Ex-10.1 Debtor-in-Possession Note Term Sheet



 






EXHIBIT 10.1




EXHIBIT A




Anchor Glass Container Corporation




$15,000,000




Debtor-in-Possession Note




Term Sheet



This Term Sheet, together with the Term Notes issued by the Debtor to the Note Purchasers,
substantially in the form annexed hereto as Exhibit A (collectively, the “Notes”), and the Interim
Order approved by the Bankruptcy Court, provides for the terms and conditions agreed to by the
Debtor and the Note Purchasers with respect to the Facility (as such capitalized terms are
hereinafter defined).




	 	 	 
	Debtor:

	 	Anchor Glass Container Corporation (the “Debtor”).
	 
	 	 
	Note Purchasers:

	 	Those holders (the “Holders”) of the 11% Senior
Secured Notes due 2013 (the “Senior Secured
Notes”) identified on the signature pages hereto.
	 
	 	 
	Administrative Agent:

	 	Wells Fargo Bank, N.A.
	 
	 	 
	The Facility:

	 	Advances made available to the Debtor by the Note
Purchasers in an aggregate principal amount of
$15,000,000 (the “Facility”). All amounts
outstanding and any other obligations of the
Debtor under the Facility shall become due and
payable on the Maturity Date.
	 
	 	 
	 

	 	The Debtor also hereby agrees that it shall, assuming satisfactory






 









 






	 	 	 
	 

	 	completion by the Note
Purchasers of appropriate due diligence and
appropriate documentation, enter into an agreement
with certain holders of the Senior Secured Notes
who agree to become note purchasers thereunder to
issue an additional $125,000,000 within twenty
days hereof on substantially the same terms and
conditions to be agreed to by such holders,
subject to Bankruptcy Court approval, as well as
such additional terms and conditions to be
provided in appropriate note purchase
documentation which shall be used to pay all
obligations to the Holders under this Facility,
retire in full the Wachovia DIP facility, and
retire in full the Madeline facility.
	 
	 	 
	 

	 	The Debtors and Wachovia (or any other interim DIP
lender) shall agree to the term sheet for the
Facility by no later than August 10, 2005.
	 
	 	 
	Use of Proceeds:

	 	Proceeds of the notes issued under the Facility
will be used to pay for the post-petition
operating expenses of the Debtor in accordance
with the Budget and other costs and expenses of
administration of the Chapter 11 case concerning
the Debtor (the “Case”), which has been commenced
in the United States Bankruptcy Court for the
Middle District of Florida (the “Bankruptcy
Court”). Expenses not on the Budget require
approval of the Note Purchasers as follows: After
$5 million of the Note proceeds has been used, in
the event a weekly variance of net cash flows
exceeds negative $500,000 then the Debtor shall
require Note Purchasers consent for further
variances. If positive variance, net positive can
roll forward to next week.






 









 






	 	 	 
	 

	 	Debtor agrees to twice
weekly cash forecast/business update calls with
the Note Purchasers.
	 
	 	 
	 

	 	The Debtor’s use of the proceeds shall be in
compliance with a budget which shall be agreed
upon by the Debtor and the Note Purchasers.
	 
	 	 
	Closing Date:

	 	The Facility shall close upon the first date
practicable following the entry of an interim
order by the Bankruptcy Court approving the
Facility on terms and conditions satisfactory to
the relevant Holders in their sole discretion (the
“Interim Order”), which is anticipated to be on or
prior to August 10, 2005.
	 
	 	 
	Maturity Date:

	 	The earliest of (i) forty-five (45) days from the
Closing Date or (ii) the date on which an Event of
Default (as defined below) occurs. All amounts
outstanding and any other obligations of the
Debtor under the Facility shall be due and payable
in full in cash on the Maturity Date.
	 
	 	 
	Prepayment Fee

	 	A fee equal to 100 bps if the Facility is
refinanced with a replacement debtor in possession
financing before maturity (unless such replacement
debtor in possession financing is the $125,000,000
Facility contemplated above).
	 
	 	 
	Interest Rate:

	 	The Facility will bear cash interest at a rate
equal to the rate applicable to a LIBOR interest
period of 3 month on the Closing Date (as
determined by the Administrative Agent on such
date in accordance with applicable conventions in
the Eurodollar lending market) plus 700 bps,
payable on the Maturity Date.






 









 






	 	 	 
	Default Interest Rate:

	 	During the continuance of an Event of Default, the
Facility will bear cash interest at an additional
200 bps per annum.
	 
	 	 
	Commitment Fees:

	 	A commitment fee to the Note Purchasers equal to
100 bps of the principal amount of the Facility
will be earned and due and payable to the Note
Purchasers upon entry of the Interim Order.
	 
	 	 
	Agent’s Agreement:

	 	All fees, terms and conditions applicable to
appointment and duties of the Administrative Agent
with respect to the Facility shall be reasonably
acceptable to the Note Purchasers.
	 
	 	 
	Expenses:

	 	The Debtor shall pay in the ordinary course,
without further Court order, all (i) reasonable
out of pocket costs and expenses of the
Administrative Agent (including all reasonable
fees, expenses and disbursements of outside
counsel and consultants) in connection with the
preparation, execution and delivery of the note
purchase documentation and the funding of the
Facility, the administration of the Facility and
any amendment or waiver of any provision of the
note purchase documentation, (ii) reasonable out
of pocket costs and expenses of the Note
Purchasers (including reasonable fees, expenses
and disbursements of counsel) in connection with
the enforcement or protection of any of their
rights and remedies under the note purchase
documentation and (iii) all reasonable fees and
expenses of the Note Purchasers’ professionals in
connection with the Case. The Note Purchasers
shall provide a summary of those fees and expenses
to the Debtor, any duly appointed official
committee, the office of the U.S. Trustee and, in
the event of an objection within five days of
receipt, such objection






 









 






	 	 	 
	 

	 	shall be heard by the
Bankruptcy Court.
	 
	 	 
	Priority:

	 	All amounts owing by the Debtor under the Facility
in respect thereof at all times will constitute
allowed super-priority administrative expense
claims in the Case having priority over all
administrative expenses of the kind specified in
sections 503(b) and 507(b) of the Bankruptcy Code,
subject only to the Carve-Out (as defined below).
	 
	 	 
	Collateral:

	 	All amounts owing by the Debtor under the Facility
will be secured by a first priority perfected
priming security interest in, and lien on, all of
the assets (tangible, intangible, real, personal
or mixed) of the Debtor, whether now owned or
hereafter acquired, which currently secure the
Senior Secured Notes, subject only to (i) such
valid and enforceable liens of record as of the
date of the commencement of the Case as are
acceptable to the Administrative Agent and the
Note Purchasers in their sole discretion, and (ii)
the Carve-Out for professional fees.
	 
	 	 
	Carve-Out:

	 	“Carve-Out” shall mean sums having priority ahead
of the super priority claims and liens securing
the Facility for (i) the payment of any unpaid
fees payable to the United States Trustee pursuant
to 28 U.S.C. §1930 and (ii) the payment of unpaid
claims (whether then or subsequently allowed) for
fees and expenses incurred by professionals
retained by an order of the Bankruptcy Court,
including fees and expenses incurred prior to, and
after, the occurrence of an Event of Default, not
to exceed $500,000 in the aggregate (the
“Professional Expense Cap”); provided, however,
any payments actually made to such professionals






 









 






	 	 	 
	 

	 	under sections 330 or 331 of the Bankruptcy Code,
the Bankruptcy Rules, any local bankruptcy rule or
any order of the Bankruptcy Court, after the
occurrence of an Event of Default shall reduce the
Professional Expense Cap on a dollar-for-dollar
basis. The application of pre-petition retainers
shall not reduce the Carve-Out.
	 
	 	 
	Adequate Protection:

	 	As a result of the priming contemplated herein,
the Trustee for the Senior Secured Notes, for the
benefit of all holders of the Senior Secured
Notes, shall be granted the following as adequate
protection: (i) a replacement security interest
in, and lien on all of the Debtors’ property that
currently serves as collateral for the Senior
Secured Notes; and (ii) a security interest in,
and a lien on, the Debtors’ working capital,
except that such lien may be junior to any
existing liens held by, or adequate protection
liens granted to, the Pre-Petition Lenders.
	 
	 	 
	Conditions Precedent

To the Closing:

	 	On the Closing Date, the following conditions
precedent shall have been satisfied, to the
reasonable satisfaction of the Note Purchasers in
their sole discretion:
	 
	 	 
	 

	 	(i) All documentation relating to the Facility
shall be in form and substance satisfactory to the
Administrative Agent, each Note Purchaser and its
counsel in their sole discretion;
	 
	 	 
	 

	 	(ii) The Debtor and the Note Purchasers shall have
agreed upon an approved budget;
	 
	 	 
	 

	 	(iii) The Debtor shall have provided evidence of
insurance






 









 






	 	 	 
	 

	 	satisfactory to the Administrative Agent
in its sole discretion;
	 
	 	 
	 

	 	(iv) All fees and expenses (including reasonable
fees and expenses of counsel) required to be paid
to the Administrative Agent and/or the Note
Purchasers on or before the closing date have been
paid;
	 
	 	 
	 

	 	(v) All motions and other documents to be filed
with and submitted to the Bankruptcy Court in
connection with the Facility (including, without
limitation, the Interim Order) shall be in form
and substance satisfactory to the Administrative
Agent and Note Purchasers in their sole
discretion;
	 
	 	 
	 

	 	(vi) Except for the filing of the Cases, there
shall have occurred no material adverse change in
any of (i) the operations, performance, prospects,
business, assets, properties, or condition
(financial or otherwise) of the Debtor, based on
information provided by the Debtor to the
Administrative Agent and Note Purchasers, (ii)
the ability of the Debtor to perform its
respective obligations under the note purchase
documentation or (iii) the ability of the
Administrative Agent and the Note Purchasers to
enforce the note purchase documentation (any of
the foregoing being a “Material Adverse Change”);






 









 






	 	 	 
	 

	 	(vii) Governmental and third party consents and
approvals necessary in connection with the
Facility and the transactions contemplated
thereby, to the extent required, shall have been
obtained and shall remain in effect.
	 
	 	 
	 

	 	(viii) The making or issuance of the Notes shall
not violate any requirement of applicable law and
shall not be enjoined, temporarily, preliminarily
or permanently; and
	 
	 	 
	 

	 	(ix) The Bankruptcy Court shall have entered an
Interim Order, in form and substance satisfactory
to the Administrative Agent and Note Purchasers in
their sole discretion, which order shall be in
full force and effect and shall not have been
reversed, vacated or stayed and shall not have
been amended, supplemented or otherwise modified
without the prior written consent of the
Administrative Agent and Note Purchasers (which
consent may be withheld in their sole discretion)
authorizing and approving the Facility and the
transactions contemplated thereby, including,
without limitation, the granting of the
super-priority status, security interests and
liens, and the payment of all fees referred to
herein.
	 
	 	 
	Representations
and Warranties:

	 	Usual and customary for financings of this nature,
and such other representations and warranties as
are reasonably acceptable to the Note Purchasers
in their sole discretion.






 









 






	 	 	 
	Affirmative and
Negative Covenants:

	 	The Debtor hereby agrees to the following
affirmative and negative covenants that will
require that the Debtor:
	 

	 	(i) Deliver all pleadings, motions and other
documents filed on behalf of the Debtor with the
Bankruptcy Court to the Administrative Agent and
its counsel;
	 
	 	 
	 

	 	(ii) Not file, support or endorse (x) any plan of
reorganization or (y) propose any sale of assets
that has not been approved by the Administrative
Agent and Note Purchasers unless the sale
or plan provides payment in full in cash of the
Notes;
	 
	 	 
	 

	 	(iii) Not make or permit to be made any change to
the Interim Order or the Final Order; and
	 
	 	 
	 

	 	(iv) Not seek any other Debtor-in-possession
financing other than the $125,000,000 to be
provided by certain holders of Senior Secured
Notes who agree to become note purchasers
referenced herein.
	 
	 	 
	Events of Default:

	 	The following shall be events of default:







	 	(i)	 	the Debtor shall file a Plan or motion seeking
approval of a 363 Sale the terms of which are not
acceptable in advance to the Note Purchasers;





 









 





	 	(ii)	 	dismissal of any material portion of the
Debtor’s case or conversion of its case to a
Chapter 7 case;
	 
	 	(iii)	 	appointment of a Chapter 11 trustee or
examiner or other person with expanded powers;

	 
	 	(iv)	 	granting of relief from the automatic stay as
to assets of the Debtor with a value in excess of
$1 million;
	 
	 	(v)	 	cessation of liens or super-priority claims
granted with respect to the Facility to be valid,
perfected and enforceable in all respects;
	 
	 	(vi)	 	failure of the Bankruptcy Court to enter (1)
the Interim Order on or before August 11, 2005, or
(2) the Final Order within 20 days of the Closing
Date;
	 
	 	(vii)	 	reversal, vacation or stay of the
effectiveness of either the Interim Order or the
Final Order; and
	 
	 	(viii)	 	failure of the Debtor to retain a chief
restructuring officer or replacement thereof
reasonably acceptable to the Note Purchasers
having such duties and authority as are reasonably
acceptable to the Note Purchasers, on or before
August 30, 2005 (subject to Court approval
thereafter). The Debtor may, with the reasonable
consent of the Note Purchasers, terminate the
chief restructuring officer if it is in the best
interests of the Debtor’s estate.




 









 











	 	 	 
	Indemnification:

	 	The Debtor, jointly and severally, shall indemnify
and hold harmless the Administrative Agent, each
Note Purchaser and each of their affiliates and
each of the respective officers, directors,
members, partners, employees, agents, advisors,
attorneys and representatives of each (each, an
“Indemnified Party”) from and against any and all
claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees
and disbursements of counsel), that may be
incurred by or asserted or awarded against any
Indemnified Party (including, without limitation,
in connection with or relating to any
investigation, litigation or proceeding or the
preparation of any defense in connection
therewith), in each case arising out of or in
connection with or by reason of the Facility,
except to the extent such claim, damage, loss,
liability or expense is found in a final judgment
by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of
an investigation, litigation or other proceedings
to which the indemnity in this paragraph applies,
such indemnity shall be effective whether or not
such investigation, litigation or proceeding is
brought by the Debtor, any of its directors,
security holders or creditors, an Indemnified
Party or any other person, or an Indemnified Party
is otherwise a party thereto and whether or not
the transactions contemplated hereby are
consummated. The Debtor further agrees that no
Indemnified Party shall have any liability
(whether direct or indirect, in contract, tort, or
otherwise) to the Debtor or any of its security






 









 






	 	 	 
	 

	 	holders or creditors for or in connection with the
transactions contemplated hereby, except for
direct damages (as opposed to special, indirect,
consequential or punitive damages (including,
without limitation, any loss of profits, business
or anticipated savings)).
	 
	 	 
	Governing Law:

	 	State of New York.






     IN WITNESS WHEREOF, the parties hereto have caused this Term Sheet to be executed by their
respective officers thereunto duly authorized, as of the date first above written.



 









 





	 	 	 	 	 	 	 
	ANCHOR GLASS CONTAINER CORPORATION
	 
	 	 	 	 	 	 
	By
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name:	 	 	 	 
	 
	 	 	 	 	 	 
	Title:	 	 	 	 






 









 






	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name:	 	 	 	 
	 
	 	 	 	 	 	 
	Title: