Document:

Ex-10.14 Amended/Restated Glass Bottle Supply Agmt

 

Exhibit 10.14

AMENDED AND RESTATED SOUTHEAST GLASS BOTTLE SUPPLY AGREEMENT

BETWEEN

ANHEUSER-BUSCH, INCORPORATED

AND

ANCHOR GLASS CONTAINER CORPORATION

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	PAGE NUMBER

	1.

	 	DEFINITIONS
	 	 	1	 
	2.

	 	PURCHASE AND SALE OF PRODUCT
	 	 	3	 
	3.

	 	PRICE
	 	 	5	 
	4.

	 	WARRANTY
	 	 	9	 
	5.

	 	DELIVERY
	 	 	11	 
	6.

	 	PAYMENTS
	 	 	12	 
	7.

	 	FORCE MAJEURE
	 	 	13	 
	8.

	 	TERM AND TERMINATION
	 	 	15	 
	9.

	 	AUDITS
	 	 	18	 
	10.

	 	PLANT VISITS
	 	 	19	 
	11.

	 	CONFIDENTIALITY
	 	 	20	 
	12.

	 	PUBLIC STATEMENTS
	 	 	20	 
	13.

	 	NOTICES
	 	 	20	 
	14.

	 	ASSIGNMENT
	 	 	21	 
	15.

	 	INDEPENDENT CONTRACTOR
	 	 	21	 
	16.

	 	ADDITIONAL AGREEMENTS
	 	 	21	 
	17.

	 	REPRESENTATIONS AND WARRANTIES OF ANCHOR
	 	 	25	 
	18.

	 	REPRESENTATIONS AND WARRANTIES OF AB
	 	 	26	 
	19.

	 	DISPUTE RESOLUTION
	 	 	27	 
	20.

	 	MISCELLANEOUS
	 	 	27	 

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

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TABLE OF ATTACHMENTS

	 	 	 
	Section
	 	 
	3.1

	 	SELLING PRICES
	 
	 	 
	3.4(a)

	 	* * *
	 
	 	 
	3.6(d)

	 	SCHEDULE OF BULK BOTTLE PRODUCTION AND DELIVERY CAPACITY OF THE

PRODUCTION FACILITIES
	 
	 	 
	3.7(c)

	 	* * *
	 
	 	 
	3.10

	 	* * *
	 
	 	 
	4.4

	 	FLAVOR STANDARDS
	 
	 	 
	6.1

	 	FORM OF ELECTRONIC PAYMENTS AGREEMENT
	 
	 	 
	6.3

	 	TRADING PARTNER AGREEMENT
	 
	 	 
	8.4(a)

	 	SUPPLIER CERTIFICATION PROGRAM
	 
	 	 
	8.5(a)

	 	FACILITY MANAGEMENT INSPECTION CRITERIA
	 
	 	 
	8.5(d)

	 	FORM OF NO TAMPERING OR CONTAMINATION CERTIFICATION
	 
	 	 
	16.2(a)

	 	SPECIFIED ANCHOR SHAREHOLDERS AND AFFILIATES
	 
	 	 
	20.8

	 	EEOC COMPLIANCE CERTIFICATE

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

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AMENDED AND RESTATED SOUTHEAST GLASS BOTTLE SUPPLY AGREEMENT

          This AMENDED AND RESTATED SOUTHEAST GLASS BOTTLE SUPPLY AGREEMENT (this
“Agreement”) between ANHEUSER-BUSCH, INCORPORATED, a Missouri corporation
(“AB”), and ANCHOR GLASS CONTAINER CORPORATION, a Delaware corporation
(“Anchor”), was signed on July 26, 2004 and is deemed effective January 1,
2004.

Background

          A. AB and Anchor previously entered into a certain Southeast Glass Bottle
Supply Agreement dated May 26, 1999, as amended by Amendment to Southeast
Bottle Supply Agreement between AB and Anchor signed December 4, 2003, as
further amended by that Second Amendment to Glass Bottle Supply Agreement and
Southeast Glass Bottle Supply Agreement between AB and Anchor dated as of June
6, 2003, and as further amended by that certain letter agreement dated February
9, 2004 (as amended per the foregoing amendments and pursuant to any other
written or oral agreements between the parties prior to the date this Agreement
is signed, the “Existing Southeast Agreement”).

          B. The Existing Southeast Agreement contains two options of two years each
in favor of AB (applicable to the periods of January 1, 2006 through December
31, 2007 and January 1, 2008 through December 31, 2009 respectively) (the
“Options”).

          C. Anchor has requested that AB exercise both of the Options in exchange
for certain revisions to the Existing Southeast Agreement requested by AB.

          D. In lieu of AB exercising the Options, the parties have agreed to enter
into this Agreement, which, except as otherwise expressly stated in this
Agreement, amends, restates, and replaces the Existing Southeast Agreement in
its entirety.

          THEREFORE, in consideration of the foregoing premises and the mutual
promises set forth below, the parties to this Agreement have agreed as follows:

     1. DEFINITIONS.

          The capitalized terms specified below shall have the following meanings
(certain other capitalized terms are defined elsewhere in this Agreement and
are not referenced in this Section 1):

          1.1 “Affiliate” shall mean, with respect to either party, any individual,
corporation, company, partnership, limited liability company, joint venture or
other business entity which owns a majority of the equity of or otherwise
controls, is controlled by or is under common control with, such party. The
term ‘control’ includes, without limitation, the possession, directly or
indirectly, of the power to direct the management and policies of a person or
entity, whether through the ownership of voting securities, by contract or
otherwise.

		
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          1.2 “Base Price” shall mean a portion of the Selling Price for each type
of Bottle, as set forth in Attachment 3.1.

          1.3 “Bottle” shall mean a returnable or non-returnable glass receptacle of
specified size, shape and color used in the packaging of AB’s beverage
products, and which otherwise conforms to the applicable Specifications.

          1.4 “Beverage Bottle” shall mean a returnable or non-returnable glass
receptacle used as a container for any beverage, including but not limited to
malt beverages, carbonated or uncarbonated soft drinks, flavored and unflavored
waters and any other fluids intended for human consumption.

          1.5 “Breweries” shall mean both the AB brewery located in Jacksonville,
Florida and the AB brewery located in Cartersville, Georgia and “Brewery” shall
mean either of the Breweries.

          1.6 “Contract Year” shall mean any twelve (12) month period during the
Term starting on a January 1 and ending the following December 31.

          1.7 “Lightweighting” shall mean any reduction in the weight of a given
size and shape Bottle, which does not materially alter the size or shape of
such Bottle.

          1.8 “Manufacturing Costs” shall mean the aggregate of all actual costs
incurred by Anchor or its Affiliates in producing the Bottles and delivering
them to AB, including transportation, warehouse and insurance costs, and net of
all discounts, rebates or allowances received by Anchor or its Affiliates with
respect to any services or materials acquired by Anchor in connection with its
performance of this Agreement.

          1.9 “Maximum Production Quantity” shall mean the total actual capacity of
Bottles available from the Production Facilities.

          1.10 “Packaging Components” shall mean all packaging materials used to
package packed bottles provided under this Agreement and which conform to the
Specifications including, without limitation, each of the following: (a)
corrugated boxes, trays, carriers, cartons, and basket carriers, and (b)
partitions.

          1.11 “Production Facilities” shall mean the Bottle production facilities
located in Jacksonville, Florida and Warner Robins, Georgia operated by Anchor.

          1.12 “Rated Production Capacity” shall mean an annual quantity of * * *

          1.13 “Requirements” shall mean:

               (a) for Contract Year 2004 * * *

               (b) for Contract Year 2005, the Breweries’ aggregate Bottle requirements
during Contract Year 2005; and

		
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               (c) for each of Contract Years 2006, 2007, 2008 and 2009 * * * during such
Contract Year; * * * for such Contract Year in excess of * * *; provided that
AB does not guarantee that the aggregate Bottle requirements of the two
Breweries during any or all of these Contract Years will equal or exceed any
particular amount.

          During Contract Years 2006 through 2009 AB shall determine the mix of
Bottles included in the Requirements, but AB agrees to * * * pursuant to the
terms of subsection 1.13(c) above. Anchor agrees that if the * * * than
originally estimated by AB.

          1.14 “Selling Price” shall mean the net delivered (F.O.B. Brewery)
selling price of each color, size and shape Bottle which is made up of (a) the
Base Price specified in Attachment 3.1, and (b) * * *, each in accordance with
the schedule of permitted charges for such services set forth in Attachment
3.1, * * *, each in accordance with the schedule of permitted charges specified
in Attachment 3.1.

          1.15 “Specifications” shall mean AB’s specifications for each of the
Bottles, each of the Applied Plastic Labels and all other labels applied to the
Bottles, each of the Packaging Components, and each of the pallets and other
packaging components to be used for bulk Bottles, and shall also include
packaging and unit load specifications for Bottle deliveries to each Brewery,
as communicated from time to time by AB to Anchor (provided AB gives Anchor at
least sixty (60) days’ advance notice) * * *

          1.16 “Term” shall mean the term of the Agreement as described in Section
8.1(a) below.

          1.17 “Applied Plastic Labels” shall mean all applied plastic labels used
to label any of the Bottles provided under this Agreement, and which conform to
the Specifications.

          1.18 “December 2000 Agreement” shall mean that certain Glass Bottle Supply
Agreement between Anchor and AB dated as of December 18, 2000, as amended,
restated and/or replaced from time to time.

     2. PURCHASE AND SALE OF PRODUCT.

          2.1 Purchase Quantities.

               (a) During Contract Year 2004 and Contract Year 2005 Anchor shall make
available for purchase by AB, in the Specifications requested by AB, the
Maximum Production Quantity of Bottles, subject to AB’s release of any portion
of such production in accordance with Section 2.1(c). During Contract Year
2004 and Contract Year 2005 AB shall purchase from Anchor, in the
Specifications requested by AB, the Requirements for such Contract Years.
During Contract Year 2004 and Contract Year 2005, Anchor shall not be obligated
to provide under this Agreement any Bottles in excess of the Maximum Production
Quantity. Without AB’s express written consent, Anchor may neither reduce the
Maximum Production Quantity to less than the Rated Production Capacity nor
reduce the Rated Production Capacity.

		
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               (b) During each of Contract Years 2006, 2007, 2008, and 2009, Anchor shall
make the applicable Requirements available for purchase by AB and AB shall
purchase the applicable Requirements from Anchor in the Specifications
requested by AB.

               (c) To the extent that Anchor may determine, from time to time, that the
Maximum Production Quantity exceeds the sum of the Requirements and any
additional Bottles being purchased by AB under this Agreement during Contract
Year 2004 or Contract Year 2005, Anchor shall so notify AB. AB shall have
fifteen (15) days after it receives such notice within which to notify Anchor
that AB will purchase such excess production, and the location to which such
Bottles are to be delivered; provided, that AB shall never be obligated to
notify Anchor before October 1 of the year prior to the Contract Year in which
AB would purchase such production. Any such purchases shall be under the same
terms and conditions set forth in this Agreement, except that if AB requests
such deliveries to locations other than the Breweries, any added charge for
transportation, delivery, insurance and warehousing shall be as negotiated, * *
* Anchor shall be free to sell to any third party any such excess which AB has
not committed to purchase under the foregoing provisions.

          2.2 Annual Estimates.

               (a) On or before September 1, 2004 Anchor shall advise AB of the estimated
Maximum Production Quantity available from the Production Facilities in
Contract Year 2005. On or by October 1, 2004, AB shall advise Anchor of AB’s
estimated Requirements for Contract Year 2005 for each Brewery, stated
separately for each Bottle size, shape and color to be produced for AB by
Anchor and any additional Bottles AB wishes to purchase. On or before February
1st of the following Contract Year, AB shall advise Anchor of any non-binding
changes to its initial estimates.

               (b) On or before November 1st of Contract Year 2005 and each Contract Year
thereafter, AB shall advise Anchor of AB’s non-binding estimate of AB’s Bottle
requirements for the following Contract Year, stated separately for each
Brewery and for each Bottle size, shape, color and type packaging (i.e., packed
Bottles or bulk Bottles) to be produced for AB by Anchor under this Agreement
and under all other bottle supply agreements between AB and Anchor in effect at
the time. On or before February 1st of the following Contract Year, AB shall
advise Anchor of any non-binding changes to its initial estimates.

          2.3 Revised Estimates and Shipping Instructions. Each Contract Year
Anchor shall be able to access on BudExchange.Com or such other medium as AB
may subsequently designate each of the following non-binding estimates
supplementing the non-binding annual estimate provided to Anchor pursuant to
Section 2.2 above:

               (a) On or before the last business day of each month, AB’s estimate for
each of the succeeding three months of the AB Bottle requirements to be
produced by Anchor under this Agreement and under all other bottle supply
agreements between AB and Anchor in effect at the time, stated separately for
each Brewery and by Bottle size, shape, color, carton style, and type of
packaging (i.e., packed Bottles or bulk Bottles).

		
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               (b) On or before the last business day of each week, a running eight (8)
week forecast of the AB Bottle requirements to be produced by Anchor under this
Agreement and under all other bottle supply agreements between AB and Anchor in
effect at the time, stated separately for each Brewery and by Bottle size,
shape, color, carton style, and type of packaging (i.e., packed Bottles or bulk
Bottles).

               (c) If Anchor requests, AB agrees to meet with Anchor at a time and place
mutually acceptable to the parties to discuss the estimates provided by AB
pursuant to Sections 2.3(a) and 2.3(b).

               (d) Anchor will report all shipments of Bottles upon their departure from
the specified Production Facility, including but not limited to, shipping
information related to truck load identification, expected delivery date,
delivery location, and quantity of Bottles in the load, in the format specified
by AB and using the electronic reporting media and software specified by AB.

          2.4 Inventory. Anchor shall maintain at no additional cost to AB a
finished goods inventory of Bottles at either Production Facility or a
warehouse maintained by Anchor in the vicinity of the applicable Brewery * * *
However, to the extent that Anchor may elect to maintain an inventory in excess
of * * * with respect to any Bottle or carton style, AB shall have no
responsibility for any costs incurred by Anchor because of any graphics or
other changes to the Bottles or their Packaging Components or Applied Plastic
Labels. Without limiting the foregoing, Anchor agrees that it will always
maintain in such inventory * * * for each Brewery, allocated by * * * as
provided to Anchor in accordance with Section 2.3(b) above.

     3. PRICE.

          3.1 Selling Price.

               (a) Subject to any applicable changes provided in one or more of the other
provisions of this Section 3, the Selling Price for each size, color and shape
Bottle ordered by AB from Anchor under this Agreement for delivery at any time
during the Term is set forth in Attachment 3.1.

          3.2 Intentionally Deleted.

          3.3 Specification Changes.

               (a) If AB makes any changes to the Specifications of an existing Bottle
other than those directly relating to Lightweighting which (i) result in an
increase or decrease to the Manufacturing Costs for those particular Bottles
and/or (ii) necessitate that Anchor purchase or lease capital equipment not
otherwise required to satisfy its obligations under this Agreement prior to the
Specification change, then, subject to Section 3(d) below, the Base Price for
such Bottles shall be changed to a Base Price * * * shape, size and color set
forth in Attachment 3.1. This changed Base Price shall not exceed * * *
Anchor shall provide documentation of such changes in cost as AB may reasonably
request.

		
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               (b) If at any time during the Term, AB should add a new Bottle shape, size
or color to its existing family of Bottles (a “New Bottle”), the Base Price for
such New Bottle shall be the Base Price * * * size, shape and color Bottle.
The Base Price for such New Bottle shall not exceed * * * Anchor shall provide
documentation of such charges or costs as AB may reasonably request.

               (c) Intentionally deleted.

               (d) (i) Before increasing or decreasing Base Prices pursuant to the terms
of Section 3.3(a), Anchor agrees to meet with AB to discuss written
documentation previously provided to AB by Anchor that specifies (A) in
reasonable detail why and how much Anchor’s Manufacturing Costs increased as a
result of the applicable Specification change and, if applicable, the cost of
the capital equipment purchased or leased by Anchor as a result of the
Specification change (the “Increased Specification Change Costs”) or the amount
by which Manufacturing Costs decreased as a result of the applicable
Specification change, and (B) the Base Prices Anchor proposes to increase or
decrease along with a detailed written explanation of the amount of each such
proposed increase or decrease. Anchor agrees that all such Base Price
increases or decreases, as the case may be, shall be allocated solely to the
Bottles affected by the applicable Specification change(s).

                    (ii) Within thirty (30) days after the meeting specified in subsection (i)
above, AB may choose, in lieu of accepting any permitted Base Price increases,
to reimburse Anchor the amount of the Increased Specification Change Costs by
paying Anchor a lump sum cash payment or a stream of cash payments that would
reasonably result in Anchor receiving an economic benefit equivalent to or
better than Anchor would realize if permitted Base Price increases were
implemented.

                    (iii) If AB fails to notify Anchor of its intentions within the time frame
specified in subsection (ii) above, Anchor may increase Base Prices pursuant to
the terms of Section 3.3(a).

                    (iv) * * * If Anchor has to purchase and install new equipment at one or
more affected Production Facilities in order to implement the change within the
time frame required by AB, in which event the Specification change will be
deemed to have occurred immediately after the new equipment is purchased and
installed. AB also agrees that any request made by AB after October 31, 2003
that * * * Production Facility will be deemed a Specification change for
purposes of this Agreement once the * * * Production Facility ships * * * gross
(plus any additional amount reasonably attributable to productivity gains
achieved subsequent to October 31, 2003 that are not the result of additional
capital investments by Anchor) or more of * * * Bottles during a particular
Contract Year to one or more AB Breweries, * * * Production Facility will be
deemed a Specification change for purposes of this Agreement once the * * *
Production Facility ships, * * * gross (plus any additional amount reasonably
attributable to productivity gains achieved subsequent to October 31, 2003 that
are not the result of additional capital investments by Anchor) or more of * *
* Bottles during a particular Contract Year to one or more AB Breweries.

          3.4 * * *

		
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               (a) Subject only to the terms of Sections 3.4(b)-(e) below, if during any
Contract Year, Anchor or any of its Affiliates * * * in effect. The examples
set forth in Attachment 3.4(a) are intended to help illustrate how the terms of
this Section 3.4(a) should be applied.

               (b) The terms of Section 3.4(a) shall not * * *

               (c) The terms of Section 3.4(a) shall not * * *

               (d) * * * pursuant to the terms of Section 3.4(a), * * *

               (e) The examples set forth in Attachment 3.4(a) include an example under
the heading “Section 3.4(e) Example,” which illustrates a situation where the
terms of Section 3.4(a) shall not apply.

          3.5 LightWeighting. Notwithstanding the foregoing provisions of this
Section 3, if AB makes a Lightweighting change to the Specifications for any
size, shape or color Bottle, which change Anchor or another source of Bottles
makes available to AB through current commercially available narrow neck press
and blow technology, * * * determined as follows. For each * * * of such * * *
will be * * *; provided, however, that for any such * * * resulting from such
change at each * * * where such Bottle is produced. If a Lightweighting change
is implemented through other forms of technology, the parties agree to discuss
and negotiate in good faith the allocation between them of any savings
resulting from such change. Such price reduction shall become effective as
such * * * and in any event within * * * weeks after such changed Bottle has
been qualified * * * on an operating Bottle production line. If AB notifies
Anchor within a reasonable period of time after the implementation of any such
Lightweighting change that Anchor should produce the applicable Bottle
according to the Specifications in effect prior to such Lightweighting change *
* *

          3.6 Packaging Materials.

               (a) AB shall communicate to Anchor in accordance with the terms of Section
2.3(b) what amount of each Brewery’s Requirements should be filled with packed
Bottles and what amount of each Brewery’s Requirements should be filled with
bulk Bottles and Anchor shall fulfill such Requirements accordingly.

               (b) Subject to the following terms and conditions, Anchor agrees that,
upon AB’s request, Anchor shall purchase from AB all partitions that make up a
part of the Packaging Components:

                    (i) All purchases and the subsequent resale of such partitions shall be
made pursuant to the applicable terms of Section 3.6(c).

                    (ii) If Anchor receives AB’s request and notifies AB within a reasonable
time thereafter that such * * * will be conditioned upon Anchor and AB mutually
agreeing upon terms that allow Anchor to * * * in a reasonably timely manner.

		
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               (c) Anchor and AB agree that each of the terms specified in this Section
3.6(c) that pertain to partitions are expressly subject to the terms of Section
3.6(b). Anchor shall purchase its inventory of Packaging Components and
Applied Plastic Labels from AB at a price designated by AB. The price
designated by AB will include the cost of loading, transporting, and unloading
such Packaging Components and Applied Plastic Labels at the applicable
Production Facility and may be different from the price agreed to between AB
and its respective suppliers of Packaging Components and Applied Plastic
Labels. Each shipment of Packaging Components received by Anchor and each
shipment of Applied Plastic Labels received by Anchor shall be clearly marked
and identified as AB’s property and shall be and shall remain AB’s property,
subject to no interest whatsoever of Anchor, any of Anchor’s creditors, or any
other third party until AB has taken a deduction for such Packaging Components
or such Applied Plastic Labels, as specified below, at which time title to such
Packaging Components or Applied Plastic Labels, as the case may be, shall
automatically pass to Anchor. Anchor will notify AB of Anchor’s receipt of a
delivery of Packaging Components and of its receipt of a delivery of Applied
Plastic Labels by no later than the next business day after each such receipt,
in each case in a manner specified from time to time by AB. After Anchor
receives a shipment of Packaging Components or Applied Plastic Labels, as the
case may be, AB shall deduct the amount it is charging Anchor for such
Packaging Components or Applied Plastic Labels from a subsequent payment owed
by AB to Anchor for Bottles, but no earlier than * * * after Anchor has
received such Packaging Components or Applied Plastic Labels. Anchor shall
charge AB for Packaging Components (other than partitions), as delivered to AB
with a Bottle shipment, at prices determined and communicated by AB to Anchor
from time to time, * * * to purchase such Packaging Components. Anchor shall
charge AB for partitions, as delivered to AB with a Bottle shipment, at prices
determined and communicated by AB to Anchor from time to time, which shall not
be less than the price originally paid by Anchor to AB to purchase such
partitions. Anchor shall charge AB for Applied Plastic Labels, as delivered to
AB with a Bottle shipment, at prices determined and communicated by AB to
Anchor from time to time, which shall be the price originally paid by Anchor to
AB to purchase such Applied Plastic Labels. Within thirty (30) days after the
end of each calendar quarter, Anchor shall also be entitled to charge AB for an
amount equal to * * *

               (d) Each of the Production Facilities can and does ship bulk Bottles from
time to time to the applicable AB Breweries. Attachment 3.6(d) specifies the
bulk Bottle production and delivery capacity of each Production Facility as of
October 31, 2003. Attachment 3.1 specifies the associated costs Anchor shall
be entitled to add to the applicable Base Prices for any bulk Bottles delivered
by Anchor to AB under this Agreement including the costs of pallets, top frames
and tier sheets Anchor is required to purchase pursuant to the terms of Section
5.3(b).

               (e) AB shall pay Anchor for the handling, assembly and insertion of the
Packaging Components and the handling and application of Applied Plastic
Labels, each in accordance with the schedule of permitted charges for such
services set forth in Attachment 3.1. Anchor shall inspect all Packaging
Components and all Applied Plastic Labels upon Anchor’s receipt of the same and
shall promptly notify both the applicable supplier and AB upon discovery of any
defective Packaging Components or defective Applied Plastic Labels, as the case
may be.

		
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          3.7 * * *

               (a) On * * * of Contract Year 2005 and each Contract Year thereafter
during the Term (or if such day is a holiday or a Saturday or Sunday, the next
business day thereafter) a calculation will be made to determine whether AB is
obligated to pay * * * to Anchor (in each case a * * *) or whether Anchor is
obligated to pay * * * to AB (in each case, a * * *).

               (b) The amount of any * * * or * * * owing from or to AB during any
particular * * * shall be calculated as follows:

                    (i) * * *

                    (ii) * * *

               (c) * * * are each defined in Attachment 3.7(c). Attachment 3.7(c)
specifies * * * Attachment 3.7(c) also * * *

               (d) * * * as specified in Attachment 3.7(c).

          3.8 Intentionally Deleted.

          3.9 Base Price Adjustments. Subject to the terms of Sections 3.3, 3.4,
3.5 and 3.10, the Base Prices set forth in the Selling Price Attachment that is
included in Attachment 3.1 and * * * Subject to the terms of Sections 3.3,
3.4, 3.5 and 3.10, the Base Prices set forth in the Selling Price Attachment
that is included in Attachment 3.1 and * * *

          3.10 * * * as follow (with examples of how this will work set forth in
Attachment 3.10 attached hereto):

               (a) Pursuant to the terms of Section 3.3(a) of this Agreement and Section
3.4(a) of the December 2000 Agreement, Anchor is entitled under certain
conditions to * ** Notwithstanding any terms in Section 3.3(a) of this
Agreement or Section 3.4(a) of the December 2000 Agreement to the contrary,
Anchor agrees that the amount of the * * *

               (b) The amount of the * * * not applied pursuant to the terms of Section
3.10(a) above shall be paid by Anchor to AB * * *

          3.11 * * *

     4. WARRANTY.

          4.1 Express Warranties. Notwithstanding any independent investigation by
AB, Anchor represents and warrants to AB that: Each Bottle (i) will be
merchantable and fit for the purpose intended, which is a commercially
acceptable container for beverages; (ii) will be manufactured in accordance
with the Specifications and all function and taste requirements specified
therein; (iii) will conform to samples previously delivered to and approved by
AB; (iv) and the substances and materials used to produce such Bottle will be
free from defects in

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

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materials and workmanship and will be permissible under applicable Federal
and State laws and regulations; and (v) will be delivered free from any
security interest, lien or other encumbrance.

          4.2 FDA Compliance. Anchor represents and warrants that each Bottle and
each related article contained in and comprising each shipment or other
delivery to AB and all information and ingredient lists furnished for use by AB
in labeling such articles for resale, is (i) not adulterated or misbranded (or,
in the case of labeling information and ingredient lists not a cause of
misbranding when applied to such articles) within the meaning of the Federal
Food, Drug and Cosmetic Act, as amended, and not an article which may not be
introduced into interstate commerce, (ii) complies with the requirements of the
Poultry Products Inspection Act, the Meat Inspection Act and the Federal Food,
Drug and Cosmetic Act, as amended, to the extent that said Acts are then
effective and applicable, (iii) registered, if required, and not adulterated or
misbranded within the meaning of the terms of the Federal Insecticide,
Fungicide and Rodenticide Act, any state pure food act, or any other applicable
Federal, State or local law, (iv) not banned or misbranded within the meaning
of the terms of the Federal Hazardous Substances Act, (v) not an article which
cannot be legally transported or sold under the provisions of any Federal,
State or local law, and (vi) if an article which is or which contains a color
additive, such color additive is or will be from a batch certified by the
Seller, its subsidiaries, if any, or its suppliers, in accordance with the
Federal Food, Drug and Cosmetic Act, as amended, and all regulations issued
under said Act.

          4.3 Fair Labor Standards. To the extent work is performed in the United
States in connection with the performance of Anchor’s obligations under this
Agreement, Anchor represents that all such work will be performed in compliance
with the requirements of the Fair Labor Standards Act of 1938, as amended.
Anchor further represents that all work performed in meeting its obligations
under this Agreement complies with the provisions of Executive Order No. 11246.

          4.4 Flavor Standards. AB and Anchor acknowledge that the delivery of
Bottles under this Agreement is subject to their respective rights and
obligations as stated in the flavor standards addendum marked as Attachment 4.4
to this Agreement.

          4.5 Indemnification. AB shall have all rights and remedies of a buyer
under the Uniform Commercial Code of Missouri (the “UCC”). Any purchases of
Bottles under the “cover” provision of Section 2-712 of the UCC shall be
applied in satisfaction of AB’s Requirements under this Agreement. Anchor
shall in addition indemnify and hold harmless AB, its parent, subsidiary and
Affiliates and their respective directors, officers, employees, agents and
other representatives, from and against any and all costs, losses, liabilities,
damages, claims, judgments or expenses, including without limitation court
costs, attorneys fees and other legal expenses resulting from any alleged or
actual breach by Anchor of any representation or warranty set forth herein or
the failure by Anchor to perform in a timely manner any of its obligations
hereunder. Anchor’s obligations under the terms of the immediately preceding
sentence shall survive the expiration or earlier termination of this Agreement.

          4.6 Pricing. The pricing provided to AB under this Agreement, including
but not limited to each Selling Price, is lawful.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

10

 

     5. DELIVERY.

          5.1 Delivery Terms. Anchor shall in accordance with the Specifications:
(a) package each Bottle shipment according to whether the applicable Bottles
are bulk Bottles or packed Bottles, (b) load the packaged Bottles for shipment,
and (c) deliver the Bottles F.O.B. the applicable Brewery. AB shall be
responsible for unloading at the applicable Brewery all bulk Bottles which need
to be manually unloaded and all packed Bottles and once AB commences unloading
title to and risk of loss pertaining to such Bottles shall pass to AB. Anchor
shall be responsible for unloading at the applicable Brewery all bulk Bottles
which may be automatically unloaded and after the completion of such unloading,
title to and risk of loss pertaining to such Bottles shall pass to AB.

          5.2 Delivery Option.

               (a) Notwithstanding anything to the contrary in Section 5.1 above, AB
shall have an option, exercisable individually by AB with respect to each
Brewery and each Production Facility, to control the selection of freight
carrier and insurance provider used for shipments of Bottles from such
Production Facility or delivered to such Brewery, subject to the following
conditions: First, AB may only exercise this option in a way that does not
increase Anchor’s operating costs or adversely affect Anchor’s production and
delivery efficiencies. * * *

               (b) * * *

               (c) Anchor shall cooperate and assist AB in implementing such shipping
arrangements if AB exercises such option, subject to the foregoing conditions.
With respect to each shipping or delivery location for which AB exercises such
option, AB shall be responsible for and pay all related freight and insurance
charges, and Anchor shall deduct from the Base Price for all affected Bottles
the freight charges (per 1000 gross of Bottles) incurred by Anchor applicable
to such Bottle deliveries or shipments, based on the average charges of such
deliveries or shipments prior to the exercise of such option by AB.

          5.3 Pallets.

               (a) Anchor agrees to use pallets supplied by AB to package and deliver all
of AB’s packed Bottle Requirements pursuant to the terms of this Agreement.
Anchor and AB agree that until further notice all such pallets shall be AB’s
standard 32 x 37 pallet. Both parties agree that the user fee Anchor owes AB
for such pallets has been reflected in the Selling Price for packed Bottles
and, as a result, Anchor shall not be required to send any payments to AB in
consideration for its use of such pallets. Anchor shall not take title to any
such pallets. Anchor shall exercise reasonable care in the use of such
pallets, but shall otherwise not be responsible for the replacement or
maintenance and repair of such pallets should any of them be lost or damaged
due to no fault of Anchor. Subject to * * * right to seek reimbursement from
* * * in certain instances as specified below, * * * shall be responsible for
arranging and paying for transportation necessary to transport any and all such
pallets to the respective Production Facilities specified in the table below:

	 	 	 
	Production Facility To

	 	Dollar Amount

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

11

 

	 	 	 
	Which Pallets Are Shipped

	 	Per Pallet
	
 

	 	
 
	Warner-Robins, GA

Jacksonville, FL

	 	$* * *

$* * *

* * * shall be entitled to seek reimbursement from * * * for the amount of the
excess * * * is entitled to seek reimbursement from * * * for $* * * AB agrees
to work with Anchor to help Anchor minimize the freight costs Anchor is
responsible for under this Section 5.3(a). At the expiration or earlier
termination of the Term, Anchor shall return all such pallets in its possession
to AB.

               (b) Anchor shall purchase on its own account 100% of the pallets, top
frames, tier sheets, and all other materials required by Anchor to package and
deliver AB’s bulk Bottle Requirements in accordance with the Specifications.
Attachment 3.1 specifies the amount Anchor shall be entitled to add to the Base
Prices for bulk Bottles to account for the cost of such pallets, top frames,
tier sheets, and other materials and other packaging costs associated solely
with bulk Bottles.

     6. PAYMENTS.

          6.1 Payment Due Date. AB shall pay Anchor for all Bottles purchased
hereunder, based on the date of to the applicable Brewery. Terms of payment
shall be payment in full within * * * after AB receives the Bottles, subject to
any additional days provided pursuant to the terms of the Electronic Payments
Agreement attached hereto and marked as Attachment 6.1, as it may be amended
from time to time pursuant to its terms. Any amounts payable by either party
under any provision of this Agreement which are due on a Saturday, a Sunday, or
a public holiday generally recognized in the United States, shall instead be
due and payable on the first business day thereafter.

          6.2 Purchase Orders. AB and Anchor may exchange standard form documents
(such as purchase orders) for administrative and informational purposes, and
the terms and conditions stated thereon shall neither modify, amend or
supplement the terms and conditions stated in this Agreement.

          6.3 Electronic Transactions. AB and Anchor acknowledge that this
Agreement is subject to the agreement pertaining to the electronic exchange of
information between the parties in the form of that “Trading Partner Agreement”
made as of January 1, 2001 marked as Attachment 6.3 to this Agreement and
signed by each of them, as it may be amended from time to time pursuant to its
terms. Anchor and AB agree that the terms of Section 4.1 of the attached
Trading Partner Agreement are deleted in their entirety and replaced with the
following:

     “4.1 Termination. The term of this Agreement shall continue for so
long as either of the following two agreements between AB and Trading
Partner remain in effect: (a) Amended and Restated Southeast Glass Bottle
Supply Agreement effective as of January 1, 2004, as it may be amended,
restated and/or supplemented from time to time, and (b) Glass Bottle
Supply Agreement dated as of December 18, 2000, as it may be amended,
restated and/or supplemented from time to time. Termination of this

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

12

 

Agreement shall not affect the respective obligations or rights of
the parties arising under any Documents or otherwise under this Agreement
prior to the effective date of such termination.”

     7. FORCE MAJEURE.

          7.1 The Events.

               (a) Each party shall be relieved of its obligation to perform any part of
this Agreement to the extent its performance is prevented or rendered
impracticable by events beyond its reasonable control, which events may
include, without limitation, fire, storm, flood, earthquake, and other Acts of
God, and explosion, accident, acts of the public enemy, riots and other civil
disturbances, sabotage, court injunctions, transportation embargoes, shortages
of materials, strikes, lockouts, work stoppages and other labor disputes, acts,
regulations or other requirements of domestic or foreign federal, state,
county, municipal, or local governments or branches, subdivisions or agencies
thereof, including, without limitation, any such acts, regulations or other
governmental requirements making it unlawful (such as by an outright ban) or
commercially impractical (such as by the imposition or increase of deposit
requirements or other action directly or indirectly affecting beer or its
packaging) to manufacture or package beer in bottles, or to sell or distribute
beer in packaging of any type (the “Force Majeure”), subject to the various
limitations provided in this Section 7. Force Majeure shall further include,
without limitation, any imposition or increase of any excise tax or similar
charge by any governmental authority on the manufacture, packaging, possession,
storage, sale or distribution of beer, and AB’s obligations to purchase shall
be deemed to have been rendered impracticable thereby, without any direct proof
of causation, to the extent that there is any decrease in the demand of beer
manufactured, sold or distributed by AB after such Force Majeure event occurs.

               (b) Notwithstanding the foregoing, Anchor acknowledges that Force Majeure
will not include a strike, lockout, work stoppage or other labor dispute
affecting any of the Production Facilities, and in the event of such a labor
dispute at any of the Production Facilities, Anchor agrees to use its
commercially reasonable best efforts to operate any affected Production
Facility with management or other personnel to the full extent necessary to
satisfy the Requirements.

               (c) Anchor agrees that if picketing, a work stoppage, a strike or any
refusal to work of or by any of AB’s employees or any employees of any AB
contractor occurs at one or more of the Breweries or any other facilities owned
or operated by AB, Anchor shall still cause deliveries of Bottles to continue
to the Breweries as otherwise required hereunder, but if any of the carriers
transporting the Bottles to the Breweries express concern to AB about the
safety of their drivers or their equipment at the Breweries during any such AB
labor dispute, AB shall take all actions reasonably necessary to insure the
safety of such drivers and equipment once they reach the Breweries.

          7.2 Notice.

               (a) Each party will immediately notify the other party of the occurrence
of any Force Majeure that may affect its performance of this Agreement.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

13

 

               (b) If any Force Majeure event occurs affecting one or more Production
Facilities or deliveries, Anchor will:

                    (i) use commercially reasonable efforts to operate the affected Production
Facilities prior to any other Anchor bottle production facility, so long as
such actions by Anchor are not in violation of any agreements Anchor is a party
to as of the date of this Agreement;

                    (ii) use commercially reasonable efforts to provide Bottles to AB from the
affected Production Facilities;

                    (iii) use commercially reasonable efforts to provide Bottles to AB which
Anchor is not able to supply from Production Facilities affected by the Force
Majeure from Production Facilities and/or other Anchor bottle production
facilities not affected by the Force Majeure; and

                    (iv) give AB priority of production from each of the Production Facilities
and each of Anchor’s other bottle production facilities and their respective
equipment and furnaces, so long as such actions by Anchor are not in violation
of any agreements Anchor is a party to as of the date of this Agreement.

               (c) With respect to Bottles supplied by Production Facilities unaffected
by the Force Majeure pursuant to subsection (iii) above, Anchor will use
commercially reasonable efforts to ship such Bottles from Production Facilities
or such other bottle production facilities that will minimize freight charges.

               (d) * * * represents and warrants that as of the date of this Agreement it
is not a party to any other agreement (other than agreements with AB) which
entitles the other party thereto * * * or requires that * * * in the event of a
* * * and * * * covenants that during the Term it will not agree to or allow
any such terms to be included in any agreement or renewal or restatement it
enters into with any party * * * after the date of this Agreement.

               (e) If a Force Majeure event occurs affecting a particular Brewery, AB
will use commercially reasonable efforts to allocate to Anchor Bottle
requirements at other Brewery locations, subject to AB’s other contractual
commitments.

          7.3 Rights. If Anchor’s performance hereunder is suspended due to Force
Majeure, then AB shall have, in addition to such other rights which it may have
as a buyer under the Uniform Commercial Code or otherwise, the right to procure
alternative sources of Bottle supply on commercially reasonable terms with
respect to all Bottles not delivered by Anchor because of the Force Majeure,
which may require an alternative Bottle purchase commitment by AB for a period
of time which extends beyond the Force Majeure affecting Anchor. Any such
alternative purchases of Bottles by AB shall be applied to its obligation to
purchase the Requirements.

          7.4 Intentionally Deleted.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

14

 

          7.5 Termination Because of Force Majeure. If all or a substantial part of
either party’s performance hereunder is prevented or suspended by reason of
Force Majeure for more than ninety (90) consecutive days at any one time, or
more than one hundred eighty (180) days in the aggregate during the Term, then
the other party shall have the right to immediately terminate this Agreement
(upon notice to the party affected by the Force Majeure). Such termination
shall be without liability with respect to the obligations so terminated.

     8. TERM AND TERMINATION.

          8.1 Term.

               (a) The “Term” of this Agreement shall begin on January 1, 2004 and,
unless terminated earlier in accordance with the terms of this Agreement, shall
remain in effect through and including December 31, 2009.

          8.2 Rights of Termination.

               (a) Subject to the terms of Section 8.3 and in addition to any right of
termination granted elsewhere in this Agreement, either party shall have the
right at any time to terminate this Agreement, without prejudice to any other
legal rights to which such terminating party may be entitled, upon the
occurrence of any one or more of the following:

                    (i) Material breach by the other party in the performance of any of the
provisions of this Agreement, which breach is not cured within thirty (30) days
following written notice of such breach to the defaulting party;

                    (ii) The making by the other party of an assignment for the benefit of
creditors;

                    (iii) The appointment of a trustee or receiver or similar officer of any
court for the other party or for a substantial part of the property of the
other party, whether with or without the consent of the other party;

                    (iv) The institution of bankruptcy, reorganization, insolvency or
liquidation proceedings by or against the other party without such proceedings
being dismissed within thirty (30) days from the date of the institution
thereof; or

                    (v) A material breach by the other party of any of its representations or
warranties set forth herein.

               (b) Subject to the terms of Section 8.3 and in addition to any right of
termination granted elsewhere in this Agreement, AB shall have the right at any
time to terminate this Agreement, without prejudice to any other legal rights
to which AB may be entitled, upon the occurrence of one or more defaults by
Anchor under the terms of the December 2000 Agreement and Anchor’s failure to
cure any such default(s) within the period of any applicable cure period
specified in the December 2000 Agreement.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

15

 

               (c) Either party which exercises a right of termination under the
foregoing provisions of Section 8.2(a) or 8.2(b) may exercise such right by
delivery of a termination notice which shall provide that such termination is
effective not less than ninety (90) days nor more than twelve (12) months after
the date such notice is issued, at the choice of the party exercising such
right of termination.

          8.3 Effect of Termination. Termination of this Agreement for any reason
provided herein shall not relieve either party from its obligation to perform
up to the effective date of such termination or to perform such obligations as
may survive termination. If payments attributable to periods after the
termination of the Agreement have been made before the termination of the
Agreement, the party receiving such payments shall refund the payments so
attributable promptly after the termination of the Agreement. If payments
attributable to periods before the termination remain unpaid upon the
termination of the Agreement, the party required to make such payments shall do
so promptly after the termination of this Agreement. Nothing in this Section
shall limit the rights otherwise available to a party arising from the breach
of the provisions hereof.

          8.4 Supplier Certification Requirements.

               (a) Anchor agrees to use its commercially reasonable best efforts to
achieve “Select Status” at each Production Facility by * * * “Select Status”
is described in the Supplier Certification Program attached to this Agreement
as Attachment 8.4(a). Anchor agrees that the Supplier Certification Program
may be revised from time to time after October 31, 2003 in accordance with the
rules regarding Specification changes set forth in Section 3.3(a) and for the
purposes of this Section 8.4(a) only all references in Section 3.3(a) to
“Specifications” shall be deemed to mean the “Supplier Certification Program.”
If the terms of the Supplier Certification Program are changed pursuant to the
terms of the preceding sentence or otherwise through mutual agreement of the
parties, the target date of * * * may be revised accordingly.

               (b) AB agrees that any failure of Anchor to achieve Select Status at
either or both of the Production Facilities shall not be considered a material
breach of this Agreement giving rise to a right by AB to terminate this
Agreement.

               (c) AB may, upon notice to Anchor, terminate or phase out AB’s purchase of
Bottles from any Production Facility that fails to achieve Select Status by * *
* or by such other date as may be mutually agreed upon by the parties as a
result of an amendment to the terms of the Supplier Certification Program, or
fails to maintain Select Status after achieving it if (i) such failure is a
result of Anchor ceasing to make reasonable efforts to attain or maintain
Select Status at such Production Facility after Anchor receives notice from AB
and has a reasonable opportunity to cure, or (ii) such failure is based on a
deficiency which may reasonably be expected to adversely affect the quality,
flavor, or safety characteristics of the Bottles being delivered to AB from
such Production Facility. In such event, Anchor may replace such Bottles with
deliveries from another approved Production Facility, provided that AB shall
not be required to pay any additional charge for transportation, storage or
delivery from such alternative Production Facility. * * *

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

16

 

          8.5 Facilities Management Requirements.

               (a) Each Production Facility and each warehouse used by Anchor to store
Bottles is subject to inspection by AB, as further provided in Section 10
below. AB will determine a Facility Management Inspection Score for each
Production Facility and each warehouse used to store Bottles after each
inspection, based on the criteria stated in Attachment 8.5(a). AB shall be
entitled to make any change to the criteria after October 31, 2003 so long as
the change is reasonably related to improving the quality, flavor or safety
characteristics of Bottles delivered to AB and the rules regarding
Specification changes set forth in Section 3.3(a) are adhered to (in which
event, for the purposes of this Section 8.5(a) only, all references in Section
3.3(a) to “Specifications” shall be deemed to mean the criteria stated in
Attachment 8.5(a)).

               (b) In addition to Anchor’s duty to achieve and maintain Select Status at
each Production Facility, as set forth in Section 8.4 above (which Select
Status is based, in part, on the Facility Management Inspection Score), AB may,
upon notice to Anchor, terminate or phase-out its purchases of Bottles from any
Production Facility based upon (i) a deficiency noted during any AB inspection
which may reasonably be expected to adversely affect the quality, flavor, or
safety characteristics of any of the Bottles being delivered to AB from such
Production Facility or from the warehouse servicing such Production Facility,
or (ii) Anchor ceasing to make reasonable efforts towards continuous
improvements in their Facility Management Inspection Score at such Production
Facility or such warehouse after being notified by AB and given a reasonable
opportunity to cure.

               (c) If AB exercises its right to terminate or phase-out purchases of
Bottles from any Production Facility pursuant to the terms of Section 8.5(b),
Anchor may replace such lost deliveries of bottles in the manner provided in
Section 8.4(c) above, * * *

               (d) Anchor acknowledges the stringent appearance standards maintained by
AB with respect to not only its own facilities, but also those of its
suppliers. Anchor accordingly agrees to ensure that each of the Production
Facilities, the delivery vehicles used to deliver Bottles to any of the
Breweries, and each of the warehouses used to store Bottles prior to such
delivery are each maintained using the highest practicable standards for
sanitation and housekeeping. Anchor further agrees to ensure that such
delivery vehicles, such warehouses, and each of the Production Facilities are
each maintained so that they present a clean, high quality appearance. Anchor
further agrees to cause each individual working in a warehouse in which Bottles
are stored by Anchor or any of its contractors from time to time prior to
delivery to a Brewery, to represent to AB in a writing in the form of
Attachment 8.5(d) that they have not in any way tampered with any of the
Bottles in an effort to contaminate or make such Bottles unsafe or anything
other than in compliance with the Specifications.

          8.6 Universal Quality Standards.

               (a) AB maintains a quality measure for each production facility (whether
or not owned or operated by Anchor) supplying Bottles to AB’s domestic
breweries which, without limitation, takes into account the number, frequency,
and severity of each of the following regarding the applicable production
facility and the Bottles such production facility

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately
with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

17

 

delivers to one or more AB breweries: (i) defective material reports, (ii)
consumer complaints, (iii) downtime experienced at the AB breweries receiving
Bottle deliveries from the applicable production facility, (iv) Bottles that
are not in accordance with the Specifications, (v) defects in materials and
workmanship, and (vi) flavor, health, sanitation, and safety issues. A
weighted average of the quality measure is prepared by AB on a monthly basis
based on the volume of Bottles supplied by each such production facility (the
“Weighted Average Quality Measure”).

               (b) Without limiting the terms of Sections 4, 8.4 or 8.5 or any of AB’s
rights and remedies thereunder, Anchor agrees that beginning in Contract Year *
* * and at all times thereafter during the Term the quality measure determined
by AB on a monthly basis for each Production Facility (in each case, a
“Production Facility Quality Measure”) will equal or exceed the Weighted
Average Quality Measure in effect at the time. If Anchor receives written
notice from AB that a Production Facility Quality Measure for one or both of
the Production Facilities is less than the applicable Weighted Average Quality
Measure, Anchor will have nine months from its receipt of said notice to raise
and maintain the quality of the Production Facility or Facilities in question
to a level that is equal to or above the applicable Weighted Average Quality
Measure.

               (c) If Anchor fails to satisfy its obligations specified Section 8.6(b),
Anchor agrees to meet with AB promptly thereafter and negotiate in good faith
reasonable remedies in favor of AB including, without limitation, delivery of
Bottles required under this Agreement from one or more alternate Anchor
production facilities (other than the Production Facility or Facilities with
quality issues) at the same Selling Price AB would have paid if the Bottles had
been delivered from the Production Facility or Facilities experiencing quality
issues.

     9. AUDITS.

          9.1 Scope of the Audits; Auditors. Each party shall have the right to
audit information (i) used to determine the Selling Price and any changes to it
and its constituent components including, without limitation, all information
necessary to determine whether the terms of Section 3 (and each of the sections
and subsections thereunder) have been fully complied with, (ii) pertaining to
improper payments referred to in Section 16.5 below, and (iii) provided by the
other party pursuant to the terms of this Agreement in addition to the
information specified in subsections (i) and (ii) above. All audits shall be
performed by a nationally recognized public accounting firm mutually acceptable
to the parties, or in the absence of other agreement between the parties,
PriceWaterhouseCoopers (the “Auditor”).

          9.2 Costs. The full cost of any audit shall be borne by the requesting
party, unless a “material discrepancy” adverse to the requesting party is
uncovered by the audit and such material discrepancy is caused by the actions
of the other party or the other party’s failure to act; in which case the
audited party shall then bear 100% of the cost of the audit. A “material
discrepancy” shall be any discrepancy or group of discrepancies which, in the
aggregate for any one audit, would result in a payment by one party to the
other of an amount equal to or greater than $25,000 or an adjustment in what
one party owes to the other under this Agreement in an amount equal to or
greater than $25,000.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

18

 

          9.3 Maintenance of Records. Each party shall maintain records in
sufficient detail to permit an acceptable audit, and, without limiting the
foregoing, shall maintain each such record (i) for one full year after the
expiration or earlier termination of this Agreement and (ii) for so long as any
audit pertaining to such record is pending. The Auditor shall be given access
to any and all records that it deems necessary to conduct the audit.

          9.4 Notice. Prior to requesting an audit, the requesting party shall
notify the other party of its intent to exercise its audit rights. The other
party shall then be allowed a reasonable amount of time (not to exceed 30 days)
to explain/resolve the question to the satisfaction of the requesting party,
and thus eliminate the need for an audit.

          9.5 Audit Procedures. If the requesting party is not satisfied with the
explanation provided by the other party pursuant to the terms of Section 9.4
and determines that an audit should be conducted, the parties shall in good
faith make reasonable efforts to mutually agree upon a joint letter of
instruction for the Auditor which shall describe the format and procedure the
Auditor shall undertake and the documents it will examine in the course of its
audit. If the parties are unable to agree on the terms of the letter of
instruction, the Auditor shall make its examination and determination in
accordance with written instructions provided by the requesting party. A copy
of said written instruction shall be provided to the other party no later than
five (5) business days prior to the Auditor commencing its audit; provided
that, prior to commencing such audit, the Auditor shall have agreed to hold in
confidence and not disclose to anyone, including the other party, unless
required by law, any of the information that the parties have designated in
writing as confidential. Each party is obligated to furnish or make available
to the Auditor such information in the party’s possession as is required in the
Auditor’s reasonable opinion to conduct the audit. The Auditor shall provide
both parties with a final written conclusion of compliance or noncompliance and
the amount of the discrepancy, if any, but shall not otherwise disclose any
confidential information of either party. If the Auditor discovers any
discrepancy, the Auditor’s conclusions shall specify the amount owed to AB or
Anchor, and, in either event, a general statement as to the basis for the
discrepancy.

          9.6 Survival of Rights. The provisions of this Section 9 shall expressly
survive expiration or termination of this Agreement for a period of two (2)
years.

     10. PLANT VISITS.

          Subject to Section 11 below, Anchor shall allow employees and
representatives of AB and Anheuser-Busch Companies, Inc. who have a legitimate
and non-competitive purpose to visit the Production Facilities during normal
business hours and upon at least three (3) business days’ notice; provided,
however, where the purpose of the visit is for health, sanitation or quality
control inspections, no notice need be given to Anchor. Such employees and
representatives shall have full access to all phases of operation but shall not
unreasonably interfere with Anchor’s operations. All such employees and
representatives shall abide by all applicable rules and regulations of the
Production Facilities with respect to visitors.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

19

 

     11. CONFIDENTIALITY.

          Each party, and their respective employees, officers, directors,
representatives, subsidiaries, affiliates, assigns, subcontractors and any and
all persons or business entities acting under one or any of them (the
“Disclosees”), shall treat in confidence and not disclose to others any
confidential information of the other, which such Disclosees may have furnished
to them by the other party hereto or by any third party, or which such
disclosees may have accessed in the performance of this Agreement, except to
the extent that any such information is (i) generally available to those
skilled in the art, (ii) acquired from a third party rightfully having such
information and under no obligation to not disclose it to the Disclosees, (iii)
already lawfully in the Disclosee’s possession or (iv) developed by a Disclosee
independently of any confidential information disclosed to such party by, or
learned by such party from, the other party (the “Information”). For purposes
of this Agreement, subject to the four exceptions set forth in the preceding
sentence, information regarding a party’s cost of materials, production, raw
materials, labor and other costs, suppliers, customers and technology, whether
or not labeled or described by such party as “confidential,” shall be
considered “confidential information” and within the definition of
“Information,” in addition to any other information identified from time by
such party as “confidential.” However, notwithstanding the foregoing, * * *
may disclose * * *

     12. PUBLIC STATEMENTS.

          In the event that Anchor is required under applicable law to file the
Agreement or any related document pertaining to the Agreement or its
performance with the Securities and Exchange Commission or any other regulatory
authority, Anchor shall promptly notify AB of such requirement and (i) use
reasonable efforts to obtain confidential treatment of any portion of the
Agreement or related document for which such treatment is requested by AB, (ii)
to the extent requested by AB and permitted by law, delete the most highly
confidential elements of the form of Agreement submitted for filing, including
but not limited to all price and other financial terms, (iii) promptly notify
AB of any attempt by any party to obtain access to any portion for which
confidential treatment has been requested and (iv) at the request of AB, use
reasonable efforts to defend against any such attempt. Prior to including any
discussion of the Agreement or any related document in any document to be filed
with the Securities and Exchange Commission or any other regulatory authority,
Anchor shall provide such discussion to AB and shall make such changes thereto
as may be requested by AB within 20 days after AB has received a copy of such
proposed discussion, except to the extent that such changes would violate
applicable law. Anchor shall be free to file any proposed discussion for which
AB has not requested changes within such 20 day period.

     13. NOTICES.

          All notices from one party to the other under the terms of this Agreement,
unless otherwise directed, shall be hand delivered or sent by fax or certified
mail or by a responsible overnight courier, addressed to the parties at the
addresses indicated below and shall be deemed delivered on the date of receipt,
or the business day next succeeding the date of posting if mailed:

     If to AB:

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

20

 

ANHEUSER-BUSCH, INCORPORATED

c/o Anheuser-Busch Companies, Inc.

One Busch Place

St. Louis, Missouri 63118

Attention: Vice President, Corporate Purchasing

Fax Number: 314/577-9750

If to Anchor:

ANCHOR GLASS CONTAINER CORPORATION

4343 Anchor Plaza Parkway

Tampa, Florida 33634

Attention: President

Fax Number: 813/882-5735

     14. ASSIGNMENT.

          Neither party hereto shall assign its rights or obligations under this
Agreement to any third party without the prior written consent of the other.

     15. INDEPENDENT CONTRACTOR.

          Nothing contained in this Agreement shall create an association
partnership, joint venture or the relation of principal and agent (except as
specifically set forth herein). Neither of the parties hereto shall have any
authority to bind the other in any way except as stated herein. The parties
recognize that during the Term of this Agreement, there will be employees of
either party upon the premises of the other. It is understood and agreed that
on such occasions the employees of each party shall remain the employees of
that party solely, and that party shall be solely responsible for the wages and
benefits for its employees, and any injuries which are sustained by such
employees shall be covered under the Worker’s Compensation insurance contracts
of the respective employers.

     16. ADDITIONAL AGREEMENTS.

          16.1 Maintenance of Corporate Existence. Either party shall at all times
maintain its corporate existence. Each party will do or cause to be done all
things necessary to preserve and keep in full force and effect its rights
(charter and statutory), licenses and franchises.

          16.2 Merger, Consolidation, Asset Sale.

               (a) AB may terminate this Agreement upon at least ninety (90) days’ notice
to Anchor, if (i) more than forty percent (40%) of Anchor’s equity securities
are sold, conveyed, or assigned to a third party or a group, or a sufficient
amount of such equity securities are sold, conveyed or assigned to a third
party or group to enable them to control the selection of a majority of the
members of Anchor’s board of directors or of Anchor’s equivalent highest level
of management; provided, however, that the terms of this subsection (i) shall
not be triggered by

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

21

 

any public offering of Anchor’s equity securities nor shall it be
triggered by any sale, conveyance, or assignment of some or all of Anchor’s
equity securities to a third party or a group that (A) is a shareholder or
Affiliate of Anchor as of October 31, 2003, (B) is specified in Attachment
16.2(a) of this Agreement, and (C) is a shareholder or Affiliate of Anchor at
the time of any such sale, conveyance or assignment, (ii) Anchor or any
Affiliate of Anchor consolidates with, merges into, becomes an Affiliate of, or
acquires a controlling interest in (A) any other corporation (or other form of
business organization) which is a competitor of AB by engaging in any of the
following lines of business: production, marketing or distribution of any brand
of beverage products or the operation of public entertainment parks, or (B) any
producer of Beverage Bottles which has production facilities situated in the
United States; (iii) Anchor or any Affiliate of Anchor consolidates with or
merges into, or becomes an Affiliate of any other corporation (or other form of
business organization) the result of which is a change in Anchor ‘s financial
condition which materially adversely affects Anchor’s ability to perform this
Agreement; or (iv) Anchor sells, leases or otherwise transfers full or partial
control or ownership of any Production Facility to any third party which is not
an Affiliate of Anchor; provided, however, that Anchor shall be entitled to
engage in a sale and leaseback transaction involving one or more of the
Production Facilities with one or more financial institutions without AB being
entitled to invoke its rights under this Section.

               (b) In addition to the rights granted under sub-section (a) above, AB
shall have a sixty (60) day right of first refusal prior to any sale or
transfer to a third party by Anchor of either Production Facility (either
directly or as a part of a larger transaction involving the stock or additional
assets of Anchor or any of its Affiliates). Anchor may not accept any offer of
any third party to purchase either of the Production Facilities (independently
or as part of a larger transaction) until AB has had sixty (60) days within
which it may exercise its right of first refusal in accordance with this
Section 16.2(b). Anchor shall require any third party proposing to purchase
the Production Facilities to submit either (i) a written offer for one or both
of the Production Facilities, independent of other assets or interests of
Anchor or its Affiliates, or (ii) dual offers for the stock or assets of Anchor
that in the alternative would include assets in addition to the Production
Facilities or an offer for the other assets or the stock of Anchor which
excludes both Production Facilities. In that event, the price to AB for the
Production Facilities for purposes of its exercise of this right of first
refusal shall be the difference between the two prices offered for Anchor or
its assets, either including or excluding the Production Facilities. Any
non-monetary portion of the amount offered consideration which is impossible or
impractical for AB to perform or otherwise satisfy shall be valued at its fair
market value, and such amount shall be added to the monetary portion of such
third party’s offer for purposes of determining the amount of AB’s right of
first refusal. AB shall have a period of sixty (60) days after receiving such
offer to notify Anchor that AB is electing to purchase the Production
Facilities at the proposed price, as adjusted, if necessary, as described
above, and in accordance with all other applicable terms and conditions of such
offer. If AB does not notify Anchor of its exercise of such right of first
refusal, Anchor shall be free to complete the sale of the Production Facilities
to such third party in accordance with the particulars of such offer, as
disclosed to AB.

          16.3 Insurance.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

22

 

               (a) At all times during the Term, Anchor shall have and shall maintain in
full force and effect the following insurance coverages:

                    (i) Commercial General Liability Insurance, including without limitation
Products Liability coverage, with minimum limits per occurrence and in the
aggregate of at least Ten Million Dollars ($10,000,000). This coverage shall
be endorsed to name AB and each of its subsidiaries and affiliates as
additional insureds, and to evidence such endorsement, Anchor will provide a
certificate of insurance from a licensed insurance broker stating the
following:

“The following are additional insureds: Anheuser-Busch Companies, Inc.,
and its direct and indirect subsidiaries and affiliated entities,
including any entity directly or indirectly controlling, controlled by or
under common control of it, including, without limitation,
Anheuser-Busch, Incorporated.”

                    (ii) Property Insurance, including fire and extended coverage, for all
risks of physical loss or damage to the buildings and property of Anchor,
including each of the Production Facilities and all Bottles stored on all
property owned or leased by Anchor. Such insurance coverage shall have a
minimum limit adequate to cover risks on a replacement cost basis.

                    (iii) Workers Compensation Insurance, including Employer’s Liability
coverage, with minimum limits per employee and per event of not less than One
Million Dollars ($1,000,000). Such coverage shall include, where permitted by
state law, a waiver of subrogation applicable to each of the additional
insureds identified in subsection (a) (i) above; provided that AB also waives
subrogation (to the extent permitted by law) with respect to claims against
Anchor in AB’s policy of Workers Compensation Insurance and provides evidence
thereof to Anchor.

               (b) The insurance described in subsection (a) above shall be provided by
one or more nationally recognized insurance carriers which each has a rating of
at least “A-” or better, Size IX or larger, by the A.M. Best rating service,
or if the Best rating service is no longer available, an equivalent rating by
another nationally recognized insurance rating service designated by AB. Such
insurance shall be primary and non-contributing with respect to any insurance
maintained by AB. Such insurance shall contain a “separation of insureds”
endorsement, a “severability of interests” endorsement, or an equivalent
endorsement. To the extent any such coverage is written on a claims-made
basis, it shall have a retroactive date no later than the start of this
Agreement and notwithstanding termination of this Agreement, shall allow for
reporting of claims until at least 2 years beyond the expiration of this
Agreement, either directly or through “tail” coverage purchased at the sole
cost and expense of Anchor.

               (c) Within thirty (30) days after the execution of this Agreement, Anchor
shall provide AB with a certificate from its licensed insurance broker
evidencing the foregoing coverages effective as of the start of this Agreement,
and providing that AB shall be given at least thirty (30) days notice of
cancellation, non-renewal or restrictive endorsement with respect to any of the
foregoing coverages. Anchor shall provide AB with similar certificates
evidencing renewal of such coverage prior to the expiration of any such
policies of insurance,

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

23

 

and shall use its commercially reasonable best efforts to provide such
certificates at least thirty (30) days or more prior to expiration of the
applicable coverage.

          16.4 Efforts to Minimize Costs.

               (a) Anchor shall at all times use reasonable diligence to seek and procure
its requirements of all materials and equipment at the lowest available prices
(taking into account all relevant factors, including quality and service), and
shall likewise minimize all plant costs in a manner consistent with prudent
management practices, including, without limitation, adherence to total quality
management practices and statistical process control.

               (b) The long-term objective of AB and Anchor is to implement any cost
saving measures that result in declining costs over the life of the Agreement
and beyond. To accomplish the goal, joint “Cost Reduction Teams” will be
formed between AB and Anchor to study areas of cost and recommend changes to
reduce the costs. Any savings generated will be distributed as agreed to by
Anchor and AB’s Corporate Purchasing Department.

          16.5 Improper Payments. Anchor hereby warrants that no payments have been
or shall be made, directly or indirectly, by or on behalf of Anchor to or for
the benefit of any AB employee or agent who may reasonably be expected to
influence the decision to purchase Bottles. As used herein “payments” shall
include money, property, services and all other forms of consideration. AB may
verify this warranty in accordance with the audit provisions in Section 9
above.

          16.6 Cullet. Anchor shall offer AB (or its designated Affiliate) the
opportunity to sell cullet to Anchor at market prices, so long as such sales do
not conflict with Anchor’s cutlet supply agreements in effect on the date
hereof, or with Anchor’s internal cullet supply system, and so long as Anchor
is then buying cullet.

          16.7 One Agreement. Anchor acknowledges that AB’s purchase of Bottles
from Anchor under this Agreement and under the December 2000 Agreement are
considered, discussed, negotiated, and administrated by Anchor and AB as one
agreement instead of two separate agreements. Accordingly, Anchor and AB each
acknowledge and agree that in addition to any other rights of set off or
recoupment that AB may have against Anchor, AB is authorized, without notice to
Anchor (any such notice being expressly waived by Anchor), to set off and apply
against amounts that may become payable by Anchor to AB under this Agreement,
any present or future amounts owing by AB to Anchor that arise under this
Agreement or any other present or future agreements between AB and Anchor
including, without limitation, the December 2000 Agreement.

          16.8 * * *

               (a) Subject to the terms of Section 16.8(b), Anchor agrees that in order
for AB to receive a * * *

               (b) * * *

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

24

 

     17. REPRESENTATIONS AND WARRANTIES OF ANCHOR.

          Anchor covenants, represents and warrants to AB as follows:

          17.1 Corporate Existence and Power. Anchor is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has full corporate power and authority to carry on its business as
now conducted and as currently proposed to be conducted, and to execute,
deliver and carry out the terms of this Agreement, has all permits and
authorizations necessary to carry on its business as presently conducted, and
is duly qualified to do business as a foreign corporation in good standing in
each jurisdiction wherein the nature of Anchor’s business and operations or the
character of the properties owned or held under lease by Anchor makes such
qualification necessary and in which the failure to so qualify would have a
materially adverse effect on the business, prospects, profits, condition or
operations, financial or otherwise, of Anchor.

          17.2 Authorization; No Legal Bar. The execution, delivery and performance
by Anchor of this Agreement have been duly authorized by all necessary
corporate action on the part of Anchor and do not require any approval of
Anchor’s shareholders or approval or consent of any holder (or trustee of any
holder) of any indebtedness or other obligations of Anchor except such as have
been duly obtained, certified copies whereof have been delivered to AB, and
neither the execution and delivery nor the performance by Anchor of this
Agreement does or will contravene any law or governmental rule or regulation,
or any judgment or order, applicable to or binding on Anchor or any of its
subsidiaries, or Anchor’s charter documents, or result in any breach of or
constitute any default under, or result in the creation of any lien upon any
property of Anchor under, any indenture, mortgage or other agreement or
instrument to which Anchor or any of its subsidiaries is a party or by which it
or any of its subsidiaries, or any of its or their respective properties, may
be bound or affected. Each of the Production Facilities is in compliance in
all material respects and Anchor shall cause each of the Production Facilities
to remain in compliance in all material respects throughout the Term with all
existing federal, state and local governmental laws and regulations including,
without limitation, all laws and regulations pertaining to air emissions,
liquid effluents, and noise levels.

          17.3 Governmental Approvals. Neither the execution and delivery nor the
performance by Anchor of this Agreement requires any consent or approval of,
giving notice to, registration with, or taking of any other action in respect
of, any federal or state governmental authority or agency.

          17.4 Other Agreements. Anchor is not a party to any agreement or
instrument, or subject to any charter or any corporate restriction, which
individually, or in the aggregate would materially adversely affect Anchor’s
financial condition, business or operations or would adversely affect the
ability of Anchor to perform its obligations under this Agreement.

          17.5 Execution, Delivery and Enforceability. This Agreement and all
related documents have been duly executed and delivered by Anchor; assuming the
due authorization (corporate and otherwise), execution and delivery thereof by
AB, this Agreement constitutes a legal, valid and binding agreement or
obligation of Anchor enforceable against it in accordance

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

25

 

with its terms, subject to applicable bankruptcy, insolvency, and similar
laws affecting the enforcement of creditors’ rights generally.

     18. REPRESENTATIONS AND WARRANTIES OF AB.

          AB covenants, represents and warrants to Anchor as follows:

          18.1 Corporate Existence and Power. AB is a corporation duly organized,
validly existing and in good standing under the laws of the State of Missouri,
has full corporate power and authority to carry on its business as now
conducted and as currently proposed to be conducted, and to execute, deliver
and carry out the terms of this Agreement, has all permits and authorizations
necessary to carry on its business as presently conducted, and is duly
qualified to do business as a foreign corporation in good standing in each
jurisdiction wherein the nature of AB’s business and operations or the
character of the properties owned or held under lease by AB makes such
qualification necessary and in which the failure to so qualify would have a
materially adverse effect on the business, prospects, profits, condition or
operations, financial or otherwise, of AB.

          18.2 Authorization; No Legal Bar. The execution, delivery and performance
by AB of this Agreement have been duly authorized by all necessary corporate
action on the part of AB and do not require any approval of AB’s shareholders
or approval or consent of any holder (or trustee for any holder) of any
indebtedness or other obligations of AB except such as have been duly obtained,
certified copies whereof have been delivered to Anchor, and neither the
execution and delivery nor the performance by AB of this Agreement does or will
contravene any law or governmental rule or regulation, or any judgment or
order, applicable to or binding on AB or any of its subsidiaries, or AB’s
charter documents, or result in any breach of or constitute any default under,
or result in the creation of any lien upon any property of AB under any
indenture, mortgage or other agreement or instrument to which AB or any of its
subsidiaries is a party or by which it or any of its subsidiaries, or any of
its or their respective properties, may be bound or affected.

          18.3 Governmental Approvals. Neither the execution and delivery nor the
performance by AB of this Agreement requires any consent or approval of, giving
notice to, registration with, or taking of any other action in respect of, any
federal or state governmental authority or agency.

          18.4 Other Agreements. AB is not a party to any agreement or instrument,
or subject to any charter or any corporate restriction, which individually or
in the aggregate would materially adversely affect AB’s financial condition,
business or operations or would adversely affect the ability of AB to perform
its obligations under this Agreement.

          18.5 Execution, Delivery and Enforceability. This Agreement and all
related documents have been duly executed and delivered by AB; assuming the due
authorization (corporate and otherwise), execution and delivery thereof by
Anchor, this Agreement constitutes a legal, valid and binding agreement or
obligation of AB enforceable against it in accordance with its terms, subject
to applicable bankruptcy, insolvency, and similar laws affecting the
enforcement of creditors’ rights generally.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

26

 

     19. DISPUTE RESOLUTION.

          19.1 Guiding Principles. Any dispute arising out of or relating to this
Agreement (in each case a “Dispute”) shall be resolved in accordance with the
procedures specified in this Section 19, which shall be the sole and exclusive
procedures for the resolution of any such Disputes; provided, however, that a
party, without prejudice to the procedures set forth below, may file a
complaint to seek a preliminary injunction or other provisional judicial
relief, if in its sole judgment such action is necessary to avoid irreparable
damage or to preserve the status quo. Despite such action the parties will
continue to participate in good faith using the procedures specified in this
Section 19. All negotiations and proceedings pursuant to this Section 19,
other than litigation, are confidential and shall be treated as compromise and
settlement negotiations for purposes of applicable rules of evidence. All
applicable statutes of limitation and defenses based upon the passage of time
shall be tolled while the procedures specified in this Section 19 are pending.
The parties will take such action, if any, required to effectuate such tolling.
Other than as required or permitted by a court order, each party will continue
to perform its obligations under this Agreement pending final resolution of any
Dispute arising out of or relating to this Agreement.

          19.2 Procedures.

               19.2.1. The parties shall attempt settlement of each Dispute through
good faith friendly consultations. If no settlement can be reached
through such consultations within sixty (60) days after either party has
notified the other party in writing of the existence of a Dispute, then
either party may exercise its right to seek resolution of the Dispute
through mediation pursuant to the terms of Section 19.2.2 below by
notifying the other party in writing within thirty (30) days after
expiration of the aforementioned sixty (60) day period.

               19.2.2. If one party chooses to mediate the Dispute in accordance
with the terms of Section 19.2.1, the parties shall mutually endeavor to
settle the Dispute by confidential mediation with reasonable promptness
under the then current CPR Mediation Procedure. Unless otherwise agreed,
the parties will select a mediator from the CPR Panels of Neutrals and
shall notify CPR to initiate the selection process.

               19.2.3. If the mediation specified in Section 19.2.2 fails, then
either party may pursue any remedy available to it at law or in equity.

     20. MISCELLANEOUS.

          20.1 Severability. Any provision of this Agreement that 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 of any jurisdiction shall not of itself invalidate or render
unenforceable such provision in any other jurisdiction.

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

27

 

          20.2 Waivers: Modifications. No term or provision of this Agreement may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.

          20.3 Authorization; Binding Effect; Successors and Assigns. Each of the
individuals executing this Agreement certifies that he or she is duly
authorized to do so. The terms and provisions of this Agreement and the
respective rights and obligations of the parties hereunder shall be binding
upon and inure to the benefit of the parties, their respective successors and
permitted assigns. Any permitted assignee of this Agreement, including but not
limited to an Affiliate of Anchor, shall, prior to such assignment furnish to
the other party evidence of such assignee’s assumption of all liabilities and
obligations of the applicable assignor.

          20.4 Reproduction of Documents. This Agreement and all documents relating
hereto, may be reproduced by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process. Each party hereto
stipulates that, to the extent permitted by law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.

          20.5 Amendment and Restatement; Entire Agreement. This Agreement amends,
restates, and replaces the Existing Southeast Agreement in its entirety;
provided, however, that Anchor’s warranties and indemnity specified in Section
4.5 of the Existing Southeast Agreement with respect to Bottles and other goods
delivered to AB prior to the effectiveness of this Agreement shall survive.
Notwithstanding anything in this Agreement to the contrary, the terms in that
Second Amendment to Glass Bottle Supply Agreement and Southeast Glass Bottle
Supply Agreement between AB and Anchor dated as of June 6, 2003 and the terms
in that certain letter agreement dated February 9, 2004 between AB and Anchor,
that are applicable to the December 2000 Agreement, shall continue to modify
the applicable terms of the December 2000 Agreement. This Agreement, including
each Attachment referred to in this Agreement, represents the complete
agreement of the parties with respect to the transactions contemplated
hereunder, and, except as otherwise expressly provided in the previous two
sentences, supersedes all prior or contemporaneous agreements, representations,
promises or understandings in connection therewith, whether orally or written.
All statements contained in any certificate or other instrument delivered
hereafter by or on behalf of any party hereto pursuant hereto or in connection
with the performance of the transactions contemplated hereby shall be deemed
representations and warranties by such party hereunder.

          20.6 Captions; References. The captions in this Agreement and in the
table of contents are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof. Reference herein to sections and
subsections without reference to the document in which they are contained are
references to this Agreement.

          20.7 Governing Law. This Agreement is entered into in the State of
Missouri and shall be governed by the provisions of the Missouri Uniform
Commercial Code. To the extent that there is to be a delivery or performance
of services hereunder, such services shall be deemed “goods” within the meaning
of the Uniform Commercial Code. In any event, this

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

28

 

Agreement shall be governed by and construed in accordance with the laws
of the State of Missouri.

          20.8 Equal Opportunity. Anchor shall sign a copy of the Equal Employment
Opportunity Compliance Certificate, in the form attached hereto as Attachment
20.8, at the time this Agreement is executed by the parties and upon receipt,
shall submit another signed copy to AB prior to December 31 of each Contract
Year.

[NEXT PAGE IS SIGNATURE PAGE]

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

29

 

SIGNATURE PAGE TO AMENDED AND RESTATED GLASS BOTTLE SUPPLY

AGREEMENT BETWEEN ANHEUSER-BUSCH, INCORPORATED AND ANCHOR

GLASS CONTAINER CORPORATION SIGNED JULY 26, 2004 AND EFFECTIVE

JANUARY 1, 2004

     IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized representative on the day and year first set
forth above.

	 	 	 	 	 
	 	 	ANHEUSER-BUSCH INCORPORATED (AB)
	 
	 	 	 	 
	

	 	By:
	 	/s/ Thomas J. Adamitis
	

	 	 	 	
 
	

	 	 	 	Thomas J. Adamitis, Vice President
	

	 	 	 	Corporate Purchasing and an Authorized
	

	 	 	 	Agent for AB
	 
	 	 	 	 
	 	 	ANCHOR GLASS CONTAINER CORPORATION
	 
	 	 	 	 
	

	 	By:
	 	/s/ Darrin J. Campbell
	

	 	 	 	
 
	

	 	 	 	EVP CFO

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

30

 

ATTACHMENT 3.1

SELLING PRICES

* * *

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

31

 

ATTACHMENT 3.4(a)

* * *

* * *

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

32

 

ATTACHMENT 3.6(d)

* * *

* * *

	 	 	 
	***

	 	Portions hereof and portions of the
exhibit have been omitted and filed separately with the Commission
pursuant to a request for confidential treatment in accordance with
Rule 24-b. 

33

 

ATTACHMENT 3.7(c)

* * *

* * *

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

34

 

ATTACHMENT 3.10

* * *

* * *

		
	*** 	Portions hereof and portions of the exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment in accordance with Rule 24-b.

35Ex-10.15 Richard M. Deneau Employment Agreement

 

Exhibit 10.15

Employment Agreement

          This Employment Agreement (the “Agreement”) is effective as of August 30,
2002 (the “Effective Date”), by and between Anchor Glass Container Corporation
(the “Company”), and Richard M. Deneau (the “Executive”).

          WHEREAS, the Company has employed the Executive as its President and Chief
Operating Officer and wishes to continue to employ the Executive;

          WHEREAS, the Company and the Executive have reached agreement concerning
the terms and conditions of his continued employment with the Company and wish
to formalize that agreement;

          NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions stated in this Agreement, the Company and the Executive hereby agree
as follows:

ARTICLE I

Employment Term

          1.1 Employment. The Company hereby employs the Executive and the
Executive hereby accepts employment with the Company as President and Chief
Executive Officer. During the Employment Term (as hereinafter defined), the
Executive will have the title, status and duties of President and Chief
Executive Officer and will report directly to the Company’s Board of Directors
(the “Board”).

          1.2 Term of Employment. The term of employment (“Employment Term”) under
this Agreement will commence on the Effective Date and will continue thereafter
until three (3) years from the Effective Date, unless sooner terminated by
either party in accordance with the provisions of this Agreement.

ARTICLE II

Duties

          2.1 Duties. During the Employment Term, the Executive shall continue to
perform the duties assigned to him and in effect during the one hundred and
twenty (120) day period immediately preceding the Effective Date and shall
further perform the duties assigned to him by the Board, from time to time
after commencement of the Effective Date; provided that the Executive shall not
be assigned tasks inconsistent with those of President and Chief Executive
Officer. The Executive’s services shall be performed at the Company’s Tampa,
Florida offices.

          (a) The Executive shall devote substantially all of his business
time and use his reasonable best efforts, talents, knowledge and
experience to serve as the Company’s President and Chief Executive
Officer and to promote the interests of the Company.

 

 

          (b) The Executive will perform his duties diligently and competently
and shall act in conformity with the Company’s written and oral policies
and within the limits, budgets and business plans set by the Company.
The Executive will at all times during the Employment Term strictly
adhere to and obey all of the rules and regulations in effect from time
to time relating to the conduct of the executives of the Company. Except
as provided in Section 2.2 below, the Executive shall not engage in
consulting work or any trade or business for his own account or for or on
behalf of any other person, firm or company that competes, conflicts or
interferes with the performance of his duties hereunder in any material
way.

          2.2 Other Activities. The Executive may devote reasonable time to
activities such as supervision of personal investments and activities involving
professional, charitable, educational, religious and similar types of
activities, speaking engagements and, upon prior written approval of the Board,
membership on other boards of directors, provided that such activities do not
interfere in any material way with the performance of his duties under this
Agreement. The time involved in such activities shall not be treated as
vacation time. The Executive shall be entitled to keep any amounts paid to him
in connection with such activities (e.g., director fees and honoraria).

ARTICLE III

Compensation and Benefits

          During the Employment Term, the Company shall provide to the Executive,
and the Executive shall accept from the Company as full compensation for the
Executive’s services hereunder, compensation and benefits as follows:

          3.1 Base Salary. The Company shall pay the Executive an annual base
salary of $350,040 per year (“Base Salary”). The Board, or such committee of
the Board as is responsible for setting the compensation of senior executive
officers (the “Committee”) shall review the Executive’s performance and Base
Salary at least annually in January of each year after consultation with the
Executive, and may from time to time increase the Executive’s Base Salary. The
first review shall be in January 2003. Effective as of the date of any such
increase, the “Base Salary” as so increased shall become the Executive’s “Base
Salary” for all purposes of this Agreement and may not thereafter be reduced
without the Executive’s written consent. Any increase in Base Salary shall not
limit or reduce any other obligation of the Company to the Executive under this
Agreement. The Company shall pay the Executive’s Base Salary according to the
payroll practices in effect for all senior executive officers of the Company.

          3.2 Annual Bonus. The Company shall pay to the Executive an annual cash
bonus (“Annual Bonus”) in accordance with the terms hereof for each “Year” (as
defined below) which ends during the Employment Term. The Executive shall be
eligible for an Annual Bonus as set forth in the Mercer Human Resource
Consulting “Management Incentive Plan Design Anchor Glass Container
Corporation” report, dated June 11, 2002 (the “Mercer Report”). The term
“Year” shall mean the Company’s fiscal year unless indicated otherwise.

- 2 -

 

          (a) If the Executive achieves his target performance goals (the
“Target Annual Goals”), as determined by the Board on an annual basis
after consulting with the Executive, such Annual Bonus shall be as set
forth in the Mercer Report (the “Target Annual Bonus”). If the Executive
achieves his maximum performance goals (“Maximum Annual Goals”), as
determined by the Board (or Committee) on an annual basis after
consulting with the Executive, such Annual Bonus shall be as set forth in
the Mercer Report. (the “Maximum Annual Bonus”). If the Executive
achieves threshold performance goals (“Threshold Annual Goals”), as
determined by the Board (or Committee) on an annual basis after
consulting with the Executive, such Annual Bonus shall be as set forth in
the Mercer Report. If the Executive achieves a level of performance
which falls between the Threshold Annual Goals and the Target Annual
Goals or between the Target Annual Goals and the Maximum Annual Goals,
lineal interpolation shall be used to determine the Executive’s Annual
Bonus for such Year. Such performance goals shall be set by the Board
(or Committee) within ninety (90) days after the first day of the
applicable Year.

          (b) For the Company’s 2002 Year, the Executive shall be eligible for
a target bonus as set forth in the Mercer Report.

          (c) The Company shall pay the entire Annual Bonus that is payable
with respect to a Year in a lump-sum cash payment as soon as practicable
after the Board (or Committee) can determine whether and the degree to
which Maximum Annual Goals, Target Annual Goals or Threshold Annual Goals
have been achieved following the close of such Year. Any such Annual
Bonus shall in any event be paid within ninety (90) days after the end of
the Year.

          3.3 Equity Incentives. The Company shall make available to its senior
executives the following forms of equity

          (a) Stock Options. The Executive shall be eligible to participate
in any stock option plan maintained by the Company, pursuant to the terms
of such plan.

          (b) Stock Purchase. On the Effective Date, certain senior
executives of the Company shall have the opportunity to purchase shares
of Common Stock of the Company from Cerberus Capital Management, L.P., on
behalf of one or more funds or affiliates to be designated by it
(“Cerberus”), equal to an aggregate purchase price of approximately Three
Hundred Thousand Dollars ($300,000) (the “Common Shares”). The Executive
shall have the opportunity to purchase 229,500 Common Shares from
Cerberus, at a purchase price per Common Share of $0.5555, for a total
purchase price of $127,500. In connection with the purchase of Common
Shares, the Executive shall become a party to the Company’s Shareholders
Agreement.

          3.4 Incentive Compensation. The Executive shall be eligible to
participate in any annual performance bonus plans, long-term incentive plans,
and/or equity-based compensation plans established or maintained by the Company
for its senior executive officers.

- 3 -

 

          3.5 Executive Benefit Plans. The Executive and/or his family (to the
extent eligible), as the case may be, will be eligible to participate on
substantially the same basis as the Company’s other senior executive officers
in any executive benefit plans offered by the Company. The Company reserves
the right to modify, suspend or discontinue any and all of the plans,
practices, policies and programs at any time without recourse by the Executive,
so long as Company takes such action generally with respect to other similarly
situated senior executive officers.

          3.6 Business Expenses. The Company shall promptly reimburse the Executive
for all reasonable business-related expenses incurred in the performance of
services for the Company, in accordance with the policies, practices and
procedures of the Company.

          3.7 Vacation. The Executive will be entitled to 20 paid vacation days for
each calendar year during the Employment Term.

ARTICLE IV

Payments on Termination of Employment

          4.1 Termination of Employment for any Reason. The following payments will
be made upon the Executive’s termination of employment for any reason and shall
be the only payments provided as a result of a termination of employment by the
Company for Cause or a voluntary termination by the Executive without Good
Reason:

          (a) Earned but unpaid Base Salary through the date of termination;

          (b) Any accrued but unpaid vacation;

          (c) Any incentive compensation for which the performance measurement
period has ended and a payment earned under the terms of the incentive
plan, program or arrangement remains unpaid at the time of termination of
employment;

          (d) Any amounts payable under any of the Company’s executive benefit
plans in accordance with the terms of those plans, except as may be
required under Section 401(a)(13) of the Code; and

          (e) Unreimbursed business expenses incurred by the Executive on the
Company’s behalf pursuant to the Company’s reimbursement policy.

          4.2 Termination of Employment for Retirement, Death or Disability. In
addition to the amounts determined under Section 4.1 above, if the Executive’s
termination of employment occurs by reason of Normal Retirement, death or
Disability: (a) the Executive (or his Beneficiary) will receive a pro rata
portion of any bonus payable under the Company’s incentive plans and under this
Agreement for the year in which such termination occurs determined based on the
Company’s actual performance against its Annual Goals for the fiscal year in
which such termination occurs; (b) all benefits received under this Agreement
that are subject to a vesting schedule shall continue to vest until the end of
the year in which the death, Disability or Normal Retirement occurs; and (c)
only in the case of Normal Retirement, the

- 4 -

 

Executive shall be eligible to participate in an executive retiree health
plan; provided that the Executive shall pay the full cost of any applicable
premiums or other costs. For purposes of this Agreement, “Disability” means a
determination by the Company, in accordance with applicable law that, as a
result of a physical or mental injury or illness, the Executive is unable to
perform the essential functions of his job with or without reasonable
accommodation. The term “Normal Retirement” means the date in which the
Executive terminates from employment with the Company and does not perform
services for any other person or entity on or after the later of (i) attaining
age sixty-five (65) or (ii) five (5) years of service with the Company (which
shall include periods prior to the Effective Date).

          4.3 Termination by the Company Without Cause, or Voluntary Termination by
the Executive for Good Reason. If the Company terminates the Executive’s
employment other than for Cause or the Executive voluntarily terminates his
employment for Good Reason, the Company will pay the following amounts and
provide the following benefits:

          (a) The Base Salary and any annual bonus that the Company would have
paid under the Agreement had the Executive’s employment continued to the
end of the Employment Term. For this purpose, an annual bonus will be
the actual bonus paid for the fiscal year immediately preceding such
termination.

          (b) Continued coverage under the Company’s medical and dental plans
through the end of the Employment Term, under the terms and conditions of
the applicable plans, provided, however, that if the Executive becomes
employed with another employer and is eligible to receive medical and
dental benefits under another employer-provided plan, the medical and
dental benefits described herein shall be terminated.

          (c) Continued vesting of any outstanding stock options or other
equity-based compensation awards as if the Executive remained employed
through the end of the Employment Term.

          4.4 Good Reason.

          (a) For purposes of this Agreement, “Good Reason” shall mean the
occurrence of any of the following without the Executive’s written
consent: (i) assigning duties to the Executive that are inconsistent
with those of the position of President and Chief Executive Officer for
similar companies in similar industries (except to the extent the Company
promotes the Executive to a higher executive position), or any other
action by the Company that results in a material diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive; (ii) requiring the Executive to
report to someone other than the Board; (iii) the failure of the Company
to pay any portion of the Executive’s compensation within ten (10) days
of the date such compensation is due; (iv) the Company requires the
Executive to relocate his principal business office to a location not
within thirty-five (35) miles of the Company’s principal business office
located in the

- 5 -

 

Tampa, Florida; (v) the Company’s material breach of any term of
this Agreement; or (vi) any failure of the Company to comply with and
satisfy Section 6.1 of this Agreement.

          (b) For purposes of this Section 4.4, “Company” shall mean any
successor to the Company by sale of more than fifty percent (50%) of the
voting securities of the Company or by sale of all or substantially all
of the assets of the Company so that in the event that a successor upon a
transaction does not assume this Agreement, the Executive may terminate
employment with Good Reason.

          (c) Notwithstanding the above, the actions described in subsection
4.4(a) above shall not constitute Good Reason until after the Company
shall have been provided thirty (30) days prior written notice of such
action (which notice need not be given more than twice in any one year
period) and shall have failed to remedy such action during such thirty
(30) day period.

          4.5 Cause. For purposes of this Agreement, “Cause” shall mean: (i) the
Executive’s material breach of any provision of the Agreement; (ii) the
Executive’s willful and continued failure to perform his duties as an executive
of the Company (other than any such failure resulting from a Disability); (iii)
the Executive’s willful misconduct, materially injurious to the Company,
monetarily or otherwise, or (iv) the Executive’s commission of a felony; in
each case as determined by the Board; provided, however, the actions described
in clauses (i), (ii) and (iii) above shall not constitute Cause until after a
written demand for substantial performance is delivered to the Executive by the
Board, which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his duties, and
which gives the Executive at least thirty (30) days to cure such alleged
deficiencies.

          For purposes of this Section 4.5, no act or failure to act, on the part of
the Executive, shall be considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company.

          4.6 Timing of Payments. All payments described above shall be made in a
lump sum cash payment as soon as practicable (but in no event more than ten
(10) days) following the Executive’s termination of employment. If the total
amount of annual bonus is not determinable on that date, the Company shall pay
the amount of bonus that is determinable and the remainder shall be paid in a
lump sum cash payment within ten (10) days of the date that annual performance
results are finalized.

ARTICLE V

Restrictive Covenants

          5.1 Definitions. For purposes of this Agreement, the following terms will
be defined as follows:

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          (a) “Confidential Information” shall mean the Company’s trade
secrets and all other information unique to the Company and not readily
available to the public, including developments, designs, improvements,
inventions, formulas, compilations, methods, forecasts, software
programs, processes, know-how, data, research, operating methods and
techniques, and all business plans, strategies, costs, profits,
customers, vendors, markets, sales, products, key personnel, pricing
policies, marketing, sales or other financial or business information,
and any modifications or enhancements of any of the foregoing.

          (b) The term “Business Conducted by the Company” shall mean the
glass container manufacturing business conducted by the Company as of the
date of the Executive’s termination of employment.

          5.2 Inventions or Developments. The Executive agrees that he will
promptly and fully disclose to the Company all discoveries, improvements,
inventions, formulas, ideas, processes, designs, techniques, know-how, data and
computer programs (whether or not patentable, copyrightable or susceptible to
any other form of protection), made, conceived, reduced to practice or
developed by the Executive, either alone or jointly with others, during his
employment with the Company (collectively, the “Inventions or Developments”).
All Inventions and Developments shall be the sole property of the Company,
including all patents, copyrights, intellectual property or other rights
related thereto and the Executive assigns to the Company all rights (if any)
that the Executive may have or acquire in such Inventions or Developments.

          Notwithstanding the foregoing, any right of the Company or assignment by
the Executive as provided in this paragraph shall not apply to any Inventions
or Developments for which no equipment, supplies, facility or trade secret
information of the Company were used and which were developed entirely on the
Executive’s own time, unless: (a) the Inventions or Developments relate to the
Business Conducted by the Company or the actual or demonstrably anticipated
research or development of the Company; or (b) the Inventions or Developments
result from any work performed by the Executive for the Company.

          5.3 Non-Disclosure of Confidential Information or Inventions or
Developments. The Executive acknowledges that he has had and will have access
to Confidential Information or Inventions or Developments of the Company and
agrees that he shall not, at any time, directly or indirectly use, divulge,
furnish or make accessible to any person any Confidential Information or
Inventions or Developments, but instead shall keep all such matters strictly
and absolutely confidential; provided, however, that, with respect to periods
after the Executive’s termination of employment, all business plans,
strategies, costs, profits, customers, vendors, markets, sales, products, key
personnel, pricing policies, marketing, and sales shall only be considered
“Confidential Information” for the duration that payments are made to the
Executive pursuant to Section 4.3 hereof or for 1 year after a termination with
Cause.

          5.4 No Diversion of Business Opportunities and Prospects. The Executive
agrees that during his employment with the Company: (a) the Executive shall not
directly or indirectly engage in any employment, consulting or other business
activity that is competitive with the Business Conducted by the Company; (b)
the Executive shall promptly disclose to the Company all business opportunities
that are presented to the Executive in his capacity as an

- 7 -

 

employee of the Company or which is of a similar nature to the Business
Conducted by the Company or which the Company has expressed an interest in
engaging in the future; and (c) the Executive shall not usurp or take advantage
of any such business opportunity without first offering such opportunity to the
Company.

          5.5 Actions Upon Termination. Upon the Executive’s employment termination
for whatever reason, the Executive shall neither take or copy nor allow a third
party to take or copy, and shall deliver to the Company all property of the
Company, including, but not limited to, all Confidential Information or
Inventions or Developments, regardless of the medium (i.e., hard copy, computer
disk, CD ROM) on which the information is contained.

          5.6 Non-Competition. The Executive agrees that so long as he is employed
by the Company, for the period that the Executive receives payments pursuant to
Section 4.3 hereof after termination of employment or for 1 year after a
termination with Cause (the “Period”), he shall not, without the prior written
consent of the Company, participate or engage in, directly or indirectly (as an
owner, partner, employee, officer, director, independent contractor,
consultant, advisor or in any other capacity calling for the rendition of
services, advice, or acts of management, operation or control), any business
that, during the Period, is competitive with the Business Conducted by the
Company within the United States (hereinafter, the “Geographic Area”).

          5.7 Non-Solicitation of Employees. The Executive agrees that, during the
Period, he shall not, without the prior written consent of the Company,
directly or indirectly solicit any current employee of the Company, or any
individual who becomes an employee during the Period, to leave such employment.

          5.8 Non-Solicitation of Suppliers or Customers. The Executive agrees
that, during the Period, he shall not, without the prior written consent of the
Company, directly or indirectly solicit, seek to divert or dissuade from
continuing to do business with or entering into business with the Company, any
supplier, customer, or other person or entity that had a business relationship
with or with which the Company was planning or pursuing a business relationship
at or before the date of termination of his employment.

          5.9 Irreparable Harm. The Executive acknowledges that: (a) the
Executive’s compliance with this Article V is necessary to preserve and protect
the Confidential Information, Inventions or Developments and the goodwill of
the Company as a going concern; (b) any failure by the Executive to comply with
the provisions of this Section will result in irreparable and continuing injury
for which there will be no adequate remedy at law; and (c) in the event that
the Executive should fail to comply with the terms and conditions of this
Article V, the Company shall be entitled, in addition to such other relief as
may be proper, to all types of equitable relief (including, but not limited to,
the issuance of an injunction and/or temporary restraining order) as may be
necessary to cause the Executive to comply with this Section, to restore to the
Company its property, and to make the Company whole.

          5.10 Survival. The provisions set forth in this Article V shall, as
noted, survive termination of this Agreement.

- 8 -

 

          5.11 Forfeiture. If the Executive violates any provision of this Article
V, the Executive will forfeit his right to all payments and benefits under
Section 4.3, except to the extent otherwise provided by law.

          5.12 Unenforceability. If any provision(s) of this Article V shall be
found invalid or unenforceable, in whole or in part, then such provision(s)
shall be deemed to be modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed excised
from this Agreement, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law, as if such
provision(s) had been originally incorporated herein as so modified or
restricted, or as if such provision(s) had not been originally incorporated
herein, as the case may be.

ARTICLE VI

Miscellaneous

          6.1 Assignment; Successors. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors. The Company may not assign
this Agreement without the Executive’s written consent, except that the
Company’s obligations under this Agreement shall be the binding legal
obligations of any successor to the Company by sale, and in the event of any
transaction that results in the transfer of substantially all of the assets or
business of the Company, the Company will cause the transferee to assume the
obligations of the Company under this Agreement. Upon the Executive’s death
this Agreement will inure to the benefit of the Executive’s heirs, legatees and
legal representatives of the Executive’s estate.

          6.2 Insurance and Indemnification. For the period from the Effective Date
through at least the tenth anniversary of the Executive’s termination of
employment from the Company, the Company agrees to maintain the Executive as an
insured party on all directors’ and officers’ insurance maintained by the
Company for the benefit of its directors and officers on at least the same
basis as all other covered individuals and provide Executive with at least the
same corporate indemnification as it provides to its other senior executive
officers.

          6.3 Interpretation. The laws of the State of Florida shall govern the
validity, interpretation, construction and performance of this Agreement,
without regard to the conflict of laws principles thereof.

          6.4 Withholding. The Company may withhold from any payment that it is
required to make under this Agreement amounts sufficient to satisfy applicable
withholding requirements under any federal, state or local law.

          6.5 Amendment or Termination. This Agreement may be amended at any time
by written agreement between the Company and the Executive.

          6.6 Notices. Notices given pursuant to this Agreement shall be in writing
and shall be deemed received when personally delivered, or on the date of
written confirmation of receipt by (a) overnight carrier, (b) telecopy, (c)
registered or certified mail, return receipt requested, addressee only, postage
prepaid, or (d) such other method of delivery that provides a written
confirmation of delivery. Notice shall be directed to:

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	If to the Company, to: Anchor Glass Container Corporation
	

	 	4343 Anchor Plaza Parkway
	

	 	Tampa, Florida 33634-7513
	

	 	Attention: Board of Directors
	 
	 	 
	With a copy to:

	 	Cerberus Capital Management, LP
	

	 	450 Park Avenue
	

	 	New York, New York 10022
	

	 	Attention: Lenard Tessler
	 
	 	 
	With a copy to:

	 	Schulte Roth & Zabel LLP
	

	 	919 Third Avenue
	

	 	New York, New York 10022
	

	 	Attention: Ronald E. Richman, Esq.
	 
	 	 
	If to the Executive, to his home address set forth in
the records of the Company
	 
	 	 
	With a copy to:

	 	Winston & Strawn
	

	 	35 West Wacker Drive
	

	 	Chicago, Illinois 60601
	

	 	Attention: Michael S. Melbinger, Esq.

The Company may change the person and/or address to whom the Executive must
give notice under this Section by giving the Executive written notice of such
change, in accordance with the procedures described above. Notices to or with
respect to the Executive will be directed to the Executive, or to the
Executive’s executors, personal representatives or distributees, if the
Executive is deceased, or the assignees of the Executive, at the Executive’s
home address on the records of the Company.

          6.7 Severability. If any provision(s) of this Agreement shall be found
invalid or unenforceable by a court of competent jurisdiction, in whole or in
part, then it is the parties’ mutual desire that such court modify such
provision(s) to the extent and in the manner necessary to render the same valid
and enforceable, and this Agreement shall be construed and enforced to the
maximum extent permitted by law, as if such provision(s) had been originally
incorporated herein as so modified or restricted, or as if such provision(s)
had not been originally incorporated herein, as the case may be.

          6.8 Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the Company and the Executive and supersedes all prior
agreements and understandings, written or oral, relating to the subject matter
hereof.

          6.9 Consultation With Counsel. Executive acknowledges that he has had a
full and complete opportunity to consult with counsel of the Executive’s own
choosing concerning the terms, enforceability and implications of this
Agreement, and the Company has made no representations or warranties to
Executive concerning the terms, enforceability or implications of this
Agreement other than as are reflected in this Agreement.

- 10 -

 

          6.10 Waiver; Release of Claims. No failure or delay by the Company or the
Executive in enforcing or exercising any right or remedy hereunder shall
operate as a waiver thereof. No modification, amendment or waiver of this
Agreement nor consent to any departure by the Executive from any of the terms
or conditions thereof, shall be effective unless in writing and signed by the
Chairman of the Company’s Board. Any such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.

          6.11 Mitigation. In no event shall the Executive be obligated to seek
other employment or take any other action to mitigate the amounts payable to
the Executive under any of the provisions of this Agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned as result
of the Executive’s employment by another employer, except that any continued
welfare benefits provided for by Section 4.3 shall not duplicate any benefits
that are provided to the Executive and his family by such other employer and
shall be secondary to any coverage provided by such other employer.

          6.12 Beneficiary. If the Executive dies prior to receiving all of the
amounts payable to him in accordance with the terms of this Agreement, such
amounts shall be paid to one or more beneficiaries (each, a “Beneficiary”)
designated by the Executive in writing to the Company during his lifetime, or
if no such Beneficiary is designated, to the Executive’s estate. Such payments
shall be made in a lump sum to the extent so payable and, to the extent not
payable in a lump sum, in accordance with the terms of this Agreement.
Executive, without the consent of any prior Beneficiary, may change his
designation of Beneficiary or Beneficiaries at any time or from time to time by
a submitting to the Company a new designation in writing.

          6.13 Enforcement Costs. The prevailing party in any litigation or action
with respect to this Agreement shall be reimbursed for all fees or expenses
incurred in such litigation or action; provided, however, that the maximum
reimbursement from the Executive to the Company shall be $100,000.

          6.14 Representations by Executive. Executive represents and warrants that
by accepting employment with the Company under this Agreement, he is not (a)
breaching any other agreement with any third party, including but not limited
to any former employer, or (b) in any other way restricted in or limited from
fulfilling the terms of this Agreement.

          6.15 Survival. All sections of this Agreement survive beyond the
Employment Term except as otherwise specifically stated.

          6.16 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.

          6.17 Counterparts. The parties may execute this Agreement in one or more
counterparts, all of which together shall constitute but one Agreement.

- 11 -

 

          IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.

	 	 	 	 	 
	Anchor Glass Container Corporation	 	EXECUTIVE
	 	 	 	 	 
	By:
	 	/s/ Lenard B. Tessler
	 	/s/ Richard Deneau
	
	 	
 
	 	
 

	 	 	 	 	 
	    Its: Authorized Signatory	 	 

- 12 -

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