<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 16, 1998
REGISTRATION NO. 333-31363
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ANCHOR GLASS CONTAINER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3220 59-3417812
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
CONSUMERS U.S., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 6719 23-2874087
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
ONE ANCHOR PLAZA
4343 ANCHOR PLAZA PARKWAY
TAMPA, FLORIDA 33634-7513
(813) 884-0000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
C. KENT MAY, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ANCHOR GLASS CONTAINER CORPORATION
ONE ANCHOR PLAZA
4343 ANCHOR PLAZA PARKWAY
TAMPA, FLORIDA 33634-7513
(813) 884-0000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
AGENT FOR SERVICE)
------------------------
COPIES TO:
RANDI L. STRUDLER, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
ANCHOR GLASS CONTAINER CORPORATION
Certificate of Incorporation
Article VIII of the Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") for Anchor Glass Container Corporation (the
"Company") provides for the indemnification of directors and officers of the
Company and any persons serving at the request of the Company as a director,
trustee, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan, to the fullest extent permitted by the General Corporate
Law of the State of Delaware (the "DGCL"). The Certificate of Incorporation also
allows the Company, by action of the Board of Directors, to indemnify other
officers, employees and agents of the Company. These rights to indemnification
(i) are contract rights; (ii) cannot be changed by any amendment to the
Certificate of Incorporation to adversely affect any person being indemnified
with respect to any alleged action or inaction occurring prior to such
amendment; (iii) subject to any rights imposed by law and the By-Laws of the
Company, include the right to have the Company advance expenses incurred in
defending any such action, suit or proceeding prior to the final disposition;
and (iv) are not exclusive of any other right which any person may have or may
acquire under the Certificate of Incorporation, or any statute, by-law or
agreement, or by any vote of the stockholders or disinterested directors of the
Company, or otherwise. In addition to the indemnification provided by Article
VIII, Article IX limits the personal liability of directors for monetary damages
arising out of a breach of fiduciary duty to the fullest extent permitted by the
DGCL.
The Certificate of Incorporation generally prohibits the Company from
indemnifying any person in connection with an action, suit or proceeding (or
portion thereof) initiated by such person unless such action, suit or proceeding
(or portion thereof) was authorized by the Board of Directors. However, this
prohibition does not apply to a counterclaim, cross-claim or third party claim
brought by an indemnitee in any action, suit or proceeding. In addition, persons
claiming a right to indemnification or advancement may bring suit against the
Company if the claim is not paid in full by the Company within sixty days, in
the case of a claim for indemnification, or thirty days, in the case of a claim
for advancement, after receipt of the written claim.
By-laws
The By-laws of the Company contain no provision for indemnification.
CONSUMERS U.S., INC.
Certificate of Incorporation
The Certificate of Incorporation of Consumers U.S., Inc. (the "Parent
Guarantor") provides that the personal liability of the directors of the Parent
Guarantor is limited to the fullest extent permitted by the DGCL and that the
Parent Guarantor shall indemnify the directors, officers, employees and agents
to the fullest extent permitted by the DGCL. The right to indemnification is not
exclusive of any other right which any person may have or may acquire under the
Certificate of Incorporation, or any statute, by-law or agreement, or by any
vote of the stockholders or disinterested directors of the Parent Guarantor, or
otherwise.
By-laws
The By-laws of the Parent Guarantor contain no provision for
indemnification.
II-1
<PAGE> 3
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
Under the DGCL, directors, officers, employees, and other individuals may
be indemnified against expenses (including attorneys' fees), judgements, fines,
and amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation -- a "derivative action")
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard of care is applicable in the case of a
derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action and Delaware law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the corporation.
Delaware corporations may limit the personal liability of their directors
for monetary damages for a breach of fiduciary duty, provided, however, that the
directors can still be held personally liable (i) for a breach of the duty of
loyalty to the corporation and its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL (described below), and (iv) for any
transaction from which the director derived an improper personal benefit.
Section 174 of the DGCL makes directors personally liable for unlawful dividends
or unlawful stock repurchases or redemptions in certain circumstances and
expressly sets forth a negligence standard with respect to such liability.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- -----------------------------------------------------------------------------------
<C> <S>
2.1 Asset Purchase Agreement dated as of December 18, 1996 among Anchor Glass Container
Corporation, now known as Anchor Resolution Corp. ("Old Anchor"), Consumers
Packaging Inc. and Owens-Brockway Glass Container Inc.
2.2 Amendment to Asset Purchase Agreement (the "Asset Purchase Agreement") dated as of
February 5, 1997 by and among Old Anchor, Consumers Packaging Inc. and
Owens-Brockway Glass Container Inc.
2.3 Order of United States Bankruptcy Court for the District of Delaware approving (i)
the Asset Purchase Agreement and (ii) the assumption and assignment of certain
related executory contracts
2.4 Order of United States Bankruptcy Court for the District of Delaware approving the
Amendment to the Asset Purchase Agreement
2.5 Memorandum of Understanding dated February 5, 1997 among Old Anchor, Consumers
Packaging Inc., and the Company
3.1 Amended and Restated Certificate of Incorporation of the Company
3.2 Certificate of Incorporation of the Parent Guarantor
3.3 Certificate of Amendment to Certificate of Incorporation of the Parent Guarantor
3.4 Bylaws of the Company
3.5 Bylaws of the Parent Guarantor
3.6 Certificate of Designation for Series A 10% Cumulative Convertible Preferred Stock
3.7 Certificate of Designation for Series B 8% Cumulative Convertible Preferred Stock
4.1 Indenture dated as of April 17, 1997 among the Company, the Parent Guarantor and
The Bank of New York, as trustee
4.2 Form of Initial Notes (included in Exhibit 4.1)
4.3 Form of Exchange Notes (included in Exhibit 4.1)
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- -----------------------------------------------------------------------------------
<C> <S>
4.4 Security Agreement dated as of February 5, 1997 among the Company and Bankers Trust
Company, as agent under the Revolving Credit Agreement
4.5 Assignment of Security Agreement dated as of April 17, 1997 among the Company,
Bankers Trust Company, as assignor, and The Bank of New York, as assignee and as
trustee under the Indenture
4.6 Pledge Agreement dated as of April 17, 1997 among the Parent Guarantor and The Bank
of New York, as trustee under the Indenture
4.7 Intercreditor Agreement dated as of February 5, 1997 among The Bank of New York, as
Note Agent, and BT Commercial Corporation, as Credit and Shared Collateral Agent
4.8 Amendment No. 1 to the Intercreditor Agreement, dated as of April 17, 1997 among
The Bank of New York, as Note Agent, and BT Commercial Corporation, as Credit and
Shared Collateral Agent
4.9 Registration Rights Agreement dated as of April 17, 1997 among the Company, the
Parent Guarantor, BT Securities Corporation and TD Securities (USA) Inc.
5.1** Opinion of Eckert Seamans Cherin & Mellott, LLC
5.2** Opinion of Jones, Day, Reavis & Pogue
10.1 Credit Agreement (the "Credit Agreement") dated as of February 5, 1997 among the
Company, Bankers Trust Company, as Issuing Bank, BT Commercial Corporation, as
Agent and Co-Syndication Agent, PNC Bank, National Association, as Co-Syndication
Agent and Issuing Bank, and the various financial institutions party thereto
10.2 First Amendment to the Credit Agreement dated as of March 11, 1997 among the
Company, Bankers Trust Company, BT Commercial Corporation, and PNC Bank, National
Association
10.3 Second Amendment to the Credit Agreement dated as of April 9, 1997 among the
Company, Bankers Trust Company, BT Commercial Corporation, and PNC Bank, National
Association
10.4 Third Amendment and Waiver to the Credit Agreement dated as of May 23, 1997 among
the Company, Bankers Trust Company, BT Commercial Corporation, PNC Bank, National
Association and the various financial institutions party to the Credit Agreement
10.5* Fourth Amendment to the Credit Agreement dated as of September 15, 1997 among the
Company, Bankers Trust Company, PNC Bank, National Association and the various
financial institutions party to the Credit Agreement
10.6 Assignment of Security Interest in U.S. Trademarks and Patents dated February 5,
1997 by the Company to BT Commercial Corporation, as Collateral Agent under the
Credit Agreement
10.7 Assignment of Security Interest in U.S. Copyrights dated February 5, 1997 by the
Company to BT Commercial Corporation, as Collateral Agent under the Credit
Agreement
10.8 Guaranty dated February 5, 1997, by the Parent Guarantor in favor of BT Commercial
Corporation and the other financial institutions party to the Credit Agreement Plan
10.9 Termination Agreement dated February 3, 1997 by and between Consumers Packaging
Inc., the Company and the Pension Benefit Guaranty Corporation
10.10 Release Agreement among Old Anchor, the Company, the Official Committee of
Unsecured Creditors of Anchor Glass Container Corporation (Old Anchor) and Vitro,
Sociedad Anonima
10.11 Agreement (the "Vitro Agreement") dated as of December 18, 1996 between Vitro,
Sociedad Anonima, Consumers Packaging Inc., on behalf of itself, and Consumers
Packaging Inc., on behalf of the Company
10.12 First Amendment to the Vitro Agreement dated as of February 4, 1997 among Vitro,
Sociedad Anonima, Consumers Packaging Inc. and the Company
10.13 Waiver Agreement dated as of February 5, 1997 by and between Old Anchor and
Consumers Packaging Inc.
10.14 Assignment and Assumption Agreement dated as of February 5, 1997 by and between
Consumers Packaging Inc. and the Company
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- -----------------------------------------------------------------------------------
<C> <S>
10.15 Assignment and Assumption Agreement dated as of February 5, 1997 between Consumers
Packaging Inc. and the Company relating to certain employee benefit plans
10.16 Assignment and Assumption Agreement dated as of February 5, 1997 between Consumers
Packaging Inc. and the Company relating to certain commitment letters
10.17 Bill of Sale, Assignment and Assumption Agreement dated as of February 5, 1997 by
and between Old Anchor and the Company
10.18 Assignment of Patent Property and Design Property from Old Anchor to the Company
10.19 Trademark Assignment from Old Anchor to the Company
10.20 Foreign Trademark Assignment from Old Anchor to the Company
10.21 Copyright Assignment from Old Anchor to the Company
10.22 Agreement dated as of February 5, 1997 between The Travelers Indemnity Company and
its Affiliates, including The Aetna Casualty and Surety Company and their
predecessors, and the Company
10.23 Allocation Agreement dated as of February 5, 1997 between Consumers Packaging Inc.
and Owens-Brockway Glass Container Inc.
10.24 Supply Agreement dated as of February 5, 1997 by and between the Company and Owens-
Brockway Glass Container Inc.
10.25 Transition Agreement dated as of February 5, 1997 between Consumers Packaging Inc.,
the Company and Owens-Brockway Glass Container Inc.
10.26*+ Technical Assistance and License Agreement executed December 18, 1996 by
Owens-Brockway Glass Container Inc. and Consumers Packaging Inc.
10.27 Assurance Agreement (the "Assurance Agreement") dated as of February 5, 1997 among
Owens-Brockway Glass Container Inc., Consumers Packaging Inc., the Company, BT
Commercial Corporation, Bankers Trust Company and The Bank of New York
10.28 Letter agreement relating to Assurance Agreement dated April 17, 1997 addressed to
Owens-Brockway Glass Container Inc. and signed by Bankers Trust Company and The
Bank of New York
10.29 Intercompany Agreement dated as of April 17, 1997 among G&G Investments, Inc.,
Glenshaw Glass Company, Inc., Hillsboro Glass Company, I.M.T.E.C. Enterprises,
Inc., Consumers Packaging Inc., Consumers International Inc., the Parent Guarantor,
the Company, BT Securities Corporation and The Bank of New York, as trustee under
the Indenture
10.30 Management Agreement dated as of February 5, 1997 by and between the Company and
G&G Investments, Inc.
10.31 Anchor Glass Container Corporation/Key Executive Employee Retention Plan
10.32 Lease Agreement -- Anchor Place at Fountain Square (the "Lease Agreement") dated
March 31, 1988, by and between Old Anchor and Fountain Associates I Ltd. relating
to the Company's headquarters in Tampa, Florida
10.33 First Amendment to Lease Agreement effective as of June 16, 1992, by and between
Fountain Associates I Ltd. and Old Anchor
10.34 Second Amendment to Lease Agreement effective as of September 30, 1993, by and
between Fountain Associates I Ltd. and Old Anchor
10.35 Third Amendment to Lease Agreement effective as of February 22, 1995, by and
between Fountain Associates I Ltd. and Old Anchor
10.36 Agreement dated as of March 31, 1996 by and between Fountain Associates I Ltd.,
Citicorp Leasing, Inc. and Old Anchor
10.37 Amended and Restated Agreement effective as of September 12, 1996, by and between
Fountain Associates I Ltd., Citicorp Leasing Inc. and Old Anchor
</TABLE>
II-4
<PAGE> 6
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- -----------------------------------------------------------------------------------
<C> <S>
10.38 Sixth Amendment to Lease and Second Amendment to Option Agreement dated as of
February 5, 1997, by and between Fountain Associates I Ltd., Citicorp Leasing Inc.
and Old Anchor
10.39 Building Option Agreement dated March 31, 1988, by and between Fountain Associates
I, Ltd. and Old Anchor
10.40 First Amendment to Building Option Agreement effective as of June 16, 1992, by and
between Fountain Associates I, Ltd. and Old Anchor
10.41*+ Supply Agreement effective as of June 17, 1996 between The Stroh Brewery Company
and the Company
10.42*+ Supply Agreement between Bacardi International Limited and the Company
10.43 Warrant Agreement dated as of February 5, 1997 between the Company and Bankers
Trust Company
10.44 Form of Warrant issued pursuant to the Warrant Agreement
10.45** American Appraisal Associates, Inc. ("AAA") appraisal of liquidation in place value
of
certain property of the Company
10.46** AAA appraisal of fair market value of certain property of the Company
10.47*+ Rebate Agreement dated as of January 1, 1996 between Bacardi International Limited
and the Company
12.1 Statement re: computation of ratio of earnings to fixed charges for the period from
February 5, 1997 to September 30, 1997
12.2 Statement re: computation of ratio of earnings to fixed charges for the years ended
December 31, 1992, 1993, 1994, 1995 and 1996
21.1 List of Subsidiaries of the Company
21.2 List of Subsidiaries of the Parent Guarantor
23.1 Consent of Arthur Andersen LLP
23.2** Consent of Eckert Seamans Cherin & Mellott, LLC, included in Exhibit 5.1
23.3** Consent of Jones, Day, Reavis & Pogue, included in Exhibit 5.2
23.4 Consent of American Appraisal Associates, Inc.
24.1 Power of Attorney of the Company
24.2 Power of Attorney of the Parent Guarantor
25.1 Statement on Form T-1 of the eligibility of the Trustee with respect to the Company
25.2 Statement on Form T-1 of the eligibility of the Trustee with respect to the Parent
Guarantor
27.1 Financial Data Schedule of Old Anchor
27.2 Financial Data Schedule of the Company
27.3 Financial Data Schedule of the Parent Guarantor
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter to DTC Participants
99.4 Form of Letter to Clients and Form of Instruction to Book-Entry Transfer
Participants
</TABLE>
- ---------------
* Filed herewith
** To be filed by amendment.
+ Confidential treatment requested pursuant to Rule 406 of Regulation C.
All other exhibits were filed previously.
II-5
<PAGE> 7
(b) FINANCIAL STATEMENT SCHEDULES
SCHEDULE II
ANCHOR RESOLUTION CORP.
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- -------------------------------------- -------- -------- -------- ---------- --------
ADDITIONS
---------------------
BALANCE CHARGED
AT TO COSTS CHARGED BALANCE
BEGINNING AND TO OTHER AT END
DESCRIPTION OF YEAR EXPENSES ACCOUNTS DEDUCTIONS OF YEAR
- -------------------------------------- -------- -------- -------- ---------- --------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1996
Allowance for doubtful accounts..... $1,826 $1,126 $ -- $1,449(A) $1,503
Year ended December 31, 1995
Allowance for doubtful accounts..... $3,447 $ 656 $ -- $2,277(A) $1,826
Year ended December 31, 1994
Allowance for doubtful accounts..... $3,615 $ 50 $ -- $ 218(A) $3,447
</TABLE>
- ---------------
(A) Accounts written off
SCHEDULE II
ANCHOR GLASS CONTAINER CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
PERIOD FROM FEBRUARY 5, 1997 TO SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
- ------------------------------------------ -------- -------- -------- ---------- ----------
ADDITIONS
--------------------
BALANCE
AT CHARGED
BEGINNING TO COSTS CHARGED BALANCE AT
OF AND TO OTHER END OF
DESCRIPTION PERIOD EXPENSES ACCOUNTS DEDUCTIONS PERIOD
- ------------------------------------------ -------- -------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Period from February 5, 1997 to September
30, 1997
Allowance for doubtful accounts......... $1,630(B) $225 -- $ 65(A) $1,790
</TABLE>
- ---------------
(A) Accounts written off
(B) Amount recognized as part of Anchor Acquisition.
II-6
<PAGE> 8
ITEM 22. UNDERTAKINGS.
The Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this form,
within one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
Registration Statement through the date of responding to the request.
(5) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the Registration Statement when it became
effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-7
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Act, Anchor Glass Container
Corporation has duly caused this Amendment No. 2 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Pittsburgh, in the Commonwealth of Pennsylvania, on January 16, 1998.
ANCHOR GLASS CONTAINER CORPORATION
By: /s/ M. WILLIAM LIGHTNER, JR.
------------------------------------
M. William Lightner, Jr.
Senior Vice President -- Finance
Chief Financial Officer and
Treasurer
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to
the Registration Statement has been signed by the following persons in the
capacities indicated on January 16, 1998.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------------------------------------------- --------------------------------------------
<C> <S>
* Chairman, Chief Executive Officer and
- --------------------------------------------- Director (Principal Executive Officer)
John J. Ghaznavi
/s/ M. WILLIAM LIGHTNER, JR. Senior Vice President -- Finance, Chief
- --------------------------------------------- Financial Officer, Treasurer and Director
M. William Lightner, Jr. (Principal Financial Officer)
* Controller (Principal Accounting Officer)
- ---------------------------------------------
Edward M. Jonas
* Director
- ---------------------------------------------
David T. Gutowksi
* Director
- ---------------------------------------------
C. Kent May
* Director
- ---------------------------------------------
Paul H. Farrar
</TABLE>
*By: /s/ M. WILLIAM LIGHTNER, JR.
-----------------------------------
M. William Lightner, Jr.
Pursuant to Powers of Attorney
filed herewith or previously with
the Securities and Exchange
Commission
II-8
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act, Consumers U.S., Inc.
has duly caused this Amendment No. 2 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Pittsburgh, in the Commonwealth of Pennsylvania, on January 16, 1998.
CONSUMERS U.S., INC.
BY: /s/ M. WILLIAM LIGHTNER, JR.
------------------------------------
M. William Lightner, Jr.
Vice President and Chief Financial
Officer
Pursuant to the requirements of the Securities Act, this Amendment No. 2 to
the Registration Statement has been signed by the following persons in the
capacities indicated on January 16, 1998.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- --------------------------------------------- --------------------------------------------
<C> <S>
* Chairman, Chief Executive Officer and
- --------------------------------------------- Director (Principal Executive Officer)
John J. Ghaznavi
/s/ M. WILLIAM LIGHTNER, JR. Vice President and Chief Financial Officer
- --------------------------------------------- (Principal Financial and Accounting
M. William Lightner, Jr. Officer)
* Director
- ---------------------------------------------
David T. Gutowksi
* Director
- ---------------------------------------------
C. Kent May
</TABLE>
*By: /s/ M. WILLIAM LIGHTNER, JR.
-----------------------------------
M. William Lightner, Jr.
Pursuant to Powers of Attorney
filed herewith or previously with
the Securities and Exchange
Commission
II-9
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
- ------- -----------------------------------------------------------------------------------
<C> <S>
2.1 Asset Purchase Agreement dated as of December 18, 1996 among Anchor Glass Container
Corporation, now known as Anchor Resolution Corp. ("Old Anchor"), Consumers
Packaging Inc. and Owens-Brockway Glass Container Inc.
2.2 Amendment to Asset Purchase Agreement (the "Asset Purchase Agreement") dated as of
February 5, 1997 by and among Old Anchor, Consumers Packaging Inc. and
Owens-Brockway Glass Container Inc.
2.3 Order of United States Bankruptcy Court for the District of Delaware approving (i)
the Asset Purchase Agreement and (ii) the assumption and assignment of certain
related executory contracts
2.4 Order of United States Bankruptcy Court for the District of Delaware approving the
Amendment to the Asset Purchase Agreement
2.5 Memorandum of Understanding dated February 5, 1997 among Old Anchor, Consumers
Packaging Inc., and the Company
3.1 Amended and Restated Certificate of Incorporation of the Company
3.2 Certificate of Incorporation of the Parent Guarantor
3.3 Certificate of Amendment to Certificate of Incorporation of the Parent Guarantor
3.4 Bylaws of the Company
3.5 Bylaws of the Parent Guarantor
3.6 Certificate of Designation for Series A 10% Cumulative Convertible Preferred Stock
3.7 Certificate of Designation for Series B 8% Cumulative Convertible Preferred Stock
4.1 Indenture dated as of April 17, 1997 among the Company, the Parent Guarantor and
The Bank of New York, as trustee
4.2 Form of Initial Notes (included in Exhibit 4.1)
4.3 Form of Exchange Notes (included in Exhibit 4.1)
4.4 Security Agreement dated as of February 5, 1997 among the Company and Bankers Trust
Company, as agent under the Revolving Credit Agreement
4.5 Assignment of Security Agreement dated as of April 17, 1997 among the Company,
Bankers Trust Company, as assignor, and The Bank of New York, as assignee and as
trustee under the Indenture
4.6 Pledge Agreement dated as of April 17, 1997 among the Parent Guarantor and The Bank
of New York, as trustee under the Indenture
4.7 Intercreditor Agreement dated as of February 5, 1997 among The Bank of New York, as
Note Agent, and BT Commercial Corporation, as Credit and Shared Collateral Agent
4.8 Amendment No. 1 to the Intercreditor Agreement, dated as of April 17, 1997 among
The Bank of New York, as Note Agent, and BT Commercial Corporation, as Credit and
Shared Collateral Agent
4.9 Registration Rights Agreement dated as of April 17, 1997 among the Company, the
Parent Guarantor, BT Securities Corporation and TD Securities (USA) Inc.
5.1** Opinion of Eckert Seamans Cherin & Mellott, LLC
5.2** Opinion of Jones, Day, Reavis & Pogue
</TABLE>
<PAGE> 12
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
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<C> <S>
10.1 Credit Agreement (the "Credit Agreement") dated as of February 5, 1997 among the
Company, Bankers Trust Company, as Issuing Bank, BT Commercial Corporation, as
Agent and Co- Syndication Agent, PNC Bank, National Association, as Co-Syndication
Agent and Issuing Bank, and the various financial institutions party thereto
10.2 First Amendment to the Credit Agreement dated as of March 11, 1997 among the
Company, Bankers Trust Company, BT Commercial Corporation, and PNC Bank, National
Association
10.3 Second Amendment to the Credit Agreement dated as of April 9, 1997 among the
Company, Bankers Trust Company, BT Commercial Corporation, and PNC Bank, National
Association
10.4 Third Amendment and Waiver to the Credit Agreement dated as of May 23, 1997 among
the Company, Bankers Trust Company, BT Commercial Corporation, PNC Bank, National
Association and the various financial institutions party to the Credit Agreement
10.5* Fourth Amendment to the Credit Agreement dated as of September 15, 1997 among the
Company, Bankers Trust Company, BT Commercial Corporation, PNC Bank, National
Association, and the various financial institutions party to the Credit Agreement
10.6 Assignment of Security Interest in U.S. Trademarks and Patents dated February 5,
1997 by the Company to BT Commercial Corporation, as Collateral Agent under the
Credit Agreement
10.7 Assignment of Security Interest in U.S. Copyrights dated February 5, 1997 by the
Company to BT Commercial Corporation, as Collateral Agent under the Credit
Agreement
10.8 Guaranty dated February 5, 1997, by the Parent Guarantor in favor of BT Commercial
Corporation and the other financial institutions party to the Credit Agreement Plan
10.9 Termination Agreement dated February 3, 1997 by and between Consumers Packaging
Inc., the Company and the Pension Benefit Guaranty Corporation
10.10 Release Agreement among Old Anchor, the Company, the Official Committee of
Unsecured Creditors of Anchor Glass Container Corporation (Old Anchor) and Vitro,
Sociedad Anonima
10.11 Agreement (the "Vitro Agreement") dated as of December 18, 1996 between Vitro,
Sociedad Anonima, Consumers Packaging Inc., on behalf of itself, and Consumers
Packaging Inc., on behalf of the Company
10.12 First Amendment to the Vitro Agreement dated as of February 4, 1997 among Vitro,
Sociedad Anonima, Consumers Packaging Inc. and the Company
10.13 Waiver Agreement dated as of February 5, 1997 by and between Old Anchor and
Consumers Packaging Inc.
10.14 Assignment and Assumption Agreement dated as of February 5, 1997 by and between
Consumers Packaging Inc. and the Company
10.15 Assignment and Assumption Agreement dated as of February 5, 1997 by and between
Consumers Packaging Inc. and the Company relating to certain employee benefit plans
10.16 Assignment and Assumption Agreement dated as of February 5, 1997 between Consumers
Packaging Inc. and the Company relating to certain commitment letters
10.17 Bill of Sale, Assignment and Assumption Agreement dated as of February 5, 1997 by
and between Old Anchor and the Company
10.18 Assignment of Patent Property and Design Property from Old Anchor to the Company
10.19 Trademark Assignment from Old Anchor to the Company
10.20 Foreign Trademark Assignment from Old Anchor to the Company
10.21 Copyright Assignment from Old Anchor to the Company
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
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<C> <S>
10.22 Agreement dated as of February 5, 1997 between The Travelers Indemnity Company and
its Affiliates, including The Aetna Casualty and Surety Company and their
predecessors, and the Company
10.23 Allocation Agreement dated as of February 5, 1997 between Consumers Packaging Inc.
and Owens-Brockway Glass Container Inc.
10.24 Supply Agreement dated as of February 5, 1997 by and between the Company and Owens-
Brockway Glass Container Inc.
10.25 Transition Agreement dated as of February 5, 1997 between Consumers Packaging Inc.,
the Company and Owens-Brockway Glass Container Inc.
10.26*+ Technical Assistance and License Agreement executed December 18, 1996 by
Owens-Brockway Glass Container Inc. and Consumers Packaging Inc.
10.27 Assurance Agreement (the "Assurance Agreement") dated as of February 5, 1997 among
Owens-Brockway Glass Container Inc., Consumers Packaging Inc., the Company, BT
Commercial Corporation, Bankers Trust Company and The Bank of New York
10.28 Letter agreement relating to Assurance Agreement dated April 17, 1997 addressed to
Owens-Brockway Glass Container Inc. and signed by Bankers Trust Company and The
Bank of New York
10.29 Intercompany Agreement dated as of April 17, 1997 among G&G Investments, Inc.,
Glenshaw Glass Company, Inc., Hillsboro Glass Company, I.M.T.E.C. Enterprises,
Inc., Consumers Packaging Inc., Consumers International Inc., the Parent Guarantor,
the Company, BT Securities Corporation and The Bank of New York, as trustee under
the Indenture
10.30 Management Agreement dated as of February 5, 1997 by and between the Company and
G&G Investments, Inc.
10.31 Anchor Glass Container Corporation/Key Executive Employee Retention Plan
10.32 Lease Agreement -- Anchor Place at Fountain Square (the "Lease Agreement") dated
March 31, 1988, by and between Old Anchor and Fountain Associates I Ltd. relating
to the Company's headquarters in Tampa, Florida
10.33 First Amendment to Lease Agreement effective as of June 16, 1992, by and between
Fountain Associates I Ltd. and Old Anchor
10.34 Second Amendment to Lease Agreement effective as of September 30, 1993, by and
between Fountain Associates I Ltd. and Old Anchor
10.35 Third Amendment to Lease Agreement effective as of February 22, 1995, by and
between Fountain Associates I Ltd. and Old Anchor
10.36 Agreement dated as of March 31, 1996 by and between Fountain Associates I Ltd.,
Citicorp Leasing, Inc. and Old Anchor
10.37 Amended and Restated Agreement effective as of September 12, 1996, by and between
Fountain Associates I Ltd., Citicorp Leasing Inc. and Old Anchor
10.38 Sixth Amendment to Lease and Second Amendment to Option Agreement dated as of
February 5, 1997, by and between Fountain Associates I Ltd., Citicorp Leasing Inc.
and Old Anchor
10.39 Building Option Agreement dated March 31, 1988, by and between Fountain Associates
I, Ltd. and Old Anchor
10.40 First Amendment to Building Option Agreement effective as of June 16, 1992, by and
between Fountain Associates I, Ltd. and Old Anchor
10.41*+ Supply Agreement effective as of June 17, 1996 between The Stroh Brewery Company
and the Company
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT
NUMBER ITEM
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<C> <S>
10.42*+ Supply Agreement between Bacardi International Limited and the Company
10.43 Warrant Agreement dated as of February 5, 1997 between the Company and Bankers
Trust Company
10.44 Form of Warrant issued pursuant to the Warrant Agreement
10.45** American Appraisal Associates, Inc. ("AAA") appraisal of liquidation in place value
of certain property of the Company
10.46** AAA's appraisal of fair market value of certain property of the Company
10.47*+ Rebate Agreement dated as of January 1, 1996 between Bacardi International Limited
and the Company
12.1 Statement re: computation of ratio of earnings to fixed charges for the period from
February 5, 1997 to September 30, 1997
12.2 Statement re: computation of ratio of earnings to fixed charges for the years ended
December 31, 1992, 1993, 1994, 1995 and 1996
21.1 List of Subsidiaries of the Company
21.2 List of Subsidiaries of the Parent Guarantor
23.1 Consent of Arthur Andersen LLP
23.2** Consent of Eckert Seamans Cherin & Mellott, LLC, included in Exhibit 5.1
23.3** Consent of Jones, Day, Reavis & Pogue, included in Exhibit 5.2
23.4 Consent of American Appraisal Associates, Inc.
24.1 Power of Attorney of the Company
24.2 Power of Attorney of the Parent Guarantor
25.1 Statement on Form T-1 of the eligibility of the Trustee with respect to the Company
25.2 Statement on Form T-1 of the eligibility of the Trustee with respect to the Parent
Guarantor
27.1 Financial Data Schedule of Old Anchor
27.2 Financial Data Schedule of the Company
27.3 Financial Data Schedule of the Parent Guarantor
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letter to DTC Participants
99.4 Form of Letter to Clients and Form of Instruction to Book-Entry Transfer
Participants
</TABLE>
- ---------------
* Filed herewith.
** To be filed by amendment.
+ Confidential treatment requested pursuant to Rule 406 of Regulation C.
All other exhibits have been filed previously.
<PAGE> 1
Exhibit 10.5
FOURTH AMENDMENT
FOURTH AMENDMENT (this "Amendment"), dated as of September 15, 1997,
among ANCHOR GLASS CONTAINER CORPORATION, f/k/a Anchor Glass Acquisition
Corporation, a Delaware Corporation (the "Borrower"), the financial institutions
party to the Credit Agreement referred to below (the "Lenders"), BANKERS TRUST
COMPANY, as an Issuing Bank (an "Issuing Bank"), BT COMMERCIAL CORPORATION,
acting as Co-Syndication Agent and Agent (the "Agent"), and PNC BANK, NATIONAL
ASSOCIATION, as Co-Syndication Agent and as an Issuing Bank (an "Issuing Bank").
All capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Credit Agreement referred to
below.
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders, the Issuing Banks and the Agent
are parties to a Credit Agreement, dated as of February 5, 1997 (as amended,
modified or supplemented through the date hereof, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided;
NOW, THEREFORE, it is agreed:
Section 1.1 of the Credit Agreement is hereby amended by inserting
the following new definition in alphabetical order:
"Qualified Offer shall have the meaning given to such term in
Section 8.23."
Section 8.23 of the Credit Agreement is hereby amended by (i)
deleting subsection (b)(i) in its entirety, (ii) deleting each reference to the
amount "$2,500,000" in subsection (b)(ii) and inserting "$5,000,000" in lieu
thereof, (iii) deleting the text "the Agent shall have received a Qualified
Offer" appearing in subsection (b)(ii) and inserting the following text in lieu
thereof:
"the Borrower shall have delivered to the Agent a written bona fide offer
to purchase the Headquarters Property on terms and conditions, and from
parties, reasonably satisfactory to the Agent (provided that acceptability
of the purchase price shall be
<PAGE> 2
determined based on an appraisal delivered to the Agent by the Borrower
from appraisers, and in form and substance, satisfactory to the Agent) (an
offer meeting the foregoing requirements, a "Qualified Offer"), and which
such Qualified Offer",
(iv) re-numbering subsection (b)(ii) as (b)(i), (v) re-numbering subsection
(b)(iii) as (b)(ii), and (vi) re-numbering subsection (b)(iv) as (b)(iii).
In order to induce the Lenders to enter into this Amendment, the
Borrower hereby represents and warrants that (i) the representations, warranties
and agreements contained in Article 6 of the Credit Agreement are true and
correct in all material respects on and as of the Fourth Amendment Effective
Date (as defined in Section 7 of this Amendment) (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date) and (ii) there exists no Default or Event of Default on
the Fourth Amendment Effective Date, in each case both before and after giving
effect to this Amendment.
This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower, the Agent and each Lender.
THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
This Amendment shall become effective on the date (the "Fourth
Amendment Effective Date") when the Borrower and the Required Lenders shall have
signed a counterpart hereof (whether the same or different counterparts) and
shall have delivered (including by way of facsimile transmission) the same to
the Agent at its address for notice provided for in the Credit Agreement.
From and after the Fourth Amendment Effective Date, all references
in the Credit Agreement and each of the Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as amended hereby.
<PAGE> 3
* * *
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
ANCHOR GLASS CONTAINER
CORPORATION
By /s/ C. Kent May
----------------------------
Name: C. Kent May
Title: Sr. Vice President
BT COMMERCIAL CORPORATION,
Individually, as Agent and as
Co-Syndication Agent
By /s/ Basil Palmeri
----------------------------
Name: Basil Palmeri
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
Individually, as Co-Syndication Agent and
Issuing Bank
By /s/ illegible
----------------------------
Name: illegible
Title: Assistant Vice President
BANKERS TRUST COMPANY,
as Issuing Bank
By /s/ Basil Palmeri
----------------------------
Name: Basil Palmeri
<PAGE> 4
Title:
BTM CAPITAL CORPORATION
By /s/ Ronald A. Donatelli
----------------------------
Name: Ronald A. Donatelli
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT,
INC.
By /s/ Edward A. Jesser
----------------------------
Name: Edward A. Jesser
Title: Vice President
CORESTATES BANK, N.A.
By /s/ John T. Havrin
----------------------------
Name: John T. Havrin
Title: Vice President
FLEET BANK
By
----------------------------
Name:
Title:
KEY CORPORATE CAPITAL INC.
By /s/ Lee K. Mosby
----------------------------
<PAGE> 5
Name: Lee K. Mosby
Title: Senior Vice President
MELLON BANK, N.A.
By /s/ Norman K. Smith
----------------------------
Name: Norman K. Smith
Title: Vice President
NATIONAL BANK OF CANADA
By /s/ Donald P. Haddad
----------------------------
Name: Donald P. Haddad
Title: Vice President
By /s/ Eric L. Moere
----------------------------
Name: Eric L. Moere
Title: Vice President
NATIONAL CITY COMMERCIAL
FINANCE, INC.
By /s/ Mark Harak
----------------------------
Name: Mark Harak
Title: Account Executive/Officer
SUMMIT COMMERCIAL/
GIBRALTAR CORP.
By /s/ Irwin Schwartz
----------------------------
Name: Irwin Schwartz
Title: President
<PAGE> 1
Exhibit 10.26
TECHNICAL ASSISTANCE
AND LICENSE AGREEMENT
OWENS-BROCKWAY GLASS CONTAINER INC., a corporation organized and existing
under the laws of the State of Delaware, with its principal office at One
SeaGate, Toledo, Ohio 43666, hereinafter called "Owens", and CONSUMERS PACKAGING
INC., a corporation organized and existing under the laws of Canada, with its
principal office at 401 The West Mall, Suite 900, Etobicoke, Ontario, Canada,
hereinafter called "Licensee", have agreed as follows:
Owens has considerable expertise in the manufacture of glass containers,
and Licensee desires that Owens provide certain manufacturing consulting
services and associated technological and patent licenses to assist Licensee in
the manufacture of glass containers.
Owens represents that it has a strict policy and program for compliance
with the antitrust laws, regulations and court decisions, and that such services
and licenses will be provided in a manner consistent with such policy and
program.
Based upon the foregoing understandings, the parties have agreed as
follows:
1. For all purposes of this Agreement
(a) The term "Affiliate" shall mean, with respect to any person, any
person which directly or indirectly controls or is controlled by or is under
common control with such person.
(b) The term "control" (including the terms "controlling",
"controlled by" and under "common control with") shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a person.
(c) The term "Antitrust Sensitive Information" shall mean any
information (including, without limitation, information relation to pricing,
costs, sales, credit, marketing or
<PAGE> 2
production capacity) which, in the opinion of the party requested to disclose or
license such information, is sensitive from the standpoint of the antitrust laws
of the United States or any political subdivision thereof (the "antitrust laws")
and the disclosure or licensing of which, in the opinion of such party would be
inappropriate from the standpoint of the antitrust laws or would result in a
violation of the antitrust laws.
(d) The term "Owens" shall mean Owens-Brockway Glass Container Inc.
(e) The term "Owens Group" shall mean Owens and all Affiliates of
Owens engaged in the manufacture of Licensed Products.
(f) The term "Licensee Group" shall mean Licensee and all
Subsidiaries of Licensee operating within the Licensed Territory which (i)
manufacture Licensed Products and (ii) accept the obligations of this Agreement
in writing as set forth in Attachment 1. A current list of members of the
Licensee Group is set forth in Attachment 2, which may be amended from time to
time by the parties.
(g) The term "Licensee Group Technical Information" shall mean all
technical facts, information, data or advice, whether written or oral
(including, without limitation, reports, letters, drawings, training and
operating manuals, specifications, bills of materials, photographs,
advertisements, and the like), relating to furnaces, compositions, product
designs, machines, molds, methods, techniques, processes, factory and
administration management, which facts, information, data or advice are utilized
commercially by any member of Licensee Group in the manufacture, processing,
inspecting, testing and packaging of Licensed Products in the regular course of
its business throughout the term of this Agreement, but shall not include:
(i) any facts, information, data or advice that any member of
Licensee Group receives from third parties and which may not lawfully be
disclosed by such member or the
2
<PAGE> 3
utilization of which requires the payment by any member of the Licensee Group of
royalties to third parties, except as provided in the following sentence;
(ii) any facts, information or data that any member of
Licensee Group develops for, or in cooperation with, third parties, and which
such member is obliged to maintain in confidence, except as provided in the
following sentence; and
(iii) any Antitrust Sensitive Information.
In the event that Licensee and Owens agree that any facts, information,
data or advice described in clause (i) or (ii) above shall be of significant
interest to Owens or important to the implementation of this Agreement, Licensee
shall, at Owens' request, use reasonable efforts to obtain the consent from any
such third party to permit disclosure of such information to Owens, provided,
however, that in the event Licensee shall be required to pay royalty fees or
incur other costs for the use of such information. Licensee will notify Owens in
writing of the type of information and the amount of royalty fees or other costs
associated with the use of such information by Owens and Owens shall have the
option to receive such information if Owens shall agree, in writing, to pay such
royalty fees and other costs in addition to any other amounts required to be
paid by Owens under the terms of this Agreement.
(h) The term "Licensed Products" shall mean soda-lime glass
containers such as bottles and jars made substantially of vitreous soda-lime
silicate composition.
(i) The term "Technical Information" shall mean all technical facts,
information, data or advice, whether written or oral (including, without
limitation, reports, letters, drawings, training and operating manuals,
specifications, bills of materials, photographs, advertisements, and the like),
relating to furnaces, compositions, product designs, machines, molds, methods,
techniques, processes, factory administration and scheduling management, and
access to associated computer
3
<PAGE> 4
services available (as provided in the second following sentence) from Owens or
any transferee of Owens' computer services department, which facts, information,
data, advice or computer services are utilized commercially in the Licensed
Territory by any member of the Owens Group in the manufacture, processing,
inspecting, testing and packaging of Licensed Products in the regular course of
its business throughout the term of this Agreement, including multiple gob
narrow neck press and blow forming technology and equipment and the rights
thereto as developed by Owens or acquired by Owens from Hermann Heye of
Obernkircken, Federal Republic of Germany (the multiple gob narrow neck press
and blow forming technology, including applicable know-how and trade secrets and
equipment as the same may be improved and upgraded from time to time, shall be
collectively referred to as the "Multiple Gob Press and Blow Technology"), but
shall not include:
(i) any facts, information, data, advice or computer services
that any member of the Owens Group receives from third parties and which may not
lawfully be disclosed by such member, or the utilization of which requires the
payment by any member of the Owens Group of royalties to third parties, except
as provided in the following sentence;
(ii) any facts, information, data, advice or computer services
that any member of the Owens Group develops for, or in cooperation with, third
parties, and which such member is obliged to maintain in confidence, except as
provided in the following sentence;
(iii) any facts, data, formulas, compositions, processes,
apparatus, computer programs, compilations of information or any other patented
or unpatented technology, information or equipment relating to the Owens
development known as *** or
(iv) any Antitrust Sensitive Information.
In the event that Owens and the Licensee agree that any facts,
information, data, advice or computer services described in clause (i) or (ii)
above shall be of significant interest to Licensee or
*** Confidential treatment requested pursuant to Rule 406.
4
<PAGE> 5
important to the implementation of this Agreement, Owens shall, at Licensee's
request, use reasonable efforts to obtain the consent from any such third party
to permit disclosure of such information to Licensee Group; provided, however,
that in the event Owens shall be required to pay royalty fees or incur other
costs for the use of such information, Owens will notify Licensee in writing of
the type of information and the amount of royalty fees or other costs associated
with the use of such information by Licensee Group and Licensee Group shall have
the option to receive such information if Licensee shall agree, in writing, to
pay such royalty fees and other costs in addition to any other amounts required
to be paid by Licensee Group under the terms of this Agreement. Owens and
Licensee acknowledge and agree that (i) design and analytical computer services
shall be available for use only at an Owens Group facility or an Owens Group
controlled program bank and then only under the control and supervision of Owens
personnel to help solve problems (the design and analytical computer programs
themselves not being an item of Technical Information to be transferred to
Licensee Group); (ii) object code type, administrative process control, and
financial computer programs may be transferred to Licensee Group, and (iii)
computer programs which function to provide management information (e.g.,
programs for product information computer and control system supervisory
computer) or function to control machinery/equipment provided by any member of
the Owens Group (e.g., programs for Com-Soc, Auto-Mot, batch computing furnace
computer and glass conditioning computer) shall be provided by Owens only as an
integral part of such machinery/equipment unless otherwise specifically agreed
upon by Owens, all computer programs being considered trade secrets of Owens.
(j) The term "Licensed Territory" shall mean the United States of
America, and the Dominion of Canada.
5
<PAGE> 6
(k) The term "Licensed Patent" shall mean any patent of the Licensed
Territory pertaining to Licensed Products, including the manufacture thereof,
owned or acquired by Owens or in which Owens has or acquires licensable rights
during the term of this Agreement and which is based on any item of Technical
Information.
(l) The term "Licensed Trade Secret" shall mean any and all
Technical Information of a confidential nature or in which Owens has licensable
proprietary rights such as formulas, processes, apparatus, compilations of
information and the like which is used by Owens in the Licensed Territory to
give it an advantage over competitors who do not use it and which is designated
in writing as a trade secret at the time of disclosure or thereafter. It is
understood that the term "Licensed Trade Secret" shall include both industrial
and commercial trade secrets.
(m) The term "Net Sales Price" shall mean the sales price for
shipments of Licensed Products as itemized on customer invoices, debit memos and
credit memos net of (i) discounts and allowances made in the ordinary course of
business, (ii) expenses relating to freight, transportation, insurance,
packaging and non-glass accessories or components, (iii) sales and use taxes and
other similar governmental charges and (iv) returns for credit. In the case of
Licensed Products sold by Licensee Group to any other person which is so closely
allied to Licensee Group as to prevent arm's-length bargaining, the Net Sales
Price shall be no lower than the net sales price charged by such seller for
similar products sold in the same period to customers not thus closely allied.
No member of Licensee Group shall change the method or system it uses to invoice
customers, or otherwise change its accounting methodology, in order to reduce
the amount of payments to be made to Owens under paragraph 6.
(n) The term "person" shall mean any natural person, corporation,
division of a corporation, business trust, joint venture, association, company
or partnership.
6
<PAGE> 7
(o) The term "Prime Rate" shall mean at any time the rate of
interest per annum publicly announced from time to time by Citibank, N.A. as its
prime rate in effect at its principal office in New York, New York.
(p) The term "Subsidiary" shall mean a person, a majority of the
total outstanding Voting Power of which is owned, directly or indirectly, by
Owens or Licensee.
(q) "Voting Power" when used with reference to the capital stock of,
or other ownership interest in, any person shall mean the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote in
the election of directors of such person (if such person is a corporation) or to
exercise rights in respect of such person equivalent to the right to vote in the
election of directors (if such person is not a corporation).
2. During the term of this Agreement, Owens shall:
(a) Have its representatives meet from time to time, and whenever
reasonably requested by Licensee, with representatives of Licensee Group to
review the scope and content of any Technical Information of interest to
Licensee Group and to work out with Licensee practical procedures for promptly
conveying any item of Technical Information to Licensee Group.
(b) Furnish Licensee Group on a timely basis with copies of
technical reports and manuals relating to any item of said Technical Information
which are prepared from time to time by any member of the Owens Group for
distribution among plants in the Licensed Territory and which in the judgment of
Owens may be of interest to Licensee Group.
(c) Furnish or make available to the designated representative of
Licensee Group, on a timely basis, any Technical Information requested by any of
them; provided, however, that requests shall in each case be specific items of
Technical Information, and the obligation of Owens hereunder shall be limited:
7
<PAGE> 8
(i) to supplying drawings, manuals, specifications, bills of
material, and the like, only to the extent that Owens has prepared such material
for its own use, or for the use of third parties; and
(ii) as to all Technical Information, to cause each such
request to be fully and fairly answered to the best of the ability of Owens.
Upon receipt of invoices from Owens from time to time, Licensee shall
promptly reimburse Owens for any expenses at Owens' normal internal costs which
Owens shall incur, including freight, shipping expenses and reproduction of
documents, in furnishing information requested by Licensee Group pursuant to
this paragraph 2.
3. Owens shall, upon Licensee's prior written request:
(a) Arrange for duly authorized representatives of Licensee Group to
visit factories, selected by Owens, where Technical Information is used in
manufacturing, testing and inspecting Licensed Products, and to inspect, at such
factories, all such operations utilizing Technical Information, provided,
however, that Owens shall not be obligated to arrange for visits to an extent
that by reason of the number of visits or the number of representatives, such
visits will interfere with the operation of such factories, provided, further,
that Owens shall not expose representatives of Licensee Group to Antitrust
Sensitive Information.
(b) Make available to Licensee Group at offices, factories or
laboratories of Owens, the services of representatives of Owens, who are
familiar with the manufacture of Licensed Products, for consultation and advice
concerning Licensee Group's manufacture thereof.
(c) Arrange for representatives of Owens to consult with and advise
Licensee Group on the purchase by Licensee Group from third parties of any
machines or devices which are used by Owens in the manufacture, testing or
inspection of Licensed Products.
8
<PAGE> 9
(d) Owens shall not be required to provide more than *** man-days of
all the services described in paragraph 3(a), 3(b) and 3(c) above in any
calendar year.
(e) Make available to Licensee Group at the plants of Licensee Group
in the Licensed Territory the services, for not more than an aggregate of ***
man-days in any calendar year, of one or more representatives of Owens who are
familiar with the commercial manufacture of Licensed Products for consultation
and advice concerning the Licensee Group's manufacture thereof.
(f) When such consultation takes place away from the Owens
representative's place of regular employ, Licensee Group shall pay Owens the
amount of (i) the reasonable travel and subsistence expenses which will be
incurred by any such representative in traveling from his place of regular
employ, visiting, and returning to his place of regular employ from the plants
of Licensee Group, and (ii) the total cost to Owens of any such representative,
for the entire period any such representative is away from his regular place of
employ for consultation with Licensee Group.
4. (a) Each member of Licensee Group agrees that all Technical Information
made available or disclosed by Owens in accordance with the terms of this
Agreement is solely for Licensee Group's use in the Licensed Territory in
accordance with this Agreement and shall remain the property of Owens, and that,
for the term of this Agreement plus five (5) years from termination, each member
of Licensee Group will take all reasonable care to keep any and all such
Technical Information confidential and shall not disclose such Technical
Information to any third party (including, without limitation, any person that
has an ownership interest in any member of Licensee Group, unless such person
otherwise has right of access to Technical Information under this Agreement) or
to any director of any member of Licensee Group who is known to Licensee to be
an officer, director, partner, employee or at least 10% stockholder of any
person that (x) is a commercial customer or an Affiliate of a commercial
customer for glass containers (a "Customer") or (y) is
*** Confidential treatment requested pursuant to Rule 406.
9
<PAGE> 10
engaged in the manufacture or is an Affiliate of a person engaged in the
manufacture of rigid containers of glass, metal or plastic (a "Manufacturer"),
unless such Technical Information (i) becomes generally available to the public
other than as a result of a disclosure by, or other wrongful act of, any member
of Licensee Group, (ii) was lawfully available to any member of Licensee Group
or any of its Affiliates from a source other than an Owens Group or an Owens
Group authorized source on a nonconfidential basis prior to its disclosure by
any member of Owens Group, (iii) becomes available to any member of Licensee
Group on a nonconfidential basis from a source other than any member of Owens
Group or an Owens Group authorized source, provided that such source is not
bound by a confidentiality agreement with any member of Owens Group known to any
member of Licensee Group or (iv) is required by applicable law to be disclosed.
(b) Each member of Licensee Group agrees to provide the security
necessary to protect Licensed Trade Secrets under the laws of the State of Ohio
and the laws of the United States of America.
(c) Further, and without limitation on the other particular
obligations of confidence recited herein, none of the members of Licensee Group
shall disregard the obligations of confidence by using the Technical Information
given any member of Licensee Group to guide a search by it of publications and
other publicly available information, to select a series of items of knowledge
from unconnected sources, and to fit them together by use of the integrated
disclosure of Technical Information from Owens to justify its disregard of the
obligations of confidence.
(d) None of the members of Licensee Group has the right to disclose
Technical Information which it is obliged to maintain in confidence under
paragraph 4(a) to any subcontractor without prior approval by Owens. Such
consent shall not be withheld if the
10
<PAGE> 11
subcontractor is reasonably acceptable to Owens and appropriate safeguards are
provided to protect the confidentiality of, and any proprietary rights of Owens
in, such material.
(e) Owens and Licensee agree that each member of Licensee Group can
fulfill its obligations of confidentiality by instituting and maintaining
reasonable security precautions, which may include confidentiality agreements
for appropriate employees and limited access to Technical Information within
Licensee Group's organization on a need-to-know basis.
5. Owens hereby grants to Licensee Group, for the term of this Agreement,
a non-transferable (except as provided herein), non-exclusive, indivisible right
and license in the Licensed Territory to use Technical Information (including,
without limitation, Licensed Patents and Licensed Trade Secrets) in the
manufacture, use and sale of Licensed Products. This license does not include
the right to manufacture machinery and equipment embodying Technical Information
in the Licensed Territory, provided that members of Licensee Group may
manufacture molds for the exclusive use of members of Licensee Group so long as
any molds which incorporate Technical Information are not transferred to any
third party or may manufacture Customer-owned molds not incorporating Technical
Information which molds may be transferred to such Customer or at such
Customer's direction. This Agreement does not restrict the sale throughout the
world of Licensed Products made in the Licensed Territory by any member of
Licensee Group; provided, however, that each member of Licensee Group
acknowledges that this Agreement does not grant to any member of Licensee Group
any license under the patents, trade secrets or other intellectual property
rights of Owens in any country outside of the Licensed Territory.
6. In consideration of the performance of the obligations of Owens under
paragraphs 2 and 3, and of the rights granted in respect of Technical
Information (including Licensed Patents and Licensed Trade Secrets under
paragraphs 4 and 5), and in addition to the payment of expenses as
11
<PAGE> 12
provided in paragraphs 2 and 3, Licensee Group shall pay and remit to Owens
royalty payments equal to *** of the Net Sales Price of all Licensed Products
manufactured under this license which are sold or otherwise transferred by
Licensee Group during the term of this Agreement. Such royalty payments shall be
calculated during the term of this Agreement as of the end of each calendar
quarter and, to the extent applicable, amounts denominated in a foreign currency
shall be converted into United States Dollars using the official exchange rate
if one exists or otherwise at the exchange rate announced by Citibank, N.A. of
New York, New York as of such date.
It is understood and agreed that these royalty payments based upon Net
Sales Price are for the administrative convenience of the parties in avoiding
determinations of the extent of the use of the various Licensed Patents and
Licensed Trade Secrets, and associated bookkeeping and reporting, and include
the payment for patent rights under the Licensed Patents.
In addition to the patent licenses and rights obtained under the Licensed
Patents, the parties agree that the royalty payments based on Net Sales Price
are in consideration for the right of access to Technical Information, the right
to use unpatented Technical Information and Licensed Trade Secrets, the right of
access to Owens' technical representatives, and the right to access of and use
of patented and unpatented improvements in Technical Information. The parties
agree that the fair value of these rights and licenses is as specified herein.
Licensee Group shall further pay all taxes and governmental impositions of
every character, other than income and similar taxes (including those which must
be withheld by Licensee Group on account for Owens), required by law to be paid
by Owens or any member of Licensee Group as a tax upon, or as a condition or
prerequisite of receipt of, payments provided for by this paragraph 6 or by
other provisions of this Agreement. As to any income and similar taxes withheld
from payment
*** Confidential treatment requested pursuant to Rule 406.
12
<PAGE> 13
hereunder. Licensee Group shall provide Owens with certificates evidencing the
payment and amount of such taxes.
It is contemplated by the parties that Licensee will be responsible for
collecting all reports and payments due Owens and to deliver such reports and
payments to Owens to insure the performance of the terms and conditions of this
Agreement by the members of Licensee Group. Notwithstanding anything to the
contrary contained herein, each member of the Licensee Group shall be jointly
and severally responsible for the full performance of all of the obligations of
the Licensee Group hereunder.
7. (a) All obligations of Licensee Group under this Agreement shall be
paid at such place as Owens shall designate and in United States Dollars.
Payments under paragraph 6 shall be made within thirty (30) days after the end
of each calendar quarter for all Licensed Products sold or otherwise transferred
by Licensee Group during said calendar quarter. All other payments due Owens by
Licensee Group under this Agreement shall be made within thirty (30) days after
receipt of Owens' invoice.
(b) Any payments not made by Licensee Group to Owens on or before
the due date thereof shall bear interest from and after the due date at the
Prime Rate in effect on the date payment is due, such interest rate to be
adjusted at the beginning of each calendar month thereafter. Even though
nonpayment by Licensee Group might result in termination of this Agreement by
Owens, such interest shall continue to accrue until complete payment including
accrued interest is made. Licensee Group's obligations under this paragraph to
pay such accrued interest to Owens at the earliest possible time shall not be
nullified by the occurrence of any contingency referred to in paragraph 17
hereof.
13
<PAGE> 14
8. Each member of Licensee Group shall keep accurate records showing the
quantity, gross sales prices, allowable deductions, Net Sales Price, purchasers,
and date of sale or other transfer of all Licensed Products sold or otherwise
transferred by such member during the term of this Agreement, and Licensee shall
furnish Owens, within thirty (30) days after the end of each calendar quarter, a
certificate signed by an officer of Licensee showing the aggregate Net Sales
Price for all Licensed Products sold or otherwise disposed of by each such
member of Licensee Group during said calendar quarter. Licensee Group shall,
upon written request by Owens, make said records available for inspection at its
place of business during normal business hours and on a confidential basis, by
an independent Certified Public Accountant of national standing which is
designated by Owens (and which is reasonably acceptable to Licensee) who shall
certify to Owens only the amount of payments due for the period examined. Such
Certified Public Accountant shall agree not to communicate to Owens or any other
member of Owens Group any information which it shall acquire during such
inspection, other than the amount of payments due to Owens. In the event of any
disagreement between Licensee and Owens as to the amount of payments due Owens
arising solely as a result of a disagreement in the calculation of the
royalties, Licensee and Owens agree that the amount of payments certified by
such Certified Public Accountant shall, absent manifest error, be deemed to be
the amount of payments due to Owens.
9. (a) To permit both parties to obtain the full benefits of an efficient
exchange of technical information, Licensee Group shall permit, upon the prior
written request of Owens, duly authorized representatives of Owens to inspect
Licensee Group plants manufacturing Licensed Products, provided, however, that
Licensee Group shall not be obligated to permit visits to an extent that by
reason of the number of visits or the number of representatives such visits will
interfere with the operations of Licensee Group plants, provided, further, that
Licensee Group shall not expose
14
<PAGE> 15
Owens' representatives to Antitrust Sensitive Information. Owens will bear all
of the expenses of its representatives during the visits described in this
paragraph.
(b) Licensee Group shall convey or transmit any specific item of
information on Licensed Products at its disposal, which is utilized by Licensee
Group commercially in the manufacture of Licensed Products, during such visits
or in response to requests for such information by Owens at other times, except
information that Licensee Group is bound to keep secret or confidential in
accordance with a contract with a third party or information which is Antitrust
Sensitive Information.
(c) Owens agrees that all Licensee Group Technical Information made
available or disclosed by any member of Licensee Group in accordance with the
terms of this Agreement is solely for the use of the Owens Group and shall
remain the property of such member, and that, for the term of this Agreement
plus five (5) years from termination, each member of Owens Group will take all
reasonable care to keep any and all such Licensee Group Technical Information
confidential, and shall not disclose such Licensee Group Technical Information,
unless such Licensee Group Technical Information (i) becomes generally available
to the public other than as a result of a disclosure by, or other wrongful act
of, any member of Owens Group, (ii) was available to any member of Owens Group
or any of its Affiliates on a nonconfidential basis prior to its disclosure by
any member of Licensee Group, (iii) becomes available to any member of Owens
Group on a nonconfidential basis from a source other than any member of Licensee
Group, provided that such source is not bound by a confidentiality agreement
with any member of Licensee Group known to any member of Owens Group or (iv) is
required by applicable law to be disclosed. Owens agrees to provide the security
necessary to protect Licensee's proprietary information under the laws of the
State of Ohio and the laws of the United States of America.
15
<PAGE> 16
(d) Upon receipt of invoices from Licensee from time to time, Owens
shall promptly reimburse Licensee Group for any expenses incurred by Licensee
Group in furnishing information requested by Owens pursuant to this paragraph 9
(including, without limitation, expenses relating to freight, shipping and the
reproduction of documents), at a rate equal to Licensee Group's normal internal
costs for such services.
10. Each member of Licensee Group agrees to grant to each member of Owens
Group for a reasonable royalty to be negotiated, and on terms and conditions
substantially similar to the terms and conditions of this Agreement, a
nonexclusive, nontransferable, indivisible right and license to make, use and
sell Licensed Products in any country of the world under any Licensee Group
Technical Information relating to Licensed Products or the manufacture thereof
owned by Licensee Group during the term of this agreement.
11. (a) Owens will use its best efforts in providing consulting advice and
technical services under this Agreement, although Owens does not guarantee or in
any way warrant that Licensee Group will achieve specific performance objectives
through implementation of Owens' Technical Information or advice.
(b) Owens makes no warranty or representation that Licensee Groups'
utilization of Technical Information in the Licensed Territory will not infringe
patents valid therein which are owned by parties other than Owens, nor any
warranty or representation as to the validity or scope of any patent under which
a license is granted to Licensee Group under this Agreement. The obligations of
Licensee Group to Owens shall be in no way affected, and no obligation of any
character of Owens to Licensee Group shall be created, by the fact that the
utilization of any Technical Information in the Licensed Territory might
infringe the patent rights of others. Licensee
16
<PAGE> 17
Group assumes all risks of liability to any third person by reason of
infringement of patents or other rights owned by third persons.
(c) Licensee Group assumes all legal risks of claims and lawsuits
(including but not limited to product liability claims, health and safety
related claims, environmental pollution related claims and patent infringement
claims) associated with Licensee Group's implementation of advice or Technical
Information received from Owens, and Licensee Group agrees to indemnify and hold
Owens harmless against all reasonable costs, expenses and damages which may
result to Owens from Licensee Group's implementation of advice or Technical
Information from Owens. It is understood, however, that Owens shall provide
reasonable assistance in defense of any such claims based on the Licensee
Group's use of Technical Information as received from Owens at Licensee Group's
request and expense.
12. (a) This Agreement shall become effective as to Licensee and Owens
upon the date (the "Effective Date") that: (i) this Agreement shall have been
executed by each of the parties and (ii) the Closing (as defined in Section 2.07
of that Asset Purchase Agreement, dated as of December 18, 1996, among Anchor
Glass Container Corporation, Licensee and Owens) shall have occurred, and shall
be effective until the fifth anniversary of the Effective Date (the "Expiration
Date"). It is understood, however, that Licensee shall have the option to extend
the term for an additional five (5) year period after the Expiration Date under
the same terms and conditions by providing Owens with written notice of its
intent to so extend at least one year prior to the Expiration Date.
(b) In the event that the aggregate amount of royalties paid to
Owens under paragraph 6 with respect to the period beginning on the Effective
Date and ending on the date two years following the Effective Date do not equal
at least *** , Owens and
*** Confidential treatment requested pursuant to Rule 406.
17
<PAGE> 18
Licensee shall negotiate in good faith to amend the royalty rate to provide an
adequate return to Owens for a negotiation period not to exceed six months from
the second anniversary of this Agreement. If Owens and Licensee are unable to
agree upon an amendment to the royalty fee as provided in this clause (b) during
such six month period, then Owens shall have the unilateral right to terminate
this Agreement upon 30 days' prior written notice to Licensee.
13. In the event that at the time of any termination of this Agreement
(other than (i) a termination by Owens under paragraph 12(b) or 14(a) or (ii)
any termination of this Agreement by a trustee, receiver or similar official in
a bankruptcy, receivership or similar proceeding in respect of any member of the
Licensee Group), any member of Licensee Group is using any Technical
Information, then, upon written request to Owens made prior to any such
termination, Owens shall grant Licensee Group a non-exclusive, nontransferable
(except as described below), perpetual license to utilize such Technical
Information. Any license granted under this paragraph shall contain provisions
(i) for payment of a reasonable royalty to be agreed upon between Owens and
Licensee or determined as provided hereinafter, (ii) for periodic inspection by
an independent Certified Public Accountant of national standing which is
designated by Owens (and which is reasonably acceptable to Licensee) who shall
agree not to communicate to Owens any information which it shall obtain during
such inspection, other than the amount of royalty fees due to Owens, of Licensee
Group's books and records relating to the royalties payable who shall certify to
Owens only the amount of royalty payments due for period examined, (iii) for the
cancellation of the license upon failure of any member of Licensee Group to
permit the inspection of its books and records as herein provided, (iv) for the
transfer or extension of the license to any member of the Licensee Group
(whether or not such members exists at the time of termination), and (v) for
maintaining the confidentiality of such Technical Information and for
restricting the transfer of the capital stock of or other ownership
18
<PAGE> 19
interest in, or any plants which utilize Technical Information of, any member of
Licensee Group, in each case in a form substantially similar to the related
terms of this Agreement. Upon receipt of a request for a license under the
provisions of this paragraph, Owens shall advise Licensee of the royalty which
it deems reasonable for the license of the Technical Information. If Owens and
Licensee are unable to agree upon a reasonable royalty within ninety (90) days
from the date on which such request for a license is received by Owens, the
matter of the determination of a reasonable royalty for the Technical
Information shall be submitted for arbitration in accordance with the terms of
paragraph 16. The cost of such arbitration proceedings shall be shared equally
by Owens and Licensee.
14. (a) This Agreement may be terminated by either party hereto upon any
substantial default of the other party by giving written notice specifying the
default, and such termination shall become effective at the expiration of sixty
(60) days, unless such default is cured within that time or unless the matter
has been referred to arbitration in accordance with paragraph 16 of this
Agreement.
(b) In the event of (i) a termination by Owens under paragraph 12(b)
or 14(a) or (ii) any termination of this Agreement by a trustee, receiver or
similar official in a bankruptcy, receivership or similar proceeding in respect
of any member of Licensee Group, Licensee Group shall not retain any right to
use any Technical Information which Licensee Group is obligated to maintain in
confidence under paragraph 4, and shall cease use of such Technical Information
immediately and Licensee Group agrees to return all Technical Information
materials furnished by Owens (including copies and excerpts therefrom) upon
request of Owens. Except as provided in the foregoing sentence, at the time of
termination of this Agreement, Licensee Group may obtain a license to continue
to use Technical Information, Licensed Patents and Licensed Trade Secrets as
specified in paragraph 13.
19
<PAGE> 20
15. Except as otherwise provided in this Agreement, all notices, consents,
requests and other communications required or permitted to be given hereunder
shall be in writing and shall be deemed to have been duly given when delivered
personally or three days after being mailed by registered or certified mail
(return receipt requested) to the parties at the addresses set forth in the
immediately succeeding sentence (or at such other address for a party as shall
be specified by like notice). Notices to Owens shall be addressed to
Owens-Brockway Glass Container Inc., One SeaGate, Toledo, Ohio 43666, Attention
of Licensing Manager, and notices to Licensee shall be addressed to Consumers
Packaging Inc., 401 The West Mall, Suite 900, Etobicoke, Ontario, Canada.
16. All disputes or inabilities to agree arising in connection with this
Agreement which cannot be settled by discussion and mutual accord between the
parties at the level of at least Corporate Vice President shall be submitted to
arbitration under the rules of the American Arbitration Association , but no
arbitration proceeding may revoke or revise any provision of this Agreement. The
seat of the arbitration shall be in New York City, New York. Demand for
arbitration shall be made in writing and shall be served upon the party to whom
the demand is addressed by registered mail A mere registered letter will suffice
for valid submission to the arbitration court, an agreement of submission to
arbitration prior thereto not being necessary. Judgment upon the award rendered
may be entered in any court having jurisdiction, or application may be made to
such court for a judicial acceptance of the award and an order of enforcement,
as the case may be.
17. If the performance of this Agreement, or of any obligation hereunder
is prevented, restricted, or interfered with by reason of
(a) Fire, explosion, breakdown or plant failure of machinery,
strike, lockout, labor dispute, casualty or accident, lack of or failure in
whole or in part of transportation facilities,
20
<PAGE> 21
epidemic, cyclone, flood, drought, lack of or failure in whole or in part of
sources of supply of labor, raw materials, or power;
(b) War, revolution, civil commotion, acts of public enemies,
blockades or embargo;
(c) Any law, order, proclamation, regulation, ordinance, demand or
requirement of any government or any subdivision, authority or representative of
any such government; or
(d) Any other acts whatsoever, whether similar or dissimilar to
those above enumerated, beyond the reasonable control of a party hereto, the
party so affected, upon giving prompt notice to the other party, shall be
temporarily excluded from such performance to the extent of such prevention,
restriction or interference, except that the party so affected shall use its
best efforts to avoid or remove such causes of nonperformance and shall make up,
continue and complete full performance hereunder with the utmost dispatch
whenever such causes are removed; provided, however, that in the event Owens or
any member of Licensee Group chooses to consent to the entry of a judgment
against it by a United States court of competent jurisdiction or enter into a
consent decree with any governmental instrumentality or authority rather than
incur substantial expenses or great inconvenience, the entry of such judgment or
consent decree shall excuse the consenting party from performance hereunder to
the extent that such judgment or consent decree forbids or restrains such
performance.
18. (a) Nothing herein shall be construed as requiring any member of
either party to disclose to the other party any knowledge or information in
violation of the laws of any country having jurisdiction over such party or in
violation of the rules, regulations, or requirements of any department,
division, or agency of any such country. Nothing in this Agreement shall
authorize the
21
<PAGE> 22
disclosure of classified security information, material, or know-how of the
government of the United States.
(b) Licensee Group agrees, with respect to any Technical Information
that it receives from Owens hereunder, not to transmit such data to any third
party, and not to sell products produced by the use of such data to any third
party, when such transmission or sale would be in violation of any laws or
regulations of the United States, including, but not being limited to,
regulations of the United States Department of Commerce regarding the export of
technical data and the direct products thereof.
19. Whenever this Agreement requires that a representative or
representatives of either party to this Agreement meet with a representative or
representatives of the other party to this Agreement, each such party shall use
its best efforts to accommodate any reasonable request from the other party
regarding the identity or qualifications of the representative or
representatives of such party.
20. This Agreement shall supersede (i) the terms of any other license or
similar agreement between Owens and Licensee and any other license or similar
agreement between Owens and any person in respect of the Licensed Territory
which is or becomes a member of Licensee Group, including the agreement entitled
Limited License Agreement between Owens-Brockway Glass Container Inc. and
Consumers Packaging Inc. of June 2, 1995, and (ii) the terms of any license or
similar agreement between Owens and Container Holdings Corp., Anchor Glass
Container Corp. and any subsidiary or affiliate thereof in respect of any and
all assets transferred to Licensee by or from any such person, including the
Technical Assistance and Licensing Agreement between Owens and Container
Holdings Corp. dated August 9, 1989.
22
<PAGE> 23
21. Notwithstanding anything to the contrary contained in this Agreement,
none of John J. Ghaznavi ("Ghaznavi"), any Affiliates of Ghaznavi or any member
of Licensee Group will, without Owens' consent which shall not be unreasonably
withheld, (i) issue or transfer a majority of the capital stock or other
ownership interest or (ii) otherwise directly or indirectly effect a change in
control in any member of Licensee Group to any Customer or Manufacturer other
than, in each case, to any other member of Licensee Group. Notwithstanding
anything to the contrary contained in this Agreement, no member of Licensee
Group shall sell or otherwise transfer any plant owned or operated by any member
of Licensee Group which utilizes Technical Information (including Licensed Trade
Secrets or Licensed Patents) to any Customer or Manufacturer, other than to any
other member of Licensee Group. Owens will, not later than ten days after
written request by Licensee, confirm to Licensee whether or not Owens considers
a person identified by Licensee to be a Customer or Manufacturer. For purposes
of the foregoing, it is expressly understood that it shall not be unreasonable
for Owens to withhold its consent to a transfer hereunder to a Manufacturer that
is a significant competitor of Owens, any of its affiliates or licensees. This
provision shall not apply to the transfer of the capital stock or other
ownership interest of any member of the Licensee Group (other than the entity to
be formed by Licensee, or any successor or subsidiary of that entity, that will
or does assume Licensee's obligation under the Asset Purchase Agreement dated as
of December 18, 1996, between Anchor Glass Container Corp., Owens and Licensee
("New Anchor")), or any plant owned or operated by any member of the Licensee
Group (other than New Anchor), which does not utilize Technical Information in
any equipment or machinery (such as furnaces, refiners, forehearths, electric
boosts, feeding and delivery systems, forming machines, inspection equipment,
and the like) that is purchased, installed or designed subsequent to the
Effective Date.
23
<PAGE> 24
22. Licensee will give Owens not less than thirty (30) days' prior written
notice of any transfer permissible under paragraph 21 of this Agreement.
Promptly after receipt of such notice Owens will offer to enter into a technical
assistance and license agreement with such transferee with terms substantially
similar to the terms of this Agreement including, without limitation, paragraphs
4, 13, 14, 21 , and 22. The amount of the royalty payment shall be reasonably
agreed by negotiation between Owens and such transferee. In the event Owens and
such transferee do not promptly agree as to the amount of the royalty, the
determination of a reasonably royalty shall be submitted for arbitration in
accordance with paragraph 16, provided that the royalty rate shall in any event
not be less than the royalty rate specified in paragraph 6. Any such transfer
shall not be consummated prior to the time Owens and such transferee have
entered into such technical assistance and license agreement, unless Owens has
failed to comply with the provisions of this paragraph.
23. This Agreement shall be construed according to and governed by the
laws of the State of Ohio.
24. This Agreement can only be amended in writing by duly authorized
officers of the respective parties, and shall be binding upon the successors of
Licensee and the successors and assigns of Owens, but in that it involves
personal technical services of the parties hereto shall not be assignable by
Owens or any member of Licensee Group, except any member of Licensee Group may
assign a security interest in this Agreement to any bank or other financial
institution and except as otherwise expressly provided herein, without the prior
written consent of the other party.
24
<PAGE> 25
CONSUMERS PACKAGING INC. OWENS-BROCKWAY GLASS CONTAINER INC.
By: /s/ John J. Ghaznavi By: /s/illegible
---------------------------- ----------------------------
Title: Chairman Title: Vice President
------------------------ ------------------------
Date 12/18/96 Date 12/18/96
-------------------------- --------------------------
As to Paragraph 21:
JOHN J. GHAZNAVI
/s/ John J. Ghaznavi
- -------------------------------
G&G INVESTMENTS, INC.
By /s/ John J. Ghaznavi
----------------------------
Title Chairman
------------------------
Date 12/18/96
--------------------------
25
<PAGE> 26
ATTACHMENT 1
In consideration for the right to receive the benefits of a member of the
Licensee Group under the Technical Assistance and Licensee Agreement between
Owens-Brockway Glass Container Inc. and Consumers Packaging Inc., Glenshaw Glass
Company hereby agrees to accept the obligations as a member of the Licensee
Group as set forth in such Technical Assistance and License Agreement.
CONSUMERS PACKAGING INC. LICENSEE GROUP MEMBER
By: /s/ John J. Ghaznavi By: /s/ John J. Ghaznavi
---------------------------- ----------------------------
Title: Chairman Title: Chairman
------------------------ ------------------------
Date: 12/18/96 Date: 12/18/96
-------------------------- --------------------------
OWENS-BROCKWAY GLASS CONTAINER INC.
By: /s/illegible
----------------------------
Title: Vice President
------------------------
Date: 12 December 1996
--------------------------
26
<PAGE> 27
ATTACHMENT 1
In consideration for the right to receive the benefits of a member of the
Licensee Group under the Technical Assistance and Licensee Agreement between
Owens-Brockway Glass Container Inc. and Consumers Packaging Inc., Hillsboro
Glass Company hereby agrees to accept the obligations as a member of the
Licensee Group as set forth in such Technical Assistance and License Agreement.
CONSUMERS PACKAGING INC. LICENSEE GROUP MEMBER
By: /s/ John J. Ghaznavi By: /s/ John J. Ghaznavi
---------------------------- ----------------------------
Title: Chairman Title: Chairman
------------------------ ------------------------
Date: 12/18/96 Date: 12/18/96
-------------------------- --------------------------
OWENS-BROCKWAY GLASS CONTAINER INC.
By: /s/illegible
----------------------------
Title: Vice President
------------------------
Date: 18 December 1996
--------------------------
27
<PAGE> 28
ATTACHMENT 2
Licensee Group Members
Glenshaw Glass Company
Hillsboro Glass Company
28
<PAGE> 29
ATTACHMENT 1
In consideration for the right to receive the benefits of a member of the
Licensee Group under the Technical Assistance and Licensee Agreement between
Owens-Brockway Glass Container Inc. and Consumers Packaging Inc., Anchor Glass
Container Corporation hereby agrees to accept the obligations as a member of the
Licensee Group as set forth in such Technical Assistance and License Agreement.
CONSUMERS PACKAGING INC. LICENSEE GROUP MEMBER
By: /s/ John J. Ghaznavi By: /s/ John J. Ghaznavi
---------------------------- ----------------------------
Title: CEO Title: Chairman and CEO
------------------------ ------------------------
Date: February 5, 1997 Date: February 5, 1997
-------------------------- --------------------------
OWENS-BROCKWAY GLASS CONTAINER INC.
By: /s/illegible
----------------------------
Title: Vice President
------------------------
Date: February 5, 1997
--------------------------
29
<PAGE> 1
Exhibit 10.41
SUPPLY AGREEMENT
This Agreement ("Agreement") is entered into, effective as of the 17th day
of June, 1996 ("Effective Date") by and between THE STROH BREWERY COMPANY, an
Arizona corporation ("Buyer"), and ANCHOR GLASS CONTAINER CORPORATION, a
Delaware corporation ("Seller").
RECITALS
A. Buyer has entered into an Asset Purchase Agreement, dated as of April
1, 1996 (the "Asset Purchase Agreement") with Heileman Holding Company ("HHC"),
G. Heileman Brewing Company, Inc. ("GHB"), and the subsidiaries of GHB listed on
Schedule A attached hereto (the "Heileman Subsidiaries"), pursuant to which
Buyer will purchase the following (the "Heileman Assets"):
all of the assets and business of HHC, GHB and the Heileman
Subsidiaries (collectively, the "Transaction Sellers"), excepting
only the capital stock of the Heileman Subsidiaries
(such purchase under the Asset Purchase Agreement being herein referred to as
the "Transaction").
B. Buyer has provided a copy of the Asset Purchase Agreement to Seller.
C. Seller has agreed to provide funds to Buyer for the purpose of
assisting Buyer to complete the Transaction, and Buyer has agreed to purchase
bottles from Seller, all upon the terms and conditions herein provided.
OPERATIVE TERMS
In consideration of the premises and the mutual promises and covenants set
forth below, and for other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Cash Payment by Seller. In order to enable Buyer to purchase the
Heileman Assets, Seller shall pay to Buyer, subject to adjustments as provided
herein, TWENTY-THREE MILLION AND NO/100 DOLLARS ($23,000,000.00) ("Cash
Payment"), as follows:
(a) on July 1, 1996, ("Heileman Closing Date"), Seller shall pay to
Buyer TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) upon Seller's receipt of
the "Heileman Closing Certificate" (as defined below).
(b) on December 31, 1997, Seller shall pay to Buyer SIX MILLION AND
NO/100 DOLLARS ($6,000,000.00); and
(c) on December 31, 1998, Seller shall pay to Buyer SEVEN MILLION AND
NO/100 DOLLARS ($7,000,000.00).
<PAGE> 2
Except as expressly provided in this Agreement, Buyer shall not be entitled to
receive any interest on any unpaid part of the Cash Payment.
As used in this Agreement, the term "Heileman Closing Certificate" shall
mean a certificate signed by any two or more of William L. Henry, as President
of Buyer, Christopher T. Sortwell, as Senior Vice President (Finance) and Chief
Financial Officer of Buyer, and George E. Kuehn, as Senior Vice President,
General Counsel and Secretary of Buyer, dated the date of the Heileman Closing
and in precisely the form of Schedule B attached hereto.
2. Heileman Closing. The closing of the Transaction ("Heileman Closing")
shall occur on the Heileman Closing Date in the offices of Simpson, Thacher &
Bartlett in New York, New York.
3. Representations and Warranties of Buyer. Buyer represents and warrants
to Seller that:
(a) the Heileman Assets include on the date hereof, and shall
include on the Heileman Closing Date, (i) the breweries and other plants
identified in Schedule C attached hereto; and (ii) all the products and product
names owned by or used by the Transaction Sellers and all rights associated
therewith, including without limitation, all intellectual property rights;
(b) on the Heileman Closing Date, Buyer shall be the sole owner of
all the Heileman Assets;
(c) the financial statement delivered to Seller for Buyer dated
March 31, 1996 is true and complete, as of its date and in all material respects
on the Heileman Closing Date, and Buyer is solvent on the date hereof;
(d) the financial statement delivered to Seller for GHB dated
December 31, 1995 is, to the best of Buyer's knowledge, true and complete, as of
its date;
(e) the pro forma financial statement delivered to Seller for Buyer,
after acquisition of the Heileman Assets, dated May 2, 1996, is identical to the
pro forma financial statement delivered by Seller to Morgan Guaranty Trust
Company of New York ("Morgan") in connection with the making of the loans
described in the Credit Agreement to be executed on or about the date of the
Heileman Closing ("Credit Agreement"), among Buyer, The Stroh Companies, Inc.
("Stroh, Inc.") certain lending banks named therein, and Morgan as agent;
2
<PAGE> 3
(f) after consummation of the acquisition by Buyer of the Heileman
Assets, neither Buyer nor any "Affiliate of Buyer" (as defined below) will have
any obligation or commitment, oral or written, to purchase bottles or other
glass containers from any person or entity except (i) obligations to Seller
pursuant to this Agreement, (ii) the existing, unfulfilled, portion of Buyer's
obligations assumed from Heileman to other vendors to purchase no more than ***
gross bottles in calendar year 1996, a portion of which obligations were
fulfilled before the date hereof; (iii) obligations existing as of the date
hereof to other vendors to purchase no more than *** gross bottles in calendar
year 1997, *** gross bottles in calendar year 1998, *** gross bottles in
calendar year 1999, *** gross bottles in calendar year 2000, and *** gross
bottles in calendar year 2001, and (iii) incidental bottles purchased by Buyer
for its own use and not for packaging, resale or distribution by Buyer.
As used in this Agreement, the term "Affiliate of Buyer" shall mean each
subsidiary of Buyer, each entity in which Buyer has a majority interest or
voting control, each entity owning, either directly or indirectly, an equity
interest in Buyer, and each entity succeeding Buyer by operation of law or
following a merger or sale of Buyer's stock or assets. Buyer shall ensure that,
during the term hereof, no Affiliate of Buyer shall, individually or in the
aggregate, purchase Bottles from vendors other than Seller unless Buyer is
entitled under this Agreement to purchase such Bottles directly from such other
vendors.
4. Purchase and Sale.
(a) Commencing on the date of the Heileman Closing, Seller will sell
to Buyer and Buyer will purchase from Seller bottles and glass containers
produced at Seller's plants ("Bottles"), conforming in all material ways to the
"Specifications" (as defined below). At all times during the term of this
Agreement, subject to the conditions expressly set forth herein, Buyer shall
purchase from Seller one hundred percent (100%) of Buyer's total requirement for
bottles and other glass containers, excluding only (i) bottles supplied by other
vendors which currently have valid, enforceable contracts with Buyer, subject to
the limits specified in Sections 3(f) and 5 of this Agreement, (ii) bottles
supplied by other vendors pursuant to valid, enforceable contracts with entities
acquired by Buyer or an Affiliate of Buyer (by way of asset purchase, stock
purchase, merger, or otherwise) after the date hereof, but only to the extent
that such contracts were not created with the express or implicit consent of
Buyer in contemplation of the acquisition and only to the extent that Buyer is
obligated by law or under the terms of such contracts, or required as a
condition to the acquisition by Buyer, to assume and perform the obligations of
such other entity after the date of such acquisition, and (iii) bottles
purchased by Buyer in accordance with Sections 4(e) and 4(f) of this Agreement.
(b) Buyer acknowledges that Seller's agreement to pay the Cash
Payment is made in consideration of Buyer's agreement to purchase 100% of
Buyer's requirements for Bottles, as provided herein. Buyer expects to purchase
Bottles in the following amounts for each calendar year ("Expected Purchases"),
which amounts reflect Buyer's current requirements and its expected future
requirements but not necessarily its actual future requirements:
*** Confidential treatment requested pursuant to Rule 406.
3
<PAGE> 4
--------------------------------------------------------------------
Calendar Year Number of Gross of Bottles
--------------------------------------------------------------------
1996 4.6 Million(1) (excluding
Bottles purchased by Heileman
before the Heileman Closing Date)
--------------------------------------------------------------------
1997 *** Million
--------------------------------------------------------------------
1998-2001 *** Million
--------------------------------------------------------------------
2002-2011 *** Million
--------------------------------------------------------------------
(1) Which amount will be (A) adjusted downward by any amount by which
actual sales to other vendors under Section 3(f)(ii) in 1996 is
below *** million gross as of the date of the Heileman
Closing, and (B) adjusted upward by any amount by which actual sales
to other vendors under Section 3(f)(ii) in 1996 is above *** million
gross as of the date of the Heileman Closing.
If Buyer purchases less than the Expected Purchases in any calendar year as a
result of Buyer's insolvency, or as a result of the packaging of bottles by an
Affiliate of Buyer, or as a result of a sale of stock or assets by Buyer or a
merger or other corporate reorganization of Buyer, the Cash Payment shall be
adjusted or repaid to Seller, on an equitable basis, to compensate Seller for
the loss of expected business.
(c) On or before September 30 of each year, Buyer shall provide to
Seller, in writing, an estimate of Buyer's bottle requirements, by item, size
and brewery location, for the upcoming calendar year, and, thereafter, Buyer
shall notify Seller, in writing, of any revision to such estimate, each such
revision to be effective on the first day of the second calendar month after the
notice (such estimate, as so revised and as otherwise modified from time to time
by written agreement between Seller and Buyer, is referred to herein as the
"Estimate of Requirements"), by item, by brewery for the upcoming calendar year.
If an estimate is not provided to Seller by any September 30 for the upcoming
calendar year, the most recent prior Estimate of Requirements will be effective
on January 1 of such calendar year.
(d) As used herein, the term "Specifications" shall mean the written
specifications previously provided to Seller by Buyer for the Bottle types and
sizes described in Schedule D attached hereto and the written specifications
hereafter provided to Seller by Buyer and mutually agreed upon by Seller and
Buyer for Bottle types and sizes hereafter desired by Seller.
(e) If Seller is unable to provide sufficient Bottles to satisfy
Buyer's requirements, Seller shall notify Buyer as to the number or type, if
any, of Bottles that Seller elects not to provide, and Buyer will have the right
until further notice from Seller to purchase from other sources the number of
Bottles, which, together with the Bottles supplied by Seller, is sufficient to
satisfy such requirements. Thereafter, upon notice from Seller that it will
provide sufficient Bottles to satisfy
*** Confidential treatment requested pursuant to Rule 406.
4
<PAGE> 5
such requirements, Buyer shall, as soon as possible under the circumstances,
resume purchasing Bottles from Seller to the extent required under Section 4(a)
of this Agreement.
If Seller fails to provide Bottles in material compliance with the
Specifications, Buyer shall so notify Seller in writing, and Seller shall
exercise reasonable efforts to otherwise correct such noncompliance within a
reasonable time under the circumstances, but in any event within sixty (60) days
after Buyer's written notice. If Seller fails to timely correct such
noncompliance as required under this Section 4(e), Buyer will have the right
until the noncompliance is corrected to purchase from other sources the number
of Bottles, which, together with the Bottles supplied by Seller, is sufficient
to satisfy the Buyer's requirements. Thereafter, upon Seller's correction of the
noncompliance, Buyer shall, as soon as possible under the circumstances, resume
purchasing Bottles from Seller to the extent required under Section 4(a) of this
Agreement.
(f) ***
(i) ***
(ii) ***
(iii) ***
*** Confidential treatment requested pursuant to Rule 406.
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<PAGE> 6
(iv) A failure by Buyer to timely provide any notice permitted
under this Section 4(f) will be deemed for all purposes to constitute a
waiver of Buyer's right to provide such notice.
(v) Notwithstanding the rights of Buyer in this Section 4(f)
to purchase Bottles from sources other than Seller, it is the intention of
the parties that Seller will become the sole source of Bottles for Buyer.
The parties shall exercise good faith efforts to effectuate such
intention.
(g) ***
5. Buyer's Covenants.
(a) Except as expressly permitted herein, neither Buyer nor any
Affiliate of Buyer may purchase bottles or other glass containers during the
term hereof from any vendor other than Seller (individually, an "Other Vendor",
and, collectively, the "Other Vendors").
(b) If Buyer or any Affiliate of Buyer enters into any "co-packing"
agreement or other arrangement, partnership or agreement ("Co-Packing
Agreement"), Buyer or such Affiliate of Buyer shall exercise reasonable, good
faith efforts to (i) permit Buyer to have the right, under such Co-Packing
Agreement, to purchase Bottles or to designate the supplier of Bottles, and (ii)
ensure that the net effect of all such Co-Packing Agreements, taken together,
does not result in a reduction of Bottles purchased from Seller. Additionally,
if, under the terms of any Co-Packing Agreement, Buyer or any Affiliate of Buyer
has the right to purchase bottles or to designate the supplier of bottles, then
Buyer shall not permit the purchase of bottles thereunder from any Other Vendor,
except to the extent that any such purchase is otherwise permitted under this
Agreement.
(c) Buyer and each Affiliate of Buyer shall terminate as soon as
possible its obligations and commitments to all Other Vendors (including,
without limitation those Other Vendors described in Section 4(a)(ii) hereof, but
excluding Other Vendors from whom Buyer is expressly authorized to purchase
under Sections 4(e) and 4(f) hereof), provided, however, that Buyer and the
Affiliates of Buyer will not be obligated, in connection with any such
termination, to breach any such obligations and commitments. In order to
accomplish such terminations, Buyer shall diligently provide notice of
termination as may be required or permitted under any contract with any such
Other Vendor.
(d) The amount of bottles and other glass containers purchased by
Buyer from all Other Vendors (excluding Other Vendors from whom Buyer is
expressly authorized to purchase under Section 4(e) and 4(f) hereof) during any
calendar year shall not exceed the amounts specified in the foregoing Section
3(f) for any calendar year.
(e) Neither Buyer nor any Affiliate of Buyer shall purchase from any
Other Vendor (excluding Other Vendors from whom Buyer is expressly authorized to
purchase under
6
<PAGE> 7
Sections 4(e) and 4(f) hereof) any size or type of bottle which is not currently
being supplied by, or required to be supplied by, such Other Vendor to Buyer
under a valid and enforceable contract with such Other Vendor.
(f) Buyer shall cause each Affiliate of Buyer to comply in all
respects with the provisions of this Agreement pertaining to such Affiliate of
Buyer. Additionally, if Buyer has an equity interest in any entity which is not
an Affiliate of Buyer, Buyer shall exercise reasonable good faith efforts to
cause such entity to comply with the provisions of this Agreement pertaining to
the Affiliate of Buyer.
6. Term. The initial term of this Agreement shall commence effective as of
the Effective Date and continue until June 30, 2011. The term of this Agreement
shall be extended automatically for additional terms of two (2) years each,
unless, at least six (6) months prior to the end of a term, one party has
delivered to the other party a notice of termination of this Agreement.
7. Prices
(a) The initial prices of Bottles to be purchased hereunder are set
forth on Schedule D attached hereto and incorporated herein by reference. Such
prices are effective through March 31, 1997, and shall be adjusted thereafter as
set forth in this Section 7. Prices for new products shall be determined by
mutual agreement as and when such new products are introduced.
(b) During the first (1st) calendar quarter of 1997, Seller shall
present to Buyer data, in the form set forth in Schedule E, for the purpose of
establishing Bottle prices for the period beginning April 1, 1997 and ending
December 31, 1997 ("Partial Year"). Such data will identify the average
annualized changes (for the twelve month period ending March 31, 1997) in the
primary glass production cost components at Seller's plants, weighted as shown,
using April 1, 1996 as the base calculation date and will identify, as the "%
increase/decrease in Bottle prices," an amount equal to *** percent *** of the
"total effect" on component cost. Except as provided in Sections 7(f) and (g)
below, Bottle prices for the Partial Year shall be adjusted upward or downward,
as appropriate, by the "% increase/decrease in Bottle prices".
(c) During the fourth (4th) calendar quarter of 1997, Seller shall
present to Buyer data, in the form set forth in Schedule E, for the purpose of
establishing Bottle prices for the period beginning January 1, 1998 and ending
December 31, 1998 ("First Full Year"). Such data will identify the average
annualized changes (during the nine-month period ending December 31, 1997) in
the primary glass production cost components at Seller's plants, weighted as
shown, using April 1, 1997 as the base calculation date and will identify, as
the "% increase/decrease in Bottle prices", an amount equal to *** percent ***
of the "total effect" on component cost. Except as provided in Sections 7(f) and
(g) below, Bottle prices for the First Full Year shall be adjusted upward or
downward, as appropriate, by the "% increase/decrease in Bottle prices".
(d) During the fourth (4th) calendar quarter of each year during the
term of this Agreement, beginning in 1998 (including any extended term), Seller
shall present to Buyer data, in the form set forth in Schedule E, for the
purpose of establishing Bottle prices for the calendar year beginning on the
next succeeding January 1. Such data will identify the average annualized
changes
*** Confidential treatment requested pursuant to Rule 406.
7
<PAGE> 8
(during the twelve month period ending on December 31 of the year the data is
given) in the primary glass production cost components at Seller's plants,
weighted as shown, using the preceding January 1 as the base calculation date
and will identify, as the "% increase/decrease in Bottle prices", an amount
equal to *** percent *** of the "total effect" on component cost. Except as
provided in Sections 7(f) and (g) below, Bottle prices for the following
calendar year shall be adjusted upward or downward, as appropriate, by the "%
increase/decrease in Bottle prices".
(e) Buyer shall have the right to have an audit of Seller's records
performed by Buyer's independent accountants for the limited purpose of
verifying the correctness of the data and the calculations shown in each
Schedule E submitted to Buyer. Buyer recognizes that such records are the
confidential, proprietary information of Seller, and Buyer shall take such steps
as are reasonably necessary to ensure that no information or data from such
records is revealed to any person or entity except Buyer's accountants and
employees of Buyer who have a business need to know such information and who
have agreed to maintain the confidentiality of such records.
(f) If Seller's marginal income from the sale of Bottles under this
Agreement deteriorates for two successive years during the term hereof as a
result of market conditions, component costs or production costs over which
Seller has no effective control, Buyer shall reasonably consider a reasonable
increase in prices as necessary to restore Seller's marginal income from such
sales.
(g) It is the intention of the parties that Buyer shall not become
economically disadvantaged, relative to other purchasers from Seller, as a
direct result of the prices determined pursuant to the foregoing Sections 7(a) -
(f). Accordingly, an alternative adjustment in price shall be made as follows
for any product:
(i) if Seller sells substantially the same product at
substantially the same annual volume to another purchaser and Seller has
agreed to make an adjustment in the price to that purchaser for the same
period, which adjustment (expressed as a percentage of the price for that
product for the previous period) is more favorable than the adjustment to
Buyer as computed under the foregoing Sections 7(b) - (d). In such case,
the price for such product to Buyer shall be adjusted downward by the same
percentage as the price for such product was adjusted to the other
purchaser for the same period.
(ii) if Seller sells substantially the same product at a
different volume to another purchaser and Seller has agreed to make an
adjustment in the price to that purchaser for the same period, which
adjustment (expressed as a percentage of the price for that product for
the previous period) is more favorable than the adjustment to Buyer as
computed under the foregoing Sections 7(b) - (d). In such case, the price
for such product to Buyer shall be adjusted downward equitably by Seller
based on the relative costs to, and volumes purchased by, Buyer and the
other purchaser.
The price of all other products purchased by Buyer shall be adjusted as provided
in the foregoing Sections 7(b) - (d). Buyer acknowledges that the data for the
computations required by this Section 7(g) is largely confidential and may not
be disclosed by Seller. For purposes of determining the accuracy of such
computations, Buyer shall rely solely on summary information provided by Seller
*** Confidential treatment requested pursuant to Rule 406.
8
<PAGE> 9
and Seller's good-faith obligation to adjust prices hereunder in an accurate,
timely manner, and Buyer shall not have the right to receive data supporting any
adjustments made hereunder.
8. Payment Terms. All Bottles sold pursuant to this Agreement shall be
invoiced upon shipment with payment terms of "1% Ten/Net 30 days," i.e., a one
percent discount will be taken by Buyer for payment by the 10th day following
receipt of the invoice, with net payment due by the thirtieth day following
receipt of the invoice.
9. Ordering and Delivery. Buyer shall order Bottles from Seller by issuing
annually a standard purchase order form with a reference on the front side
thereof to this Agreement. In the event there are any inconsistencies between
the terms and conditions stated on the preprinted purchase order and the terms
and conditions of this Agreement, the provisions of this Agreement shall govern.
10. Packaging. Packaging shall be in accordance with normal industry
standards, unless specific other packaging requirements are mutually agreed upon
by Seller and Buyer.
11. Force Majeure. In the event that either party's performance of its
obligations under this Agreement are delayed or prevented as a result of any
law, decree, order or regulation, either local, state or federal, or in the
event of such delay or prevention of performance as a result of any riots, war,
public disturbances, strikes, fires, floods, acts of God, accidents of
navigation, failure of delivery of raw material, or for any other reason
(whether or not of the same class or kind as set forth above), which occurrence
was not within the control of the party whose performance has been affected and
which, by the exercise of reasonable diligence, that party could not have
reasonably prevented or avoided, then such party's failure to perform shall be
excused and such party shall not be subject to any liability for its failure to
perform its obligations hereunder; provided that the party whose performance has
been affected takes all reasonable action to remove the occurrence which has
prevented or delayed its performance as expeditiously as possible. The
requirement that any such Force Majeure be removed as quickly as possible shall
not require the settlement of strikes or labor controversies by acceding to the
demands of the opposing party or parties to the extent that the party whose
performance has been affected continues to negotiate with such party. Either
party may, at its option, suspend delivery or receipt of Bottles during the
period that such cause continues.
12. Warranties
(a) In lieu of all other warranties whether express or implied,
Seller hereby expressly warrants that the Bottles sold to Buyer hereunder shall
be materially free from defects in the workmanship and materials; shall conform
in material respects to the Specifications as may be amended by agreement from
time to time; and in any case shall be suitable for use as containers for
Buyer's beverages. These warranties shall survive acceptance and payment by
Buyer. Seller specifically disclaims all other warranties, including without
limitation all implied warranties of merchantability and fitness for a
particular purpose.
(b) Seller shall not be liable to Buyer, or to any other party, to
the extent that Seller reasonably establishes that claims have resulted from (i)
faulty crowns, or (ii) the failure of Buyer (or any other person, other than a
person engaged or otherwise hired by Seller, from time to
9
<PAGE> 10
time having control or custody of allegedly defective Bottles) to exercise in
accordance with the customary good commercial practice of the trade the proper
degree of care in conveying, warehousing, inspecting, using, packing,
distributing, or storing filled or unfilled Bottles.
(c) Nothing in this Agreement shall be construed to impose upon
Seller liability (i) for consequential damages of any kind, such as lost profits
or lost business, or (ii) for damages and expenses attributable to acts or
omissions of Buyer, its employees or agents, or any parties other than Seller or
its agents or employees.
13. Waiver. No failure or delay on the part of either party in exercising
its right, power or remedy under this Agreement shall operate as a waiver of
such right, power or remedy nor shall any single or partial exercise of any such
right, power or remedy operate as a waiver thereof.
14. Termination. This Agreement may be terminated by either party prior to
the expiration of the initial term of this Agreement or any renewal thereof for
breach of a material provision of this Agreement by either party, provided the
party alleging the breach gives the other party a written notice setting forth
the nature of such breach, and said other party shall have ninety (90) days from
receipt of such notice to cure the breach. If said other party has not secured
the breach within said ninety-day period, this Agreement may be terminated
immediately by the party alleging the breach. Disputes regarding any breach
hereof or the curing of any such breach will be resolved in accordance with
Section 19 hereof.
15. Effect of Termination. In the event of termination of this Agreement
by either party pursuant to the provisions of Section 14 above, Buyer shall be
required to take delivery and pay for all Bottles previously ordered from Seller
unless the notice of termination by Buyer states that such Bottles do not meet
the Specifications therefor. Also, upon termination of this Agreement for any
reason, Seller shall have no further obligation to pay to Buyer any part of the
Cash Payment, and buyer shall immediately repay to Seller any part of the Cash
Payment previously paid by Seller which exceeds the product of (a) $4,200.91,
multiplied by (b) the number of days after the Heileman Closing Date when the
termination occurred.
16. Notices. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given if
personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to Buyer, to: The Stroh Brewery Company
100 River Place
Detroit, Michigan 48207
Attention: Vice President in Charge
of Purchasing
With a copy, at the same address, to the attention of Buyer's General
Counsel;
If to Seller, to: Anchor Glass Container Corporation
4343 Anchor Plaza Parkway
Tampa, Florida 33634
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<PAGE> 11
Attention: Senior Vice President,
Beer Industry
With a copy to: Carlton, Fields, Ward, Emmanuel,
Smith & Cutler, P.A.
One Harbour Place, Fifth Floor
Tampa, Florida 33602
Attention: Edgel C. Lester, Jr.
or to such other address as may hereafter be furnished by the respective party
by notice to the other party in the manner required above. Such notice or
communication shall be deemed to have been effected and received as of the date
personally delivered, or if mailed, three (3) days after the date so mailed.
17. Entire Agreement. This Agreement, including the attached Schedules and
any purchase orders issued by Buyer pursuant to this Agreement, contains the
entire agreement between the parties with respect to the matters covered hereby,
and there are no other agreements, written or oral, with respect to such matters
except as set forth herein. This Agreement may be amended only by a writing duly
executed by each of the parties. This Agreement supersedes all prior agreements
between Buyer and Seller with respect to the sale and purchase of Bottles.
18. Assignability. Neither this Agreement nor any right or obligation
arising hereunder shall be assigned by either party hereto without the prior
written consent of the other party (which consent shall not be unreasonably
withheld) except that the parties agree that no such consent shall be necessary
if either party hereto is a party to a merger or consolidation which results in
the rights and obligations hereunder being transferred, by operation of law, to
a successor company.
19. Dispute Resolution. If the parties hereto are unable to resolve a
disagreement or reach agreement concerning any dispute on any matter, the
parties or either party may refer the matter for good-faith resolution to the
Chief Executive Officers of the parties or other individuals holding comparable
executive positions and who have applicable decision-making authority ("CEO's").
Within 20 days after referral to the CEO's, the CEO's shall meet at a mutually
acceptable time and place to exchange relevant information and attempt to
resolve the disagreement. Resolution of the disagreement by the CEO's shall be
final and binding on the parties.
20. Captions. The captions of the various sections of the Agreement have
been inserted only for the purpose of convenience of reference. Such captions
are not a part of this Agreement and shall not be deemed in any manner to
modify, explain or restrict any provisions of this Agreement.
21. Limit of Authority. Both parties are independent contractors and this
Agreement does not constitute either party as the legal representative of the
other for any purpose whatsoever. Neither party has authority under this
Agreement to assume or create any obligation whatsoever, expressed or implied,
on behalf or in the name of the other party, nor to bind the other in any manner
whatsoever.
22. Confidentiality. Neither party shall, without the written consent of
the other party, disclose the terms or content of this Agreement to any other
person or entity, except employees and
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<PAGE> 12
agents of the party as necessary for the performance or enforcement of this
Agreement, institutions to whom the party has applied for financing, and others
upon the order or demand of any court, tribunal or governmental agency.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.]
THE STROH BREWERY COMPANY ANCHOR GLASS CONTAINER CORPORATION
By: /s/ G. E. Kuehn By: /s/Alfonso Gomez Palacio
---------------------------- ----------------------------
Name: G.E. Kuehn Name: Alfonso Gomez Palacio
--------------------- ---------------------
Title: Senior Vice President Title: President
---------------------
Date: June 17, 1996 Date: June 18, 1996
By: /s/ James K. Malone
----------------------------
Name: James Malone
----------------------
Chairman of the Board
Date: June 18, 1996
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<PAGE> 14
SCHEDULE A
HEILEMAN SUBSIDIARIES
Blitz-Weinherd Brewing Company
Carling National Brewing Company, Inc.
Christian Schmidt Brewing Company
GHB Souvenir Sales, Inc.
Heileman Air Services, Inc.
Heileman Brewing Company, Inc.
Heileman Export Marketing, Inc.
HBC Leasing Company, Inc.
Lone Star Brewing Company, Inc.
Rainier Brewing Company, Inc.
<PAGE> 15
SCHEDULE B
CERTIFICATE
This Certificate has been given by The Stroh Brewery Company, an Arizona
corporation, to Anchor Glass Container Corporation, a Delaware corporation,
pursuant to Section 2 of the Supply Agreement dated June 17, 1996 between Stroh
and Anchor ("Supply Agreement"). Capitalized terms that are used but not defined
herein will have the meanings ascribed to them in the Supply Agreement.
Buyer hereby certifies to Seller that, upon delivery by Seller to Buyer of
the portion of the Cash Payment due upon the Heileman Closing Date, (A) the
Heileman Closing will be consummated and complete, subject to no conditions or
contingencies; (B) Buyer will own all the Heileman Assets, free of any claims by
Heileman, any trustee in bankruptcy for Heileman, any creditors of Heileman or
any other person or entity, excepting only (i) the liens securing loans to Buyer
in the aggregate amount $250,000,000.00, as evidenced by the Credit Agreement
dated on or about the date of the Heileman Closing among Buyer, Stroh, Inc.,
certain subsidiaries of Buyer, certain lending banks named therein, and Morgan
Guaranty as agent and (ii) other liens existing in the ordinary course of
Buyer's business; (C) the sale of the Heileman Assets to Buyer on the Heileman
Closing Date will be permitted by the United States Bankruptcy Court for the
District of Delaware; (D) Buyer will have the full right to produce, bottle and
distribute all the products currently produced, bottled or distributed by the
Transaction Sellers; and (E) all Buyer's representations and warranties in the
Supply Agreement are true and complete on the date of the Heileman Closing.
THE STROH BREWERY COMPANY
By:
-----------------------------
By:
-----------------------------
<PAGE> 16
SCHEDULE C
HEILEMAN BREWERIES AND OTHER PLANTS
La Crosse, Wisconsin,
Baltimore, Maryland,
San Antonio, Texas,
Seattle, Washington,
Portland, Oregon,
Perry, Georgia
<PAGE> 17
SCHEDULED
FY97
FY97 ANCHOR PRICING Rev 3 6/6/97
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D - Page 1
<PAGE> 18
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D - Page 2
<PAGE> 19
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D--Page 3
<PAGE> 20
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D--Page 4
<PAGE> 21
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D--Page 5
<PAGE> 22
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D - page 6
<PAGE> 23
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D - page 7
<PAGE> 24
FY97
Rev 3 6/6/97
FY97 ANCHOR PRICING
PKG STROH P.O. Dividing Standard
DESCRIPTION CODE PART # MOULD PRICE PRICE/GR Unit Cost
--------
*** *** *** *** *** *** *** ***
*** Confidential treatment requested pursuant to Rule 406.
Schedule D - page 8
<PAGE> 25
SCHEDULE E
Primary Cost Components
***
*** Confidential treatment requested pursuant to Rule 406.
<PAGE> 1
Exhibit 10.42
STRATEGIC SUPPLY AGREEMENT
This Strategic Supply Agreement is made to be effective between the
parties hereto as of and from January 1, 1996, by and between Anchor Glass
Container Corporation, a Delaware corporation with offices located at 4343
Anchor Plaza Parkway, Tampa, Florida 33634-7537 ("Seller"), and Bacardi
International Limited, a Bermuda company with offices located at 65 Pitts Bay
Road, Hamilton HM CX, Bermuda ("Buyer").
WITNESSETH:
WHEREAS, Seller and Vitro Envases Norte America, S.A. de C.V. have formed
a strategic alliance to supply the North American glass container needs of
certain members of the Bacardi-Martini group of companies;
WHEREAS, Buyer has been authorized by Bacardi Limited, the ultimate
parent company of the Bacardi-Martini group of companies, to negotiate and enter
into a long-term, strategic supply agreement for the glass container needs of
Castleton Beverage Corporation ("Castleton"), Bacardi Corporation,
Bacardi-Martini Canada, Inc. and Bacardi & Company Limited (these four companies
are hereinafter referred to as the "North American Affiliates");
WHEREAS, Buyer desires to enter into arrangements under which the
North American Affiliates and such other affiliates of the Buyer as Buyer and
Seller may from time to time agree will buy from Seller glass containers to be
used by the purchasing companies in connection with their bottling operations,
all upon and subject to the terms and conditions hereinafter set forth; and
WHEREAS, Seller desires to sell glass containers to the North
American Affiliates and such other affiliates of the Buyer as Buyer and Seller
may from time to time agree, all upon and subject to the terms and conditions
hereinafter set forth;
<PAGE> 2
NOW THEREFORE, in consideration of the foregoing premises and the
mutual promises set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. The following terms, when used in this
Agreement, shall, except where the context otherwise requires, have the
following meanings:
"Added Production Costs" means the additional cost of producing
Bacardi-Martini Products attributable to an Untimely Delivery, including but not
limited to downtime, spoilage and disposal costs.
"Agreement" means this agreement and all exhibits, schedules and
attachments hereto.
"Amortization Rate" means, for any given Specified Glass Container,
a fraction, the numerator of which is the Seller's Mold Cost and the denominator
of which is the Mold Life of such Specified Glass Container.
"Annual Forecast" has the meaning set forth in Article VIII.
"Bacardi-Martini Group" means Bacardi Limited and its direct and
indirect subsidiaries.
"Bacardi-Martini Products" means those products marketed by the
Bacardi-Martini Group for which the Bacardi-Martini Group owns or possesses the
relevant trademarks.
"Base Price" has the meaning set forth in Schedule B.
"Basic Index" has the meaning set forth in Schedule B.
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<PAGE> 3
"Buyer" has the meaning set forth in the first paragraph hereof.
"Castleton" has the meaning set forth in the preamble.
"Change of Control" means a change in the control of Seller or any
Seller's Parent, which shall be deemed to have occurred if (and only if) (a) any
persons other than the stockholders of Seller or any Seller's Parent as of the
date hereof acquire the right, by virtue of their ownership of voting securities
of Seller or the Seller's Parent or otherwise, to elect or designate a majority
of the members of the board of directors of Seller or the Seller's Parent; (b)
Seller's or any Seller's Parent's stockholders approve an agreement to merge or
consolidate with another corporation, unless following the consummation of such
merger or consolidation Seller's or a Seller's Parent's stockholders as of the
date hereof, singly or jointly, have the right, by virtue of their ownership of
voting securities or otherwise, to elect or designate a majority of the members
of the board of directors of the surviving corporation; or (c) Seller's or any
Seller's Parent's stockholders approve an agreement (including a plan of
liquidation) to sell or otherwise dispose of all or substantially all of the
business or assets of Seller or the Seller's Parent to any entity other than an
entity as to which Seller's or a Seller's Parent's stockholders as of the date
hereof, singly or jointly, have the right, by virtue of their ownership of
voting securities or otherwise, to elect or designate a majority of the members
of the board of directors.
"Date of Determination" has the meaning set forth in Schedule B.
"Mold Life" has the meaning set forth in Section 14.2.
"New Glass Containers" means glass containers other than the
Specified Glass Containers.
"North American Affiliates" has the meaning set forth in the
preamble.
"One-Year Period" has the meaning set forth in Section 14.2.
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<PAGE> 4
"Pre-existing Purchase Obligations" means binding contractual
obligations of the Purchasing Affiliates to purchase glass containers from third
party sellers of glass containers during the Startup Period.
"Purchase Order" has the meaning set forth in Article V.
""Purchasing Affiliate" shall mean the North American Affiliates and
such other current or future members of the Bacardi-Martini Group as Buyer and
Seller may from time to time agree in writing.
"Qualification Process" means the procedures required to qualify
Seller as an approved supplier of a particular Specified Glass Container, as
such procedures are set forth in Schedule F.
"Rebate Agreement" has the meaning set forth in Section 26.9.
"Seller" has the meaning set forth in the first paragraph hereof.
"Seller's Mold Cost" has the meaning set forth in Section 14.2.
"Seller's Parent" means any corporation or other entity having the
direct or indirect right, by virtue of its ownership of voting securities or
otherwise, to elect or designate a majority of the members of the board of
directors of Seller.
"Specified Glass Containers" means glass containers the
specifications for which are set forth in Schedule A.
"Startup Period" means the period of time commencing on January l,
1996, and ending on June 30, 1996.
"Territory" means the Bahamas, Canada, and the United States of
America, its territories and possessions (including Puerto Rico) and such other
countries or parts thereof as the Buyer and Seller may from time to time agree
in writing.
4
<PAGE> 5
"Tropicana" means Tropicana Products, Inc., a Delaware corporation.
"Unreflected Cost Reduction" means any reduction in Seller's costs
arising as a result of changes in the design, production, packaging or shipping
of Specified Glass Containers hereunder to the extent the same is not fully
reflected in price reductions resulting from the application of the provisions
of Sections 12.3, 13.2 and 13.3 and Schedule B.
"Untimely Delivery" means a failure by Seller to deliver conforming
Specified Glass Containers within the time limits specified in the applicable
Purchase Order; provided, however, that in no event shall the period applicable
for purposes of determining whether an Untimely Delivery has occurred commence
earlier than the sixtieth (60th) day following the date of the applicable
Purchase Order. In addition, delay due to Force Majeure as set forth in Section
25.1 of this Agreement shall not give rise to an Untimely Delivery. Included
within events giving rise to an Untimely Delivery are deliveries of
nonconforming goods, including Specified Glass Containers not in an amount and
quality as specified in this Agreement and the applicable Purchase Order, even
if such nonconforming delivery is subsequently corrected.
"Vitro Agreement" has the meaning set forth in Section 26.9.
Section 1.2 Cross-References. Unless otherwise specified, references
in this Agreement to any section are references to such section of this
Agreement and, unless otherwise specified, references in any section or
definition to any clause are references to such clause of such section or
definition.
Section 1.3 General Provisions Relating to Definitions. Terms for
which meanings are defined in this Agreement shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may permit or
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The term "including" means including,
5
<PAGE> 6
without limiting the generality of any description preceding such term. Each
reference herein to any person shall include a reference to such person's
successors and permitted assigns. Unless otherwise specified, references to any
agreement, instrument or other document in this Agreement refer to such
agreement, instrument or other document as originally executed or, if
subsequently varied, replaced or supplemented from time to time, as so varied,
replaced or supplemented and in effect at the relevant time of reference
thereto.
ARTICLE II
SUPPLY AND PURCHASE OF GLASS CONTAINERS
Section 2.1 Supply of Glass Containers. Seller shall supply, at the
prices and in accordance with and subject to the other terms and conditions set
forth herein, including the Startup Period provisions of Section 3.4, all
Specified Glass Containers required by the Purchasing Affiliates for use at
facilities located in the Territory in connection with the bottling of
Bacardi-Martini Products.
Section 2.2 Purchase of Glass Containers. Buyer shall cause the
Purchasing Affiliates to purchase from the Seller, at the prices and in
accordance with and subject to the other terms and conditions set forth herein,
including the Startup Period provisions of Section 3.4, all of their
requirements for Specified Glass Containers for use at facilities located in the
Territory in connection with the bottling of Bacardi-Martini Products.
Section 2.3 New Glass Containers. Seller and Buyer agree to
negotiate in good faith with respect to the terms and conditions upon which any
New Glass Containers required by Purchasing Affiliates for use at facilities
located in the Territory in connection with the bottling of Bacardi-Martini
Products may be supplied by Seller and purchased by Purchasing Affiliates
pursuant hereto. Upon agreement between Seller and Buyer with respect to the
terms and
6
<PAGE> 7
conditions upon which any such New Glass Container is to be supplied and
purchased pursuant hereto, (i) appropriate amendments shall be made to the
provisions hereof, including to Schedule A, and (ii) such New Glass Container
shall be qualified in accordance with the Qualification Process set forth in
Schedule F. Upon the successful completion of the Qualification Process, the New
Glass Container which is the subject of such amendments shall thereafter be
deemed for all purposes hereof to be a Specified Glass Container. In the event
that, following such good faith negotiations, Seller and Buyer are unable to
reach agreement with respect to the terms and conditions upon which the New
Glass Container is to be supplied by Seller and purchased by the Purchasing
Affiliates pursuant hereto, Buyer and the Purchasing Affiliates shall thereafter
be free to obtain such New Glass Container from such source or sources, as Buyer
and the Purchasing Affiliates may determine.
ARTICLE III
TERM, RENEWAL AND STARTUP
Section 3.1 Term. The term of this Agreement shall, as between the
parties hereto, commence on January 1, 1996, and shall end on *** .
Section 3.2 First Renewal. The term of this Agreement shall be
renewed without further action by either party for an additional term of two (2)
years, commencing on *** provided, however, that Buyer may terminate this
Agreement as of the end of the initial term by providing notice to Seller not
later than the *** .
Section 3.3 Second and Subsequent Renewals. Beginning ***
the term of this Agreement shall be renewed without further action by either
party for an additional term of *** ; provided, however, that the parties may by
written agreement, executed prior to *** of the then-current term, extend the
term of any such
*** Confidential Treatment request pursuant to Rule 406.
7
<PAGE> 8
renewal to *** . For terms commencing after *** , either party may
terminate this Agreement as of the end of its then-current term by notice given
not later than the*** immediately preceding the date on which the then-current
term ends.
Section 3.4 Startup. During the Startup Period, Buyer shall cause
the Purchasing Affiliates to purchase from the Seller such of their requirements
for Specified Glass Containers as is consistent with their Pre-existing Purchase
Obligations and inventory. Buyer agrees to use its best efforts to increase as
quickly as possible during the Startup Period the share of the Purchasing
Affiliates' requirements for Specified Glass Containers that are purchased from
the Seller.
Section 3.5 Early Termination by Buyer. Buyer shall have the right
to terminate this Agreement by notice to Seller immediately upon the termination
or expiration of the Rebate Agreement and the Vitro Agreement or either one of
them.
ARTICLE IV
EXTENSION OF SCOPE OF AGREEMENT
Upon Buyer's request, Seller agrees, and agrees to cause its
affiliates, to enter into good faith negotiations with Buyer regarding the
extension of the terms of this Agreement to cover glass container needs of
members of the Bacardi-Martini Group other than the North American Affiliates
and glass container needs of members of the Bacardi-Martini Group in countries
outside the Territory. Any such extension of the terms of this Agreement to
which the parties or their affiliates may agree shall be effected by appropriate
written instruments, including if necessary amendments to this Agreement.
Following the extension of the terms of this Agreement to any Specified Glass
Container needs of members of the Bacardi-Martini Group in
*** Confidential Treatment request pursuant to Rule 406.
8
<PAGE> 9
a country outside the Territory, the price payable by Buyer or its affiliates
for Specified Glass Containers supplied by Seller or its affiliates in such
country shall be subject to a *** percent *** discount applicable to all
Specified Glass Containers delivered by Seller or its affiliates to the
Bacardi-Martini Group member(s) in such country during a period commencing on
the date of the delivery of the first shipment of such Specified Glass
Containers, or after the successful completion of the Qualification Process
pursuant to Section 2.3 if applicable, and ending on the date six (6) months
from such date.
ARTICLE V
PURCHASE ORDERS
This Agreement is intended to set forth the terms upon which purchase
orders may be placed by Buyer or the Purchasing Affiliates for Specified Glass
Containers. Each purchase order placed hereunder (a "Purchase Order") shall be
governed by and subject to the terms set forth herein. A Purchase Order is a
written purchase order or a written release placed by a Purchasing Affiliate
with the Seller to purchase a certain number of Specified Glass Containers for
delivery on a date or dates certain. Each Purchasing Affiliate shall use its
best efforts to make its Purchase Orders consistent with the Annual Forecast
then in effect. However, if a conflict regarding quantity, product mix or
delivery date exists between a Purchase Order and the Annual Forecast, the
Purchase Order shall take precedence.
*** Confidential Treatment request pursuant to Rule 406.
9
<PAGE> 10
ARTICLE VI
PRICES
The prices applicable to all Specified Glass Containers to be
supplied by Seller to the Purchasing Affiliates hereunder are set forth in
Schedule B. Such prices are subject to adjustment in accordance with the
provisions set forth in Schedule B. All prices set forth herein are D.D.U. (as
defined in Incoterms 1990) at the Purchasing Affiliate's facilities in, as the
case may be, Jacksonville, Florida, San Juan, Puerto Rico, Nassau, Bahamas, or
Brampton, Ontario.
ARTICLE VII
TERMS OF PAYMENT
Section 7.1 Delivery of Invoices. Invoices shall be submitted by
Seller to the Purchasing Affiliate which received or took delivery of the
Specified Glass Containers which are the subject of the invoice.
Section 7.2 Terms. The invoice payment terms shall be net thirty
(30) days, with a one percent (1%) discount allowed for cash if payment is made
by the tenth day of the month following the month of invoicing.
ARTICLE VIII
ANNUAL FORECAST
Buyer shall cause each Purchasing Affiliate to give notice to Seller
not later than October 31 of each calendar year during the term of this
Agreement of the Purchasing Affiliate's requirements for the following calendar
year, or, in the case of the Purchasing Affiliate's requirements for calendar
year 1996, not later than ten (10) days after the date first written above,
based on good faith projections made by the Purchasing Affiliate, for Specified
Glass Containers
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<PAGE> 11
(each, an "Annual Forecast"). Each Annual Forecast shall state the quantity and
product mix required and the date and location for delivery. The Purchasing
Affiliate may adjust the quantity, product mix, delivery date or location of any
scheduled delivery in the Annual Forecast, without penalty. The Purchasing
Affiliates shall use good faith efforts to make all adjustments to the Annual
Forecast at least ninety (90) days in advance of the delivery date affected by
the adjustment (or at least ninety (90) days in advance of the adjusted delivery
date if sooner).
ARTICLE IX
DELIVERY DATES; SUPPLY DISRUPTION
Section 9.1 Delivery Dates. Delivery dates stated on each Purchasing
Affiliate's Purchase Order shall be the date of receipt of the Specified Glass
Containers at the Purchasing Affiliate's facilities as specified in such
Purchase Order. Seller agrees to use its best efforts to provide deliveries
hereunder on the exact date specified by the relevant Purchasing Affiliate. To
this end, Seller shall use its best efforts to work with local warehousing and
transportation companies that are familiar with the relevant Purchasing
Affiliate in order to ensure timely delivery. Buyer shall cause each Purchasing
Affiliate to assist Seller in providing timely deliveries hereunder by
identifying minimum and maximum inventory levels for each type of Specified
Glass Container required by the Purchasing Affiliate.
Section 9.2 Supply Disruption. Time is of the essence for this
Agreement. Seller shall notify the relevant Purchasing Affiliate immediately in
the event that Seller anticipates any delay in deliveries hereunder to the
Purchasing Affiliate. In the case of supply disruptions affecting Seller's
ability to supply Specified Glass Containers to a particular Purchasing
Affiliate from Seller's primary glass plant for such Purchasing Affiliate as set
forth in Schedule C on a timely basis, Seller shall supply Specified Glass
Containers to such Purchasing Affiliate from a
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<PAGE> 12
secondary glass plant for such Purchasing Affiliate at no additional cost to
Buyer or any Purchasing Affiliate. Furthermore, in preparation for such a
circumstance, Seller shall maintain a spare set of molds for those primary items
set forth in Schedule D hereto and shall run those molds at the secondary glass
plant set forth in Schedule C hereto for such Purchasing Affiliate as often as
is reasonably necessary in order to ensure that the secondary glass plant can
supply the Purchasing Affiliate's needs for those primary items in the event of
a supply disruption at the primary glass plant for the Purchasing Affiliate. In
the event that Seller employs such secondary molds to produce Specified Glass
Containers, Sellers shall adjust the price for any such Specified Glass
Containers to reflect any advance payment made by any Purchasing Affiliate for
such secondary mold pursuant to Section 14.2(a).
Section 9.3 Compensation for Untimely Deliveries. In the event of an
Untimely Delivery, Seller shall compensate the Purchasing Affiliate by paying to
such Purchasing Affiliate an amount equal to the Added Production Costs caused
by such Untimely Delivery.
Section 9.4 Purchases from Alternative Suppliers. With respect to
any delivery hereunder that is seven (7) or more days late, the affected
Purchasing Affiliate may at its option purchase the Specified Glass Containers
from a third party seller of glass containers. Seller agrees to pay the affected
Purchasing Affiliate the positive difference, if any, between the costs
reasonably incurred by the Purchasing Affiliate in purchasing Specified Glass
Containers from such third party seller pursuant to this Section and the costs
that the Purchasing Affiliate would have incurred had Seller timely supplied
Specified Glass Containers in accordance with the Purchase Order. The provisions
of this Section are in addition to, and not by way of limitation of, the
provisions of Section 9.3.
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Section 9.5 Right of Set-Off. Amounts payable by Seller to a
Purchasing Affiliate pursuant to this Article may be set off by the Purchasing
Affiliate and taken as a credit against amounts otherwise owed by such
Purchasing Affiliate to the Seller.
ARTICLE X
DELIVERY
Each Purchasing Affiliate shall take delivery of the Specified Glass
Containers specified in a Purchase Order at the location specified in such
Purchase Order during regular business hours at such location. Specified Glass
Containers delivered more than three (3) working days in advance of schedule are
subject to return at the risk and expense of Seller.
ARTICLE XI
COMMUNICATION AND CONTINUOUS IMPROVEMENT PROGRAM
Section 11.1 Designated Personnel. Seller shall designate for each
Primary Glass Plant as set forth in Schedule C one person employed by Seller to
serve as production coordinator for the Specified Glass Container requirements
of the Purchasing Affiliates under this Agreement. The designated production
coordinator shall devote substantially all of his or her time to the needs of
the Purchasing Affiliates. Seller shall also designate one salesperson employed
by Seller who shall travel to the production facilities of the Purchasing
Affiliates on a regular basis to service the needs of the Purchasing Affiliates.
The designated salesperson shall devote seventy-five percent (75%) of his or her
time to the needs of the Purchasing Affiliates.
Section 11.2 Strategic Partner Service Teams. Seller shall establish
a strategic partner service team for each Primary Glass Plant as set forth in
Schedule C. Each such team shall have a cross-functional representation,
including sales, marketing and scheduling personnel,
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and shall consist of individuals of sufficient seniority to permit them to
respond quickly and directly to requests of the Purchasing Affiliates. The
designated production coordinator and the designated salesperson described in
Section 11.1 shall be members of the strategic partner service teams. These
teams shall meet regularly with representatives of each of the Purchasing
Affiliates. Unless otherwise agreed by the parties, such meetings shall take
place no less frequently than monthly and shall take place at the facilities of
the Purchasing Affiliates. Personnel participating in such meetings shall set
objectives, measure progress and explore opportunities for total system cost
reductions. A Purchasing Affiliate shall have the right to request the presence
of particular Seller personnel at the meetings with its strategic partner
service team, and Seller agrees to use its best efforts to meet such requests.
Section 11.3 Semi-Annual Review Meetings. Seller and Buyer shall,
unless they otherwise agree, meet at least twice each year to review performance
under this Agreement and other matters of mutual interest. These meetings shall
take place at mutually agreed times and locations. Seller's representatives at
such meetings shall include individuals at the senior vice president level.
Buyer shall have the right to request the presence of particular Seller
personnel at these meetings, and Seller agrees to use its best efforts to meet
such requests.
Section 11.4 Annual Review Meeting. Senior management of Buyer and
Seller shall meet once each year to review performance under this Agreement.
This meeting shall take place at a mutually agreed time and location.
ARTICLE XII
DESIGN IMPROVEMENT PROGRAM
Section 12.1 Lightweighting. Seller agrees to undertake a program to
design and develop versions of the Specified Glass Containers that will weigh
less than those currently
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specified in Schedule A. Such program shall seek to make use of the narrow neck
press and blow process to produce lighter weight versions of the Specified Glass
Containers. With respect to any item not suited for narrow neck press and blow,
such program shall seek to develop methods by which such item can be produced by
the blow/blow process at the lightest possible weight. Seller shall be solely
responsible for all costs associated with this development program. Buyer
agrees, and agrees to cause the Purchasing Affiliates, to provide advice to
Seller in support of the program. Costs incurred by Buyer and its affiliates in
connection with such advice shall be borne by them.
Section 12.2 New Products. Seller agrees to provide support to Buyer
and the Purchasing Affiliates in their new product development efforts. Seller's
personnel shall be available to provide support such as, but not limited to,
creative design work, engineering services and technical assistance, subject to
any legal limitations that Seller shall have by law, agreement or otherwise.
Such support by Seller shall be at no cost to Buyer or the Purchasing
Affiliates.
Section 12.3 Pressure Sensitive Label Decorating Capabilities.
Seller agrees to cooperate with Castleton in order to establish
pressure-sensitive label decorating capabilities at either Seller's plant in
Jacksonville, Florida or with outside designers located in Jacksonville, Florida
by the beginning of the first calendar quarter of 1997. Seller shall purchase
and install the equipment necessary to establish such pressure-sensitive label
decorating capabilities, subject to the prior written approval by Castleton of
the cost and design of such equipment. Upon the installation of such
pressure-sensitive label decorating capabilities, and notwithstanding the
provisions of Section 13.1, the prices paid by Castleton hereunder shall be
adjusted so as to afford Castleton the full benefit of savings realized in
freight handling and material costs as a
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result of such pressure-sensitive label decorating capabilities, less an
allowance for the amortization of Seller's capital expenditures for the relevant
decorating equipment.
ARTICLE XIII
SHARING COST REDUCTIONS
Section 13.1 Unreflected Cost Reductions. In the event a particular
Unreflected Cost Reduction neither increases the costs of any member of the
Bacardi-Martini Group nor negatively affects the sales of the Bacardi-Martini
Group, then such Unreflected Cost Reduction shall be shared equally between
Seller and the relevant Purchasing Affiliate. In the event a particular
Unreflected Cost Reduction either increases the costs of the Bacardi-Martini
Group or negatively affects the sales of the Bacardi-Martini Group, then Buyer
shall be allocated such portion of the Unreflected Cost Reduction as is
necessary to fully compensate it for any detriment incurred by the
Bacardi-Martini Group, and the balance of the Unreflected Cost Reduction, if
any, shall be shared equally between Seller and the relevant Purchasing
Affiliate. An appropriate adjustment to achieve the allocation of any
Unreflected Cost Reduction that is contemplated in this Article shall be made in
the prices then payable with respect to orders placed by relevant Purchasing
Affiliates hereunder.
Section 13.2 Packaging. Notwithstanding the provisions of Section
13.1 and Schedule B, paragraph 2, when Castleton converts its facility to enable
Castleton to process in bulk, the prices paid by Castleton hereunder as
specified in Schedule B shall be adjusted so as to afford Castleton the full
benefit of resulting savings by Seller in packaging costs.
Section 13.3 Freight. Notwithstanding the provisions of Section 13.1
and Schedule B, paragraph 2, when Seller changes shippers to reduce Seller's
freight cost for the transportation of Specified Glass Containers from Seller's
facility in Jacksonville, Florida to
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Bacardi Corporation's facility in Puerto Rico, the prices paid by Bacardi
Corporation hereunder as specified in Schedule B shall be adjusted so as to
afford Bacardi Corporation the full benefit of all savings attributable to such
reduced freight cost.
ARTICLE XIV
MOLDS
Section 14.1 Ownership of Molds. All molds used by Seller for the
production of' Specified Glass Containers hereunder (and all rights, title and
interest therein) shall, unless otherwise agreed by the Purchasing Affiliate
that commissioned or delivered such mold, be (a) the sole and exclusive property
of the Purchasing Affiliate that commissioned or delivered such mold; (b) marked
"Property of Bacardi"; and (c) identified as the property of the commissioning
or delivering Purchasing Affiliate in Seller's records. Seller shall cooperate
with the commissioning or delivering Purchasing Affiliate to make such filings
as may be, in the sole judgment of the Purchasing Affiliate, necessary,
appropriate or advisable under applicable law to give third parties proper
notice of the Purchasing Affiliate's ownership of the molds. Seller shall not
use such molds, or allow anyone other than Seller to use such molds, without the
express written consent of the relevant Purchasing Affiliate.
Section 14.2 Commissioned Molds. Purchasing Affiliates may
commission Seller to acquire molds and mold equipment for the production of
Specified Glass Containers, as follows:
(a) In the case of molds and mold equipment acquired for the
expected production and sale of ten thousand (10,000) or more gross units
of Specified Glass Containers within one (1) year of the date when Seller
has acquired the mold and mold equipment for the Specified Glass
Containers (the "One-Year Period"), the
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commissioning Purchasing Affiliate(s) and Seller shall enter into a letter
of intent. Such letter of intent shall state (i) the expected total number
of Specified Glass Containers (expressed in gross terms) that can be
produced with such mold and mold equipment ("Mold Life") and (ii) the cost
to Seller of acquiring the mold and mold equipment ("Seller's Mold Cost").
The commissioning Purchasing Affiliate(s) shall agree in such letter of
intent that in the event that such Purchasing Affiliate(s) does not
purchase Specified Glass Containers in an amount equal to the Mold Life
for such Specified Glass Container before this Agreement, or renewals
thereof, expires or terminates, or such Specified Glass Container is
discontinued, then the commissioning Purchasing Affiliate(s) shall make a
payment to Seller in an amount equal to the product of (i) the
Amortization Rate for the Specified Glass Container multiplied by (ii) the
difference between (A) the total number of gross units of the Specified
Glass Container purchased by the Purchasing Affiliate(s) and (B) the Mold
Life.
(b) In the case of molds and mold equipment acquired for the
expected production and sale of fewer than ten thousand (10,000) gross
units of Specified Glass Containers within one (1) year of the date when
Seller has acquired the mold and mold equipment for the Specified Glass
Containers, Seller may require the commissioning Purchasing Affiliate to
pay in advance such mold costs, as stated in an agreed upon letter of
intent. If the commissioning Purchasing Affiliate makes such an advance
payment, Seller agrees not to include such Mold cost (or an amortization
of such Mold Cost) in the price of such Specified Glass Container.
Section 14.3 Existing Molds. Any Purchasing Affiliate that wishes
Seller to utilize mold equipment currently held by a third party seller of glass
containers shall provide to
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Seller mold engineering prints for such mold equipment. Seller shall make a
determination of whether such mold equipment can be modified and used by Seller
and communicate its conclusions regarding the same to the Purchasing Affiliate.
Section 14.4 Payment for Certain Existing Molds. Seller shall pay to
Tropicana, for and on behalf of Castleton, an amount (not to exceed two hundred
thousand United States dollars ($200,000)) necessary to compensate Tropicana for
unamortized mold life remaining on up to five sets of mold equipment held by
Tropicana in its capacity as a supplier of glass containers to Castleton. Seller
shall thereafter have the right to use the said mold sets if the same are
compatible with Seller's machinery.
Section 14.5 Mold Availability. Seller shall ensure availability of
primary molds (and secondary molds where required in Schedule D) allowing full
production of all Specified Glass Containers by the target dates set forth on
Schedule E. To this end, Seller shall also comply for each Specified Glass
Container with the intermediate target dates set forth on Schedule E for
container design, container engineering, unit mold, mold approval, unit mold
sampling, full set mold and mold to production.
ARTICLE XV
PACKAGING
Seller shall cooperate with each Purchasing Affiliate on an ongoing
basis to reduce packaging material costs. To the extent possible, Seller shall
deliver in bulk using returnable pallets, frames, and tier sheets. For Specified
Glass Container items that cannot be palletized in bulk, each Purchasing
Affiliate shall propose packaging specifications for approval by Seller.
Seller's approval of such proposed packaging specifications shall not be
unreasonably withheld.
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ARTICLE XVI
QUALITY
Section 16.1 Quality. All Specified Glass Containers supplied by
Seller to Purchasing Affiliates hereunder shall be of design and manufacture
approved the Purchasing Affiliate purchasing the same, or its designated agent.
The review or approval by Buyer or the Purchasing Affiliates of any designs,
engineering drawings, quality control procedures, or any other aspect of the
design and manufacture of Specified Glass Containers hereunder shall not relieve
Seller of the responsibility for producing Specified Glass Containers which
comply with all current local, state, and federal governmental specifications
and standards existing at the time of the sale of such Specified Glass
Containers to the Purchasing Affiliates.
Section 16.2 Applicable Standards. Seller is responsible for
producing and delivering Specified Glass Containers which are of good
workmanship and performance and of merchantable quality and fit for the purpose
intended. All Specified Glass Containers sold by Seller to Purchasing Affiliates
hereunder shall meet commercial standards and the quality standards set forth in
Schedule G. Buyer or any Purchasing Affiliate may propose additional quality
standards for mutual consideration and agreement at any time and from time to
time. Seller shall not unreasonably withhold its consent to any such proposed
quality standard. Nothing contained in this Agreement shall relieve in any way
the Seller from its obligation with respect to testing, inspection and quality
control.
Section 16.3 Rights of Inspection. Payment for Specified Glass
Containers delivered hereunder shall not constitute acceptance thereof.
Purchasing Affiliates shall have the right to inspect such Specified Glass
Containers and to reject any Specified Glass Containers which are in the
judgment of the Purchasing Affiliate purchasing the same defective or
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nonconforming. Purchasing Affiliates shall be informed in advance of (i) the
dates of production and (ii) the quantity of Specified Glass Containers to be
produced and shall be entitled to send representatives to be present at the time
such Specified Glass Containers are produced and Seller performs the required
quality checks. Authorized personnel of the Seller may be present at a
Purchasing Affiliate during bottling operations involving Specified Glass
Containers. Specified Glass Containers supplied in excess of five percent (5%)
of the quantities called for herein and all Specified Glass Containers rejected
may be returned to Seller at Seller's expense and, in addition to any other
rights, the Purchasing Affiliate returning the same may charge Seller all
expenses of unpacking, examining, repacking and reshipping such Specified Glass
Containers. Purchasing Affiliates shall have the right to require Seller to
replace defective or nonconforming Specified Glass Containers at the Seller's
expense.
Section 16.4 Unresolved Quality Problems. Should Seller be unable to
solve a quality problem within a reasonable length of time, affected Purchasing
Affiliates may purchase the Specified Glass Containers that are the subject of
the quality problem from a third party seller of glass containers. Seller agrees
to pay the relevant Purchasing Affiliates the positive difference, if any,
between the costs reasonably incurred by the Purchasing Affiliates in purchasing
Specified Glass Containers from such a third party seller pursuant to this
Section and the costs that the Purchasing Affiliates would have incurred had
Seller supplied conforming Specified Glass Containers in accordance with the
terms of this Agreement.
Section 16.5 ISO 9002 Requirements. Seller agrees to work with Buyer
and the Purchasing Affiliates in order to meet ISO 9002 requirements with
respect to Specified Glass Containers to be supplied hereunder.
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ARTICLE XVII
HAZARDOUS CONDITIONS
Section 17.1 Hazardous Conditions. In the event that Seller, Buyer
or any Purchasing Affiliate learns of any issue relating to a potential safety
hazard or unsafe condition in any Specified Glass Container supplied hereunder,
or is advised of such by competent authorities of any government having
jurisdiction over the manufacture, transportation, storage or use of the
Specified Glass Containers, it shall immediately advise the other party by the
most expeditious means of communication. Seller and Buyer shall cooperate, and
Buyer shall cause the Purchasing Affiliates to cooperate, in communicating with
the public and governmental agencies and in correcting any such condition that
is found to exist.
Section 17.2 Public Announcements. Buyer and its affiliates shall
consult with Seller prior to making any statements to the public or to any
governmental agency concerning issues related to safety hazards or unsafe
conditions affecting Specified Glass Containers delivered hereunder except in
circumstances in which a failure to do so would prevent the timely notification
which may be required to be given under an applicable law or regulation. Seller
shall not, except to the extent required by law, make any statement to the
public or to any governmental agency concerning issues related to safety hazards
or unsafe conditions affecting the Specified Glass Containers delivered
hereunder without first obtaining the consent of the Buyer to the making of any
such statement and its contents.
Section 17.3 Expenses of Correction. Expenses associated with the
correction of safety hazards or unsafe conditions caused by or associated with
Specified Glass Containers supplied by Seller hereunder, including reasonable
attorneys' fees and court costs, shall be solely
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<PAGE> 23
Seller's responsibility, subject only to any other arrangement negotiated by the
parties in light of the particular facts and circumstances then existing.
ARTICLE XVIII
CONFIDENTIAL INFORMATION
Each of the parties understands and agrees that information
concerning the business practices and strategies of the other party set forth
herein is confidential to such other party and shall, except as may otherwise be
required by law, only be disclosed to third parties, whether in writing, orally
or by any other means, upon the specific prior written agreement of the other
party. Seller and Buyer agree that any confidential business, financial or
marketing information, including product concepts and names, and any technical
information, including engineering and manufacturing know-how, data, and designs
(including appearance designs), whether written, oral, or in the form of
drawings; photographs, electronic media or any other medium, furnished by either
party or its affiliates to the other party or its affiliates under this
Agreement shall be deemed to be proprietary to the person furnishing such
information and shall be maintained in confidence by the party receiving such
information and its affiliates. Buyer agrees to procure the compliance of the
Purchasing Affiliates with the terms of this Article.
ARTICLE XIX
INTELLECTUAL PROPERTY
Section 19.1 No Infringement. Seller hereby represents that, to the
best of its knowledge, there are no third-party patent, trade secret, trademark,
copyright or other intellectual
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property rights which would be infringed by the manufacture, use, or sale of the
Specified Glass Containers to be supplied hereunder.
Section 19.2 Defense of Infringement Actions. Seller will defend any
suit or proceeding brought against Buyer, any Purchasing Affiliate, or any of
their customers based on a claim that the manufacture, use, or sale of any
Specified Glass Containers supplied by the Seller hereunder constitutes an
infringement of any patent, trade secret, trademark, copyright, or other
intellectual property, provided Seller is notified in writing and given
authority, information, and assistance (at Seller's expense) for the defense of
same, and shall pay all damages and costs awarded in connection therewith
against Buyer, any Purchasing Affiliate or any of their customers.
ARTICLE XX
PRODUCT LIABILITY
Section 20.1 Indemnification. Seller agrees to protect, defend, hold
harmless, indemnify, and reimburse Buyer, the Purchasing Affiliates and their
distributors, dealers, affiliates, insurers, and customers during the term of
this Agreement and at all times thereafter for any and all costs and expenses
(including reasonable attorneys' fees and expenses, overhead, settlements,
judgments, and court costs) arising out of or related to any liability, demand,
lawsuit, or claim alleging or asserting, in whole or in part, (a) any failure of
Specified Glass Containers supplied hereunder to comply with applicable
specifications, warranties, and certifications under this Agreement; (b) the
negligence or fault of Seller in design, testing, development or manufacture, or
otherwise, with respect to Specified Glass Containers supplied hereunder; or,
(c) with respect to Specified Glass Containers supplied hereunder or any parts
thereof, product liability, strict liability, or any variation thereof.
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Section 20.2 Insurance. Seller shall maintain, at its own
expense, appropriate insurance in the amount of at least *** United States
dollars *** per occurrence for injury, death, or property damage and shall
name Buyer and each Purchasing Affiliate as a co-insured party. Satisfactory
evidence thereof by copy of certificate of insurance shall be submitted annually
to Buyer upon the request of Buyer or any Purchasing Affiliate. Such insurance
shall be carried during the term of this Agreement, including extensions
thereof, and for at least three (3) years thereafter.
ARTICLE XXI
PRODUCT RECALL
In the event that any of the Specified Glass Containers supplied
hereunder is found by Seller, Buyer, any Purchasing Affiliate or any
governmental agency or court having jurisdiction to contain a defect, serious
quality or performance deficiency, or not to be in compliance with any standard
or requirement so as to require or make it advisable to recall such Specified
Glass Container, Seller shall promptly communicate all relevant facts to Buyer
and the relevant Purchasing Affiliate and undertake all necessary or appropriate
corrective actions, including those required to meet all obligations imposed by
applicable law, rules and regulations, and shall file all necessary papers,
corrective action programs, and other related documents; provided, however, that
Buyer and any relevant Purchasing Affiliate shall cooperate with and assist
Seller in any such filings and corrective actions. Nothing contained in this
Article shall preclude Buyer and the Purchasing Affiliates from taking such
action as may be required of them under any applicable law, rule or regulation.
*** Confidential Treatment request pursuant to Rule 406.
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ARTICLE XXII
WARRANTIES
Seller represents and warrants the following:
Section 22.1 Good Title. Seller will convey to the Purchasing
Affiliates good title to all Specified Glass Containers sold under this
Agreement. All Specified Glass Containers delivered to Purchasing Affiliates by
Seller under this Agreement shall be free and clear of any and all security
interests, liens and encumbrances.
Section 22.2 Conformance to Plans and Specifications. All Specified
Glass Containers delivered to Purchasing Affiliates by Seller under this
Agreement will conform to all agreed plans and specifications.
Section 22.3 Merchantability and Fitness for Intended Use. All
Specified Glass Containers delivered to Purchasing Affiliates by Seller under
this Agreement will be of merchantable quality and fit for their designated
uses.
Section 22.4 Asbestos, PCBs, and CFCs Certification. Specified Glass
Containers supplied by Seller hereunder will not contain asbestos or PCBs and
will not in any event be manufactured with CFCs.
ARTICLE XXIII
SURVIVAL
The provisions of Articles XVII, XVIII, XIX, XX, XXI and XXII shall
survive any termination or expiration of this Agreement and continue in full
force and effect thereafter.
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ARTICLE XXIV
NON-WAIVER OF DEFAULT
The failure or delay of Buyer or any Purchasing Affiliate in
enforcing any provision of this Agreement shall not operate thereafter as a
waiver of that provision or any other provision hereof.
ARTICLE XXV
FORCE MAJEURE
Section 25.1 Failure to Perform. Seller's failure to perform its
obligations under this Agreement shall be excused when such performance is
impracticable due to causes beyond Seller's control, including such causes as
national disasters, wars, inability to secure raw materials, acts of God, and
governmental or judicial regulations or orders. Seller shall give prompt written
notice to Buyer and any affected Purchasing Affiliate of the occurrence of any
such event which may make Seller's performance impracticable. Upon receipt of
any such notice, any affected Purchasing Affiliate shall have the right to make
other arrangements to assure itself of a steady supply of Specified Glass
Containers or substitutes therefor sufficient to meet its requirements.
Section 25.2 Costs. In the event Seller is unable to perform its
obligations and a Purchasing Affiliate invokes its right pursuant to this
Article to make other arrangements to assure itself of a steady supply of
Specified Glass Containers or substitutes therefor sufficient to meet its
requirements, Seller agrees to pay the affected Purchasing Affiliate the
positive difference, if any, between the costs reasonably incurred by the
Purchasing Affiliate in purchasing Specified Glass Containers from such a third
party seller pursuant to this Section and the costs that the Purchasing
Affiliate would have incurred had Seller supplied conforming
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Specified Glass Containers in accordance with the terms of this Agreement
without regard to the provisions of Section 25.1.
Section 25.3 Cessation. Upon cessation of causes excusing
performance by Seller, this Agreement shall continue in full force and effect
for the remainder of its term.
ARTICLE XXVI
MISCELLANEOUS
Section 26.1 Notices. All notices required or desired to be given
hereunder shall be in writing and shall be sent by (a) registered or certified
mail, return receipt requested, postage prepaid, (b) a reputable overnight
courier service, or (c) facsimile transmission. Notices shall be addressed as
follows:
(a) If to Buyer:
Bacardi International Limited
65 Pitts Bay Road
Hamilton HM-CX
Bermuda
Attention: President
Fax: 441-292-0562
and
Alfonso Mendez
Central Packaging Manager
Castleton Beverage Corporation
P.O. Box 26368
Jacksonville, Florida 32226
USA
(b) If to Seller:
Anchor Glass Container Corporation
4343 Anchor Plaza Parkway
Tampa, Florida 33634-7537
Attention: Brad Tucker
Fax: (813) 882-7795
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(c) If to any Purchasing Affiliate:
at the address for such Purchasing Affiliate set forth
on Schedule H hereto
and
Alfonso Mendez
Central Packaging Manager
Castleton Beverage Corporation
P.O. Box 26368
Jacksonville, Florida 32226
USA
or to such other address as either party shall designate for itself or its
affiliates by notice to the other. Any notice given by Seller hereunder shall be
given to Buyer and each Purchasing Affiliate. Notices given in accordance with
the requirements of this Section shall be deemed given (a) seven days after
mailing if given by mail, (b) on the next regular business day in the
jurisdiction to which such notice is addressed following delivery of the notice
to an authorized representative of an overnight courier service if given by
overnight courier service, and (c) on the next regular business day in the
jurisdiction to which such notice is addressed following confirmed facsimile
transmission of the notice.
Section 26.2 Assignment. Neither this Agreement nor any of the
rights or interests of Buyer or Seller hereunder may be assigned, transferred,
or conveyed by operation of law or otherwise without the prior written consent
of the other party, except to a parent or subsidiary thereof, in which event the
party so assigning shall remain obligated and liable to the other party for the
full and complete performance of this Agreement by the parent or subsidiary to
which this Agreement is assigned.
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Section 26.3 ***
Section 26.4 Law and Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
regardless of the laws that might govern under that state's principles of
conflicts of laws. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association in effect at the time
such arbitration is instituted. The arbitration panel shall be composed of three
arbitrators, one of whom shall be chosen by Buyer, one of whom shall be chosen
by Seller, and one of whom shall be chosen by the two arbitrators previously
designated. If both or either Buyer and/or Seller fails to choose an arbitrator
within fourteen (14) days after receiving notice of commencement of arbitration
or if the two arbitrators fail to choose a third arbitrator within fourteen (14)
days of their appointment, such arbitrators shall be chosen by the American
Arbitration Association. Unless the parties to the arbitration shall otherwise
agree, the place of arbitration shall be Washington, D.C., and the arbitration
shall be conducted in the English language. The
*** Confidential Treatment request pursuant to Rule 406.
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arbitration award shall be final and binding upon the parties thereto and may be
entered in any court having jurisdiction.
Section 26.5 Survival of Rights of Parties. The termination or
expiration of this Agreement shall not release either party from any liability,
obligation, or agreement which, pursuant to any provision of this Agreement, is
to survive or be performed after such termination or expiration.
Section 26.6 Subject Headings. The subject headings in this
Agreement have been placed herein for the convenience of the parties and shall
not be considered in any question of interpretation or construction of this
Agreement.
Section 26.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same instrument.
Section 26.8 Amendments. 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 whom the enforcement of such change,
waiver, discharge, or termination is sought.
Section 26.9 Entire Agreement. All prior understandings, agreements,
and negotiations had by and between the parties hereto are merged in this
Agreement, which alone constitutes the entire agreement of the parties. The
parties, together with Vitro Envases Norte America, S.A. de C.V., are
simultaneously herewith entering into an agreement regarding rebates to be paid
by Seller and Vitro Envases Norte America, S.A. de C.V. on sales of glass
containers to the Bacardi-Martini Group hereunder (the "Rebate Agreement") and
under that certain Strategic Supply Agreement, of even date herewith (the "Vitro
Agreement"), between
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Bacardi-Martini (Monaco) S.A.M. and Vitro Envases Norte America, S.A. de C.V.
The Rebate Agreement and this Agreement constitute the entire agreement between
the parties relative to the supply of Specified Glass Containers by Seller to
Buyer and the Purchasing Affiliates.
Section 26.10 Breach of Rebate Agreement. A breach of the Rebate
Agreement shall be a breach of this Agreement and shall give rise in Buyer and
the Purchasing Affiliates to all such rights and remedies as Buyer and the
Purchasing Affiliates would have if the terms of the Rebate Agreement were set
out and incorporated in their entirety herein.
Section 26.11 Purchasing Affiliates. The Purchasing Affiliates are
intended beneficiaries of the rights accorded Buyer under this Agreement and
each Purchasing Affiliate shall have the right to enforce any such right
directly against Seller without the need to join Buyer in any such action.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the date(s) and places
set forth below.
SELLER: BUYER:
ANCHOR GLASS CONTAINER BACARDI INTERNATIONAL
CORPORATION LIMITED
/s/ Eduardo M. Cutillas
/s/ Alfonso Gomez Palacio
By: Eduardo M. Cutillas
By: Alfonso Gomez Palacio ------------------------
------------------------
Title: Director
Title: President and CEO ------------------------
------------------------
Date: September 6, 1996
Date: August 27, 1996 ------------------------
------------------------
Executed In: Hamilton, Bermuda
Executed In: Tampa, Florida ------------------
------------------ City, State
City, State
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STRATEGIC SUPPLY AGREEMENT
dated as of January 1, 1996,
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule A
Specifications for Specified Glass Containers:
Attached hereto are blueprint specifications corresponding with the following
blueprint codes:
***
*** Confidential Treatment request pursuant to Rule 406.
<PAGE> 34
Schedule A
(cont'd)
***
*** Confidential Treatment request pursuant to Rule 406.
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STRATEGIC SUPPLY AGREEMENT
dated as of Jan. 1, 1996,
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule B
Prices and Price Adjustments:
1. Prices for Specified Glass Containers.
Prices for Specified Glass Containers ordered during 1996 are set forth
below. For purposes of the price adjustment provisions of Section 2 of this
Schedule B, Invoice Price shall be referred to as the "Base Price."
***
*** Confidential Treatment request pursuant to Rule 406.
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Schedule B
(cont'd)
***
*** Confidential Treatment request pursuant to Rule 406.
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<PAGE> 37
Schedule B
(cont'd)
***
*** Confidential Treatment request pursuant to Rule 406.
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Schedule B
(cont'd)
***
*** Confidential Treatment request pursuant to Rule 406.
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2. Price Adjustments.
***
*** Confidential Treatment request pursuant to Rule 406.
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STRATEGIC SUPPLY AGREEMENT
dated as of Jan. 1, 1996,
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule C
Primary and Secondary Glass Plants:
<TABLE>
<CAPTION>
Bacardi-Martini Bacardi & Company
Castleton Bacardi Corporation Canada, Inc. Limited
--------- ------------------- --------------- -----------------
<S> <C> <C> <C> <C>
Primary Glass *** *** *** ***
Plan
Secondary Glass *** *** *** ***
Plan
</TABLE>
*** Confidential Treatment request pursuant to Rule 406.
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STRATEGIC SUPPLY AGREEMENT
dated as of January 1, 1996,
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule D
Primary items for which secondary molds are to be maintained:
Description Anchor Glass Container Code
- ----------- ---------------------------
(AGCC Item)
*** ***
*** Confidential Treatment request pursuant to Rule 406.
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STRATEGIC SUPPLY AGREEMENT
dated as of Jan. 1, 1996,
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule E
Primary and Secondary Mold Availability:
Bacardi Bacardi-Martini Bacardi &
Castleton Corporation Canada, Inc. Company Limited
--------- ----------- ------------ ---------------
Primary Mold
Availability *** *** *** ***
Secondary Mold *** *** *** ***
Availability
*** Confidential Treatment request pursuant to Rule 406.
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STRATEGIC SUPPLY AGREEMENT
dated as of Jan. 1, 1996,
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule F
Qualification Process:
A. Seller shall submit two samples of each cavity to the applicable
Purchasing Affiliate.
1. These units will be checked for dimensional verification as per
blueprint
2. These units will also be checked for capacity verification as per
blueprint
B. After the submitted units have passed the first step, Seller shall supply
Specified Glass Containers on the following schedule:
1. For the first run, one truckload shall be scheduled, but only the
first four pallets shall be run to verify the quality and
performance of the product.
2. If the first four pallets run well, then the balance of the
truckload shall be run.
3. After the first truckload is run successfully, then 10,000 cases
shall be scheduled to be run. This production will be supervised as
per the incoming inspection procedure.
4. If there are no rejections in the first 10,000 cases, a second
10,000 cases shall be scheduled and run.
5. If there are no rejections in the first 20,000 cases then a third
run shall be scheduled for 10,000 cases.
C. If there are no rejections of the Specified Glass Containers after 30,000
cases, then the Seller will be an approved supplier.
D. If at any time Seller's quality constantly drops below Buyer's standards,
Buyer may requalify Seller, at the Buyer's option.
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STRATEGIC SUPPLY AGREEMENT
dated as of January 1, 1996
between
Anchor Glass Container Corporation
and
Bacardi International Limited
Schedule G
Quality Standards:
Seller shall inspect each batch of Specified Glass Containers and shall submit
to the Purchasing Affiliate a declaration for each batch that Seller has
inspected such batch under procedures and frequencies at least as strict as
Military Standard 105E, Inspection Level II as amplified by Part I below. Seller
shall identify each batch of Specified Glass Containers according to its date of
production and Seller's identification procedures.
1. Definition and Acceptable Quality Level (AQL) for Defect
Classification
1.1 CRITICAL DEFECTS
Defects that could potentially harm the health of the consumer
as a result of the presence inside the bottles of glass chips
or other foreign bodies and substances, or that cause the
product to become dangerous to health or inconsumable. These
critical defects include but are not limited to:
a. Overpressed Finish - The inside of the finish is pulled
up and extends over the sealing surface.
AQL - No tolerance
b. Press Up Flange - When the inside of the finish is
"pulled up" on the inner lip of the finish, creating a
moderately sharp inner edge. Very similar to
"over-press".
AQL - No tolerance
c. Birdswing - A thin string of glass which extends from
side to side or at the base of the glassware. Could
break into the product.
d. AQL - No tolerance
e. Checks and Slit Finish - An actual break in the finish
which may or may not break off.
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AQL - No tolerance
f. Choked Necks - The inside diameter is smaller than the
Purchasing Affiliate's filler tube due to excess glass.
AQL - No tolerance
g. Chipped Sealing Surface - Where a piece of glass is
broken off or still sitting on the sealing surface. It
could fall into the product.
AQL - No tolerance
h. Slug Necks - Excess glass on only one side of the neck
preventing the filler tube from entering straight.
AQL - No tolerance
i. Contamination - When received, bottles shall be clean
and free of foreign material that would contaminate the
product.
AQL - No tolerance
j. Unfilled Finish - Bottles which are not completely
formed cause problems on the line.
AQL - No tolerance
k. Unfilled Sharp Handle - A 1.75 liter handle has a rough
edge. A consumer could get cut.
AQL - No tolerance
l. Stuck Glass - (inside bottle) - A piece of glass which
has fallen into the bottle.
AQL - No tolerance
1.11 MAJOR DEFECTS
Those defects that cause or could cause inconveniences or
interruptions along the bottling lines; those defects that
make the bottle unusable, illegal or unmarketable, and could
cause breakage of accidents, or alteration of the
13
<PAGE> 46
product as a result of inadequate sealing. These include but
are not limited to:
a. Rocker Bottom - A sunken bottom which extends below the
bearing surface, causing the bottle to rock.
AQL - 0.65
b. Leaner - A bottle which leans from the heal parting away
from the vertical line.
AQL - 0.65
c. Bent Neck - A bottle which leans away from the base of
the parting vertical line.
AQL - 0.65
d. Soft Blister - An air bubble which is on the surface of
the bottle and can be broken very easily.
AQL - 0.65
e. Cocked Finish - The whole finish is tilting away from
the parting vertical line, but only from the transfer
bead up.
AQL - 0.65
f. Chipped Beads - Where a piece of glass has broken off
the transfer bead.
AQL - 0.65
g. Stones - Irregularly shaped pieces of refractory
material or unmelted material which can also cause the
bottle to crack.
AQL - 0.65
h. Stuck Glass - Bottles which stick together on the
outside surface, giving it a rough cutting edge.
AQL - 0.65
i. Blow Out - Where the bottle has a thin spot condition.
14
<PAGE> 47
AQL - 0.65
j. Cracked Bottom - A bottle which is cracked on the
bottom.
AQL - 0.65
k. Checked Handle Base - 1.75 liter handles which have a
cracked handle base.
AQL - 0.65
l. Dip Finish - The sealing surface dips down a maximum of
0.015" from its surface parting line.
AQL - 0.65
1.111 MINOR DEFECTS
Those that affect the aesthetic appearance of bottles, without
in any way affecting the product's quality or causing
interruptions during bottling. This could include but are not
limited to:
a. Seed - Air bubbles of glass embedded in the glass,
caused in the operation process.
AQL - 2.5
b. Hard Blister - Air bubbles embedded well within the
middle of the glass walls. It is more of an appearance
problem.
AQL - 2.5
c. Body Marks - Marks which appear in the exterior surface
of the bottle, causing a poor appearance.
AQL - 2.5
d. Bottles Packed Wrong Way - If the 1.75 liter handle is
packed the wrong way it cannot run on the line.
AQL - 2.5
e. Swung Baffle - A baffle seam that extends too far away
from the center of the bottom which in turn could cause
thin glass.
AQL - 2.5
15
<PAGE> 48
f. Out of Round - Bottles that are not round, but oval
shaped, maximum out of round is 0.047".
AQL - 2.5
g. Heavy Offset Seam - Where the molds meet and pronounced
seam is manufactured from the blank or finished bottle
mold seam, making it a poor package appearance. Limit
samples are needed.
AQL - 2.5
2. BREAKAGE
Any breakage on the production line, except those due to
depalletization operations, shall not exceed 0.2/1000 of the bottles used on a
daily basis.
16
<PAGE> 49
STRATEGIC SUPPLY AGREEMENT
dated as of Jan. 1, 1996,
between
Anchor Glass Container Corporation and
Bacardi International Limited
Schedule H
Notice address for Purchasing Affiliates:
(a) Castleton Beverage Corporation
12200 North Main Street
Jacksonville, Florida 32228
U.S.A.
P.O. Box 26368
Jacksonville, Florida 32226-6368
U.S.A.
Attention: President
Fax: 904-751-1397
(b) Bacardi Corporation
Highway 165, Kilometer 2.6
Bayview Industrial Area
Catano, Puerto Rico 00962
P.O. Box 363549
San Juan, Puerto Rico 00936-3549
Attention: President
Fax: 809-788-5075
(c) Bacardi-Martini Canada, Inc.
1000 Steeles Avenue E
Brampton, Ontario L65 IA1
Canada
Attention: President
Fax: 905-451-1941
(d) Bacardi & Company Limited
Millar Road
P.O. Box N-4880
Nassau
Bahamas
Attention: President
Fax: 809-362-1415
17
<PAGE> 1
Exhibit 10.47
REBATE AGREEMENT
This Rebate Agreement is made to be effective between the parties
hereto as of and from January 1, 1996, by and between Anchor Glass Container
Corporation, a Delaware corporation with offices located at 4343 Anchor Plaza
Parkway, Tampa, Florida 33634-7537 ("Anchor"), Vitro Envases Norte America, S.A.
de C.V., a Mexican corporation with offices located at Avenida Ricardo Margain,
440 Garza Garcia, Nuevo Leon, Mexico C.P. 66265 ("Vitro"), Bacardi International
Limited, a Bermuda company with offices located at 65 Pitts Bay Road, Hamilton
HM CX, Bermuda ("BIL"), and Bacardi-Martini (Monaco) S.A.M., a Monagasque
corporation with offices located at Le Monte-Carlo Sun, 74 Boulevard d'ltalie,
MC- 98011, Monaco Cedex ("Bacardi Monaco").
WITNESSETH:
WHEREAS, Anchor and Vitro have formed a strategic alliance to supply
the North American glass container needs of certain members of the
Bacardi-Martini group of companies;
WHEREAS, BIL has been authorized by Bacardi Limited, the ultimate
parent company of the Bacardi-Martini group of companies ("BL"), to negotiate
and enter into a long-term, strategic supply agreement for the glass container
needs of the BIL-Covered Affiliates (as hereinafter defined);
WHEREAS, Bacardi Monaco has been authorized by BL to negotiate and
enter into a long-term, strategic supply agreement for the glass container needs
of the Bacardi Monaco-Covered Affiliates (as hereinafter defined);
WHEREAS, BIL and Anchor are, simultaneously herewith, entering into
a Strategic Supply Agreement (the "Anchor Agreement") pursuant to which Anchor
will supply the
<PAGE> 2
glass container needs of the BIL-Covered Affiliates and such other affiliates of
BIL as BIL and Anchor may from time to time agree;
WHEREAS, Bacardi Monaco and Vitro are, simultaneously herewith,
entering into a Strategic Supply Agreement (the "Vitro Agreement"; together with
the Anchor Agreement, the "Supply Agreements") pursuant to which Vitro will
supply the glass container needs of the Bacardi Monaco-Covered Affiliate and
such other affiliates of Bacardi Monaco as Bacardi Monaco and Vitro may from
time to time agree;
WHEREAS, Anchor and Vitro (together, the "Sellers") have offered, as
an inducement to BIL and Bacardi Monaco (together, the "Buyers") to enter into
the Supply Agreements, to provide rebates, based on group-wide purchases of
glass containers under the Supply Agreements, to the affiliates of BIL and
Bacardi Monaco from time to time purchasing glass containers pursuant to the
Supply Agreements;
WHEREAS, the parties now desire to set forth their agreement as to the
terms upon which such rebates will be paid;
NOW THEREFORE, in consideration of the foregoing premises and the
mutual promises set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Section 1.1 Defined Terms. The following terms, when used in this
Agreement, shall, except where the context otherwise requires, have the
following meanings:
"Agreement" means this agreement and all exhibits, schedules and
attachments hereto.
<PAGE> 3
"Anchor" has the meaning set forth in the first paragraph hereof.
"Anchor Agreement" has the meaning set forth in the preamble.
"Annual Base Amount" means, for Measurement Year 1996, *** . For
Measurement Years subsequent to 1996, Annual Base Amount means the number of
glass containers (expressed in gross terms) shipped during the immediately
preceding Measurement Year to all Purchasing Affiliates.
"Annual Volume Rebate" has the meaning set forth in Article II.
"Annual Rebate Notice" has the meaning set forth in Section 3.4.
"Bacardi Monaco" has the meaning set forth in the first paragraph.
"Bacardi Monaco-Covered Affiliates" means Bacardi y Compania, S.A.
de C.V., together with such other members of the Bacardi-Martini Group as may
from time to time purchase glass containers pursuant to the Vitro Agreement.
"Bacardi Monaco-Covered Affiliate Average Annual Invoice Price"
means, for any Measurement Year, the total price stated on all of the invoices
issued by Sellers to Bacardi Monaco-Covered Affiliates during the Measurement
Year divided by the total number of glass containers that were the subject of
those invoices.
"Bacardi Monaco-Covered Affiliate Annual Volume Rebate" means an
amount equal to the percentage set forth in Schedule C of the product of (i) the
Bacardi Monaco-Covered Affiliate Average Annual Invoice Price for the
Measurement Year, multiplied by (ii) the Bacardi Monaco-Covered Affiliate Excess
Volume for such Measurement Year.
"Bacardi Monaco-Covered Affiliate Base Amount" means, for
Measurement Year 1996, *** . For Measurement Years subsequent to 1996,
the Bacardi Monaco-Covered
*** Confidential treatment requested pursuant to Rule 406.
<PAGE> 4
Affiliate Base Amount means the number of glass containers (expressed in gross
terms) shipped during the immediately preceding Measurement Year to all Bacardi
Monaco-Covered Affiliates.
"Bacardi Monaco-Covered Affiliate Excess Volume" means (i) the
number of glass containers (expressed in gross terms) shipped during a
Measurement Year to all Bacardi Monaco-Covered Affiliates less (ii) the Bacardi
Monaco-Covered Affiliate Base Amount for the Measurement Year; provided, that in
no event shall the Bacardi Monaco-Covered Affiliate Excess Volume be less than
zero (0). For the avoidance of doubt, the parties acknowledge and agree that no
adjustment is to be made in determining the Bacardi Monaco-Covered Affiliate
Excess Volume by virtue of the addition of new Purchasing Affiliates to this
Agreement.
"Bacardi Monaco-Covered Affiliate Percentage Increase" means (i) the
quotient of (A) one hundred (100), divided by (B) the number of glass containers
(expressed in gross terms) shipped to a Bacardi Monaco-Covered Affiliate during
the year immediately preceding the Measurement Year, multiplied by (ii) the
positive difference, if any, between (A) the number of glass containers
(expressed in gross terms) shipped to such Bacardi Monaco-Covered Affiliate
during the Measurement Year less (B) the number of glass containers (expressed
in gross terms) shipped to such Bacardi Monaco-Covered Affiliate during the year
immediately preceding the Measurement Year. For Measurement Year 1996, the
number of glass containers (expressed in gross terms) shipped to each Bacardi
Monaco-Covered Affiliate during the year immediately preceding the Measurement
Year, i.e., 1995, is set forth in Schedule A. For the avoidance of doubt, where
the number of glass containers shipped to a Bacardi Monaco-Covered Affiliate
during the Measurement Year is less than the number of glass containers shipped
to such Bacardi Monaco-Covered Affiliate during the year immediately preceding
the Measurement Year, the Percentage Increase for such Bacardi Monaco-Covered
Affiliate is zero (0).
"Bacardi Monaco-Covered Affiliate Share" has the meaning set forth
in
<PAGE> 5
Section 3.2.
"Bacardi-Martini Group" means Bacardi Limited and its direct and
indirect subsidiaries.
"Bacardi-Martini Products" means those products marketed by the
Bacardi-Martini Group for which the Bacardi-Martini Group owns the relevant
trademarks.
"BIL" has the meaning set forth in the first paragraph hereof.
"BIL-Covered Affiliates" means Castleton Beverage Corporation,
Bacardi Corporation, Bacardi-Martini Canada, Inc., and Bacardi & Company
Limited, together with such other members of the Bacardi-Martini Group as may
from time to time purchase glass containers pursuant to the Anchor Agreement.
"BIL-Covered Affiliate Average Annual Invoice Price" means, for any
Measurement Year, the total price stated on all of the invoices issued by
Sellers to BIL-Covered Affiliates during the Measurement Year divided by the
total number of glass containers that were the subject of those invoices.
"BIL-Covered Affiliate Annual Volume Rebate" means an amount equal
to the percentage set forth in Schedule D of the product of (i) the BIL-Covered
Affiliate Average Annual Invoice Price for the Measurement Year, multiplied by
(ii) the BIL-Covered Affiliate Excess Volume for such Measurement Year.
"BIL-Covered Affiliate Base Amount" means, for Measurement Year
1996, *** . For Measurement Years subsequent to 1996, the BIL-Covered
Affiliate Base Amount means the number of glass containers (expressed in gross
terms) shipped during the immediately preceding Measurement Year to all
BIL-Covered Affiliates.
*** Confidential treatment requested pursuant to Rule 406.
<PAGE> 6
"BIL-Covered Affiliate Excess Volume" means (i) the number of glass
containers (expressed in gross terms) shipped during a Measurement Year to all
BIL-Covered Affiliates less (ii) the BIL-Covered Affiliate Base Amount for the
Measurement Year; provided, that in no event shall the BIL-Covered Affiliate
Excess Volume be less than zero (0). For the avoidance of doubt, the parties
acknowledge and agree that no adjustment is to be made in determining the
BIL-Covered Affiliate Excess Volume by virtue of the addition of new Purchasing
Affiliates to this Agreement.
"BIL-Covered Affiliate Percentage Increase" means (i) the quotient
of (A) one hundred (100), divided by (B) the number of glass containers
(expressed in gross terms) shipped to a BIL-Covered Affiliate during the year
immediately preceding the Measurement Year, multiplied by (ii) the positive
difference, if any, between (A) the number of glass containers (expressed in
gross terms) shipped to such BIL-Covered Affiliate during the Measurement Year
less (B) the number of glass containers (expressed in gross terms) shipped to
such BIL-Covered Affiliate during the year immediately preceding the Measurement
Year. For Measurement Year 1996, the number of glass containers (expensed in
gross terms) shipped to each BIL-Covered Affiliate during the year immediately
preceding the Measurement Year, i.e., 1995, is set forth in Schedule A. For the
avoidance of doubt, where the number of glass containers shipped to a
BIL-Covered Affiliate during the Measurement Year is less than the number of
glass containers shipped to such BIL-Covered Affiliate during the year
immediately preceding the Measurement Year, the Percentage Increase for such
BIL-Covered Affiliate is zero (0).
"BIL-Covered Affiliate Share" has the meaning set forth in Section
3.3.
"BL" has the meaning set forth in the preamble.
"Buyers" has the meaning set forth in the preamble.
<PAGE> 7
"Excess Volume" means (i) the number of glass containers (expressed
in gross terms) shipped during a Measurement Year to all Purchasing Affiliates
less (ii) the Annual Base Amount for the Measurement Year; provided, that in no
event shall Excess Volume be less than zero (0). For the avoidance of doubt, the
parties acknowledge and agree that no adjustment is to be made in determining
Excess Volume by virtue of the addition of new Purchasing Affiliates to this
Agreement.
"Measurement Year" means the calendar year during which the number
of glass containers shipped to the Purchasing Affiliates is measured to
determine the Annual Volume Rebate.
"Purchasing Affiliate" shall mean the BIL-Covered Affiliates, the
Bacardi Monaco-Covered Affiliates, and such other members of the Bacardi-Martini
Group as may from time to time purchase glass containers pursuant to either or
both of the Supply Agreements.
"Review Period" has the meaning set forth in Section 3.4.
"Sellers" has the meaning set forth in the preamble.
"Supply Agreements" has the meaning set forth in the preamble.
"Vitro" has the meaning set forth in the first paragraph hereof.
"Vitro Agreement" has the meaning set forth in the preamble.
Section 1.2 Cross-References. Unless otherwise specified, references
in this Agreement to any section are references to such section of this
Agreement and, unless otherwise specified, references in any section or
definition to any clause are references to such clause of such section or
definition.
Section 1.3 General Provisions Relating to Definitions. Terms for
which meanings are defined in this Agreement shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may permit or
require, any pronoun shall include the
<PAGE> 8
corresponding masculine, feminine and neuter forms. The term "including" means
including, without limiting the generality of any description preceding such
term. Each reference herein to any person shall include a reference to such
person's successors and permitted assigns. Unless otherwise specified,
references to any agreement, instrument or other document in this Agreement
refer to such agreement, instrument or other document as originally executed or,
if subsequently varied, replaced or supplemented from time to time, as so
varied, replaced or supplemented and in effect at the relevant time of reference
thereto.
ARTICLE 2.
ANNUAL VOLUME REBATE
Sellers agree to pay to the Purchasing Affiliates, in accordance
with the provisions of Article III, an Annual Volume Rebate for each Measurement
Year in which the Excess Volume is greater than zero (0). For each such
Measurement Year the Annual Volume Rebate shall be equal to the sum of (i) the
Bacardi Monaco-Covered Affiliate Annual Volume Rebate and (ii) the BIL-Covered
Affiliate Annual Volume Rebate.
ARTICLE 3.
PAYMENT
Section 3.1 Time of Payment. The Sellers shall pay the Annual Volume
Rebate for each Measurement Year by February 1 of the year following the
Measurement Year.
Section 3.2 Allocation of Bacardi Monaco-Covered Affiliate Annual
Volume Rebate Payment. The Sellers shall pay to the Bacardi Monaco-Covered
Affiliates that purchased glass containers pursuant to the Supply Agreements
during the Measurement Year the Bacardi Monaco-Covered Annual Volume Rebate for
the Measurement Year. The Bacardi Monaco-Covered Affiliate Annual Volume Rebate
shall be allocated among the Bacardi Monaco-Covered
<PAGE> 9
Affiliates so as to pay each Bacardi Monaco-Covered Affiliate its Bacardi
Monaco-Covered Affiliate Share. For each Bacardi Monaco-Covered Affiliate, the
Bacardi Monaco-Covered Affiliate Share shall equal (i) the quotient of (A) such
Bacardi Monaco-Covered Affiliate's Percentage Increase, divided by (B) the sum
of all Bacardi Monaco-Covered Affiliate Percentage Increases, multiplied by (ii)
the Bacardi Monaco-Covered Affiliate Annual Volume Rebate. For the avoidance of
doubt, the sum of all Bacardi Monaco-Covered Affiliate Percentage Increases may
or may not equal one hundred percent (100%).
Section 3.3 Allocation of BIL-Covered Affiliate Annual Volume Rebate
Payment. The Sellers shall pay to the BIL-Covered Affiliates that purchased
glass containers pursuant to the Supply Agreements during the Measurement Year
the BIL-Covered Affiliate Annual Volume Rebate for the Measurement Year. The
BIL-Covered Affiliate Annual Volume Rebate shall be allocated among the
BIL-Covered Affiliates so as to pay each BIL-Covered Affiliate its BIL-Covered
Affiliate Share. For each BIL-Covered Affiliate, the BIL-Covered Affiliate Share
shall equal (i) the quotient of (A) such BIL-Covered Affiliate's Percentage
Increase, divided by (B) the sum of all BIL-Covered Affiliate Percentage
Increases, multiplied by (ii) the BIL-Covered Affiliate Annual Volume Rebate.
For the avoidance of doubt, the sum of all BIL-Covered Affiliate Percentage
Increases may or may not equal one hundred percent (100%).
Section 3.4 Currency. The payment to each Purchasing Affiliate
pursuant to Sections 3.2 and 3.3 shall be in the currency in which that
Purchasing Affiliate paid the Sellers for glass containers purchased pursuant to
the Supply Agreements during the relevant Measurement Year or, if the Purchasing
Affiliate made payments in more than one currency, pro rata on the basis of
aggregate purchases made by the Purchasing Affiliate in each currency determined
on the basis of foreign exchange rates in effect on December 31 of the
Measurement Year.
<PAGE> 10
Section 3.5 Annual Rebate Notice and Review. Sellers shall provide
to Buyers and each Purchasing Affiliate an Annual Rebate Notice by January 7 of
the year following the Measurement Year. The Annual Rebate Notice shall state
(i) the total amount of the Bacardi Monaco-Covered Affiliate Annual Volume
Rebate (ii) the total amount of the BIL-Covered Affiliate Annual Volume Rebate,
(iii) the allocation of the Annual Volume Rebate among the Purchasing Affiliates
pursuant to Sections 3.2 and 3.3, and (iv) the amount to be paid to each
Purchasing Affiliate in respect of the Annual Volume Rebate, stated in the
appropriate currency pursuant to Section 3.4. Buyers shall have ten (10) days
from the date of the submission of the Annual Rebate Notice to review such
Notice (the "Review Period"). For such purpose, Sellers shall afford Buyers
reasonable access to all books, records and work papers used by Sellers to
prepare the Annual Rebate Notice. If, in Buyers' reasonable judgement, the
Annual Rebate Notice does not fairly present the Annual Volume Rebate as payable
in accordance with this Agreement, then Buyers shall have the right to propose
any adjustment thereto within the Review Period. Buyers and Sellers shall use
their best effort for five (5) days after the expiration of the Review Period to
agree upon any such proposed adjustments. Any dispute as to the content or
preparation of the Annual Rebate Notice which is not resolved by Buyers and
Sellers during such 5-day period shall, if either Buyers or Sellers by notice to
the other party so request, be submitted for resolution in accordance with the
provisions of this Agreement to the Washington, D.C. office of Price Waterhouse,
whose costs shall be divided equally between Buyers and Sellers. The decision of
such firm shall be final and binding on Buyers and Sellers in the absence of
manifest error.
<PAGE> 11
ARTICLE 4.
TERM
The term of this Agreement, as between the parties hereto, shall
commence on January 1, 1996, and shall continue for so long as either of the
Supply Agreements remains in force.
ARTICLE 5.
EXTENSION OF SCOPE OF AGREEMENT
Upon the addition of any member of the Bacardi-Martini Group as a
"Purchasing Affiliate" for purposes of either or both of the Supply Agreements,
such member of the Bacardi-Martini Group shall thereupon, without any further
action on the part of any party hereto, be and become a Purchasing Affiliate for
purposes of this Agreement. Each such additional Purchasing Affiliate shall be
designated either a Bacardi Monaco-Covered Affiliate or a BIL-Covered Affiliate.
ARTICLE 6.
MISCELLANEOUS
Section 6.1 Notices. All notices required or desired to be given
hereunder shall be in writing, and shall be sent by (a) registered or certified
mail, return receipt requested, postage prepaid, (b) a reputable overnight
courier service, or (c) facsimile transmission. Notices shall be addressed as
follows:
(a) If to the Buyers:
(i) Bacardi International Limited
P.O. Box HM 720
65 Pitts Bay Road
Hamilton HM CX
BERMUDA
<PAGE> 12
Attention: President
Fax: 441-292-0562
(ii) Bacardi-Martini (Monaco) S.A.M.
Le Monte-Carlo Sun
74 Boulevard d'ltalie
Boite Postal 405
MC - 98011
MONACO CEDEX
Attention: President
Fax: 93-25-15-80
(b) If to the Sellers:
(i) Anchor Glass Container Corporation
4343 Anchor Plaza Parkway
Tampa, Florida 33634-7537
USA
Attention: Brad Tucker
Fax: 813-882-7795
(ii) Vitro Envases Norte America, S.A. de C.V.
Avenida Ricardo Margain
440 Garza Garcia
Nuevo Leon
Mexico C.P. 66265
Attention: Luis Noriega Pasquel
Fax: 011-525-281-2085
(c) If to any Purchasing Affiliate:
at the address for such Purchasing Affiliate set forth on
Schedule B hereto
or to such other address as either party shall designate for itself or its
affiliates by notice to the other. Any notice given by a Seller to the Buyers
hereunder shall be given to each of the Buyers and each Purchasing Affiliate.
Any notice given by a Buyer to the Sellers hereunder shall be given to each of
the Sellers. Notices given in accordance with the requirements of this Section
shall be deemed given (a) fifteen days after mailing if given by mail, (b) on
the third regular business day in the jurisdiction to which such notice is
addressed following delivery of the notice to an authorized representative of an
overnight courier service if given by overnight courier
<PAGE> 13
service, and (c) on the next regular business day in the jurisdiction to which
such notice is addressed following confirmed facsimile transmission of the
notice.
Section 6.2 Assignment. Neither this Agreement nor any of the rights
or interests of the Buyers or the Sellers hereunder may be assigned,
transferred, or conveyed by operation of law or otherwise without the prior
written consent of the other parties, except to a parent or subsidiary (direct
or indirect) of the assigning party, in which event the party so assigning shall
remain obligated and liable to the other parties for the full and complete
performance of this Agreement by the assignee.
Section 6.3 Law and Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York,
regardless of the laws that might govern under that state's principles of
conflicts of laws. Subject to the provisions of Section 3.5, any controversy or
claim arising out of or relating to this Agreement, or the breach thereof, shall
be settled by arbitration in accordance with the rules of the American
Arbitration Association in effect at the time such arbitration is instituted.
The arbitration panel shall be composed of three arbitrators, one of whom shall
be chosen by the Buyers, acting together, one of whom shall be chosen by the
Sellers, acting together, and one of whom shall be chosen by the two arbitrators
previously designated. If the Buyers and/or the Sellers fail to choose an
arbitrator within fourteen (14) days after receiving notice of commencement of
arbitration or if the two arbitrators fail to choose a third arbitrator within
fourteen (14) days of their appointment, such arbitrators shall be chosen by the
American Arbitration Association. Unless the parties to the arbitration shall
otherwise agree to a different place of arbitration, the place of arbitration
shall be Washington, D.C. The arbitration shall be conducted in the English
language. The arbitration award shall be final and binding upon the parties
thereto and may be entered in any court having jurisdiction.
<PAGE> 14
Section 6.4 Survival of Rights of Parties. The termination or
expiration of this Agreement shall not release any party from any liability,
obligation, or agreement which, pursuant to any provision of this Agreement, is
to survive or be performed after such termination or expiration.
Section 6.5 Subject Headings. The subject headings in this Agreement
have been placed herein for the convenience of the parties and shall not be
considered in any question of interpretation or construction of this Agreement.
Section 6.6 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same instrument.
Section 6.7 Amendments. 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 whom the enforcement of such change,
waiver, discharge, or termination is sought.
Section 6.8 Entire Agreement. All prior understandings, agreements,
and negotiations had by and between the parties hereto are merged in this
Agreement, which alone constitutes the entire agreement of the parties. The
Supply Agreements and this Agreement constitute the entire agreement between the
parties relative to the supply of glass containers by the Sellers to the Buyers
and the Purchasing Affiliates.
Section 6.9 Purchasing Affiliates. The Purchasing Affiliates are
intended beneficiaries of the rights accorded the Buyers under this Agreement
and each Purchasing Affiliate shall have the right to enforce any such right
directly against Seller without the need to join either Buyer in any such
action.
<PAGE> 15
Section 6.10 Obligations Joint and Several. The obligations of the
Sellers hereunder shall be joint and several.
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the date(s) and places
set forth below.
SELLERS: BUYERS:
ANCHOR GLASS CONTAINER BACARDI INTERNATIONAL
CORPORATION LIMITED
/s/ Alfonso Gomez Palacio /s/Eduardo M. Cutillas
By: Alfonso Gomez Palacio By: Eduardo M. Cutillas
-------------------------- -----------------------------
Title: President and CEO Title: Director
-------------------------- -----------------------------
Date: August 27, 1996 Date: September 6, 1996
-------------------------- -----------------------------
Executed In: Tampa, Florida Executed In: Hamilton, Bermuda
-------------------------- -----------------------------
City, State City, State
VITRO ENVASES NORTE AMERICA, BACARDI-MARTINI (MONACO) S.A.M.
S.A. de C.V.
/s/ Fernando Florez /s/ Maurizio Cisrario /s/ Jean Paul De Vit
By: Fernando Florez By: Maurizio Cisrario Jean Paul De Vit
-------------------------- -------------------------------------
Title: Vice Predisent Operations Title: President General Deputy Manager
-------------------------- -------------------------------------
Date: August 27, 1996 Date: September 9, 1996
-------------------------- -------------------------------------
Executed In: Tampa, Florida Executed In: Monte-Carlo (Principality of
-------------------------- Monaco
City, State -------------------------------
City, State
<PAGE> 17
REBATE AGREEMENT
dated as of January 1, 1996,
between
Anchor Glass Container Corporation,
Vitro Envases Notre America, S.A. de C.V.,
Bacardi International Limited,
and
Bacardi-Martini (Monaco)
Schedule A
Glass Containers Shipped to Purchasing Affiliates in 1995:
Number of Glass
Containers
Purchasing Affiliate Shipped (Gross)
-------------------- ---------------
***
*** Confidential treatment requested pursuant to Rule 406.
<PAGE> 18
REBATE AGREEMENT
dated as of January 1, 1996,
between
Anchor Glass Container Corporation,
Vitro Envases Norte America, S.A. de C.V.,
Bacardi International Limited,
and
Bacardi-Martini (Monaco)
Schedule B
Notice addresses for Purchasing Affiliates:
(a) Castleton Beverage Corporation
12200 North Main Street
Jacksonville, Florida 32228
U.S.A.
P.O. Box 26368
Jacksonville, Florida 32226-6368
U.S.A.
Attention: President
Fax: 904-751-1397
(b) Bacardi Corporation
Highway 165, Kilometer 2.6
Bayview Industrial Area
Catano, Puerto Rico 00962
P.O. Box 363549
San Juan, Puerto Rico 00936-3549
Attention: President
Fax: 787-788-5075
(c) Bacardi-Martini Canada, Inc.
1000 Steeles Avenue E
Brampton, Ontario L65 1A1
Canada
Attention: President
Fax: 905-451-1941
(d) Bacardi & Company Limited
Millar Road
P.O. Box N-4880
Nassau
Bahamas
Attention: President
Fax: 809-362-1415
(e) Bacardi Y Compania S.A. de C.V.
Autopista Mexico Queretaro No. 4431
C.P. 54900 Tultitlan
Estado de Mexico
Attention: President
Fax: 52-5-310- 8474
<PAGE> 19
REBATE AGREEMENT
dated as of January 1, 1996,
between
Anchor Glass Container Corporation,
Vitro Envases,
Norte America, S.A. de C.V.
Bacardi International Limited,
and
Bacardi-Martini (Monaco)
Schedule C
The percentage for the calculation of the Bacardi Monaco-Covered
Affiliate Annual Volume Rebate is: *** .
*** Confidential treatment requested pursuant to Rule 406.
<PAGE> 20
*** Confidential treatment requested pursuant to Rule 406.
