Exhibit 10.27
BERKSHIRE FUND V, LIMITED PARTNERSHIP
BERKSHIRE FUND V COINVESTMENT FUND, LIMITED PARTNERSHIP
Xxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
December 18, 2001
United States Can Company
000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Dear Xx. Xxxxxxx:
As you know, United States Can Company (the "Borrower"), U.S. Can Corporation ("U.S. Can") and USC May
Verpackungen Holding Inc. ("May" and, together with U.S. Can, the "Guarantors") are today preparing to enter into
a Second Amendment to Credit Agreement (the "Amendment") for the purpose of amending certain provisions of the
Credit Agreement dated as of October 4, 2000 (as previously amended and as amended by the Amendment, the "Credit
Agreement") among the Borrower, the Guarantors, Bank of America, N.A., as Administrative Agent, and the lenders
party thereto. Capitalized terms used and not otherwise defined in this letter agreement shall have the meanings
set forth in the Credit Agreement.
The Amendment, inter alia, establishes a new Tranche C Term Loan for the benefit of the Borrower. The
Tranche C Term Loan Committed Amount is $25,000,000, and the initial amount borrowed under the Tranche C Term
Loan will be $20,000,000. As a condition precedent to the effectiveness of the Amendment and the obligation of
the Tranche C Term Loan Lender to make the Tranche C Term Loan, the Tranche C Term Loan Lender has required each
of Berkshire Fund V, Limited Partnership ("Berkshire Fund V") and Berkshire Fund V Coinvestment Fund, Limited
Partnership ("Berkshire Coinvestment Fund" and, together with Berkshire Fund V, "Berkshire") to enter into a
Purchase Agreement dated as of the date hereof (together, the "Purchase Agreements") for the benefit of the
Tranche C Term Loan Lender, which provides that each of Berkshire Fund V and Berkshire Coinvestment Fund, under
certain specified circumstances, will purchase a participation interest in the outstanding principal and interest
owing under the Tranche C Term Loan.
We have indicated to you that Berkshire is prepared to execute and deliver the Purchase Agreements,
subject to reaching an understanding with the Company and each Guarantor (together, the "U.S. Can Obligors")
regarding the fees to be received by Berkshire in consideration of its willingness to enter into and perform the
Purchase Agreements, as well as the reimbursement to Berkshire of all amounts that may be required to be paid
pursuant to the Purchase Agreements. The purpose of this letter agreement is to set forth our mutual agreement
with respect to those understandings.
Specifically, Berkshire requests that each of the U.S. Can Obligors expresses its agreement with
Berkshire as follows:
1. Upon execution of the Purchase Agreements by Berkshire on the date hereof, the U.S. Can Obligors will
become obligated to pay to Berkshire an initial fee of 2.75% of the amount of the Tranche C Term Loan
borrowed on such date, or $550,000. The foregoing fee will constitute compensation for Berkshire for
the first year, or any part thereof, of its obligation under the Purchase Agreements, and shall be
deemed earned in full on the date hereof. If the underlying Tranche C Term Loan Committed Amount is for
any reason terminated or reduced, and all or any portion of Berkshire's obligations under the Purchase
Agreements is released prior to the first anniversary date of the Purchase Agreements, there will be no
proration or return of any portion of the initial fee.
2. On each of the first, second and third anniversary dates of the Purchase Agreements, the U.S. Can
Obligors will become obligated to pay to Berkshire, provided that Berkshire's obligations under the
Purchase Agreements remain outstanding on such anniversary date, an additional fee equal to 2.75% of the
then outstanding Tranche C Term Loan amount. Each such fee shall be deemed earned in full on the
applicable anniversary date, without any proration in the event that the Tranche C Term Loan is reduced
or terminated (and Berkshire's obligations under the Purchase Agreements are correspondingly reduced or
released) prior to the subsequent anniversary date.
3. On the fourth anniversary date of the Purchase Agreements, the U.S. Can Obligors will become obligated
to pay to Berkshire, provided that Berkshire's obligations under the Purchase Agreements remain
outstanding, an additional fee equal to (a) 2.75% of the then outstanding Tranche C Term Loan amount
multiplied by (b) 17/365, representing the fractional portion of a year beginning on the fourth
anniversary date of the Purchase Agreements and concluding on the Tranche C Term Loan Maturity Date.
Such fee shall be deemed earned in full on the fourth anniversary date, without any proration in the
event that the Tranche C Term Loan is reduced or terminated (and Berkshire's obligations under the
Purchase Agreements are correspondingly reduced or released) prior to the Tranche C Term Loan Maturity
Date.
4. If at any time between the execution of the Purchase Agreements and the Tranche C Term Loan Maturity
Date (other than on an anniversary date of the Purchase Agreements) the Second Funding Date occurs and
the Borrower borrows an additional $5,000,000 under the Tranche C Term Loan, then, on the Second Funding
Date, the U.S. Can Obligors will become obligated to pay to Berkshire an additional fee equal to (a)
2.75% of such additional borrowing, or $137,500, multiplied by (b) the fractional portion of a year of
365 days beginning on the Second Funding Date and concluding on the subsequent anniversary date or, if
the Second Funding Date occurs after the fourth anniversary date of the Purchase Agreements, on the
Tranche C Term Loan Maturity Date. Such fee shall be deemed earned in full on the Second Funding Date,
without any proration in the event that the Tranche C Term Loan is reduced or terminated (and
Berkshire's obligations under the Purchase Agreements are correspondingly reduced or released) prior to
the subsequent anniversary date or the Tranche C Term Loan Maturity Date, as applicable. The fees
referred to in paragraphs 1, 2, 3 and 4 of this letter agreement are referred to collectively as the
"Purchase Agreement Fees."
5. If the Tranche C Term Loan Lender extends the maturity of the Tranche C Term Loan Maturity Date and
requires as a condition of doing so that the Purchase Agreements remain in effect, then Berkshire will
determine at such time whether to extend its obligations under the Purchase Agreements and, if it is
prepared to do so, the parties hereto will mutually determine at such time the appropriate fee structure
for such extension.
6. The parties hereto acknowledge that no cash payment of any Purchase Agreement Fee will be permitted to
be made by the U.S. Can Obligors while any Commitments, or any Tranche C Term Loan Obligations or Credit
Party Obligations (other than inchoate indemnification obligations that survive the termination of the
Commitments), remain outstanding under the Credit Agreement, without the prior written consent of the
Required Lenders and the Tranche C Term Loan Lender. The U.S. Can Obligors acknowledge that Berkshire
shall be entitled to request at any future time that the Lenders grant such requisite consent to the
cash payment of the Purchase Agreement Fees, or any portion thereof, and if such consent is granted,
then the U.S. Can Obligors agree to remit all such earned Purchase Agreement Fee payments to Berkshire
within twenty days of Berkshire's demand therefor.
7. In the event that Berkshire is required to purchase a participation in the Tranche C Term Loan, the U.S.
Can Obligors hereby acknowledge and agree that, in collecting upon any amounts owing by the Borrower
under the Tranche C Term Loan, Berkshire shall succeed to the rights of the Tranche C Term Loan Lender
or any Agent on behalf thereof (including, without limitation, with respect to all rights of the
Collateral Agent on behalf of the Trance C Term Loan Lender) to the fullest extent permitted or provided
for under the Purchase Agreements, the Credit Agreement or any other agreement with the Lenders and/or
any Agent, or under applicable law.
8. The U.S. Can Obligors shall be responsible and obligated to reimburse Berkshire promptly for all
out-of-pocket costs and expenses (including, without limitation, all reasonable legal fees and expenses)
incurred by Berkshire in connection with the negotiation, execution and delivery of the Purchase
Agreements and its performance thereunder, as well as in connection with the assistance provided by
Berkshire to the Borrower with respect to the negotiation, execution and delivery of the Amendment and
related documents.
Signatures follow.
If the U.S. Can Obligors are in agreement with the foregoing terms and conditions, please so indicate by
executing and returning to Berkshire the enclosed counterpart of this letter agreement. Upon such execution,
this letter agreement will become a binding agreement between the parties hereto, enforceable under the laws of
The Commonwealth of Massachusetts as a document under seal.
Very truly yours,
BERKSHIRE FUND V, LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC,
its General Partner
By /s/ Xxxxxxx Xxxxx
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Managing Member
BERKSHIRE FUND V COINVESTMENT FUND, LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC,
its General Partner
By /s/ Xxxxxxx Xxxxx
------------------------------------------
Managing Member
U.S. CAN OBLIGORS:
The foregoing terms and conditions
are accepted and agreed to as of the
date of this letter agreement.
UNITED STATES CAN COMPANY
By /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Executive Vice President & CFO
U.S. CAN CORPORATION
By /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Executive Vice President & CFO
USC MAY VERPACKUNGEN HOLDING INC.
By /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President & Treasurer
