[391126] EAR libraries classpath container for Utility projects in lib
does not contain jars in lib
diff --git a/plugins/org.eclipse.jst.j2ee/common/org/eclipse/jst/j2ee/internal/common/classpath/J2EEComponentClasspathContainer.java b/plugins/org.eclipse.jst.j2ee/common/org/eclipse/jst/j2ee/internal/common/classpath/J2EEComponentClasspathContainer.java
index 803e874..821631f 100644
--- a/plugins/org.eclipse.jst.j2ee/common/org/eclipse/jst/j2ee/internal/common/classpath/J2EEComponentClasspathContainer.java
+++ b/plugins/org.eclipse.jst.j2ee/common/org/eclipse/jst/j2ee/internal/common/classpath/J2EEComponentClasspathContainer.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2003, 2006 IBM Corporation and others.
+ * Copyright (c) 2003, 2012 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -419,7 +419,7 @@
 				// or if it is the empty string, do nothing.
 				if (libDir != null && libDir.trim().length() != 0) {
 					IPath libDirPath = new Path(libDir).makeRelative();
-					// check if the component itself is not in the library directory of this EAR - avoid cycles in the build patch
+					// check if the component itself is not in the library directory of this EAR - avoid cycles in the build path
 					IVirtualReference ref = earComp.getReference(component.getName());
 					if(ref != null){
 						IPath refPath = ref.getRuntimePath();
@@ -433,24 +433,30 @@
 							}
 						}
 						refPath = refPath.makeRelative();
-						if (!libDirPath.equals(refPath)) {
-							// retrieve the referenced components from the EAR
-							IVirtualReference[] earRefs = earComp.getReferences();
-							for (IVirtualReference earRef : earRefs) {
-								if(earRef.getDependencyType() == IVirtualReference.DEPENDENCY_TYPE_USES){
-									// check if the referenced component is in the library directory
-									IPath runtimePath = earRef.getRuntimePath().makeRelative();
-									boolean isInLibDir = libDirPath.equals(runtimePath);
-									if(!isInLibDir){
-										IPath fullPath = earRef.getRuntimePath().append(earRef.getArchiveName());
-										isInLibDir = fullPath.removeLastSegments(1).makeRelative().equals(libDirPath);
-									}
-									if (isInLibDir) {
-										libRefs.add(earRef);
-									}
+						boolean onlyBinary = false;
+						// If this component is in the library directory, we will allow only binary entries to be 
+						// added, to avoid cycles in the build path
+						if (libDirPath.equals(refPath)) {
+							onlyBinary = true;
+						}
+						// retrieve the referenced components from the EAR
+						IVirtualReference[] earRefs = earComp.getReferences();
+						for (IVirtualReference earRef : earRefs) {
+							if(earRef.getDependencyType() == IVirtualReference.DEPENDENCY_TYPE_USES){
+								// check if the referenced component is in the library directory
+								IPath runtimePath = earRef.getRuntimePath().makeRelative();
+								boolean isInLibDir = libDirPath.equals(runtimePath);
+								if(!isInLibDir){
+									IPath fullPath = earRef.getRuntimePath().append(earRef.getArchiveName());
+									isInLibDir = fullPath.removeLastSegments(1).makeRelative().equals(libDirPath);
+								}
+								if (isInLibDir) {
+									if (!onlyBinary || (onlyBinary && earRef.getReferencedComponent().isBinary()))
+									libRefs.add(earRef);
 								}
 							}
 						}
+
 						//add EAR classpath container refs
 						try {
 							ClasspathLibraryExpander classpathLibExpander = new ClasspathLibraryExpander(earComp);