults under commercial leases by the Transferee, or by companies or partnerships of which the Transferee was a principal shareholder or partner at the time of the defaults.

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The Tenant shall deliver to the Landlord such information as the Landlord may reasonably require to allow the Landlord to satisfy itself as to the foregoing.

(b) This prohibition against a Transfer shall be construed to include a prohibition against any Transfer by operation of law. If the Tenant effects a Transfer, the Landlord may collect Rent from the Transferee and apply the net amount collected to the Rent reserved in this Lease, but no such collection shall be deemed to be a waiver of this covenant or the acceptance of the Transferee as Tenant or a release of the Tenant from its obligations hereunder. Notwithstanding any Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder. Any consent by the Landlord to any Transfer shall not constitute a waiver of the requirement for consent by the Landlord to any subsequent Transfer by either the Tenant or any Transferee.

(c) Any consent granted by the Landlord shall be subject to the Tenant causing the Transferee to execute an agreement directly with the Landlord agreeing:

(i) if the Transferee is an assignee, to be bound by all of the terms contained in this Lease, as if the Transferee had originally executed this Lease as Tenant; or

(ii) if the Transferee is a subtenant or other occupant of the Premises, to do nothing, either by act or omission, that would cause the Tenant to be in default of its obligations under this Lease.

Such agreement and the consent of the Landlord to a Transfer shall be prepared by the Landlord or its solicitors and all reasonable legal and administrative costs with respect thereto shall be borne by the Tenant.

10.2 Change of Control

The prohibition against a Transfer set out in Section 10.01(a) applies to any change in the direct or indirect effective voting control of the Tenant (if the Tenant is or becomes a corporation), unless (i) the Tenant is a public corporation whose shares are listed and traded on any recognized stock exchange in Canada or the United States, and (ii) the Landlord is satisfied that there will be a continuity of business practices and policies, and management of the Tenant. If the Tenant is a partnership or is controlled by a partnership (either directly or indirectly), this prohibition against a Transfer also includes a change in the constitution of the partnership resulting from the withdrawal or addition of any partners. The prohibition also applies to an assignment by operation of law.

10.3 Leasehold Charges

The Tenant may, without the consent of the Landlord effect one or more Transfers to one or more lenders as security for a loan or loans from time to time (such Transfer being a “Leasehold Mortgage”). All rights acquired by such a Transferee (a “Leasehold Lender”) under

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a Leasehold Mortgage shall be fully subordinate to the interest of the Landlord and to the interest of a Mortgagee and subject to the terms and conditions of this Lease.

The Leasehold Lender shall execute and deliver, prior to such Leasehold Mortgage becoming effective, a landlord/lender agreement (the “the Landlord/Lender Agreement”) in form and substance acceptable to the Landlord and the Leasehold Lender but which shall provide, inter alia, as follows:

(a) the Leasehold Lender shall have the unrestricted right to assign, sell, participate, securitize and otherwise deal with its interest in the Leasehold Mortgage without the Landlord’s consent provided that the holder of such interest is bound by the Landlord/Lender Agreement;

(b) the Leasehold Lender shall not take any action against the Premises for breach or default without first giving the Landlord notice of any default by the Tenant under any Leasehold Mortgage;

(c) no voluntary surrender by the Tenant to the Landlord of this Lease or the Premises shall be valid or effective and there shall be no amendment to or cancellation of this Lease without in each case the prior written consent of the Leasehold Lender;

(d) the Landlord shall, concurrently with the delivery to the Tenant of any notice required or permitted under this Lease and prior to commencement of any enforcement proceedings against the Tenant, deliver to the Leasehold Lender a copy of such notice and no such notice to the Tenant shall be effective against the Leasehold Lender until a copy of such notice is given in accordance with the notice provisions of this Lease to such Leasehold Lender. If the Tenant fails to cure the default, the Leasehold Lender shall have a further period of ten (10) days to cure the defaults;

(e) if the Leasehold Lender is enforcing its security under the Leasehold Mortgage it may effect a Transfer in accordance with the terms of this Lease;

(f) if, in the context of enforcing its security under the Leasehold Mortgage, the Leasehold Lender takes possession of the Premises it shall be bound by the terms of the Lease until such time as it shall effect a Transfer whereupon it shall be released;

(g) upon the Leasehold Lender effecting a Transfer the Leasehold Lender shall be released from any obligations under this Lease; and

(h) if the Lease is terminated under any insolvency or bankruptcy proceedings or as a result of any default by the Tenant which is not susceptible to being cured by the Leasehold Lender, then at the request of the Leasehold Lender made within ten (10) days after the date of such termination, the Landlord will enter into a new lease on the same terms and conditions as this lease for a term expiring on the date noted in section l.l(e)(iii), subject to any rights of extension under

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section 3.2, provided, however, that all arrears of Rent shall have been paid to the Landlord and that an amount equal to the Rent that would have been payable under the Lease from the date of such termination to the commencement date of the new lease shall have been paid to the Landlord.

The Landlord shall postpone any right that it may have to distrain or right to remove the personal property of the Tenant in favour of any lender to the Tenant. The Landlord shall execute such waiver document as the lender may require, subject to such amendments and changes as may be reasonably requested by the Landlord.

10.4 Permitted Transfers

Notwithstanding the provisions of section 10.1 and provided that the Tenant is BWAY Corporation or a direct or indirect wholly-owned subsidiary of BWAY Corporation, the Landlord’s consent shall not be required in respect of any Transfer:

(a) which is effected in conjunction with the sale of all or substantially all of the business of the Tenant;

(b) a Transfer to an Affiliate of BWAY Corporation in connection with a bona fide corporate reorganization of the Tenant;

(c) a sublease of the Premises;.

provided, however, that the Landlord is given notice of such Transfer contemporaneously with the Transfer and that the transferee shall enter into an agreement under which it agrees to be bound by the Lease.

Notwithstanding any such Permitted Transfer, except as may be otherwise expressly agreed to in writing by the Landlord, the Tenant and any Indemnifier shall remain jointly and severally liable on this Lease and shall not be relieved of any of their respective obligations hereunder.

10.5 Transfer by Landlord

In the event of the sale, lease or disposition by the Landlord of the Premises or the assignment by the Landlord of this Lease or any interest of the Landlord hereunder and to the extent that the purchaser or assignee agrees in writing in favour of the Tenant to be bound by the covenants and obligations of the Landlord hereunder, the Landlord shall without further agreement be relieved of all liability with respect to such covenants and obligations.

ARTICLE 11

FIXTURES AND IMPROVEMENTS

11.1 Alterations

The Tenant may make Alterations to the Premises without first obtaining the consent of the Landlord provided that such Alterations do not affect the Structure or the base

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building systems. The Tenant will not make any Alterations to the Leased Premises without the Landlord’s prior written approval if such Alterations will affect the Structure or the base building systems. Such consent will not be unreasonably withheld if:

(a) the Alterations will equal or exceed the then current standard for the Building;

(b) adequate plans and specifications are produced; and

(c) the Tenant has obtained all requisite governmental approvals.

All Alterations will be made in a good and workmanlike manner and, if applicable, in compliance with the plans and specifications approved by the Landlord. If the Tenant obtains the consent of the Landlord to any Alteration then, unless as a condition of granting such consent, the Landlord requires that such Alteration be removed at the expiry or earlier termination of the Term the Tenant shall not be required to remove or make good any such Alteration at the expiry or earlier termination of the Term. If the Landlord’s consent is not obtained then prior to the expiry or earlier termination of the Term, such Alteration shall be removed by the Tenant and all damage caused by the installation and removal of such Alteration be repaired unless the Tenant receives written notice from the Landlord prior to the expiry of the term advising the Tenant that the Landlord will not require the Tenant to remove such Alterations.

11.2 Liens and Encumbrances on Fixtures and Improvements

In connection with any Alterations to the Premises by the Tenant, the Tenant shall comply with all the provisions of the Construction Lien Act (Ontario) (or the equivalent statute in the jurisdiction in question) (the “Act”) and other statutes from time to time applicable thereto (including any provision requiring or enabling the retention of portions of any sums payable by way of holdbacks), shall permit the Landlord to take all steps to enable the Landlord to obtain the benefit of the provisions of the Act and except as to any lawful holdback, shall promptly pay all accounts relating thereto. If and when any builder’s or other lien for work, labour, services or materials supplied to or for the Tenant or for the cost of which the Tenant may be in any way liable or claims therefor shall arise or be filed the Tenant shall within twenty (20) days after receipt of notice thereof procure the discharge thereof, including any certificate of action registered in respect of any lien, by payment or giving security or in such other manner as may be required or permitted by law, and failing which the Landlord may in addition to all other remedies hereunder avail itself of its remedy under section 15.1 and may make any payments into court (but not in any event to the lien claimant) required to procure the discharge of any such liens, shall be entitled to be reimbursed by the Tenant as provided in section 15.1, and its right to reimbursement shall not be affected or impaired if the Tenant shall then or subsequently establish or claim that any lien so discharged was without merit or excessive or subject to any abatement, setoff or defence.

11.3 Removal of Fixtures and Improvements

Subject to section 15.8, the Tenant may from time to time throughout the Term remove such of its trade fixtures, furniture and equipment from the Premises as it sees fit. The Tenant shall, in the case of every removal either during or at the end of the Term, immediately

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make good any damage caused to the Premises by the installation and removal of such furniture and equipment and, to the extent required pursuant to section 11.1, Leasehold Improvements.

11.4 Non-compliance

In the event that the Landlord determines that any alterations, additions or improvements made to the Premises or the Building systems serving the Premises by the Tenant do not comply with all applicable statutes, regulations or bylaws of any municipal, provincial or other governmental authority, and the Tenant, after receipt of notice from the Landlord, does not rectify such non-compliance with due diligence, then the Landlord may, at the Landlord’s option, rectify or repair said deficiency which shall be at the Tenant’s sole cost and expense, the same to be paid as Additional Rent by the Tenant to the Landlord upon demand.

ARTICLE 12

INSURANCE AND LIABILITY

12.1 Landlord’s Insurance

(a) The Landlord shall, at all times throughout the Term, carry: (i) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent landlords of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence; (ii) rental income insurance; and (iii) other forms of insurance as would be carried by a prudent owner of a similar building and considered advisable by the Landlord or any Mortgagee. The cost of such insurance shall be paid by the Tenant in accordance with Section 12.1(c). The Landlord may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies provided the premiums for such policy are allocated equitably among the properties covered by such blanket insurance policy.

(b) All Landlord’s insurers shall be registered and licensed to carry on the business of insurance in the Province in which the Premises are located and all insurance policies shall:

(i) contain a cross liability and/or severability of interest clause; and

(ii) contain an undertaking by the insurers to notify the Tenant in writing not less than thirty (30) days prior to any material change, cancellation or termination thereof.

(c) The Tenant will pay to the Landlord the insurance premiums in respect of the insurance required to be carried by the Landlord under this section 12.1, as Additional Rent, and in the event of any loss or damage the Tenant shall pay directly to the Landlord any deductible which the Landlord is required to pay toward or for any insured loss relating to the Premises as Additional Rent. The Landlord shall submit the invoice for such insurance premiums or deductibles to the Tenant as they come due and the Tenant shall pay all such amounts within

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thirty (30) days after receipt of such invoice. In the event that the Tenant fails to pay any such premium prior to its due date, the Landlord may pay such premium and claim it from the Tenant as Additional Rent. Notwithstanding any contribution by the Tenant to the cost of insurance premiums provided herein, the Tenant acknowledges and agrees that no insurable interest is conferred upon the Tenant under this Lease for purposes of any policies of insurance carried by the Landlord and the Tenant has no right to receive any proceeds of any such insurance policies carried by the Landlord.

12.2 Tenant’s Insurance

(a) The Tenant shall, at its expense, obtain and maintain in force throughout the Term and any Extension Term and any period when it is in possession of the Premises, in the name of the Tenant with the Landlord and the Mortgagee (if any) as additional named insureds on all property insurance policies, save that the insurance policies referred to in sections 12.2(a)(i) and (ii) below shall name the Landlord as the insured with the Mortgagee (if any), as additional named insured the following insurance:

(i) insurance on the Building and the heating, ventilating and air conditioning, and other building equipment, machinery and systems, and boilers contained therein whether owned by the Landlord or the Tenant against those risks covered by standard “all risks” (including flood and earthquake) property policies in an amount equal to the full replacement value thereof with such reasonable deductibles as would be carried by a prudent owner of a reasonably similar industrial building, having regard to size, age and location;

(ii) broad form boiler and machinery insurance on a blanket repair and replacement basis with limits for each accident in an amount of at least the replacement cost of the Premises and of all boilers, pressure vessels, air-conditioning equipment and miscellaneous electrical apparatus relating to or serving the Premises;

(iii) public liability insurance written on a comprehensive basis with coverage against third party claims for bodily injury, including death, in such amounts as are normally carried by prudent tenants of similar premises from time to time, but in no event less than five million dollars ($5,000,000.00) per occurrence;

(iv) standard owners form vehicle insurance providing third-party liability insurance with not less than three million dollars ($3,000,000.00) inclusive limits, and accident benefits insurance, covering all licensed vehicles owned or operated by or on behalf of the Tenant;

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(v) business interruption insurance covering the Annual Base Rent, the Additional Rent and all other costs and expenses in connection with the Premises, all for a twelve (12) month period; and

(vi) such other forms of insurance and increases of the amount of coverage stipulated in the foregoing sections against such risks and in such amounts as may be customarily obtained by tenants of premises similar to the Premises and any other forms of reasonable and customary insurance as the Landlord and/or a Mortgagee, reasonably requires from time to time, in forms and amounts and for risks against which a prudent tenant would insure with a use similar to that of the Tenant.

(b) All insurance policies provided for in this section 12.2 shall:

(i) be taken out with insurers licensed to carry on the business of insurance in the Province in which the Premises are located;

(ii) be non-contributing with and apply only as primary and not excess to any other insurance available to either or both of the Landlord and the Mortgagee;

(iii) not be invalidated as respects the interests of all and any of the Landlord and the Mortgagee by reason of a breach or violation of warranties, representations declarations or conditions contained in the policies; and

(iv) contain an undertaking by the insurers to notify the Landlord and its Mortgagee in writing not less than thirty (30) days before any material change, cancellation, or termination.

The Tenant may satisfy the foregoing insurance requirements by carrying blanket insurance policies and through one or more insurance policies.

(c) The proceeds of the insurance under Sections 12.2(a)(i) and 12.2(a)(ii) above shall be and are hereby assigned and made payable to the Landlord.

(d) If the Tenant shall fail to take out, renew and keep in force such insurance the Landlord may do so as the agent of the Tenant and the Tenant shall repay to the Landlord any amounts paid by the Landlord as premiums forthwith upon demand.

(e) The Tenant shall furnish to the Landlord certificates or other evidence acceptable to the Landlord as to the insurance from time to time required to be effected by the Tenant pursuant to this Lease and its renewal or continuation in force. No review or approval of any insurance certificate or insurance policy by the Landlord derogates from or diminishes the Landlord’s rights under this Lease.

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12.3 Limitation of Liability

(a) The Landlord releases each Tenant Party from all claims or liabilities in respect of any damage which is actually insured against by the Landlord or is required to be insured against under section 12.1, but only to the extent of insurance proceeds actually received by the Landlord. The Landlord shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Tenant.

(b) The Tenant releases each Landlord Party from all claims or liabilities in respect of any damage which is actually insured against by the Tenant or is required to be insured against under section 12.2, but only to the extent of insurance proceeds actually received by the Tenant. The Tenant shall cause its insurer to deliver confirmation of such release or a waiver of subrogation to the Landlord.

12.4 Indemnity

(a) Subject to section 12.3(a), the Tenant shall indemnify and save harmless the Landlord and each other Landlord Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Landlord Party arising from the conduct of any work by or any act or omission of the Tenant or any assignee, subtenant, agent, employee, contractor, invitee or licensee of the Tenant, and in respect of all costs, expenses and liabilities incurred by any Landlord Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Landlord Party arising from any breach by the Tenant of any of its covenants and obligations under this Lease. The provisions of this section 12.4(a) shall survive the expiry or earlier termination of this Lease.

(b) Subject to section 12.3(b), the Landlord shall indemnify and save harmless the Tenant and each other Tenant Party from and against any and all liability, loss, claims, demands, damages or expenses including legal expenses (on a substantial indemnity basis) in respect of, in connection with or resulting from any bodily injury or death or property damage occurring at, in or about the Premises or claims for other loss or damage sustained by any Tenant Party arising from the conduct of any work by or any act or omission of the Landlord or any assignee, agent, employee, or contractor of the Landlord, and in respect of all costs, expenses and liabilities incurred by any Tenant Party in connection with or arising out of all such claims, including the expenses of any action or proceeding pertaining thereto, and in respect of any loss, costs, expense or damage suffered or incurred by any Tenant Party arising from any breach by the Landlord of any of its covenants and obligations under this Lease. The provisions of this section 12.4(b) shall survive the expiry or earlier termination of this Lease.

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ARTICLE 13

SALE OR FINANCING , SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES

13.1 Sale or Financing of Building

The rights of the Landlord under this Lease may be mortgaged, charged, transferred or assigned to a purchaser or purchasers or to a mortgagee, lending institution or trustee for bond holders (the “Mortgagee”). In the event of a sale or of default by the Landlord under any mortgage, trust deed or trust indenture (the “Mortgage”) and the purchaser or the Mortgagee, entering into possession of the Premises, the Tenant agrees to attorn to and become the tenant of the Mortgagee or the Purchaser under the terms of this Lease. The Landlord shall provide the Tenant with a Non-Disturbance Agreement, in form and substance satisfactory to the Tenant, acting reasonably, from any Mortgagee who holds a Mortgage to which this Lease is subordinate.

The Landlord may assign its rights under this Lease to a lending institution as collateral security for a loan or other financing.

13.2 Subordination and Attornment

If required by any Mortgagee and, provided that such Mortgagee has first entered into a Non-Disturbance Agreement with the Tenant, this Lease and all rights of the Tenant hereunder shall be subject and subordinate to all Mortgages now or hereafter existing which may now or hereafter affect the Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. Subject to the foregoing, the Tenant agrees to execute and deliver promptly whenever requested by the Landlord or by such Mortgagee an instrument of subordination or attornment, as the case may be.

13.3 Registration

The Landlord agrees that the Tenant may prepare and register, at the Tenant’s cost, a notice of this Lease against title to the Premises, on terms and conditions acceptable to the Landlord. Such notice shall only describe the parties, the Premises, the Term, the Commencement Date, and any options to renew the Term. The Tenant covenants and agrees to discharge the notice of lease, at its cost, upon the expiry or earlier termination of the Lease.

13.4 Certificates

Each of the Tenant and the Landlord, whenever requested by the other, shall from time to time execute and deliver to the party making the request and to any other Person designated by the party making the request a certificate in writing as to the status of this Lease at that time, including as to whether it is in full force and effect, is modified or unmodified, confirming the rent payable hereunder and the state of the accounts between the Landlord and Tenant, the existence or non-existence of defaults, and any other matters pertaining to this Lease as to which as may reasonably be requested.

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ARTICLE 14

DELAY; NO WAIVER

14.1 Unavoidable Delay

Notwithstanding the terms of this Lease, if the Landlord or the Tenant is, in good faith, delayed or prevented from doing anything required by this Lease, because of a strike; labour trouble; inability to get materials or services; power failure; restrictive governmental laws or regulations; riots; insurrection; sabotage; rebellion; war; act of God; or any other similar reason, that is not the fault of the party delayed, the doing of the thing is excused for the period of the delay and the party delayed will do what was delayed or prevented within the appropriate period after the delay. The preceding sentence does not excuse the Tenant from payment of Rent in the amounts and at the times specified in this Lease.

14.2 No Admission

The acceptance of any Rent from or the performance of any obligation hereunder by a person other than the Tenant shall not be construed as an admission by the Landlord of any right, title or interest of such person as a subtenant, assignee, transferee or otherwise in the place and stead of the Tenant.

14.3 Part Payment

The acceptance by the Landlord of a part payment of any sums required to be paid hereunder shall not constitute waiver or release of the right of the Landlord to payment in full of such sums.

ARTICLE 15

TENANT’S DEFAULT, REMEDIES OF LANDLORD AND SURRENDER

15.1 Remedying by Landlord, Non-payment and Interest

In addition to all the rights and remedies of the Landlord available to it in the event of any default hereunder by the Tenant either by any other provision of this Lease or by statute or the common law, the Landlord, provided it has given the Tenant at least five (5) Business Days’ prior written notice in respect of monetary defaults and twenty (20) days’ prior written notice for non-monetary defaults (or such longer period as may be required under the circumstances provided that the Landlord’s interests are not prejudiced):

(a) shall have the right at all times to remedy or attempt to remedy any default of the Tenant, and in so doing may make any payments due or alleged to be due by the Tenant to third parties and may enter upon the Premises to do any work or other things therein and in such event all expenses of the Landlord in remedying or attempting to remedy such default shall be payable by the Tenant to the Landlord forthwith upon demand;

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(b) shall have the same rights and remedies in the event of any non-payment by the Tenant of any amounts payable by the Tenant under any provision of this Lease as in the case of non-payment of Rent;

(c) if the Tenant shall fail to pay any Rent promptly when due, shall be entitled, if it shall demand it, to interest thereon at the Prime Rate plus 2% from the date upon which the same was due until actual payment thereof; and

(d) shall be entitled to be reimbursed by the Tenant, and the Tenant shall forthwith pay the Landlord, the amount of all costs and expenses (including, without limitation, legal costs on a solicitor and own client basis) incurred by the Landlord in connection with the default or in efforts to enforce any of the rights, or to seek any of the remedies, to which the Landlord is or may be entitled hereunder.

Notwithstanding the foregoing, in the event of an emergency, the Landlord may take such of the foregoing actions as are required to prevent damage to the Premises or harm to individuals without first giving the above stated prior written notice provided that the Landlord shall give the Tenant as much notice as reasonably possible prior to taking such actions.

15.2 Remedies Cumulative

The Landlord may from time to time resort to any or all of the rights and remedies available to it in the event of any default hereunder by the Tenant, either by any provision of this Lease or by statute or the general law, all of which rights and remedies are intended to be cumulative and not alternative, as the express provisions hereunder as to certain rights and remedies are not to be interpreted as excluding any other or additional rights and remedies available to the Landlord by statute or the common law.

15.3 Right of Re-entry on Default

Provided and it is expressly agreed that:

(a) if and whenever the Rent hereby reserved or other monies payable by the Tenant or any part thereof, whether lawfully demanded or not, are unpaid and the Tenant shall have failed to pay such Rent or other monies within five (5) Business Days after the Landlord shall have given to the Tenant notice requiring such payment; or

(b) if the Tenant shall breach or fail to observe and perform any of the covenants, agreements, provisos, conditions, rules or regulations and other obligations on the part of the Tenant to be kept, observed or performed hereunder, and such breach or failure continues for a period of twenty (20) days (or such longer period as shall reasonably be necessary to cure the default or failure under the circumstances provided the Tenant is proceeding diligently to remedy same) after notice thereof by the Landlord to the Tenant; or

(c) if the Landlord shall have become entitled to terminate this Lease or to re-enter the Premises pursuant to any provision hereof,

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then and in every such case it shall be lawful for the Landlord thereafter to enter into and upon the Premises or any part thereof in the name of the whole and the same to have again, repossess and enjoy as of its former estate, anything in this Lease contained to the contrary notwithstanding.

15.4 Termination and Re-entry

If and whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord, in addition to all other rights and remedies, shall have the right to terminate this Lease forthwith by notice to the Tenant. Upon the giving by the Landlord of such notice, this Lease and the Term shall terminate, and the Tenant shall immediately deliver up possession of the Premises to the Landlord in accordance with section 15.8, and the Landlord may re-enter and take possession of them.

15.5 Certain Consequences of Termination and Re-entry

If the Landlord re-enters the Premises or if this Lease is terminated other than by the passing or expiration of time, then:

(a) notwithstanding any termination or the Term thereby becoming forfeited and void, the provisions of this Lease which relate to the consequences of termination, and the provisions of this Lease as they apply with respect to acts, events and omissions which occurred prior to the termination, shall all survive such termination;

(b) at the Landlord’s option, but without prejudice to the Landlord’s other rights and remedies with respect to recovery of costs, damages and expenses which relate to any default by the Tenant, the Tenant shall pay to the Landlord on demand:

(i) Rent and all other amounts payable under this Lease up to the time of re-entry or the date of termination, whichever is later, including any accelerated rent payable pursuant to section 16.2;

(ii) all damages the Landlord incurs in connection with the re-entering, terminating, re-letting, collecting sums due or payable by the Tenant and storing and realizing upon assets seized, including without limitation, brokerage fees, legal fees and disbursements, the expenses of cleaning and making and keeping the Premises in good order, and the expenses of repairing the Premises and preparing them for re-letting and including the worth at the time of such termination of the excess, if any, of the amount of Rent and charges equivalent to Rent required to be paid pursuant to this Lease for the unexpired remainder of the Term, had it not been terminated, over the then reasonable rental value of the Premises for the remainder of the Term, all of which amounts shall be immediately due and payable by the Tenant to the Landlord; and

(c) the Landlord shall take all such actions as are available to it, acting in a commercially reasonable manner, to mitigate its damages.

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15.6 Waiver of Distress

The Tenant waives and renounces the benefit of any present or future statute taking away or limiting the Landlord’s right of distress and covenants and agrees that notwithstanding any such statute none of the goods and chattels of the Tenant on the Premises at any time during the Term shall be exempt from levy by distress for rent in arrears. The Tenant will not sell, dispose of or remove any of the fixtures, goods or chattels of the Tenant from or out of the Premises during the Term without the consent of the Landlord, unless the Tenant is substituting new fixtures, goods or chattels of equal value or is bona fide disposing of individual items which have become excess for the Tenant’s purposes, and the Tenant will be the owner of its fixtures, goods and chattels and will not permit them to become subject to any lien, mortgage, charge or encumbrance.

15.7 Re-letting

Whenever the Landlord becomes entitled to re-enter upon the Premises under any provision of this Lease, the Landlord in addition to all other rights it may have, shall have the right as agent of the Tenant to enter the Premises and re-let them (for a term or terms shorter or longer than the balance of the Term, granting reasonable concessions in connection therewith) and to receive the rent therefor and to apply any rent derived from re-letting the Premises upon account of the rent due and to become due under this Lease and the Tenant shall be liable to the Landlord for the deficiency, if any.

15.8 Surrender on Termination

Forthwith upon the termination of this Lease, whether by effluxion of time or otherwise, the Tenant shall vacate and deliver up possession of the Premises in a neat and tidy state in accordance with the Tenant’s obligation under this Lease to repair the Premises, but subject to the Tenant’s rights and obligations in respect of removal in accordance with section 11.3. At the same time the Tenant shall surrender to the Landlord at the place then fixed for the payment of Rent all keys and other devices which provide access to the Premises, the Building or any part thereof and shall inform the Landlord of all combinations to locks, safes and vaults, if any, in the Premises.

ARTICLE 16

EVENTS TERMINATING LEASE

16.1 Cancellation of Insurance

If any policy of insurance upon the Building from time to time effected by the Tenant shall be cancelled or about to be cancelled by the insurer by reason of the use or occupation of the Premises by the Tenant or any assignee, subtenant or licensee of the Tenant or anyone permitted by the Tenant to be upon the Premises, the Landlord shall give the Tenant notice thereof forthwith upon receipt of such notice. The Tenant shall have a reasonable period of time after receipt of such notice either:

(a) to take such steps in respect of such use or occupation as shall enable it to reinstate or avoid cancellation of (as the case may be) such policy of insurance; or

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(b) to acquire alternate insurance.

If the Tenant fails to take such steps or to acquire alternate insurance then the Landlord may at its option either (i) terminate the Lease by giving notice of termination to the Tenant as required hereunder; or (ii) enter upon the Premises and remedy such condition and the Tenant shall pay to the Landlord the costs thereof, as Additional Rent, and the Landlord shall not be liable for any loss or damage caused to any property of the Tenant or of other persons located on the Premises as a result of such entry. The Tenant agrees that the exercise by the Landlord of its rights under this Section shall not be deemed to be a re-entry or a breach of any covenant for quiet enjoyment contained in this Lease.

16.2 Prohibited Occupancy, Bankruptcy and Other Events

If without the written consent of the Landlord the Premises shall be used by any other persons than the Tenant or its permitted assigns or permitted subtenants or for any purpose other than that for which the Premises were leased or occupied by any persons whose occupancy is prohibited by this Lease, or if the Premises shall be vacated or abandoned or remain unoccupied for ten (10) consecutive days or more while capable of being occupied, or if the Term or any of the goods and chattels of the Tenant shall at any time be seized in execution or attachment, or if a receiver or receiver-manager is appointed of the business or property of the Tenant, or if the Tenant or any Indemnifier shall make any assignment for the benefit of creditors or any bulk sale, become bankrupt or insolvent or take the benefit of any statute now or hereafter in force for bankrupt or insolvent debtors or (if a corporation) shall take any steps or suffer any order to be made for its winding-up or other termination of its corporate existence, then in any such case the Landlord may at its option terminate this Lease by notice to the Tenant and thereupon, in addition to the payment by the Tenant of Rent and other payments for which the Tenant is liable under this Lease, Rent for the current month and the next ensuing three (3) months’ Rent shall immediately become due and be paid by the Tenant, or party then controlling the Tenant’s affairs.

ARTICLE 17

MISCELLANEOUS

17.1 Notices

All notices, demands and requests required or permitted to be given under this Lease must be in writing and must be delivered personally or by nationally recognized overnight courier or sent by United States certified mail or Canadian registered mail, as applicable, return receipt requested, postage prepaid and addressed to the parties at their respective addresses set forth in section 1.1 or at such other addresses as the parties may designate from time to time by written notice in the manner provided in this section. Notwithstanding the foregoing, if there is a mail strike, slowdown or other labour dispute which might affect delivery of such notice between the time of mailing and the actual receipt of notice, then such notice shall only be effective if actually delivered.

Upon at least ten (10) days’ prior written notice, each party shall have the right to change its address to any other address within the United States of America or Canada. Notices

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shall be deemed given on the date that such notices are deposited with a nationally recognized overnight courier, deposited with the U.S. Postal Service or Canada Post, as applicable, or personally delivered.

17.2 Extraneous Agreements

The Tenant acknowledges that there are no covenants, representations, warranties, agreements or conditions expressed or implied relating to this Lease of the Premises save as expressly set out in this Lease. This Lease may not be modified except by an agreement in writing executed by the Landlord and the Tenant. If there is any conflict between the provisions of this Lease and any such agreement to lease, the provisions of this Lease shall prevail.

17.3 Time of Essence

Time shall be of the essence of this Lease.

17.4 Successors and Assigns

This Lease and everything herein contained shall enure to the benefit of and be binding upon the Landlord and its successors and assigns and on the Tenant and its permitted successors and permitted assigns. References to the Tenant shall be read with such changes in gender as may be appropriate, depending upon whether the Tenant is a male or female person or a firm or corporation. If the Tenant is comprised of more than one person or entity, then each such person and entity is joint and severally bound by the representations, warranties, agreements and covenants of the Tenant herein and any notice given or deemed to have been given at any time to any such person or entity shall be deemed to have been given at the same time to each other such person and entity.

17.5 Waiver

No condoning, excusing or overlooking by the Landlord or the Tenant of any default, breach or non-observance by the Tenant or the Landlord at any time or times in respect of any covenant, proviso or condition herein contained shall operate as a waiver of the Landlord’s or the Tenant’s rights hereunder in respect of any continuing or subsequent default, breach or non-observance or so as to defeat or affect in any way the rights of the Landlord or the Tenant herein in respect of any such continuing or subsequent default or breach, no acceptance of Rent by the Landlord subsequent to a default by the Tenant (whether or not the Landlord knows of the default) shall operate as a waiver by the Landlord, and no waiver shall be inferred from or implied by anything done or omitted by the Landlord or the Tenant save only express waivers in writing.

17.6 Governing Law and Severabilitv

This Lease shall be governed by and construed in accordance with the laws in force in the Province in which the Premises are located. Each of the provisions contained in this Lease is distinct and severable and a declaration of invalidity or unenforceability of any provision or part of a provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision in this Lease. To the extent permitted by applicable law,

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the parties waive any provision of law that renders any provision of this Lease invalid or unenforceable in any respect.

17.7 Captions

The captions appearing in this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease or of any provision thereof. References to articles and sections in this Lease refer to articles and sections of this Lease. This Lease includes all of the schedules attached to it.

17.8 Expropriation

If during the Term the Premises or any part thereof are taken by any lawful power or authority by the right of expropriation the Landlord and the Tenant shall cooperate so that each may receive the maximum awarded to which it is entitled at law.

17.9 Counterparts

This Lease may be signed in counterparts and by electronic scanning or facsimile transmission with the same effect as if the parties had signed one original copy of this Lease. All counterparts shall be construed as if they constitute one and the same original document.

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IN WITNESS WHEREOF the parties have executed this Lease as of the date first above written.

80241 CANADA LTD.
(Landlord)
By:	/s/ M. Arshinoff
Name:	Morton Arshinoff
Title:	President
By:	/s/ Fred J. Arshinoff
Name:	Fred J. Arshinoff
Title:	Vice President
ICL INDUSTRIAL CONTAINERS ULC
(Tenant)
By:	/s/ Kevin C. Kern
Name:	Kevin C. Kern
Title:	Vice President & Treasurer
By:
Name:
Title:

SCHEDULE A

LEGAL DESCRIPTION OF THE LAND

Plan 9926648, Block 3, Lot 21

SCHEDULE B

DEFINITIONS

In this Lease the following expressions shall have the following meanings:

“Additional Rent” means all sums of money to be paid by the Tenant whether to the Landlord or otherwise pursuant to this Lease except for Annual Base Rent.

“Affiliate” has the meaning given to such term in the Business Corporations Act (Ontario) in force as of the date of this Lease.

“Alterations” means any repairs, alterations, replacements, decorations or improvements to the Premises.

“Annual Base Rent” means the annual rent set out in section 1.1(f) or (g) and payable by the Tenant as set forth in section 4.1(a).

“Basic Terms” means those terms of this Lease set out in section 1.1 hereof.

“Building” means that certain building including all fixtures, improvements and amenities located on the Land more particularly described in section l.l(b)(iii) hereof.

“Business Day” means any day other than a Saturday, Sunday or statutory holiday in either the province in which the Premises are located or in the state of Georgia.

“Change of Control” means, in the case of any corporation or partnership, the transfer or issue by sale, assignment, subscription, transmission on death, mortgage, charge, security interest direct or indirect by, operation of law or otherwise, of any shares, voting rights or interest which would result in any change in the effective control of such corporation or partnership.

“Claim” means any claim made by a Person against another for any liabilities, damages, costs or expenses and any suits or actions involving any such claim.

“Commencement Date” has the meaning set out in section 1.l(e)(i).

“Contaminants” means any pollutants, contaminants, deleterious substances, underground tanks, asbestos materials, mould, lead-based paint, hazardous, corrosive, or toxic substances, special waste or waste of any kind, halon, radon, PCB’s, or other pollutants, contaminants or hazardous materials or any other substance which is now or hereafter prohibited, controlled, or regulated under Environmental Laws.

“Current Market Rent” means that rent that would be paid for improved industrial space in industrial buildings of similar age and class in the vicinity where the Premises are located, as between persons dealing in good faith and at arms’ length, without reduction for any cash payment, leasehold improvement allowance, rent-free period or other inducement.

“Environment” means the ambient air, all layers of the atmosphere, surface water, underground water, all land, all living organisms and the interacting natural systems that include components

of air, land, water, organic and inorganic matter and living organisms, and includes indoor spaces.

“Environmental Law” means all federal, provincial, municipal or local statutes, regulations, by-laws, Environmental Permits, orders or rules, and any policies or guidelines of any governmental or regulatory body or agency, and any requirements or obligations arising under the common law, relating to the Environment and, the transportation of dangerous goods or wastes and occupational safety and health law.

“Environmental Permits” means all permits, licences, approvals, consents, authorizations, registrations and certificates issued by or provided to, as the case may be, any governmental body pursuant to an Environmental Law.

“Extension Term” means any extension of the Term pursuant to a right granted to the Tenant under Article 3 or otherwise agreed to by the parties hereto.

“First Extension Term” has the meaning ascribed thereto in section 3.2(a).

“Goods and Services Taxes” means and includes any and all goods and services taxes, sales taxes, value added taxes, business transfer taxes, or any other taxes imposed on the Landlord or the Tenant from time to time in respect of the Rent payable by the Tenant to the Landlord under this Lease or the rental of the Premises or the provision of any goods, services or utilities, whatsoever by the Landlord to the Tenant under this Lease, whether characterized as a goods and services tax, sales tax, value added tax, business transfer tax, or otherwise.

“Indemnifier” means the person who has executed or agreed to execute the Indemnity Agreement that is attached to this Lease as Schedule C.

“Land” means all and singular those certain parcels or tracts of land legally described in Schedule A hereto, comprising the acreage as shown on the site plan in Schedule A hereto.

“Landlord/Lender Agreement” has meaning ascribed thereto in section 10.3.

“Landlord Party” means the Landlord, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Lease” means this Lease and all Schedules attached hereto, as amended from time to time.

“Leasehold Improvements” means all fixtures, improvements, installations, Alterations and additions now or from time to time hereafter made, erected or installed, whether by the Tenant, the Landlord or anyone else, in the Premises with the exception of trade fixtures, racking, and furniture and equipment not of the nature of fixtures, but includes all partitions however fixed (including movable partitions) and includes all wall-to-wall carpeting with the exception of such carpeting where laid over vinyl tile or other finished floor and affixed so as to be readily removable without damage.

“Leasehold Lender” has meaning ascribed thereto in section 10.3.

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“Leasehold Mortgage” has meaning ascribed thereto in section 10.3.

“Lease Year” means the twelve (12) month period from the Commencement Date of the Lease and each twelve (12) month period thereafter during the Term and any Extension Term.

“Management Fee” means an annual fee equal to one per cent (1%) of the Annual Base Rent.

“Mortgage” has the meaning ascribed thereto in section 13.1.

“Mortgagee” has meaning ascribed thereto in section 13.1.

“Non-Disturbance Agreement” means an agreement between the Tenant and a Mortgagee pursuant to which the Mortgagee agrees that provided the Tenant is not in default of any of its obligations hereunder beyond any applicable grace or call period the Tenant shall have quiet enjoyment of the Premises undisturbed by the Mortgagee or any Person claiming through or under the Mortgagee.

“Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity however designated or constituted.

“Premises” means the Land the Building and all improvements and equipment thereon and therein.

“Prime Rate” means the commercial lending rate of interest, expressed as an annual rate, which the chartered bank designated by the Landlord from time to time quotes from time to time in its principal office in Canada as the reference rate of interest and commonly known as its “prime rate”, and which serves as the basis upon which effective rates of interest are calculated for Canadian dollar loans made in Canada to its commercial customers with interest payable as a function of its prime rate.

“Release” means any release, discharge, emission, deposit, issuance, spray, escape, spill, leak and shall also have the various meanings under Environmental Laws.

“Rent” means and includes the Annual Base Rent, Additional Rent and all other sums payable by the Tenant to the Landlord or to other Persons under this Lease.

“Second Extension Term” has the meaning ascribed thereto in section 3.2(b).

“Structure” means the structural elements of the Building including foundations, exterior wall assemblies including weather walls, load bearing walls, floor slab, roof, roof deck, structural columns.

“Taxes” means all taxes, rates, duties, levies and assessments whatsoever, whether municipal, parliamentary or otherwise, which are levied, imposed or assessed against or in respect of the Building, the Land or upon the Landlord in respect thereof or which are from time to time levied,

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imposed or assessed in the future in lieu thereof, including those levied, imposed or assessed for education, schools and local improvements and including all costs and expenses (including legal and other professional fees and interest and penalties on deferred payments) incurred by the Landlord in good faith in contesting, resisting or appealing any taxes, rates, duties, levies or assessments, and shall also include any and all taxes which may in future be levied in lieu of “Taxes” as hereinbefore defined, but excluding taxes and license fees in respect of any business carried on by tenants and occupants of the Building (including the Landlord), income or profits taxes upon the income of the Landlord to the extent such taxes are not levied in lieu of taxes, rates, duties, levies and assessments against the Building or the Land or upon the Landlord in respect thereof.

“Tenant Party” means the Tenant, its employees, agents, invitees, contractors, or others for whom it is in law responsible.

“Term” means the term of this Lease set forth in section l.l(e)(i) hereof and any extension or renewal thereof and any period of permitted overholding.

“Transfer” means an assignment of this Lease in whole or in part, a sublease of all or any part of the Premises, any transaction whereby the rights of the Tenant under this Lease or to the Premises are transferred to another, any transaction by which any right of use or occupancy of all or any part of the Premises is conferred upon anyone, any mortgage charge or encumbrance of this Lease or the Premises or any part thereof or other arrangement under which either this Lease or the Premises become security for any indebtedness or other obligations and includes any transaction or occurrence whatsoever (including, but not limited to receivership proceedings, seizure by legal process directly or indirectly and transfer by operation of law), which has changed or might change the identity of the persons having lawful use or occupancy of any part of the Premises. The holding of possession of third party inventory and equipment does not constitute a Transfer.

“Transferee” means the Person to whom a Transfer is or is to be made.

“Untenantable” means that the Building is not capable of being used and occupied for the purpose for which it was intended whether by reason of damage or destruction to the Building by fire, tempest or other peril or a catastrophic event or by reason of access to the Building being cut off or impaired such that the Tenant is unable to access the Building and the Premises in the ordinary course of its business.

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SCHEDULE C

INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 1^ day of 1^, 200^.

BETWEEN:

1^

(the “Landlord”)

OF THE FIRST PART

- and -

1^

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 1^ day of 1^ made between the Landlord and 1^, as tenant (the “Tenant”), and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or

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disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns

- 4 -

of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

IN WITNESS WHEREOF the Landlord and the Indemnifier have signed and sealed this Indemnity.

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INDEMNITY AGREEMENT

THIS AGREEMENT is dated the 17th day of July, 2006.

BETWEEN:

80241 CANADA LTD.

(the “Landlord”)

OF THE FIRST PART

- and -

BWAY CORPORATION

(the “Indemnifier”)

OF THE SECOND PART

In order to induce the Landlord to enter into the lease (the “Lease”) dated the 17th day of July, 2006 made between the Landlord and ICL Industrial Containers ULC, as tenant (the “Tenant”), for the premises located at 35 Calder Place, St. Albert, Alberta and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the Indemnifier, as principal and not as surety, hereby covenants and makes the following indemnity agreement (the “Indemnity”) with and in favour of the Landlord:

1. The Indemnifier hereby agrees with the Landlord that at all times during the Term and any extension or renewal of the Term it will:

(a) make the due and punctual payment of all Base Rent and Additional Rent, monies, charges and other amounts of any kind whatsoever payable under the Lease by the Tenant whether to the Landlord or otherwise and whether the Lease has been disaffirmed or disclaimed;

(b) effect prompt and complete performance of all and singular the terms, covenants and conditions contained in the Lease on the part of the Tenant to be kept, observed and performed; and

(c) indemnify and save harmless the Landlord from any loss, costs or damages arising out of any failure by the Tenant to pay the aforesaid Base Rent and Additional Rent, monies, charges, or other amounts due under the Lease or resulting from any failure by the Tenant to observe or perform any of the terms, covenants and conditions contained in the Lease.

2. This Indemnity is absolute and unconditional and the obligations of the Indemnifier shall not be released, discharged, mitigated, impaired or affected by:

(a) any extension of time, indulgences or modifications which the Landlord extends to or makes with the Tenant in respect of the performance of any of the obligations of the Tenant under the Lease;

(b) any waiver by or failure of the Landlord to enforce any of the terms, covenants and conditions contained in the Lease;

(c) any Transfer of the Lease by the Tenant or by any trustee, receiver or liquidator;

(d) any consent which the Landlord gives to any such Transfer;

(e) any amendment to the Lease or any waiver by the Tenant of any of its rights under the Lease; or

(f) the expiration of the Term.

3. The Indemnifier hereby expressly waives notice of the acceptance of this Agreement and all notice of non-performance, non-payment or non-observance on the part of the Tenant of the terms, covenants and conditions contained in the Lease. Without limiting the generality of the foregoing, any notice which the Landlord desires to give to the Indemnifier shall be sufficiently given if delivered personally to the Indemnifier or if mailed by prepaid registered or certified post addressed to the Indemnifier at the Leased Premises, and every such notice is deemed to have been given upon the day it was so delivered personally, or if mailed forty-eight (48) hours following the date of mailing. The Indemnifier may designate by notice in writing a substitute address for that set forth above and thereafter notices shall be directed to such substitute address. If two or more Persons are named as Indemnifier, any notice given hereunder or under the Lease shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such Persons.

4. In the event of a default under the Lease or under this Agreement, the Indemnifier waives any right to require the Landlord to:

(a) proceed against the Tenant or pursue any rights or remedies against the Tenant with respect to the Lease;

(b) proceed against or exhaust any security of the Tenant held by the Landlord; or

(c) pursue any other remedy whatsoever in the Landlord’s power.

5. The Landlord has the right to enforce this Indemnity regardless of the acceptance of additional security from the Tenant and regardless of any release or discharge of the Tenant by the Landlord or by others or by operation of law.

6. Without limiting the generality of the foregoing, the liability of the Indemnifier under this Indemnity is not and is not deemed to have been waived, released, discharged, impaired or affected by reason of the release or discharge of the Tenant in any receivership, bankruptcy, winding-up or other creditors’ proceedings or the rejection, disaffirmance or disclaimer of the Lease in any proceeding, including any filing of a proposal or notice of intention to file a proposal under the Bankruptcy and Insolvency Act or by repudiation of the Lease by the Tenant, and shall continue with respect to the periods prior thereto and thereafter, for and with respect to the Term as if the Lease had not been disaffirmed or disclaimed, and in furtherance hereof, the Indemnifier agrees, upon any such disclaimer, that the Indemnifier shall, at the option of the Landlord, become the tenant of the Landlord upon the same terms and conditions as are contained in the Lease, applied

- 2 -

mutatis mutandis. The liability of the Indemnifier shall not be affected by any repossession of the Leased Premises by the Landlord, provided, however, that the net payments received by the Landlord after deducting all costs and expenses of repossessing and reletting the Leased Premises shall be credited from time to time by the Landlord against the indebtedness of the Indemnifier hereunder and the Indemnifier shall pay any balance owing to the Landlord from time to time within five (5) business days after demand.

7. No action or proceedings brought or instituted under this Indemnity and no recovery in pursuance thereof shall be a bar or defence to any further action or proceeding which may be brought under this Indemnity by reason of any further default hereunder or in the performance and observance of the terms, covenants and conditions contained in the Lease.

8. No modification of this Indemnity shall be effective unless the same is in writing and is executed by both the Indemnifier and the Landlord.

9. The Indemnifier shall, without limiting the generality of the foregoing, be bound by this Indemnity in the same manner as though the Indemnifier were the Tenant named in the Lease.

10. If two or more individuals, corporations, partnerships or other business associations (or any combination of two or more thereof) execute this Indemnity as Indemnifier, the liability of each such individual, corporation, partnership or other business association hereunder is joint and several. In like manner, if the Indemnifier named in the Indemnity is a partnership or other business association, the members of which are, by virtue of statutory or general law, subject to personal liability, the liability of each such member is joint and several.

11. All of the terms, covenants and conditions of this Indemnity extend to and are binding upon the Indemnifier, his or its heirs, executors, administrators, successors and assigns, as the case may be, and enure to the benefit of and may be enforced by the Landlord, its successors and assigns, as the case may be, and any Mortgagee of all or any part of the Landlord or Building.

12. The expressions “Landlord”, “Tenant”, “Base Rent”, “Building”, “Additional Rent”, “Term”, “Leased Premises”, “Person”, “Lands”, “Transferee”, “Mortgagee” and other terms or expressions where used in this Indemnity, have the same meaning as in the Lease.

13. This Indemnity shall be construed in accordance with the laws of the Province of Ontario.

14. Wherever in this Indemnity reference is made to either the Landlord or the Tenant, the reference is deemed to apply also to the heirs, executors, administrators, successors and assigns and transferees of the Tenant named in the Lease, and the successors and assigns of the Landlord. Any assignment by the Landlord of any of its interests in the Lease operates automatically as an assignment to such assignee of the benefit of this Indemnity.

- 3 -

IN WITNESS WHEREOF the Landlord and the Indemnifier have signed this Indemnity as of the date above first written.

80241 CANADA LTD.
By:	/s/ M. Arshinoff
Title:	Morton Arshinoff, President
BWAY CORPORATION
By:	/s/ Kevin C. Kern
Title:	Vice President Administration & CFO

- 4 -

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

BWAY CORPORATION (Delaware corporation)

Subsidiaries of BWAY Corporation (each is wholly owned)

Armstrong Containers, Inc. (Delaware corporation)

North America Packaging Corporation (Delaware corporation)

Subsidiaries of North America Packaging Corporation (each is wholly owned)

North America Packaging of Puerto Rico, Inc. (Delaware corporation)

SC Plastics, LLC (Georgia limited liability company)

Subsidiaries of Armstrong Containers, Inc. (each is wholly owned)

ICL Industrial Containers, ULC (Nova Scotia unlimited liability company)

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Jean-Pierre M. Ergas, certify that:

1. I have reviewed this annual report on Form 10-K of BWAY Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 28, 2006

/s/ Jean-Pierre M. Ergas

Chairman and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Kevin C. Kern, certify that:

1. I have reviewed this annual report on Form 10-K of BWAY Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. [paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986];

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 28, 2006

/s/ Kevin C. Kern

Vice-President of Administration and

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

The undersigned officers of BWAY Corporation (the “Company”) certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to their knowledge:

(1) The Annual Report on Form 10-K of the Company for the year ended October 1, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: December 28, 2006

/s/ Jean-Pierre M. Ergas

Jean-Pierre M. Ergas

Chairman and Chief Executive Officer

/s/ Kevin C. Kern

Kevin C. Kern

Vice-President of Administration and

Chief Financial Officer

* A signed original of this written statement required by Section 906 has been provided to BWAY Corporation and will be retained by BWAY Corporation and furnished to the Securities and Exchange Commission or its staff upon request.