Exhibit 10.20
MASTER LEASE AGREEMENT
dated as of December 26, 2002
between
GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF AND AS AGENT,
and
ANCHOR GLASS CONTAINER CORPORATION, as Lessee
MASTER LEASE AGREEMENT
TABLE OF CONTENTS
Page
I. LEASING.................................................... 1
II. TERM, RENT AND PAYMENT..................................... 2
III. [INTENTIONALLY OMITTED].................................... 2
IV. [INTENTIONALLY OMITTED].................................... 2
V. REPORTS.................................................... 2
VI. DELIVERY, USE AND OPERATION................................ 3
VII. SERVICE.................................................... 3
VIII. CASUALTY................................................... 4
IX. LOSS OR DAMAGE............................................. 4
X. INSURANCE.................................................. 5
XI. RETURN OF EQUIPMENT........................................ 5
XII. DEFAULT; REMEDIES.......................................... 5
XIII. ASSIGNMENT................................................. 7
XIV. NET LEASE; NO SET-OFF, ETC.; QUIET ENJOYMENT............... 7
XV. INDEMNIFICATION............................................ 8
XVI. DISCLAIMER................................................. 10
XVII. REPRESENTATIONS AND WARRANTIES OF LESSEE................... 10
XVIII. INTENT; GRANT OF SECURITY INTEREST; USURY SAVINGS.......... 11
XIX. TERMINATION RENTAL PREMIUM................................. 12
XX. MISCELLANEOUS.............................................. 12
XXI. CHOICE OF LAW; JURISDICTION................................ 14
XXII. CHATTEL PAPER.............................................. 14
XXIII. EARLY TERMINATION.......................................... 14
XXIV. CONFIDENTIALITY............................................ 15
SCHEDULE A: DEFINITIONS
EXHIBIT NO. 1: INCORPORATED COVENANT
EXHIBIT NO. 2: PERMITTED HOLDERS
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MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT (this "Agreement"), dated as of December 26,
2002 (the "Closing Date"), between GENERAL ELECTRIC CAPITAL CORPORATION, FOR
ITSELF AND AS AGENT, as lessor (hereinafter called, together with its successors
and assigns, if any, "Lessor") with an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and ANCHOR GLASS CONTAINER CORPORATION, a
Delaware corporation with its mailing address and chief place of business at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called "Lessee").
WITNESSETH:
I. LEASING:
(a) This Agreement shall be effective from and after the date of execution
hereof. Subject to the terms and conditions set forth below, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, the equipment
("Equipment") described in Annex A to any schedule hereto (collectively, the
"Schedule"). Certain defined terms are set forth in Schedule A attached hereto.
Terms defined in a Schedule and not otherwise defined herein shall have the
meanings ascribed to them in such Schedule.
(b) Subject to the terms and conditions hereof (including, without
limitation, Section XIII(d) hereof), Lessor agrees to purchase from the
manufacturer or supplier thereof ("Supplier") or from Lessee, as applicable,
certain Equipment for the express purpose of leasing such Equipment to Lessee,
as mutually agreed.
(c) The obligation of Lessor to purchase Equipment from the Supplier
thereof or from Lessee, as applicable, and to lease the same to Lessee under any
Schedule shall be subject to: (1) receipt by Lessor, prior to the Lease
Commencement Date (with respect to such Equipment), of each of the following
documents in form and substance reasonably satisfactory to Lessor: (A) a
Schedule relating to the Equipment then to be leased hereunder, (B) a ▇▇▇▇ of
Sale in the form of Annex E to the applicable Schedule or a Purchase Order
Assignment and Consent in the form of Annex B to the applicable Schedule, unless
Lessor shall have delivered its purchase order for such Equipment, (C) evidence
of insurance which complies with the requirements of Section X, (D) an
Estoppel/Waiver Agreement in the form of Annex G to the applicable Schedule, (E)
a Phase I environmental audit and/or such other or additional assurances
regarding the environmental condition of the premises at which the Equipment is
to be located (including, without limitation, assurances regarding the
successful remediation of any contamination or other environmental hazard
located on or in proximity of any such premises), (F) an appraisal in form and
substance, and by an appraiser, reasonably satisfactory to Lessor, with respect
to the Equipment then to be leased hereunder, (G) a disclaimer and release, and
related documents in form suitable for recording, in form and substance
satisfactory to Lessor, disclaiming and releasing the interest and Liens of the
Trustee under the Indenture and the Security Documents (as such term is defined
in the Indenture) in the Equipment, and (H) such opinions, certificates and
other documents as Lessor reasonably may request; (2) Lessor having determined
(in its sole discretion) that the following conditions have been satisfied on or
before the Closing Date: (A) a third party acceptable to Lessor has confirmed
that, as of the Closing Date, Lessee has a minimum EBITDA of $75,000,000, (B)
Cerberus Capital Management, L.P. shall be the holder of at least eighty percent
(80%) of the current outstanding preferred stock or common stock of Lessee as of
the Closing Date, (C) Lessee's energy price hedging policies must be acceptable
to Lessor as of the Closing Date; and (D) Each financial statement delivered to
Lessor has been prepared in accordance with generally accepted accounting
principles consistently applied ("GAAP") (except in the case of any interim
financial statements, (i) the absence of footnotes, and (ii) subject to year-end
adjustments) consistently applied; and since the date of the most recent such
financial statement: (1) there has been no material adverse change in the
business, financial or other condition of Lessee, the industry in which Lessee
operates, or the Equipment or in the prospects or projections of Lessee, and (2)
there has been no material increase in the liabilities, liquidated or
contingent, of Lessee, or a material decrease in the assets of Lessee; and (3)
since the Closing Date, there shall have been no
change in loan syndication, financial or capital market conditions generally
that in Lessor's judgment would materially impair syndication of the transaction
contemplated hereby.
As a further condition to such obligations of Lessor, Lessee shall, upon
delivery of such Equipment (but not later than the Last Delivery Date specified
in the applicable Schedule) execute and deliver to Lessor a Certificate of
Acceptance (in the form of Annex C to the applicable Schedule) covering such
Equipment, and deliver to Lessor or cause the Supplier to deliver to Lessor a
▇▇▇▇ of sale therefor (in form and substance reasonably satisfactory to Lessor).
Lessor hereby appoints Lessee its agent for inspection and acceptance of the
Equipment from the Supplier. Upon execution by Lessee of any Certificate of
Acceptance, the Equipment described thereon shall be deemed to have been
delivered to, and irrevocably accepted by, Lessee for lease hereunder.
II. TERM, RENT AND PAYMENT:
(a) The rent payable hereunder (the "Rent") and Lessee's right to use the
Equipment pursuant to a Schedule shall commence on the date of execution by
Lessee of the Certificate of Acceptance for such Equipment ("Lease Commencement
Date"). The Rent is payable as set forth in each Schedule and includes Interim
Rent and Basic Term Rent, as then applicable. The term of this Agreement (the
"Term") shall be the period specified in the applicable Schedule, commencing on
the Lease Commencement Date and expiring on the last day of the Basic Term of
such Schedule. If any Term is extended, the word "Term" shall be deemed to refer
to all extended terms, and all provisions of this Agreement shall apply during
any extended terms, except as otherwise may be specifically provided in writing
signed by Lessee and Lessor.
(b) Rent shall be paid to Lessor by wire transfer of immediately available
funds to: Bankers Trust ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No.
▇▇-▇▇▇-▇▇▇, ABA No. ▇▇▇-▇▇▇-▇▇▇, Ref. Anchor/CFI, or to such other account as
Lessor may direct in writing to Lessee; and shall be effective upon receipt.
Payments of Rent shall be in the amount set forth in, and due in accordance
with, the provisions of the applicable Schedule.
III. [INTENTIONALLY OMITTED]
IV. [INTENTIONALLY OMITTED]
V. REPORTS:
(a) Lessee will notify Lessor in writing, within fifteen (15) days after
obtaining knowledge of any tax or other lien which shall have attached to any
Equipment, of the full particulars thereof and of the location of such Equipment
on the date of such notification.
(b) Lessee will deliver to Lessor, within one hundred five (105) days of
the close of each fiscal year of Lessee, Lessee's balance sheet and profit and
loss statement, prepared in accordance with GAAP audited by a recognized firm of
certified public accountants, and if at the time Lessee is registered under the
Securities Exchange Act of 1934 (the "Exchange Act") and is required to file the
same with the Securities and Exchange Commission ("SEC"), together with Lessee's
Form 10K filed with the SEC. Lessee will deliver to Lessor quarterly, within
sixty (60) days of the close of each fiscal quarter of Lessee, copies of
Lessee's quarterly financial report certified by the chief financial officer of
Lessee, and if at the time Lessee is registered under the Exchange Act and
required to file the same with the SEC, together with Lessee's Form 10Q filed
with the SEC.
(c) Lessee will keep the Equipment at the Equipment Location specified in
the applicable Schedule within the continental United States and will not move
any of the Equipment from such Equipment Location without prior notice to
Lessor, except in connection with the maintenance or repair of the Equipment in
accordance with Section VII of this Agreement; provided, that prior to any such
change in location, Lessee shall furnish Lessor with executed real property
waivers and such other documentation as Lessor may reasonably request to protect
its interest in such Equipment. Upon
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Lessor's request, Lessee promptly will notify Lessor in writing of the location
of any Equipment as of the date of such notification.
(d) Lessee will promptly and fully report to Lessor in writing if any
Equipment is lost or damaged (where the estimated repair costs would exceed ten
percent (10%) of its then fair market value), or is otherwise involved in an
accident causing material personal injury or material property damage.
(e) When delivering the quarterly and/or annual financial information
required by Section V(b), Lessee will also furnish a certificate of an
authorized officer of Lessee stating that he has reviewed the activities of
Lessee and that, to the best of his knowledge, there exists no Default (as
hereinafter defined) or event which, with the giving of notice or the lapse of
time (or both), would become a Default. Lessee shall provide Lessor with written
notice within ten (10) days of Lessee's responsible officer becoming aware of
any Default of the type described in Section XII(a)(12), which notice shall
specify the nature and extent of such Default.
(f) When delivering the quarterly financial information required by
Section V(b), Lessee will also furnish a certificate of an authorized officer of
Lessee confirming Lessee's compliance with the Incorporated Covenants, including
the information necessary to substantiate such compliance.
(g) With respect to each of Lessee's fiscal years, Lessee will deliver to
Lessor Lessee's Financial Projections as soon as available but by no later than
February 28 of each year, in form and detail acceptable to Lessor, for each
fiscal year of Lessee commencing with the fiscal year ending 2003. Without
limiting the foregoing, Lessee shall furnish or cause to be furnished to Lessor
such budgets, forecasts, projections and other information with respect to the
Equipment and the business of Lessee, as Lessor may, from time to time,
reasonably request.
(h) Lessee will deliver to Lessor upon request, such additional material
financial information relating to Lessee as Lessor shall reasonably request.
VI. DELIVERY, USE AND OPERATION:
(a) The parties acknowledge that certain of the Equipment is being
purchased by Lessor pursuant to a sale/leaseback transaction and that such
portion of the Equipment is in Lessee's possession as of the Lease Commencement
Date. All other Equipment shall be shipped directly from the Supplier to Lessee.
(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable Federal,
state, and local laws and regulations and any applicable insurance policies, and
Lessee shall not permanently discontinue use of the Equipment.
(c) Lessee will keep the Equipment free and clear of all liens and
encumbrances except for Permitted Liens.
(d) Lessee will permit Lessor to inspect any Equipment and maintenance
records relating thereto during normal business hours upon reasonable prior
written notice, but no more frequently than twice during any twelve (12) month
period unless a Default has occurred and is then existing, subject to Lessee's
reasonable security and administrative requirements.
VII. SERVICE:
(a) Lessee will, at its sole expense, maintain each unit of Equipment in
good operating order, repair, condition and appearance in accordance in all
material respects with manufacturer's recommendations, normal wear and tear
excepted, and Lessee's standard practices (but in no event less than industry
practices). Lessee shall, if at any time reasonably requested by Lessor and at
Lessor's expense (unless a Default or event which with giving of notice or
passage of time or both would constitute a Default has occurred and is
continuing), affix in a prominent position on each unit of Equipment plates,
tags or other identifying labels showing the interest therein of Lessor.
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(b) Lessee will not, without the prior consent of Lessor, affix or install
any accessory, equipment or device on any Equipment if such addition will impair
the value, originally intended function or use of such Equipment. All additions,
repairs, parts, supplies, accessories, equipment, and devices furnished,
attached or affixed to any Equipment which are not readily removable shall be
made only in compliance with applicable law, including, with respect to all
Equipment, Internal Revenue Service guidelines, shall be free and clear of all
liens, encumbrances or rights of others (other than Permitted Liens), and shall
become the property of Lessor and constitute Equipment under the applicable
Schedule. Lessee will not, without the prior written consent of Lessor and
subject to such conditions as Lessor may impose for its protection, affix or
install any item of Equipment to or in any other personal or real property in
any manner which would reasonably be expected to impair Lessor's rights, title
or interests in, to or with respect to any such item of Equipment.
(c) Any alterations or modifications to the Equipment that may, at any
time during the term of this Agreement, be required to comply with any
applicable law, rule or regulation shall be made at the expense of Lessee.
VIII. CASUALTY:
Lessee shall promptly and fully notify Lessor in writing if any unit of
Equipment shall be or become irreparably worn out, permanently lost, stolen,
destroyed, irreparably damaged in the reasonable determination of Lessee, or
permanently rendered unfit for use from any cause whatsoever (such occurrences
being hereinafter called "Casualty Occurrences"). On the Rent Payment Date next
succeeding sixty (60) days after the Casualty Occurrence (the "Payment Date"),
Lessee shall either (as selected by Lessee): (a) replace the unit of Equipment
having suffered the Casualty Occurrence with equipment of comparable make and
model, having an equal or greater value and utility, free and clear of all liens
and encumbrances (other than Permitted Liens), and shall deliver to Lessor a
▇▇▇▇ of sale, an Equipment Schedule, such Uniform Commercial Code financing
statements or statements of amendment and such other documents, instruments,
filings and/or certificates as reasonably may be required by Lessor with respect
to such replacement Equipment; or (b) pay Lessor the sum of (i) the Lease
Balance with respect to such unit calculated in accordance with Annex D to the
applicable Schedule as of the Rent Payment Date next preceding such Casualty
Occurrence ("Calculation Date"); and (ii) all Rent and other amounts which are
due hereunder as of the Payment Date. Upon payment of all sums due hereunder,
(a) the term of this Lease as to such unit shall terminate, (b) except in the
case of the loss, theft or complete destruction of such unit, Lessee shall be
entitled to recover possession of such unit, and (c) Lessor will transfer to
Lessee, on an AS IS, WHERE IS BASIS without recourse to or warranty from Lessor,
express or implied ("AS IS BASIS"), all of Lessor's interest in and to such
Equipment. Lessor shall not be required to make and may specifically disclaim
any representation or warranty as to the condition of such Equipment and other
matters (except that Lessor shall warrant that it has conveyed whatever interest
it received in the Equipment from Lessee and/or the Supplier, free and clear of
any Lessor Lien). At Lessee's expense, Lessor shall execute and deliver to
Lessee such UCC Statements of Termination and ▇▇▇▇ of sale as reasonably may be
required in order to terminate and convey any interest of Lessor in and to the
Equipment. Notwithstanding the foregoing, Lessor shall not be obligated to
transfer its interest in such Equipment to Lessee if the insurer of such unit is
permitted pursuant to the terms of the applicable insurance policy to obtain
title to the same. Lessor agrees to deliver such UCC-3 termination statements as
Lessee may reasonably request in connection with such event.
IX. LOSS OR DAMAGE:
As between Lessee and Lessor, Lessee hereby assumes and shall bear the
entire risk of any loss, theft, damage to, or destruction of, any unit of
Equipment from any cause whatsoever from the time the Equipment is shipped to
Lessee until the later of the end of the Term or the return of such unit to
Lessor pursuant to Section XI hereof.
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X. INSURANCE:
Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts as specified in Paragraph D of the Equipment Schedule and against such
hazards as Lessor may reasonably require, including, but not limited to,
insurance for damage to or loss of such Equipment and liability coverage for
personal injuries, death or property damage, with Lessor named as additional
insured and with a loss payable clause in favor of Lessor, as its interest may
appear, irrespective of any breach of warranty or other act or omission of
Lessee. All such policies shall be with the companies which currently provide
such insurance to Lessee or with companies rated A8 or higher by A.M. Best
Company and on terms, reasonably satisfactory to Lessor. Lessee agrees to
deliver to Lessor evidence of insurance reasonably satisfactory to Lessor. No
insurance shall be subject to any co-insurance clause. Lessee hereby appoints
Lessor as Lessee's attorney-in-fact after the occurrence and continuation of any
Default, to make proof of loss and claim for insurance, and to make adjustments
with insurers and to receive payment of and execute or endorse all documents,
checks or drafts in connection with payments made as a result of such insurance
policies. Any expense of Lessor in adjusting or collecting insurance shall be
borne by Lessee. So long as no Default has occurred, Lessee may make adjustments
with casualty insurers with respect to claims for damage to or a Casualty
Occurrence with respect to any unit or units of Equipment where the aggregate
Lease Balance or repair costs of such unit or units, as the case may be, are
less than $1,000,000. Said policies shall provide that the insurance may not be
altered or cancelled by the insurer until after thirty (30) days' written notice
to Lessor, except that with respect to any termination for failure to pay the
applicable premium, ten (10) days' prior written notice to Lessor shall be
sufficient. All proceeds of insurance up to $250,000 shall be applied to repair
or replace the Equipment having suffered the casualty (unless such item of
Equipment having suffered the Casualty Occurrence has been damaged to such
extent that the repair thereof is uneconomical). Lessor may, at its option,
apply proceeds of insurance in excess of $250,000, in whole or in part, to (i)
repair or replace Equipment or any portion thereof, or (ii) satisfy any
obligation of Lessee to Lessor hereunder.
XI. RETURN OF EQUIPMENT:
(a) Upon any expiration, cancellation or termination of this Agreement or
any Schedule (other than in connection with Lessee's purchase of such
Equipment), Lessee shall within ten (10) days of such event, at its own cost and
expense: (i) perform any testing and repairs required to place the affected
units of Equipment in the same condition and appearance as when received by
Lessee (reasonable wear and tear excepted) and in good working order for their
originally intended purpose; (ii) if deinstallation, disassembly or crating is
required, cause such units to be deinstalled, disassembled and crated by an
authorized manufacturer's representative or such other service person as is
reasonably satisfactory to Lessor; (iii) return such units, free and clear of
all liens and encumbrances other than Lessor Liens, to a location within the
continental United States as Lessor shall direct; and (iv) satisfy the
requirements of Annex F to the applicable Schedule; provided that with respect
to the expiration, cancellation or termination of any Schedule, Lessee shall
fulfill the requirements of this Section XI(a) solely with respect to the
Equipment listed on such Schedule which has so expired, cancelled or terminated.
(b) Until Lessee fully has complied with the requirements of Paragraph (a)
above, Lessee's Rent payment obligation and all other obligations under this
Agreement shall continue from month to month notwithstanding any expiration or
termination of the Term. Lessor may terminate such continued leasehold interest
upon ten (10) days' notice to Lessee. In addition to these rents, Lessor shall
have all of its other rights and remedies available as a result of this
nonperformance.
XII. DEFAULT; REMEDIES:
(a) Lessor may in writing declare this Agreement and all Schedules in
default ("Default") if: (1) Lessee breaches its obligation to pay Rent when due;
(2) Lessee breaches its obligation to pay any sum hereunder (other than Rent)
within fifteen (15) days of the date due; (3) Lessee breaches any of its
insurance obligations under Section X hereof; (4) Lessee breaches any of its
other obligations hereunder and fails to cure that breach within thirty (30)
days after written notice thereof; provided that (A) if such
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breach is curable by practical means within sixty (60) days of such notice, (B)
Lessee is diligently undertaking to cure such breach and (C) no risk exists with
respect to either the imposition against Lessor of any criminal liability or
material civil liability, or the impairment of Lessor's rights, title or
interests in any item of Equipment, as a result of such breach, Lessee's right
to cure such breach shall be extended for thirty (30) additional days; (5) any
representation or warranty made by Lessee in connection with this Agreement
shall be false or misleading in any material respect, at the time made or deemed
made; (6) Lessee becomes insolvent or ceases to do business as a going concern;
(7) any Equipment is illegally used; (8) a petition is filed by or against
Lessee under any bankruptcy or insolvency laws and, if such petition is filed
against Lessee, such petition is not dismissed within ninety (90) days; (9) any
Change of Control; (10) Lessee shall be in default under any other material
agreement between Lessee and Lessor beyond any grace or cure period specified
therein; or (11) (A) Lessee shall be in default in the performance of any
agreement or condition contained in the Revolver, including (without limitation)
the covenant set forth in Section 9.17 thereof as such covenant exists on the
date hereof, notwithstanding any amendment, supplement, restatement or other
modification to, or expiration or termination of, the Revolver (the
"Incorporated Covenant") (for the sake of clarity, a copy of the Incorporated
Covenant has been attached hereto as Exhibit No. 1), or (B) any other event
shall occur or condition exist under the Revolver or under any other material
obligation for borrowed money, for the deferred purchase price of property or
any lease agreement for an original amount in excess of Ten Million Dollars
($10,000,000), the effect of which default or other event or condition is to
cause, or permit the lenders or the agent under the Revolver or the holders of
such other obligation (or a trustee or agent on behalf of such holder or
holders) to cause, the obligations of Lessee under the Revolver or such other
obligations to become due prior to the stated maturity thereof. Any provision of
this Agreement to the contrary notwithstanding, each Lessor and each Assignee
may exercise all rights and remedies hereunder solely with respect to the
Schedules it holds; provided, that among the Schedules it holds, it may exercise
its rights and remedies independently with respect to each individual Schedule.
(b) Upon payment in full by Lessee to Lessor of the Default Payment within
fifteen (15) days after the occurrence of an event specified in Section XII(a)
hereof which would constitute a Default, Lessor shall not declare this Agreement
and the Schedules to be in default and will transfer, on an AS IS BASIS all of
Lessor's interest in and to the Equipment. Lessor shall not be required to make
and may specifically disclaim any representation or warranty as to the condition
of the Equipment and other matters (except that Lessor shall warrant that it has
conveyed whatever interest it received in the Equipment free and clear of any
Lessor Lien). At Lessee's expense, Lessor shall execute and deliver to Lessee
such UCC Statements of Termination and ▇▇▇▇ of sale as reasonably may be
required in order to terminate and convey any interest of Lessor in and to the
Equipment.
(c) After Default, at the request of Lessor, Lessee shall comply with the
provisions of Section XI(a) hereof. Lessee hereby authorizes Lessor to enter,
with or without legal process, any premises where any Equipment is located and
take possession thereof. Lessee shall, without further demand, forthwith pay to
Lessor (i) as liquidated damages for loss of a bargain and not as a penalty, the
Lease Balance with respect to the Equipment (calculated in accordance with Annex
D to the applicable Schedule as of the Rent Payment Date next preceding the
declaration of default), and (ii) all Rent and other sums then due hereunder.
Lessor may, but shall not be required to, sell the Equipment at private or
public sale, in bulk or in parcels, with or without notice, and without having
the Equipment present at the place of sale; or Lessor may, but shall not be
required to, lease, otherwise dispose of or keep idle all or part of the
Equipment; and Lessor may use Lessee's premises for any or all of the foregoing
without liability for rent, costs, damages or otherwise. The proceeds of sale,
lease or other disposition, if any, shall be applied in the following order of
priorities: (1) to pay all of Lessor's costs, charges and expenses incurred in
taking, removing, holding, repairing and selling, leasing or otherwise disposing
of Equipment; then, (2) to the extent not previously paid by Lessee, to pay
Lessor all sums due from Lessee hereunder; then, (3) to reimburse to Lessee any
sums previously paid by Lessee as liquidated damages; and (4) in the case of
proceeds of sale of any Equipment, any surplus shall be remitted to Lessee.
Lessee shall pay any deficiency in clauses (1) and (2) forthwith.
(d) In addition to the foregoing rights, Lessor may cancel or terminate
the lease as to any or all of the Equipment.
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(e) The foregoing remedies are cumulative but shall not be duplicative,
and any or all thereof may be exercised in lieu of or in addition to each other
or any remedies at law, in equity, or under statute. Lessee waives notice of
sale or other disposition (and the time and place thereof), and the manner and
place of any advertising. If permitted by law, Lessee shall pay reasonable
attorney's fees actually incurred by Lessor in enforcing the provisions of this
Lease and any ancillary documents. Waiver of any Default shall not be a waiver
of any other or subsequent default.
XIII. ASSIGNMENT:
(a) LESSEE SHALL NOT ASSIGN, MORTGAGE, SUBLET OR HYPOTHECATE ANY EQUIPMENT
OR THE INTEREST OF LESSEE HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR
(WHICH SHALL NOT UNREASONABLY BE WITHHELD, DELAYED OR CONDITIONED), EXCEPT FOR
PERMITTED LIENS.
(b) Lessor may, without the consent of Lessee, assign this Agreement or
any Schedule, or the right to enter into any Schedule; provided that no
assignment may be made to any Person engaged in the glass container
manufacturing business or the food or beverage industry or affiliates thereof.
Lessee agrees that it will pay all Rent and other amounts payable under each
Schedule to the Lessor; provided, however, if Lessee receives written notice of
an assignment from Lessor, Lessee will pay all Rent and other amounts payable
under any assigned Schedule to such assignee (an "Assignee") or as instructed by
Lessor. Each Schedule, incorporating by reference the terms and conditions of
this Agreement, constitutes a separate instrument of lease, and Lessor named
therein or its Assignee shall have all rights as "Lessor" thereunder separately
exercisable by such named Lessor or Assignee as the case may be, exclusively and
independently of Lessor or any Assignee with respect to other Schedules executed
pursuant hereto.
(c) Lessee acknowledges that it has been advised that General Electric
Capital Corporation is acting hereunder for itself and as agent for certain
third parties (each being herein referred to as a "Participant" and,
collectively, as the "Participants"); that the interest of the Lessor in this
Agreement, the Equipment Schedules, related instruments and documents and/or the
Equipment may be conveyed to, in whole or in part, and may be used as security
for financing obtained from, one or more third parties without the consent of
Lessee (the "Syndication").
(d) Lessee agrees reasonably to cooperate with Lessor in connection with
any such proposed assignment or Syndication, including the execution and
delivery of such other documents, instruments, notices, opinions, certificates
and acknowledgments, as reasonably may be required by Lessor or such assignee;
and Lessee further agrees to confirm in writing receipt of a notice of
assignment as reasonably may be requested by Lessor, any Assignee or any
Participant. Lessee hereby waives and agrees not to assert against any Assignee
or any Participant, any defense, set-off, recoupment claim or counterclaim which
Lessee has or may at any time have against Lessor or any other Person for any
reason whatsoever.
(e) Subject always to the foregoing, this Agreement inures to the benefit
of, and is binding upon, the successors and assigns of the parties hereto.
XIV. NET LEASE; NO SET-OFF, ETC.; QUIET ENJOYMENT:
(a) This Agreement is a net lease. Lessee's obligation to pay Rent and
other amounts due hereunder shall be absolute and unconditional. Lessee shall
not be entitled to any abatement or reductions of, or set-offs against, said
Rent or other amounts, including, without limitation, those arising or allegedly
arising out of claims (present or future, alleged or actual, and including
claims arising out of strict tort or negligence of Lessor) of Lessee against
Lessor under this Agreement or otherwise. This Agreement shall not terminate and
the obligations of Lessee shall not be affected by reason of any defect in or
damage to, or loss of possession, use or destruction of, any Equipment from
whatsoever cause. It is the intention of the parties that Rents and other
amounts due hereunder shall continue to be payable in all events in the manner
and at the times set forth herein unless the obligation to do so shall have been
terminated pursuant to the express terms hereof.
7
(b) So long as no Default shall have occurred and be continuing hereunder,
and conditioned upon Lessee performing all of the covenants and conditions
hereof, as to claims of Lessor or Persons claiming under Lessor, Lessee shall
peaceably and quietly hold, possess and use the Equipment during the Term of
this Agreement subject to the terms and conditions hereof.
XV. INDEMNIFICATION:
(a) Lessee hereby agrees to indemnify (on an after-tax basis), save and
keep harmless Lessor, each Participant, each Assignee, their agents, employees,
successors and assigns, from and against any and all losses, damages, penalties,
injuries, claims, actions and suits, including legal expenses, of whatsoever
kind and nature, in contract or tort, whether caused by the active or passive
negligence of Lessor or otherwise, and including, but not limited to, Lessor's
strict liability in tort, arising out of (i) the selection, manufacture,
purchase, acceptance or rejection of Equipment, the ownership of Equipment
during the Term, and the delivery, lease, possession, maintenance, uses,
condition, return or operation of the Equipment (including, without limitation,
latent and other defects, whether or not discoverable by Lessor or Lessee and
any claim for patent, trademark or copyright infringement or environmental
damage), or (ii) the condition of Equipment sold or disposed of after use by
Lessee, any sublessee or employees of Lessee, except for any of the foregoing
arising from Lessor's gross negligence or willful misconduct. Lessee shall, upon
request, defend any actions based on, or arising out of, any of the foregoing.
(b) General Tax Indemnity. Lessee agrees to pay and assume liability for
and to indemnify (on an after-tax basis), protect, defend, save and hold
harmless Lessor from and against any and all Taxes imposed against Lessor,
Lessee, the Equipment or any portion thereof, upon or with respect to (i) the
Equipment or any portion thereof for actions, events or other conditions
occurring on or after the Closing Date, (ii) the manufacture, financing,
construction, purchase, ownership, acquisition, acceptance, rejection, delivery,
nondelivery, possession, installation, transportation, lease, sublease,
condition, return, abandonment or other application or disposition of the
Equipment or any portion thereof on or after the Closing Date, (iii) the use,
operation, maintenance or repair of the Equipment or any portion thereof on or
after the Closing Date, (iv) the rental payments, receipts or earnings arising
from the Equipment or any portion thereof or payable pursuant to this Agreement,
or (v) this Agreement or otherwise with respect to or in connection with the
transactions contemplated in this Agreement.
(1) The provisions of this Section XV(b) shall not apply to:
(i) Taxes on, or measured by, the net income (including
related capital gains and withholding taxes and corporate franchise taxes) of
Lessor imposed by the United States of America or any state, local or foreign
taxing authority except, in each case, sales, use, excise, property, value-added
or rental Taxes or taxes in the nature of the foregoing or imposed in lieu of
any of the foregoing;
(ii) Taxes imposed on Lessor solely as a result of the willful
misconduct or gross negligence of Lessor (other than willful misconduct or gross
negligence imputed to Lessor by reason of its interest in the Equipment or by
reason of Lessee);
(iii) Taxes imposed for any period, or with respect to any act
or omission, after the expiration or earlier termination of this Agreement and
the total discharge of Lessee of all of its obligations under this Agreement;
(iv) Taxes resulting from any gain from the disposition of the
Equipment or any portion thereof or interest therein (other than (A) as a result
of an Event of Default or (B) otherwise pursuant to the terms of this
Agreement); and
(v) Taxes included in the Capitalized Lessor's Cost.
(2) If any report or return is required to be made with respect to
any obligations of Lessee under this Section XV(b) or arising out of this
Section XV(b), Lessee shall either make such report
8
or return in such manner (including the making thereof in Lessor's name) as will
show the ownership of the Equipment in Lessee and send a copy of such report or
return to Lessor, or shall notify Lessor of such requirement and make such
report or return in such manner as shall be reasonably satisfactory to Lessor.
(3) The amount which Lessee shall be required to pay to or for the
account of Lessor with respect to any Taxes which are subject to indemnification
under this Section XV(b) shall be an amount sufficient to restore Lessor to the
same position Lessor would have been in had such Taxes not been incurred or
imposed. If the payment by Lessee under this Section XV(b) of an amount equal to
such Taxes is less than the amount which would be required to make Lessor whole
as a result of (i) the inclusion of any payment to be made by Lessee under this
Section XV(b) in the taxable income of Lessor in one year and the deduction of
the taxes with respect to which such payment is made from the taxable income of
Lessor in a different year or (ii) the nondeductibility of such Taxes from the
taxable income of Lessor in the year in which such Taxes are paid by Lessee, the
amount of the indemnity to be paid by Lessee shall be adjusted to an amount
which (after taking into account all tax effects on Lessor, any loss of use of
money resulting from differences in timing between inclusion of such indemnity
payment in the taxable income of Lessor and the anticipated realization of such
indemnity payment in the taxable income of Lessor and the anticipated
realization by Lessor of tax benefits resulting from the transaction to which
such indemnity payment is related and the present value of any anticipated
future tax benefits to be realized by Lessor as a result of deducting such
Taxes) will be sufficient to place Lessor in the same position Lessor would have
been in had such Taxes not been imposed. All computations for purposes of this
Section XV(b) shall be based on the highest marginal statutory tax rates in
effect on the date payment pursuant to this Section XV(b) is made. Computations
involving the loss of use of money or calculations of present value shall be
based on the three-month Treasury ▇▇▇▇ rate as published in the Wall Street
Journal at the time of such compilation or calculation as adjusted for
applicable income tax effects and compounded on the Rent Payment Dates.
(4) If any claim is made, or any proceeding is commenced, against
Lessor for any Taxes as to which Lessee may have an indemnity obligation
pursuant to this Section XV(b), Lessor promptly shall notify Lessee in writing.
Lessee, at its sole cost and expense, and upon written notice to Lessor, may
contest in good faith any liability indemnified against under this Section
XV(b), in the name of Lessee (or if Lessee is not permitted to conduct such
contest in its own name, in the name of Lessor); provided, however, that such
contest will not (i) in the opinion of Lessor, in its sole discretion, involve
any material danger of the sale, forfeiture or loss of, or the creation of any
lien (other than a Permitted Lien) on the Equipment or any part thereof or any
interest therein (except that Lessee may contest such claim in any event if it
bonds against the events described in this Section XV(b)(4), and such bond is
acceptable to Lessor in its sole discretion), or (ii) cause any impairment of
the timely payment of Rent by Lessee, or (iii) materially adversely affect the
Equipment, or any other property, assets or rights of Lessor. Lessor shall
furnish such information and provide such assistance as Lessee may reasonable
request in connection with such contest by Lessee. The out-of-pocket expenses of
Lessor in furnishing such information or providing such assistance shall be for
the account of Lessee.
(5) If Lessor shall obtain a refund of all or any part of any Taxes
payment of or indemnity for which shall have been made by Lessee pursuant to
this Section XV(b), Lessor shall, unless an Event of Default shall have occurred
and be continuing, promptly pay to Lessee (i) the amount of such refund plus
(ii) an amount equal to all tax benefits realized by Lessor as the result of the
payment of the amounts referred to in clause (i) above and this clause (ii),
provided that Lessor shall not pay to Lessee any amount which exceeds the total
amount paid by Lessee to Lessor pursuant to this Section XV(b).
(6) The obligations of Lessee under this Section XV(b) are expressly
made for the benefit of, and shall be enforceable by, Lessor and each Assignee
without declaring this Agreement to be in default and notwithstanding any
assignment by Lessor of this Agreement or any of its rights hereunder or any
disposition by Lessor of all or any part of its interest in the Equipment. All
payments required to be paid pursuant to this Section XV(b) shall be made
directly to, or as otherwise requested by, the Person entitled thereto upon
written demand by such Person without any right of setoff, counterclaim,
defense, abatement, suspension, deferment, recoupment or reduction.
9
(c) Lessee shall defend, indemnify (on an after-tax basis) and hold
harmless Lessor and its Affiliates, successors and assigns, directors, officers,
employees and agents, from and against any Environmental Claim or Environmental
Loss and, unless Lessee is then contesting in good faith such Environmental
Claim or Environmental Loss and Lessee has set aside on its books appropriate
reserves therefor, Lessee shall fully and promptly pay, perform and discharge
any such Environmental Claim or Environmental Loss.
(d) All of the rights, privileges and indemnities of Lessor, any
Participant and/or any Assignee contained in this Section shall survive the
expiration or other termination of this Agreement and the rights, privileges and
indemnities contained herein are expressly made for the benefit of, and shall be
enforceable by Lessor, each Participant, each Assignee and their successors and
assigns.
XVI. DISCLAIMER:
LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT ANY
ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS NOT
MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE EQUIPMENT LEASED
HEREUNDER OR ANY COMPONENT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS, QUALITY OF MATERIALS OR
WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE, USE OR OPERATION, SAFETY,
PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE. All such risks, as
between Lessor and Lessee, are to be borne by Lessee. Without limiting the
foregoing, Lessor shall have no responsibility or liability to Lessee or any
other Person with respect to any of the following (i) any liability, loss or
damage caused or alleged to be caused directly or indirectly by any Equipment,
any inadequacy thereof, any deficiency or defect (latent or otherwise) therein,
or any other circumstance in connection therewith; (ii) the use, operation or
performance of any Equipment or any risks relating thereto; (iii) any
interruption of service, loss of business or anticipated profits or
consequential damages; or (iv) the delivery, operation, servicing, maintenance,
repair, improvement or replacement of any Equipment. If, and so long as, no
default exists under this Lease, Lessee shall be, and hereby is, authorized
during the term of this Lease to assert and enforce, at Lessee's sole cost and
expense, from time to time, in the name of and for the account of Lessor and/or
Lessee, as their interests may appear, whatever claims and rights Lessor may
have against any Supplier of the Equipment.
XVII. REPRESENTATIONS AND WARRANTIES OF LESSEE:
Lessee hereby represents and warrants to Lessor that on the date hereof
and on the date of execution of each Schedule:
(a) Lessee has adequate power and capacity to enter into, and perform
under, this Agreement and all related documents (together, the "Documents") and
is duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by
Lessee and constitute valid, legal and binding agreements, enforceable in
accordance with their terms, except to the extent that the enforcement of
remedies therein provided may be limited under applicable bankruptcy and
insolvency laws and equitable principles.
(c) No approval, consent or withholding of objections is required from any
governmental authority or instrumentality with respect to the entry into or
performance by Lessee of the Documents except such as have already been
obtained.
(d) The entry into and performance by Lessee of the Documents will not:
(i) violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's articles of incorporation, charter or by-laws; or (ii)
result in any breach of, constitute a default under or result in the creation of
any lien, charge, security interest or other encumbrance upon any Equipment
pursuant to any
10
indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party including,
without limitation, the Indenture or the Revolver.
(e) There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee, which, if successful, would have a material adverse effect on Lessee or
the ability of Lessee to fulfill its obligations under this Agreement or which
seek to set aside, restrain, enjoin or prevent the completion and consummation
of this Agreement or the transactions contemplated hereby.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) [RESERVED]
(h) Lessee is duly incorporated and will be at all times validly existing
and in good standing under the laws of the state of its incorporation (specified
in the first sentence of this Agreement). Lessee's Federal Employer
Identification Number and Organizational Number are as specified in the
Equipment Schedule and Lessee shall give Lessor prior written notice of any
change of Lessee's name or jurisdiction of organization, or of the "location"
(as such term is used in Article 9 of the UCC) of Lessee, from its present
location.
(i) Upon the filing in the office of the Secretary of State of the State
of Delaware of UCC Financing Statements describing Lessor, as secured party, and
Lessee, as debtor, and the Equipment as collateral, Lessor shall have a first
priority perfected lien on and security interest under the UCC in the Equipment.
(j) No item of the Equipment is subject to the motor vehicle titling
provisions of any applicable state law, and no certificate of title has been or
is required to be issued with respect to any item of the Equipment.
(k) The Equipment will at all times be used for commercial or business
purposes.
XVIII. INTENT; GRANT OF SECURITY INTEREST; USURY SAVINGS:
(a) It is the express intention of the parties hereto that each Schedule,
incorporating by reference the terms of this Agreement, constitutes the
retention of a security interest by Lessor in the Equipment described therein
and not a true "lease" as defined in the UCC.
(b) In order to secure the prompt payment of the Rent and all of the other
amounts from time to time outstanding under and with respect to the Schedules,
and the performance and observance by Lessee of all the agreements, covenants
and provisions thereof (including, without limitation, all of the agreements,
covenants and provisions of this Agreement that are incorporated therein),
Lessee hereby grants to Lessor a first priority security interest in the
Equipment leased under the Schedules (whether such Equipment constitutes
"Equipment" or "Inventory" as such terms are defined in the UCC), together with
all additions, attachments, accessories and accessions thereto whether or not
furnished by the supplier of the Equipment and any and all substitutions,
replacements or exchanges therefor, together with all warranties with respect
thereto, manuals and other books and records relating thereto, in each such case
in which Lessee shall from time to time acquire an interest, and any and all
insurance and/or other proceeds (but without power of sale by Lessee) of the
property in and against which a security interest is granted hereunder.
(c) It is the intention of the parties hereto to comply with any
applicable usury laws to the extent that any Schedule is determined to be
subject to such laws; accordingly, it is agreed that, anything in this Agreement
or any of the Documents to the contrary notwithstanding, if at any time the rate
of interest payable by any Person under this Agreement or any of the Documents
exceeds the highest rate of interest permissible under any Applicable Law (the
"Maximum Lawful Rate"), then, so long as the Maximum Lawful Rate would be
exceeded, the rate of interest under this Agreement or such Document
11
shall be equal to the Maximum Lawful Rate. If at any time thereafter the rate of
interest payable under this Agreement or such Document is less than the Maximum
Lawful Rate, such Person shall continue to pay interest under this Agreement and
such Document at the Maximum Lawful Rate until such time as the total interest
received from such Person is equal to the total interest that would have been
received had the Applicable Law not limited the interest rate payable under this
Agreement or such Document. In no event shall the total interest received by
Lessor under this Agreement or any of the Documents exceed the amount which
Lessor and each other Affected Party could lawfully have received, had the
interest due under this Agreement or such Documents been calculated since the
date hereof at the Maximum Lawful Rate.
XIX. TERMINATION RENTAL PREMIUM:
Upon the expiration of the Term of the Schedule, Lessee promptly shall pay
to Lessor, without notice or demand, a Termination Rental Premium of One Dollar
($1.00), together with all Rent and other sums then due on such date, plus all
taxes and charges upon transfer (if any), and all other reasonable and
documented expenses incurred by Lessor in connection with the transfer of the
Equipment. Upon receipt by Lessor of such payment, Lessor will transfer to
Lessee, on an AS IS BASIS, all of Lessor's interest in and to the Equipment.
Lessor shall not be required to make and may specifically disclaim any
representation or warranty as to the condition of the Equipment and any other
matters (except that Lessor shall warrant that it has conveyed whatever interest
it received in the Equipment from Lessee and/or the Supplier free and clear of
any Lessor Lien). At Lessee's expense, Lessor shall execute and deliver to
Lessee such UCC Statements of Termination and ▇▇▇▇ of sale as reasonably may be
required in order to terminate and convey any interest of Lessor in and to the
Equipment.
XX. MISCELLANEOUS:
(a) LESSEE AND LESSOR EACH HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING
ESTABLISHED BETWEEN LESSEE AND LESSOR. The scope of this waiver is intended to
be all encompassing of any and all disputes that may be filed in any court
(including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT, ANY RELATED DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.
(b) Any cancellation or termination by Lessor, pursuant to the provision
of this Agreement, any Schedule, supplement or amendment hereto, or the lease of
any Equipment hereunder, shall not release Lessee from any then accrued and
unpaid obligations to Lessor hereunder and any other obligations intended to
survive such cancellation or termination.
(c) All Equipment shall at all times remain personal property subject to
the applicable Schedule and Lessor's rights, title and interests with respect
thereto, regardless of the degree of its annexation to any real property and
shall not by reason of any installation in, or affixation to, real or personal
property become a part thereof. Lessee shall obtain and deliver to Lessor (to be
recorded at Lessee's expense) from any Person having an interest in the property
where the Equipment is to be located, waivers of any lien, encumbrance or
interest which such Person might have or hereafter obtain or claim with respect
to the Equipment.
12
(d) Time is of the essence of this Agreement. Lessor's failure at any time
to require strict performance by Lessee of any of the provisions hereof shall
not waive or diminish Lessor's right thereafter to demand strict compliance
therewith.
(e) Lessee authorizes Lessor to file such UCC statements as reasonably may
be required in connection with this transaction, but only to the extent related
to the Equipment and any other collateral hereunder. Lessee agrees, upon
Lessor's request, to execute any instrument necessary or expedient for filing,
recording or perfecting the interest of Lessor, and to execute and deliver to
Lessor such further documents, instruments and assurances and to take such
further action as Lessor from time to time reasonably may request in order to
carry out the intent and purpose of the transaction contemplated hereunder.
(f) All notices required to be given hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return
receipt requested, addressed to the other party at its respective address stated
above (provided that if such notice is sent to Lessee, it shall be marked:
"Attention: Treasury") or at such other address as such party shall from time to
time designate in writing to the other party; and shall be effective from the
date of receipt.
(g) This Agreement and any Schedule and Annexes thereto constitute the
entire agreement of the parties with respect to the subject matter hereof. NO
VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY WAIVER OF ANY OF ITS
PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING AND SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
(h) The representations, warranties and covenants of Lessee herein shall
be deemed to survive the closing hereunder. Lessor's obligations to acquire and
lease specific items of Equipment shall be conditioned upon Lessee providing to
Lessor such information with respect to Lessee's financial condition as Lessor
may require, and Lessor being satisfied that there shall have been no material
adverse change in the business or financial condition of Lessee from the date of
execution hereof. The obligations of Lessee under Sections III, IV, XI, and XV
which accrue during the term of this Agreement and obligations which by their
express terms survive the termination of this Agreement, shall survive the
termination of this Agreement.
(i) In case of a failure of Lessee to comply with any provision of this
Agreement, Lessor shall have the right, but shall not be obligated, to effect
such compliance, in whole or in part; and all moneys spent and reasonable
expenses and obligations incurred or assumed by Lessor in effecting such
compliance (together with interest thereon at the rate specified in Paragraph
(j) of this Section) shall constitute additional Rent due to Lessor within five
(5) Business Days after the date Lessee receives notice from Lessor requesting
payment. Lessor's effecting such compliance shall not be a waiver of Lessee's
default.
(j) Any Rent or other amount not paid to Lessor when due hereunder shall
bear interest, both before and after any judgment or termination hereof, at the
lesser of (1) the sum of the Interest Rate plus three percent (3%), or (2) or
the maximum rate allowed by law.
(k) 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.
(l) Whether or not any Equipment is leased hereunder, Lessee shall pay
upon demand as additional Rent hereunder all reasonable and necessary documented
transaction expenses including, but not limited to, expenses of counsel, due
diligence, appraisals, lien searches, Uniform Commercial Code and/or
Estoppel/Waiver Agreement filing fees, and field audits. Without limiting the
generality of the foregoing, Lessee agrees to pay on demand all reasonable costs
and expenses incurred by Lessor in connection with the preparation, execution,
delivery, filing, recording, and administration of any of the
13
Documents, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for Lessor, and all costs and expenses, if any, in
connection with the enforcement of any of the Documents. In addition, Lessee
shall pay any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of any
of the Documents and the other documents to be delivered under the Documents,
and agrees to save Lessor harmless from and against any and all liabilities with
respect to or resulting from any delay attributed to Lessee in paying or failing
to pay such taxes and fees. In addition, Lessee shall pay to Lessor the fees
specified in the Fee Agreement.
(m) If Lessor is required by the terms hereof to pay to or for the benefit
of Lessee any amount received as a refund of any Tax or as insurance proceeds,
and a Default or event which, with the giving of notice or the lapse of time, or
both, would become a Default has then occurred and is continuing, Lessor shall
not be required to pay such amounts unless and until any such Default shall have
been cured or any such event which, with the giving of notice or the lapse of
time, or both, would become a Default shall have been waived by Lessor. In
addition, if Lessor is required by the terms hereof to cooperate with Lessee in
connection with certain matters, such cooperation shall not be required if a
Default has then occurred and is continuing. Lessor may set-off against any
amount which Lessor is required to pay to Lessee hereunder, any amount then due
by Lessee hereunder.
(n) This Agreement may be executed in multiple counterparts, each of
which, when taken together, shall constitute a single agreement.
XXI. CHOICE OF LAW; JURISDICTION:
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS
PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT. The parties agree that
any action or proceeding arising out of or relating to this Agreement may be
commenced in the United States District Court for the Southern District of New
York.
XXII. CHATTEL PAPER:
To the extent that any Schedule would constitute chattel paper, as such
term is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference; and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof, which shall be
identified as the document marked "Original" and all other counterparts shall be
marked "Duplicate".
XXIII. EARLY TERMINATION:
So long as no Default exists hereunder (from the time of such election
until the applicable Termination Date (as such term is hereinafter defined)),
Lessee may elect to terminate this Agreement as to all but not less than all of
the Equipment leased under all Equipment Schedules as to which the same Person
is then the Lessor or an Assignee as of the Early Termination Option Date (the
"Termination Date") upon at least sixty (60) days' prior written irrevocable
notice to Lessor. On the Termination Date, Lessee shall pay to Lessor in cash
the purchase price for the Equipment, determined as hereinafter provided. The
purchase price of such Equipment shall be an amount equal to the sum of (1) the
Lease Balance with respect to the Equipment (calculated as of the Termination
Date), plus (2) all sales or transfer taxes and charges upon sale (if any), plus
(3) all Rent and other sums due and unpaid with respect to the Equipment as of
the Termination Date, plus (4) the Prepayment Premium (if any). Upon
satisfaction of the conditions specified in this Section, Lessor will transfer,
on an AS IS BASIS, all of Lessor's interest in and to the Equipment. Lessor
shall not be required to make and may specifically
14
disclaim any representation or warranty as to the condition of such Equipment
and other matters (except that Lessor shall warrant that it has conveyed
whatever interest it received in such Equipment free and clear of any Lessor
Lien). At Lessee's expense, Lessor shall execute and deliver to Lessee such UCC
Statements of Termination and ▇▇▇▇ of sale as reasonably may be required in
order to terminate and convey any interest of Lessor in and to the Equipment.
XXIV. CONFIDENTIALITY:
Lessor agrees that it will not disclose without the prior consent of
Lessee (other than to its Affiliates, employees, auditors, or counsel) any
confidential information with respect to Lessee which is furnished pursuant to
this Agreement; provided, that Lessor may disclose such information (a) as has
become generally available to the public, (b) as may be required or appropriate
in any report, statement or testimony submitted to any governmental agency or
authority having or claiming to have jurisdiction over Lessor, (c) as may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any requirement of law, and/or
(e) to any prospective or actual assignee or participant in connection with any
contemplated assignment or participation of this Agreement or any Schedule or
any interest therein by Lessor which prospective assignee or participant shall
have agreed in writing to be subject to the confidentiality provision of this
Section XXIV; provided, however, that in the case of any disclosure pursuant to
the foregoing clause (c) or (d); Lessor will use its reasonable efforts to
notify Lessee, to the extent permitted as advised by counsel, in advance of such
disclosure so as to afford Lessee the opportunity to protect the confidentiality
of the information to be so disclosed. For the purposes hereof, "confidential
information" shall include all written information regarding Lessee's business
activities furnished by Lessee to Lessor in connection with this Agreement, but
shall expressly exclude, for all purposes, information which: (1) is or becomes
generally available to the public other than as a result of a disclosure by
Lessor or its Representatives, (2) was available to Lessor prior to its
disclosure by Lessee, (3) becomes available to Lessor on a non-confidential
basis from any Person (unless Lessor has actual knowledge that such Person is
violating its confidential agreement with Lessee by making such information
available), or (4) is approved for release by written authorization of either
Lessee or their Representatives.
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15
IN WITNESS WHEREOF, Lessor and Lessee have caused this Master Lease
Agreement to be executed by their duly authorized representatives as of the date
first above written.
LESSOR: LESSEE:
GENERAL ELECTRIC CAPITAL CORPORATION, ANCHOR GLASS CONTAINER
FOR ITSELF AND AS AGENT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------- ------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Risk Manager Title: EVP and CFO
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SCHEDULE A
"Adverse Environmental Condition" shall refer to (i) the existence or the
continuation of the existence, of an Environmental Emission (including,
without limitation, a sudden or non-sudden accidental or non-accidental
Environmental Emission), of, or exposure to, any Contaminant, odor or
audible noise in violation of any Applicable Environmental Law, at, in,
by, from or related to any Equipment, (ii) the environmental aspect of the
transportation, storage, treatment or disposal of materials in connection
with the operation of any Equipment in violation of any Applicable
Environmental Law, or (iii) the violation, or alleged violation, of any
Environmental Law connected with any Equipment.
"Affiliate" shall refer, with respect to any given Person, to any Person
that directly or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person.
"Agreement" shall have the meaning specified in the preamble of this
Agreement.
"Applicable Laws" means all laws, judgments, decrees, ordinances and
regulations and any other governmental rules, orders and determinations
and all requirements having the force of law, now or hereafter enacted,
made or issued, whether or not presently contemplated, including (without
limitation) compliance with all requirements of zoning laws, labor laws
and Environmental Laws, compliance with which is required with respect to
the Equipment, whether or not such compliance shall require structural,
unforeseen or extraordinary changes to any of the Equipment or the
operation, occupancy or use thereof.
"AS IS BASIS" shall have the meaning provided in Section VIII of this
Agreement.
"Basic Term Rent" means, with respect to any Equipment, the Basic Term
Rent for such Equipment set forth in, and determined in accordance with
the Schedule covering such Equipment.
"Basic Term Expiration Date" means, with respect to any Schedule, the last
day of the Basic Term of such Schedule.
"Business Day" means any day other than a Saturday, Sunday or legal
holiday for commercial banks under the laws of the State of New York.
"Calculation Date" shall have the meaning provided in Section VIII of this
Agreement.
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated) of such Person's capital stock or partnership, limited
liability company or other equity interests at any time outstanding, and
any and all rights, warrants or options exchangeable for or convertible
into such capital stock or other interests (but excluding any debt
security that is exchangeable for or convertible into such capital stock),
including, without limitation, in the case of Lessee, the Series C
Participating Preferred Stock.
"Capitalized Lessor's Cost" means, with respect to each Schedule, the
capitalized lessor's cost set forth in such Schedule.
"Casualty Occurrences" shall have the meaning provided in Section VIII of
this Agreement.
"CERCLA" shall have the meaning provided in the definition of
"Environmental Law" provided in this Agreement.
"Change of Control" shall mean (a) the transfer (in one transaction or a
series of transactions) of all or substantially all of the assets of
Lessee to any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act); (b) the liquidation or dissolution of Lessee or the
adoption of a plan by the stockholders of Lessee relating to the
dissolution or liquidation of Lessee; (c) to the extent clause (e) below
is triggered, the acquisition by any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act), except for one or more Permitted
Holders, of beneficial ownership (as determined in accordance with Rules
13d-3 and 13d-5 under the Exchange Act, except that a Person will be
deemed to have beneficial ownership of all shares that such Person has the
right to acquire, whether such right is exercisable immediately or only
after a passage of time), directly or indirectly, of more than forty
percent (40%) (or after a Qualified Public Offering, twenty-five percent
(25%) of the voting power of the total outstanding Voting Stock (on a
fully diluted basis) of Lessee or the Board of Directors of Lessee, (d)
during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Lessee
(together with any new directors who have been appointed by any Permitted
Holder, or whose nomination for election by the stockholders of Lessee, as
the case may be, was approved by a vote of at least sixty-six and
two-thirds percent (66 2/3%) of the directors then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason
to constitute a majority of the Board of Directors of Lessee then still in
office; or (e) the failure of the Permitted Holders to own directly or
indirectly at least thirty percent (30%) of the voting power of the total
outstanding Voting Stock of Lessee.
"Closing Date" shall have the meaning specified in the preamble of this
Agreement.
"Contaminant" shall refer to those substances which are regulated by or
form the basis of liability under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls ("PCBs"), and
radioactive substances.
"Default" shall have the meaning provided in Section XII(a) of this
Agreement.
"Default Payment" shall mean that amount equal to the sum of: (1) the
Lease Balance with respect to the Equipment (calculated as of the last
Rent Payment Date on which the Rent was paid), plus (2) all sales or
transfer taxes and charges upon sale (if any), plus (3) all Rent and other
sums due and unpaid with respect to the Equipment as of the date of
payment of the Default Payment, plus (4) all reasonable attorneys' fees
actually incurred by Lessor as a result of the occurrence of an event
described in Section XII(a) of this Agreement or in enforcing the
provisions of this Agreement and any ancillary documents.
"Documents" shall have the meaning provided in Section XVII(a) of this
Agreement.
"Early Termination Option Date" shall mean any Rent Payment Date with
respect to the applicable Schedule.
"EBITDA" means, with respect to any applicable fiscal period, the net
income of such Person during such period from continuing operations, plus
interest expenses, taxes, depreciation and amortization deducted in
determining net income for such period, determined on a trailing quarter
basis.
"Environmental Claim" shall refer to any accusation, allegation, notice of
violation, claim, demand, abatement or other order or direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment or other adverse
effects on the environment, or for fines, penalties or restrictions,
resulting from or based upon any Adverse Environmental Condition.
2
"Environmental Emission" shall refer to any actual or threatened release,
spill, omission, leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the indoor or outdoor
environment, or into or out of any of the Equipment, including, without
limitation, the movement of any Contaminant or other substance through or
in the air, soil, surface water, groundwater, or property.
"Environmental Law" shall mean any Federal, foreign, state or local law,
rule or regulation pertaining to the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") (42 U.S.C. Section 9601 et
seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801
et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 1361 et
seq.), and the Occupational Safety and Health Act (19 U.S.C. Section 651
et seq.), as these laws have been amended or supplemented, and any
analogous foreign, Federal, state or local statutes, and the regulations
promulgated pursuant thereto.
"Environmental Loss" shall mean any loss, cost, damage, liability,
deficiency, fine, penalty or expense (including, without limitation,
reasonable attorneys' fees, engineering and other professional or expert
fees), investigation, removal, cleanup and remedial costs (voluntarily or
involuntarily incurred) and damages to, loss of the use of or decrease in
value of the Equipment arising out of or related to any Adverse
Environmental Condition.
"Equipment" means the items of equipment identified on any Schedule,
including all Replacement Items, and all modifications, parts,
appurtenances, accessories, furnishings and other personal property of
whatever nature, which may from time to time be incorporated or installed
in or attached to any item of Equipment.
"Exchange Act" shall have the meaning provided in Section V(b) of this
Agreement.
"Financial Projections" shall mean the projections of the financial
condition of Lessee (together with the assumptions thereto) consisting of
the balance sheet, statement of income and loss, and statement of cash
flow, for the fiscal year of Lessee required to be delivered to Lessor in
accordance with Section V(g) hereof.
"GAAP" shall have the meaning provided in Section V(b) of this Agreement.
"Incorporated Covenants" shall have the meaning given such term in Section
XII(a)(11) of the Agreement.
"Indenture" shall mean that certain Indenture dated as of April 17, 1997,
as amended by that certain First Supplemental Indenture dated as of August
30, 2002, among Lessee, Consumers U.S., Inc. and The Bank of New York, as
Trustee, pertaining to $150,000,000 11/25% First Mortgage Notes due 2005.
"Interest Component" shall have the meaning provided in the applicable
Schedule.
"Interest Rate" shall have the meaning provided in the applicable
Schedule.
"Lease Balance" shall have the meaning provided in the applicable
Schedule.
"Lease Commencement Date" shall have the meaning provided in Section II(a)
of this Agreement.
"Lessee" shall have the meaning provided in this Agreement.
3
"Lessor" shall have the meaning provided in this Agreement.
"Lessor Liens" means liens or encumbrances created by or through Lessor,
other than the rights, title or interests created or conveyed by or
pursuant to any Schedule or this Agreement.
"LIBOR Rate" shall have the meaning provided in the applicable Schedule.
"LIBOR Reserve Requirements" shall have the meaning provided in the
applicable Schedule.
"Liens" shall mean any lien or encumbrance on the Equipment.
"Maximum Lawful Rate" shall have the meaning provided in Section XVIII(c)
of this Agreement.
"Participant" and "Participants" shall have the meaning provided in
Section XIII(c) of this Agreement.
"Payment Date" shall have the meaning provided in Section VIII of this
Agreement.
"Permitted Holders" shall mean the Persons identified on Exhibit No. 2
hereto.
"Permitted Lien" shall mean (i) the rights of Lessor and Lessee as herein
provided, (ii) Lessor Liens, (iii) Liens for taxes either not yet due or
being diligently contested in good faith by appropriate proceedings and so
long as adequate reserves are maintained with respect to such Liens and
available to Lessee for the payment of such taxes and only so long as
neither such proceedings nor such Liens involve any material danger of the
sale, forfeiture, loss or loss of use of the Equipment or any part
thereof, or any interest of Lessor or any risk of criminal liability or
material civil liability of Lessor, and Lessee has given Lessor prior
written notice of Lessee's intent to contest any such taxes and Lessee has
agreed to indemnify Lessor for any and all costs and expenses (including,
without limitation, reasonable attorneys' fees) which Lessor may incur as
a result of such contest, (iv) incohate materialmen's, mechanics',
carriers', workmen's, repairmen's, or other like inchoate Liens arising in
the ordinary course of Lessee's business for sums either not delinquent or
being diligently contested in good faith and only so long as neither such
proceedings nor any such Liens involve any material danger of the sale,
forfeiture, loss or loss of use of the Equipment or any part thereof, or
any interest of Lessor and further provided that adequate reserves are
maintained with respect to such Liens and provided that Lessee has given
Lessor written notice thereof within five (5) business days after having
knowledge thereof; and (v) Liens arising out of any judgment or award
against Lessee with respect to which at the time an appeal or proceeding
for review is being prosecuted in good faith by appropriate proceedings
diligently conducted and with respect to which there shall have been
secured a stay of execution pending such appeal or proceeding for review
and so long as there is no material danger of sale, forfeiture, loss, or
loss of use of the Equipment and Lessee shall have given Lessor written
notice thereof, and against which Lessee causes to be provided a bond in
such amount and under such terms and conditions as are reasonably
satisfactory to Lessor.
"Person" shall include any individual, partnership, corporation, trust,
limited liability entity, unincorporated organization, government or
department or agency thereof and any other entity.
"Prepayment Premium" shall mean an amount calculated as the following
specified percentage of the Capitalized Lessor's Cost of the Equipment to
be purchased: if the Termination Date is Rent Payment Date number one
through twelve, two percent (2%); if the Termination Date is Rent Payment
Date number thirteen through twenty-four, one percent (1%); and if the
Termination Date is on or after Rent Payment Date number twenty-five:
zero.
"Principal Component" shall have the meaning provided in the applicable
Schedule.
4
"Qualified Public Offering" shall mean any bona fide, firm commitment,
underwritten offering to the public by Lessee of its Capital Stock
pursuant to an effective registration statement under the Securities Act
of 1933, as then in effect, or any comparable statement under any similar
Federal statute then in force.
"Rent" means, with respect to any Equipment, all Basic Term Rent specified
in the Schedule covering such Equipment.
"Rent Payment Date" shall have the meaning provided in the applicable
Schedule.
"Rent Payment Period" shall have the meaning provided in the applicable
Schedule.
"Representatives" shall mean and include all subsidiaries, affiliates,
directors, officers, employees, agents and controlling persons of the
Persons referred to.
"Revolver" shall mean that certain Loan and Security Agreement dated as of
August 30, 2002, among Lessee, Congress Financial Corporation (Central),
as Administrative and Collateral Agent, Bank of America, N.A., as
Documentation Agent, and the financial institutions named therein as
lenders, or any security documents and guaranties delivered in connection
therewith.
"Schedule" means any schedule executed pursuant to this Agreement.
"SEC" shall have the meaning provided in Section V(b) of this Agreement.
"Series C Participating Preferred Stock" shall mean the shares of Capital
Stock issued by Borrower pursuant to the Certificate of Designations of
Series C Participating Preferred Stock of Lessee filed with the Delaware
Secretary of State as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
"Spread" shall have the meaning provided in the applicable Schedule.
"Supplier" shall have the meaning provided in Section I(b) of this
Agreement.
"Syndication" shall have the meaning provided in Section XIII(c) of this
Agreement.
"Taxes" shall mean all license and registration fees, and all sales, use,
personal property, excise, gross receipts, franchise, stamp or other
taxes, imposts, duties and charges, together with all penalties, fines or
interest thereon, imposed by any foreign, Federal, state or local
governmental or taxing authority.
"Telerate Page 3750" shall have the meaning provided in the applicable
Schedule.
"Term" shall have the meaning provided in Section II(a) of this Agreement.
"Termination Date" shall have the meaning provided in Section XXIII of
this Agreement.
"Voting Stock" shall mean with respect to any Person, (a) one (1) or more
classes of Capital Stock of such Person having general voting powers to
elect at least a majority of the board of directors, managers or trustees
of such Person, irrespective of whether at the time Capital Stock of any
other class or classes have or might have voting power by reason of the
happening of any contingency, and (b) any Capital Stock of such Person
convertible or exchangeable without restriction at the option of the
holder thereof into Capital Stock of such Person described in clause (a)
of this definition.
5