December 26, 2002 Master Lease Agreement

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 401 Merritt Seven, Suite 23, Norwalk, Connecticut 06851-1177, and ANCHOR GLASS CONTAINER CORPORATION, a Delaware corporation with its mailing address and chief place of business at 4343 Anchor Plaza Parkway, Tampa, Florida 33634 (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 Bill 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 bill 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 New York, New York, New York 10006, Account No. 50-202-962, ABA No. 021-001-033, 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 bill 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 bill 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 bill 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 ...