August 30, 2002 Collateral Agency Agreement

COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT


THIS COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT ("Agreement"), dated as of August 30,2002, is by and among (a) Congress Financial Corporation (Central), an Illinois corporation, in its capacity as collateral agent and administrative agent pursuant to the Revolving Loan Agreement (as hereinafter defined), acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, "Revolving Loan Agent" as hereinafter further defined), (b) the financial institutions which are parties to the Revolving Loan Agreement as lenders (collectively, the "Revolving Loan Lenders"; together with Revolving Loan Agent, collectively, "Revolving Loan Creditors" as hereinafter further defined), (c) Ableco Finance, LLC, in its capacity as administrative agent pursuant to the Term Loan Agreement (as hereinafter defined) acting for and on behalf of the financial institutions which are parties thereto as lenders (in such capacity, "Term Loan Agent" as hereinafter further defined), (d) the financial institutions which are parties to the Term Loan Agreement as lenders (collectively, the "Term Loan Lenders"; together with Term Loan Agent, collectively, the "Term Loan Creditors" as hereinafter further defined) and (e) Congress Financial Corporation (Central), an Illinois corporation, in its capacity as collateral agent for the Creditors (in such capacity, "Collateral Agent" as hereinafter further defined).


WITNESSETH:


WHEREAS, Revolving Loan Creditors and Borrower have entered or are about to enter into financing arrangements pursuant to which Revolving Loan Lenders (or Revolving Loan Agent on behalf of Revolving Loan Lenders) may make loans and advances and provide other financial accommodations to Borrower as set forth in the Loan and Security Agreement, dated of even date herewith, by and among Borrower, Revolving Loan Agent, Bank of America, N.A., as documentation agent, and Revolving Loan Lenders (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Revolving Loan Agreement") and other agreements, documents and instruments referred to therein or at any time executed or delivered in connection therewith or related thereto, including, but not limited to, this Agreement (all of the foregoing, together with the Revolving Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the "Revolving Creditor Agreements"); and


WHEREAS, Borrower and Term Loan Creditors have entered or are about to enter into financing arrangements pursuant to which Term Loan Lenders (or Term Loan Agent on behalf of Term Loan Lenders) will make a term loan to Borrower as set forth in the Term Loan Agreement, dated of even date herewith, by and among Borrower and Term Loan Creditors (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Term Loan Agreement") and other agreements, documents and instruments


referred to therein or at any time executed or delivered in connection therewith or related thereto, including, but not limited to, this Agreement (all of the foregoing, together with the Term Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the "Term Creditor Agreements"); and


WHEREAS, Creditors desire to enter into this Agreement to (i) appoint Collateral Agent to act on behalf of Creditors (as hereinafter defined) under the Mortgage Note Intercreditor Agreement (as hereinafter defined), (ii) confirm the relative priority of the interests of each Creditor in the assets and properties of Borrower, and (iii) provide for the orderly sharing among Creditors, in accordance with such priorities, of proceeds of such assets and properties upon any foreclosure thereon or other disposition thereof, and related matters;


NOW THEREFORE, in consideration of the mutual benefits accruing to Creditors hereunder and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:


1. DEFINITIONS


As used above and in this Agreement, the following terms shall have the meanings ascribed to them below:


1.1 "Agreements" shall mean, collectively, the Revolving Creditor Agreements, the Term Loan Creditor Agreements and the Security Agreements.


1.2 "Availability" shall mean, at any time, the aggregate amount of the Revolving Loans and Letter of Credit Accommodations available to Borrower from Revolving Loan Creditors based on the applicable percentages (as in effect on the date hereof) of the Net Amount of Eligible Accounts and the Value of the various types and categories of Eligible Inventory (as such terms are defined in the Revolving Loan Agreement as in effect on the date hereof) as set forth in Section 2.1 of the Revolving Loan Agreement (determined without regard to any Revolving Loans or Letter of Credit Accommodations then outstanding), and, accordingly, the term "Availability" is used herein to mean the aggregate amount of Revolving Loans and Letter of Credit Accommodations available without any reduction for the amount of Revolving Loans and Letter of Credit Accommodations outstanding.


1.3 "Borrower" shall mean Anchor Glass Container Corporation, a Delaware corporation, with its chief executive office at One Anchor Plaza, 4343 Anchor Plaza Parkway, Tampa, Florida 33634, together with its successors and assigns and including, without limitation, a receiver, trustee, or debtor-in-possession on behalf of such person or on behalf of any such successor or assign.


1.4 "Collateral" shall mean all of the property and interests in property, real or personal, tangible or intangible, now owned or hereafter acquired by Borrower in or upon which any


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Creditor at any time has a Lien, and including, without limitation, all proceeds and products of such property and interests in property.


1.5 "Collateral Agent" shall mean Congress Financial Corporation (Central), an Illinois corporation, in its capacity as collateral agent under the Mortgage Note Intercreditor Agreement, acting for and on behalf of Revolving Loan Creditors and Term Loan Creditors pursuant to the terms hereof, and its successors and assigns (including any replacement or successor agent or additional agent acting for and on behalf of the Revolving Loan Creditors and Term Loan Creditors in such capacity).


1.6 "Creditors" shall mean, collectively, Revolving Loan Creditors and Term Loan Creditors and their respective successors and assigns; each sometimes being referred to herein individually as a "Creditor".


1.7 "Insolvency Proceeding" shall mean, as to any Person, any of the following: (a) any case or proceeding with respect to such Person under the U.S. Bankruptcy Code or any other Federal or State bankruptcy, insolvency, reorganization or other law affecting creditors' rights or any other or similar proceedings seeking any stay, reorganization, arrangement, composition or readjustment of the obligations and indebtedness of such Person or (b) any proceeding seeking the appointment of any trustee, receiver, liquidator, custodian or other insolvency official with similar powers with respect to such Person or any of its assets or (c) any proceeding for liquidation, dissolution or other winding up of the business of such Person or (d) any assignment for the benefit of creditors or any marshalling of assets of such Person.


1.8 "Lenders" shall mean, collectively, Revolving Loan Lenders and Term Loan Lenders, and their respective successors and assigns.


1.9 "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance (including, but not limited to, easements, rights of way and the like), lien (statutory or other), security agreement or transfer intended as security, including without limitation, any conditional sale or other title retention agreement, the interest of a lessor under a capital lease or any financing lease having substantially the same economic effect as any of the foregoing.


1.10 "Lien Enforcement Action" means (a) any action by any Creditor to foreclose on the Lien of such Person in all or a material portion of the Collateral, (b) any action by any Creditor to take possession of, sell or otherwise realize (judicially or non-judicially) upon all or any material portion of the Collateral (including, without limitation, by setoff or notification of account debtors), and/or (c) the commencement by any Lender of any legal proceedings against or with respect to all or any material portion of the Collateral to facilitate the actions described in (a) and (b) above.


1.11 "Maximum Revolving Loan Debt" shall mean, without duplication, (a) the portion of the aggregate outstanding principal amount of Loans and Letter of Credit Accommodations made or issued pursuant to the Revolving Loan Agreement that does not exceed the lesser of (i)


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$110,000,000 and (ii) 110% of Availability, provided, that the portion of the aggregate outstanding principal amount of Loans and Letter of Credit Accommodations mat are made or issued pursuant to the Revolving Loan Agreement (as in effect on the date hereof) but that are not made or issued intentionally or with actual knowledge that such Loans and Letter of Credit Accommodations cause the aggregate outstanding principal amount of Loans and Letter of Credit Accommodations to exceed 110% of Availability shall be included (but only to the extent that the aggregate outstanding principal amount of the Loans and Letter of Credit Accommodations do not to exceed $110,000,000) for the purposes of calculating the amount of the Maximum Revolving Loan Debt and the amount of such portion shall be calculated as of the date upon which such Loans and Letters of Credit Accommodations are made or issued, plus (b) Revolving Loan Debt consisting of interest, fees, indemnities, costs or expenses in respect of amounts referred to in the immediately preceding clauses (a)(i) and (a)(ii).


1.12 "Mortgage Note Agreements" shall mean, collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Mortgage Note Indenture; (b) the Mortgage Notes; (c) the mortgages, security agreements and any other agreements, documents and instruments at any tune executed or delivered by Borrower with, to or in favor of the Mortgage Note Trustee or any Mortgage Note Holder in connection therewith or related thereto; sometimes being referred to herein individually as a "Mortgage Note Agreement".


1.13 "Mortgage Note Holders" shall mean, individually and collectively, the Mortgage Note Trustee, the holders from time to time of the Mortgage Notes, and their respective successors and assigns; each sometimes being referred to herein individually as a "Mortgage Note Holder".


1.14 "Mortgage Note Indenture" shall mean the Indenture, dated as of April 17,1997, between Borrower and the Mortgage Note Trustee, as amended in accordance with the Plan of Reorganization pursuant to the First Supplemental Indenture dated as of the date hereof, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.


1.15 "Mortgage Note Intercreditor Agreement" shall mean the Intercreditor Agreement, dated of even date herewith, by and among Collateral Agent, on behalf of Revolving Loan Agent, Revolving Loan Lenders, Term Loan Agent, Term Loan Lender and Mortgage Note Trustee, for itself and on behalf of Mortgage Note Holders, and as acknowledged and agreed to by Borrower, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.


1.16 "Mortgage Note Trustee" shall mean The Bank of New York, a New York banking corporation, in its capacity as administrative agent acting for and on behalf of the Mortgage Note Holders pursuant to the Mortgage Note Agreements, and its successors and assigns (including any replacement or successor agent or additional agent acting for or on behalf of the Mortgage Note Holders).


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1.17 "Mortgage Notes" shall mean, collectively, the 11-1/4% Notes issued by Borrower due April 1,2005 and payable to each Mortgage Note Lender in the aggregate principal amount of $150,000,000, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.


1.18 "Obligors" shall mean, individually and collectively, any person (other than Borrower) liable on or in respect of the Term Loan Debt or the Revolving Loan Debt, and each of their successors and assigns, including, without limitation, a receiver, trustee or debtor-in-possession on behalf of such person or on behalf of any such successor or assign.


1.19 "payment in full" shall mean, as applied to the Revolving Loan Debt, that (a) Revolving Loan Creditors have received final payment and satisfaction in full of all of the Revolving Loan Debt in cash or other immediately available funds and (b) the Revolving Creditor Agreements have been terminated or are otherwise not in effect; provided, that, if after receipt of any payment of, or proceeds of collateral applied to the payment of, any of the Revolving Loan Debt, any Revolving Loan Creditor is required to surrender or return such payment or proceeds to any Person for any reason, then the Revolving Loan Debt intended to be satisfied by such payment or proceeds shall be reinstated and continue as if such payment or proceeds had not been received by Revolving Loan Creditors and Revolving Loan Creditors shall not be deemed to have received "payment in full" of the Revolving Loan Debt.


1.20 "Person" or "person" shall mean any individual, sole proprietorship, partnership, corporation (including, without imitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock company, trust, joint venture, or other entity or any government or any agency or instrumentality or political subdivision thereof.


1.21 "Release Event" means (a) prior to the occurrence of an Insolvency Proceeding by or against Borrower, upon the occurrence and during the continuance of an Event of Default under the Revolving Creditor Agreements or the taking of any Lien Enforcement Action with respect to the Collateral by any Revolving Loan Creditor; provided that any Release Event occurring prior to an Insolvency Proceeding by or against Borrower shall cease to constitute a Release Event as of the occurrence of such Insolvency Proceeding if the Revolving Loan Creditors continue making loans or providing letter of credit accommodations or other financial accommodations (whether pursuant to the Revolving Creditor Agreements or otherwise) or consents to the use of cash collateral after the occurrence of such Insolvency Proceeding or (b) after the occurrence of an Insolvency Proceeding by or against Borrower, the occurrence of any of the following: (i) the entry of an order of the Bankruptcy Court pursuant to Section 363 of the U.S. Bankruptcy Code authorizing the sale of all or substantially all of Borrower's assets or (ii) the taking of any Lien Enforcement Action with respect to the Collateral by any Creditor or the entry of an order of the Bankruptcy Court pursuant to Section 362 of the U.S. Bankruptcy Code vacating the automatic stay and authorizing any Creditor to take any Lien Enforcement Action with respect to the Collateral.


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1.22 "Revolving Creditor Agreements" shall mean, collectively, the Revolving Loan Agreement and all Security Agreements and other agreements, documents and instruments at any time executed and/or delivered by Borrower or any other person to, with or in favor of any Revolving Loan Creditor in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, renewed or restated.


1.23 "Revolving Loan Agent" shall mean Congress Financial Corporation (Central), an Illinois corporation, in its capacity as agent acting for and on behalf of the Revolving Loan Lenders pursuant to the Revolving Creditor Agreements and its successors and assigns (including any replacement or successor agent or additional agent acting for and on behalf of the Revolving Loan Creditors in such capacity).


1.24 "Revolving Loan Agreement" shall have the meaning set forth in the Preamble.


1.25 "Revolving Loan Creditors" shall mean, collectively, Revolving Loan Agent and Revolving Loan Lenders and their respective successors and assigns (and including any other lender or group of lenders that at any time (a) refinances or succeeds to all or any portion of the Revolving Loan Debt or (b) is otherwise party to the Revolving Creditor Agreements); each sometimes being referred to herein individually as "Revolving Loan Creditor".


1.26 "Revolving Loan Debt" shall mean any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower or any Obligor to Revolving Loan Creditors arising under the Revolving Creditor Agreements, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Revolving Loan Agreement or after the commencement of any Insolvency Proceeding with respect to Borrower or any Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding); provided, however, for purposes of this Agreement, the term "Revolving Loan Debt" shall not include (a) the aggregate outstanding principal amount of loans and outstanding letter of credit accommodations made intentionally or with actual knowledge by a Revolving Loan Creditor pursuant to the Revolving Creditor Agreements (as in effect on the date hereof) in excess of the Maximum Revolving Loan Debt or (b) any early termination fee payable pursuant to any Revolving Creditor Agreements. The term "Revolving Loan Debt" shall include, obligations consisting of interest, fees, indemnities, costs or expenses, in each case whether or not charged by Revolving Loan Creditors to the loan account of Borrower maintained by Revolving Loan Creditors pursuant to the Revolving Loan Agreement.


1.27 "Revolving Loan Lenders" shall mean the financial institutions which are parties from time to time as lenders under the Revolving Loan Agreement, and their successors and assigns (including any other lender or group of lenders that at any time succeeds to or refinances,


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replaces or substitutes for all or any portion of the Revolving Loan Debt at any time and from time to time).


1.28 "Security Agreements" shall mean, collectively, the security agreements and any other agreement, document or instrument including, in the case of Revolving Loan Creditors, the Revolving Loan Agreement, and in the case of the Term Loan Creditor, the Term Loan Agreement and the Security Agreement (as defined therein), at any time executed or delivered by Borrower to or in favor of any Creditor granting a Lien upon any Collateral of Borrower to such Creditor, in each case as the same now or may hereafter exist and may be amended, modified, supplemented, extended, renewed, restated or replaced; each sometimes being referred to herein individually as a "Security Agreement".


1.29 "Term Creditor Agreements" shall mean, collectively, the Term Loan Agreement, and all Security Agreements and other agreements, documents and instruments at any time executed and/or delivered by Borrower or any Obligor or any other person ;with, to or in favor of Term Loan Creditors in connection therewith or related thereto, as all of the foregoing now exist or may hereafter be amended, modified, supplemented, extended, renewed or restated.


1.30 "Term Loan Agent" shall mean Ableco Finance LLC, a Delaware limited liability company, hi its capacity as agent pursuant to the Term Loan Agreement for the benefit and on behalf of Term Loan Lenders, and its successors and assigns (and including, without limitation, any successor, assignee or additional person at any time acting as agent for the benefit of or on behalf of it or Term Loan Lenders).


1.31 "Term Loan Agreement" shall have the meaning set forth in the Preamble.


1.32 "Term Loan Creditors" shall mean, collectively, the Term Loan Agent and the Term Loan Lenders and their respective successors and assigns (and including any other lender or group of lenders that at any time (a) refinances or succeeds to all or any portion of the Term Loan Debt or (b) is otherwise party to the Term Creditor Agreements); each sometimes being referred to herein individually as "Term Loan Creditor".


1.33 "Term Loan Debt" shall mean all obligations, liabilities and indebtedness of every kind, nature and description owing by Borrower or any Obligor to Term Loan Creditors arising under the Term Creditor Agreements, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, including principal, interest, charges, fees, costs, indemnities and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Term Creditor Agreements or after the commencement of any Insolvency Proceeding with respect to Borrower or any Obligor (and including, without limitation, the payment of interest which would accrue and become due but for the commencement of such Insolvency Proceeding, whether or not such interest is allowed or allowable in whole or in part in any such Insolvency Proceeding).


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1.34 "Term Loan Lenders" shall mean shall mean the financial institutions which are parties from time to time as lenders under the Term Loan Agreement, and their successors and assigns (including any other lender or group of lenders that at any tune succeeds to or refinances, replaces or substitutes for all or any portion of the Term Loan Debt at any time and from time to time).


1.35 Unless otherwise defined herein, all capitalized terms used herein shall have the meanings given to them on the Revolving Loan Agreement. All terms defined hi the Uniform Commercial Code as from time to time in effect in the State of New York, unless otherwise defined herein, shall have the meanings set forth therein. All references to any term in the plural shall include the singular and all references to any term in the singular shall include the plural.


2. APPOINTMENT OF COLLATERAL AGENT


2.1 Appointment Powers and Immunities. Each Creditor hereby irrevocably designates, appoints and authorizes Congress Financial Corporation (Central) to act as Collateral Agent under the Mortgage Note Intercreditor Agreement with such powers as are specifically delegated to Collateral Agent by the terms of this Agreement and delegated to Revolving Loan Agent under the Revolving Creditor Agreements with respect to the Revolving Loan Collateral and delegated to the Term Loan Agent under the Term Creditor Agreements with respect to the Term Loan Collateral, together with such other powers as are reasonably incidental thereto with respect to the Mortgage Note Intercreditor Agreement, including without limitation, the execution, delivery, performance and enforcement of the Mortgage Note Intercreditor Agreement. Collateral Agent (a) shall have no duties or responsibilities except those expressly set forth in this Agreement or the Mortgage Note Intercreditor Agreement, and shall not by reason of this Agreement or any Security Agreement be a trustee or fiduciary for any Creditor; (b) shall not be responsible to Creditors for any recitals, statements, representations or warranties contained in this Agreement (except for the representations by Collateral Agent set forth in Section 5.1(e) hereof) or in any of the Security Agreements, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement, the Mortgage Note Intercreditor Agreement or any Security Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any Security Agreement or any other document referred to or provided for herein or therein or for any failure by Borrower or any other Person to perform any of its obligations hereunder or thereunder; and (c) shall not be responsible to Creditors for any action taken or omitted to be taken by it hereunder or under any Security Agreement or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct as determined by a final non-appealable order of a court of competent jurisdiction. Collateral Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. Without limiting the generality of me foregoing, Collateral Agent may, at its option, delegate any of its rights and powers under any Security Agreement with respect to Collateral located outside the United States to an affiliate of Collateral Agent having offices outside the United States. Collateral Agent may deem and treat the payee of any promissory note as the holder thereof in connection with the exercise of its power and authority as Collateral Agent unless and until Collateral Agent shall


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have received a written notice from Term Loan Agent of the assignment thereof providing such information with respect to the assignee as Collateral Agent may reasonably require. Collateral Agent may rely upon such notice from Term Loan Agent as provided in Section 2.2 hereof.


2.2 Reliance by Collateral Agent. Collateral Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, without inquiry or investigation and upon advice and statements of legal counsel, independent accountants and other experts selected by Collateral Agent.


2.3 Indemnification. Creditors agree to indemnify Collateral Agent (to the extent not reimbursed by Borrower and without limiting the obligations of Borrower) ratably, in accordance with their pro rata shares (calculated based on the fraction expressed as a percentage, the numerator of which is the principal amount of the indebtedness of Borrower owing to such Creditor and the denominator of which is the sum of the principal amount of the Revolving Loan Debt and Term Loan Debt then outstanding), for any and all claims of any kind and nature whatsoever that may be imposed on, incurred by or asserted against Collateral Agent (including by any Creditor) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement, the Mortgage Note Intercreditor Agreement or any Security Agreement or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including the costs and expenses that Collate ...